DISTRIBUTION OF INDUSTRY (Hansard, 18 March 1946)

§ The President of the Board of Trade (Sir Stafford Cripps)
I beg to move, That the Distribution of Industry (Development Areas) Order, 1946 (S.R. & O., 1946, No. 197), dated 16th February, 1946, made by the Board of Trade under Section 7 of the Distribution of Industry Act, 1945, a copy of which Order was presented on 20th February, be approved. This is a Motion approving an Order made by the Board of Trade under Section 7 (2) of the Distribution of Industry Act, 1945, including in the Schedule to that Act two new areas as development areas. This is the first Order which has been made since the passing of the Act, and perhaps it would not be out of place to say a word as to the considerations we have in mind in bringing forward this Motionand including these two areas. The House will appreciate that it would be idle to try and extend the development areas over the whole country, as it would mean cutting down the value of the service which can be given to particular areas, if we made it too wide in its cover. We have had therefore to consider, with very great care, certain representations which have been made from various areas, and ourselves carry out a survey of the country, as it is now developing in this postwar period, to see whether there were any districts in which it appears that heavy unemployment is likely to recur, unless particular steps are taken to give assistance, through the Distribution of Industry Act, to those areas. In making that certain, we have had naturally to turn down some representations which have been put forward, because in our view they had been put forward too early, because there were no signs at present of the difficulties which people feared were showing themselves in these areas. That is related to a number of small isolated places, which we think we can deal with quite effectively without bringing them into development areas; one or two are larger areas where these fears have been expressed, but where we did not see signs at the moment of any heavy unemployment.
This is not necessarily by any means the final Order. We shall keep a close watch upon the whole of the country, and if at any time it appears that help of 1575 this sort is required in any district, we shall not hesitate to come before the House with further Orders, so that we may put within the benefit of the Distribution of Industry Act such other areas as may seem to need that assistance. In both these areas, Wrexham and South Lancashire, there are particular reasons why they should be included Wrexham area, as the House will appreciate, is a coalfield area, as is also the South Lancashire area: In Denbighshire, before the war there had been a fall in employment in coalmining. During the last 20 years, the numbers have fallen from 14,500 in 1928, to 9,100 in 1939, the figure for 1944 being 8,750. Although we hope that there may be some slight revival in some parts of that area as a whole, the reserves are not likely to be able to be worked, and, even if they are, intensive mechanisation will very likely reduce the actual number of persons employed. Apart from that articular class of employment, there are the steel works at Brymbo, and the tile and chemical works at Ruabon. In that area there has never been enough employment for women, but during thewar an Ordnance Factory in the area has provided employment for some 6,200 women, and a number of men as well. The result is that, on the closing down of that cordite factory, over 9,000 people were unemployed. Heavy unemployment has started, and the latest figures for the area show that there are 2,803 wholly unemployed, 797 being men and 2,006 women, which is a large percentage, nearly 11 per cent., of the total insured population in the whole area.
The problem was therefore that we had this large estate of 1,300 acres at March-wiel, and no one with power to convert it into a trading estate where these women could be employed among a number of industries. We thought the best way to deal with the problem would be to make this area a development area. We should then have the power to readapt March-wiel Ordnance Factory to the purposes of a trading estate, and that is what we are proposing to do today. We propose that it should be run as a branch of the South Wales Trading Estate with a local director of South Wales present to look after it. In that way we shall be able to provide a sufficient volume of employment to mop up the unemployed, both men and women. We think, with that readjustment in the Wrexham area, we 1576 can successfully cope with the whole of the unemployment likely to occur. If necessary, we shall have further powers to build factories in other situations if required, but we feel that at the present moment we can deal with the problem through the appropriate utilisation of this large ordnance factory.
The second area is that of South Lancashire. This is part of the Lancashire and Cheshire coalfield, and a large part of it we propose to schedule around the two boroughs of St. Helens and Wigan, including the area between the two. At the peak of coal production, in 1908, 26 million tons were raised per year; it has now declined to about 11 million tons. Some 297 pits were abandoned between 1914 and 1939, and it will therefore be seen that a large decline has taken place in the potential employment of the area, owing to the scaling down of the activities of the mining industry. Fortunately, in that area there are some other industries. In St. Helens there is a glass industry and in Newton-le-Willows an engineering industry. A large part of the employment curing wartime, however, has been in Royal Ordnance and other Government factories. There was a factory at Standish, where I.C.I. employed at its peak 5,000 people. There was also the R.O.F. at Wigan which employed a large number of people, and at least three other Royal Ordnance factories just outside the area, which, to a certain extent, drew their labour from this area.
There is left, as a result of the closing down of some of these ordnance factories and the switching over of others from three shifts to one, a large surplus of labour. Unemployment there has reached a point which makes it appear that it might possibly go back to the figure which it reacned in prewar years, when in the Wigan area it was 28 per cent. Compared with the present areas which are included on the basis of prewar experience in the Schedule, this area would certainly claim to come in as well. In April, 1945, there were 717 people unemployed, and by January, 1946, unemployment had risen to 5,349–2,721 men and 2,628 women.In this area, there is one particular difficulty. The relics of the industrial operations of the past, are, as people in Wigan will judge, not very tempting from the point of view of in- 1577 dustrialists bringing new industries there. This, I think, is a typical case where we should make use of the powers under the Distribution of Industry Act to clear the area, tidy it up, and make it far better so far as its amenities are concerned, in order to induce industrialists to go there and employ the labour which is at the present time available.
Some of the ordnance factories which are in that area will continue to give employment, but not on such a high scale as during the war. Already we have managed to introduce into the Royal Ordnance Factories a number ofcivilian manufactures, which, we hope, will be carried on as a permanent feature of the district. But that still leaves behind the danger of high unemployment which was there before the war. We feel that this is a typical case where, with the decline of the major industries of the district, which will not be met according to present expectations, we should introduce some new industries into the area. The best way of doing that seems to us to be to utilise the powers of the Distribution of Industry Act. For the two reasons which I have given—in the case of the Wrexham area, the development of the Royal Ordnance Factory as a trading estate, and in the case of the Wigan area, the putting in of new industries and the clearing up of this untidy and somewhat derelict industrial area—I feel that these two areas could only be properly coped with by bringing them into the Schedule of the Act.
I hope that the House will approve the action which we are taking and will pass the Motion which I have proposed. I hope, too, that hon. Members will not ask me to include a whole lot of other areas. They can ask certainly, but I can assure them that we are fully aware of the difficulties in these other areas, which have all been forcibly brought before us in deputations from the local authorities and by Members of Parliament They have received the most careful scrutiny and examination, but we feel that for the present, without committing ourselves negatively with regard to the future, that this is as far as we can go. If we go further until we have dealt with some of the existing development areas, we shall be spreading our energies and not helping to get effective development in the areas already in the Act.

§ Mr. Oliver Lyttelton (Aldershot)
I am sure that in adding these areas to the Schedule to the Act the Government are not asking for anything unreasonable, and it is an action. I think, of which we all approve. The figures which the President of the Board of Trade gave us of the unemployment in these areas are convincing proof that these measures are now necessary. I was particularly pleased by his closing remarks in which, he stressed that the scheduling of new areas should be undertaken with great circumspection. The dispersal of industries to where there are pockets of unemployment must be done with circumspection, because dispersal in itself does not lead to industrial efficiency and should be avoided as far as possible. If I understood correctly what the President of the Board of Trade said, itis being done in this case because the problem cannot be solved by other means. We should, as a rule, try to see that the great industrial centres where industry is already established have every chance of absorbing their unemployed before scheduling the area., I am convinced from the speech of the President of the Board of Trade that with regard to these particular areas there is no other course but to adopt the one which has been put before the House

Mr. McKie (Galloway)
The President of the Board of Trade reminded us that there was to be no finality with regard to the areas to come under the Distribution of Industry Act, and he said that there were many isolated spots in the country where the need for inclusion as special areas was already being felt He was most persuasive and begged us not to press him too far this afternoon, because he said that he had the whole country, especially the areas mentioned in this Order very much at heart. I would be the last to discourage the inhabitants of Wrexham and South Lancashire receiving the benefits which we all hope will accrue to them by the passing of this Order. Unemployment is already beginning to be a serious problem in those areas. But I hope that the right hon. and learned Gentleman will not forget that there are other places in the country which, although they cannot compare with South Lancashire or Wrexham with regard to the bulk of the industries in those areas, have a number of persons 1579 unemployed or likely to be unemployed during the coming months, if things go on drifting in the way which they are now doing. I represent a constituency which is in the category of one of those isolated geographical areas to which the President of the Board of Trade made reference.

§ Mr. Deputy-Speaker (Mr. Hubert Beaumont)
The hon. Gentleman is now going too far.

Mr. McKie
With great respect, Mr. Deputy-Speaker, I was following on the remarks of the President of the Board of Trade to show that between 60,000—

§ Mr. Deputy-Speaker
The hon. Gentleman must not allow himself to be led into temptation.

Mr. McKie
All I can say is that it was the blandishments of the right hon. and learned Gentleman which tempted me to stray from the straight and narrow path. I will leave it at that. I hope the right hon. and learned Gentleman will be as good as his word and not forget these isolated geographical areas which are already beginning to feel the burden likely to be thrust upon them in the coming months by reason of unemployment, largely due to the cessation of wartime industries. I am thinking particularly of munition factories which are now, of course, closing down. I know, Mr. Deputy-Speaker, that that is as far as you will allow me to go, and I will conclude by saying that I hope the Government, whenever possible, will include this kind of area within the Order as special development areas under the Distribution of Industry Bill, and that they will come to this House without waiting for the perpetual admonitions and threats of Members of His Majesty's Opposition.

§ Mr. Leslie Hale (Oldham)
I want to remind the House that under this Act the Government have very wide powers in addition to those with regard to the development areas. In particular, the Act gives power to erect factories where factories are needed or provide financial assistance for the erection of factories. The President of the Board of Trade said that this Order was to be regarded as more or less final for the time being and it may not be extended before the three years period of review provided by the 1580 Act. I am concerned withmatters relating to the Borough of Oldham.

Mr. McKie
That is not in Order.

§ Mr. Hale
I will accept your Ruling on that matter, Mr. Deputy-Speaker, but not someone else's.

§ Mr. Deputy-Speaker
The Borough of Oldham does not come within the terms of this Order.

§ Mr. Hale
I am much obliged to you. I would rather accept a Ruling from you than one from the hon. Member for Galloway (Mr. McKie).

Mr. McKie
I must appeal, Mr. Deputy-Speaker, for your protection. I never anticipated your Ruling. I merely made a remark sotto voce.

§ Mr. Deputy-Speaker
I know the hon. Member easily yields to temptation but always respects the Ruling of the Chair.

§ Mr. Hale
If the hon. Member for Galloway was merely speaking sotto voce, I hesitate to think what would happen if he spoke out loud. A question that comes in under the consideration of this Order is the shortage of factories. This causes the gravest concern in some of the industrial towns in the adjacent area to the borough I represent. I hope, in view of the fact that you are about to rule out of Order what I was going to say, the President of the Board of Trade, with that ability and knowledge which we all admire, will already have anticipated what I was going to say if it had been in Order, and that he will make note thereof.

§ Mr. Hoy(Leith)
I welcome the statement of the President of the Board of Trade that he contemplates making provision for other areas. My constituency can feel very sympathetically towards the places included in this Order and I only hope that when the President of the Board of Trade comes to make a new Order he will not forget that there are other places in Scotland as well as those which have been mentioned.