HC Deb 04 April 1950 vol 473 cc1023-134

Order for Second Reading read.

3.52 p.m.

The President of the Board of Trade (Mr. Harold Wilson)

I beg to move, "That the Bill be now read a Second time."

This Bill is the first full legislative Measure on the distribution of industry and on the progress of the development areas since the 1945 Act was passed. Perhaps it might be worth while if I were to remind the House for a moment or two of the principal provisions of that Act. Firstly, it dealt with the provision of premises for industrial undertakings in the development areas. Secondly, it provided for financial assistance to trading estate companies or industrial estate companies and provided financial assistance for improving basic services in the development areas. Thirdly, it provided for special financial assistance to industrial undertakings in the development areas and it also provided for dealing with derelict land in those areas.

It has often been said in this House, principally from these benches, that there was one major deficiency in the Act as it finally reached the Statute Book: that was the dropping of Clause 9, which provided for close control over industrial development outside the development areas. As the House knows, however, that Clause was reinstated in Section 14 (4) of the Town and Country Planning Act a year or two later and, of course, that Section is now in full operation.

When the 1945 Bill was before the House my right hon. Friend the Minister of Town and Country Planning, then President of the Board of Trade, said that that Bill was not the last word in legislation on this subject. We have now had experience of over 4½ years of the operation of the Act, and undoubtedly, I think that the whole House will agree, that Act has achieved great things. The first three years of its operation were reviewed in the Distribution of Industry White Paper which I brought before the House in 1948. I think it is time now to take stock once again, and more particularly to see what new legislative provisions are required in order to supplement the work of the main Act. I stress the word "legislative," although of course, as I know the House will realise, a great amount can be done, and in fact already has been done, and a great amount more is going to be done, without the need for additional legislation.

Before I come to the new Bill, it is right that we should see what has been achieved under the Act of 1945 and to consider what has been the transformation—because that is the right word—of many of these development areas as a result of that Act and of the policies which have been followed under it. First, let me deal with the factories that have been built. Some 1,359 factories, representing a total building cost of £92 million, have been licensed within the development areas since 1945. Of these, 986, or practically 1,000, have been completed, and 279 are under construction, including some of the larger iron and steel and chemical schemes, which, when they are complete, will do a great deal to increase employment in those areas. A further 94 are approved and ready to be started.

Mr. Oliver Lyttelton (Aldershot)

Would the right hon. Gentleman give us, or publish, some figures about the areas of the factories in square feet? Are they of an average of about 100,000 square feet each?

Mr. Wilson

I will see that the right hon. Gentleman has those figures, but I have not got them with me at present. As I am sure he would be the first to agree, there are many figures which might be given—employment, footage, values or numbers—but I think he will recognise that the 279 under construction represent a much bigger average footage or employment potential than the 986 which have been already completed, because of the weight in them of the great oil. chemical and iron and steel schemes.

Of the number of factories completed—almost 1,000—practically half, or 481, representing £ 20 million worth of building costs, have been Government financed schemes under the 1945 Act. If we take the estimated building costs—I think the same figures are borne out if we take the superficial area—rather more than one half of all the factories completed in Great Britain since the end of the war have been sited in the development areas. That is a remarkable fact, and contrasts very sharply with what happened in the 1930s, when the development areas received only about 7 per cent. of the number of factories erected, opened or extended in Great Britain. In fact, as I think the House knows, the number of new factories opened during those years before the war was barely sufficient to equal the number of factories which were closed in the development areas.

Since the end of the war, in spite of shortages, in spite of the necessity of giving priority to industrial building which would directly affect our struggle to close the dollar gap, something like one-half of all the factories built or extended have been in the development areas.

Air-Commodore Harvey (Macclesfield)

To be quite fair on this point, would the right hon. Gentleman say how many of these factories to which he has referred were either built or commenced in the years of the war?

Mr. Wilson

These to which I am referring are all since 1945, under the 1945 Act. A considerable volume of employment was, of course, given both by factories built during the war for munitions purposes and later transferred to peace-time use, and also by some factories which had been built even before the war in the re-armament period and which were transferred to peace-time use afterwards.

To turn the results of this policy, and of the policies that go along with it, into terms of unemployment, we have figures of unemployment for the development areas showing that there were 932,000 unemployed in the worst period of the history of the development areas—in July, 1932; 553,000 in July, 1938—a considerable improvement, but a very big problem still remaining to be solved; 200,000 in June, 1946, after unemployment had been almost removed during the war and had then risen again following the end of the war; and by June, 1949, the figure was 119,800, rather better than one-eighth of the worst figure in the development areas in the early 1930s.

Since June, 1949, the development areas have shared in the seasonal increase in unemployment which has affected the whole country, and in February, 1950, the number of unemployed was 144,500, or 4 per cent. of the insured population in those areas. I am sure that the House while expressing and sharing in satisfaction for what has been achieved in the development areas, will agree that the figure of 4 per cent. in the development areas today is still too high.

Since the end of the war the number of jobs provided by new factory development of one kind or another has been something like 200,000 of which 120,000 have been jobs for men, which is the biggest problem in the development areas. The new factories themselves account for 78,000 and surplus munition factories, referred to by the hon. and gallant Member for Macclesfield (Air-Commodore Harvey), account for a further 81,000.

Mr. Edgar Granville (Eye)

Is this the total number employed since 1945?

Mr. Wilson

This is the number of new jobs created. The general effect has been to find additional work for a number of people in those areas. These figures may be arid, but behind them there lies a change in the fortunes of millions of our fellow countrymen. Anyone who doubts that has only to go to Cumberland, Dundee, many parts of the North-East coast, many parts of South Wales and South Lancashire, many parts of Scotland and the Wrexham development area. They will see in those areas, where once there was nothing to show but derelict surroundings, despair, complete frustration and utter hopelessness, thriving industrial communities. Where once there were thousands of men with no hope of ever having work again and nothing to do but stand about, they will find those men and their families employed in productive work, work which is making a real contribution to the industrial and economic recovery of this country.

In many of these areas there has been a great success in diversifying industry and bringing new industries and new types of work and factories contributing their quotas of goods to the homes of this country, to the shops and investment, much needed investment, to our basic industries and to our export drive. From practically every one of the development areas there are goods going out into the export markets of the world capable of competing with anything which can be produced in any other country, goods produced by men and women who have learned a new industrial skill, very often in a matter of two or three months and who have disproved the view, so common before the war, that there was no future for some of these areas and no future for the people who lived in them.

Brigadier Clarke (Portsmouth, West)

Will the right hon. Gentleman say what governs the scheduling of these areas, as there is more than 5 per cent. unemployment in Portsmouth? Will he say why nothing has been done there, since he is saying so many laudatory things about other places where he has provided this sort of thing?

Mr. Wilson

I presume the hon. and gallant Member read the White Paper on Industry which was produced in 1948 and which laid down the principles which should determine the scheduling of new industrial areas. I have certainly been very much concerned about the position in Portsmouth, but, since Portsmouth is not itself a development area, I think I should be out of Order if I said very much about it. The hon. and gallant Member's predecessor whom we are all sorry not to see back in this House, was very active in bringing to my attention and to the attention of many of my hon. Friends the special position of Portsmouth. I told him and repeat to the hon. and gallant Member, that if the situation persists in Portsmouth and if I am satisfied that the problem cannot be solved except by the special aid given under the Distribution of Industry Act, I shall consider scheduling that and certain other areas which, I am certain, are troubling other hon. Members.

Mr. Snow (Lichfield and Tamworth)

My right hon. Friend said that to refer to areas which are not development areas might be out of Order. Do I understand that the Debate will be restricted to development areas? I raise the point because the principal Act covers the whole country.

Mr. Speaker

I was not following very closely. If another hon. Member raises the question of a certain area I should like to consider it when it is raised and not to say that it is out of Order now, in advance.

Mr Wilson

Until that moment arrives, I will relieve you of any anxiety about what I am going to deal with, Sir, by sticking closely to the development areas themselves.

Returning from Portsmouth to Cumberland, to which I was referring, that is an area where we have seen the successful operation of the Act and where the problem is very largely solved. There are in Cumberland 1,100 persons unemployed, against 15,000 in 1932 and 8,200 in 1938, and the unemployment figure is 2.2 per cent. One can say that the problem there, apart from one or two individual areas, is well on the way to solution. In the South Lancashire area of Wigan and St. Helens the figure is 3,200 as against 39,600 in 1932 and 27,000 as recently as 1938, and the percentage is 2.4 per cent. The problem there is well on the way to solution. In Wrexham unemployment is about 1,300 against 8,900 in 1932.

The House will realise that the job is very far from complete and that there are many areas about which we must feel great anxiety. For instance, in South Wales, while it is true to say that many parts are enjoying a prosperity they have not known for almost a generation, it is also true that in certain of the mining valleys of Glamorgan and in particular—I know I shall get into trouble with some hon. Friends if I single out special areas—Aberdare, the Rhondda and the old criminally despoiled anthracite areas of the west, are still in a state of some depression. No one can say that in those areas the problem has been solved or is near to being solved. Similarly, on the North-East Coast, where many areas show a great transformation, we see that Jarrow, the town which was murdered. lives again today, but there are still between 6 and 7 per cent. unemployed in that area.

On the North-East Coast, and the same is true of Merseyside and Clydeside, we have the new problem of redundancy in the ship repairing industry, for which it is necessary to provide alternative employment. In Scotland once again, in Dundee particularly, and in parts of the southwest, the unemployment problem is down to very small proportions, but there are certain areas, for instance, the Greenock and Port Glasgow area, where unemployment is still high, and certain parts of Lanarkshire where the problem has been accentuated by the necessary closing of uneconomic pits.

Hon. Members who represent Merseyside constituencies cannot feel that the problem has been solved there as unemployment is 28,000 as against 82,000 immediately before the war. That represents a great improvement in the fortunes of Merseyside, but Merseyside is in a particularly difficult position because it never had the factories before the war. The whole industrial and commercial system of Merseyside seemed to be based on the proposition of having a large body of unemployed dock workers at the dock gates.

Merseyside was the latest area to be scheduled, apart from the Highland area of Scotland. It came very much later into the picture, largely, I am sorry to say, through the opposition to scheduling by the Liverpool City Council. That has meant that it has not had its fair share of new factories in the period of intense industrial development which followed immediately after the war.

In the 12 or 18 months since the scheduling of Merseyside far fewer new factories have been established, and Merseyside has felt the full impact of the capital investment restrictions, which have meant that new factories cannot be built there or anywhere else unless they fulfil the export earning or import saving requirements of the capital investment programme.

I think we can say, reviewing the 1945 Act, that the development areas are better off not merely in terms of the numbers employed as a result of the growth of industry in the past five years, but that they are more sure of remaining so. There is greater diversification of industry; there is greater hope that if any of them find a sudden blow dealt to their principal industries there will be other factories and industries capable of employing those who become redundant. The basic industries have been greatly strengthened and industrial structure of the areas has been greatly widened.

In one respect the problem in the development areas can certainly be said to be solved; that is in the provision of work for women workers. In many districts a situation of a shortage of women workers is developing. There are at present in the development areas some 37,000 women unemployed, but the new factories already going up in those areas will require the employment of between 45,000 and 50,000 women, which means that in general the unemployment problem as it affects women in development areas should be wiped out by the present factory programme.

Indeed large numbers of women hitherto unoccupied, women who never felt that it was worth while applying for work because there would be none, have been drawn into industrial work in the development areas, and the number of women in factory employment has increased by 60 per cent. since 1939. Further, there is always a steady flow of inquiries from industrialists engaged in the light industries wishing to set up in districts in which female labour is available.

Our big problem is of course the provision of work for men who are unemployed, particularly men who have come from certain of the basic industries such as coalmining. In that respect I must say that the present programme of new factory construction under the 1945 Act is still not enough to provide hope of employment for all the men who are now unemployed in the development areas. As I have pointed out, in addition to finding work for the men who are now unemployed we have to provide against certain contingencies which are bound to happen in the course of the next few years or so.

There is the fact to which I have referred, that the shipbuilding and the ship repairing industry is already discharging a number of its workers. A labour force of about 130,000 men is employed in the various shipyards of the country in maintaining the Mercantile Marine, in reconverting ships used for war purposes and meeting the needs of British and overseas shipowners for the replacement for vessels lost or worn out in the war years.

A considerable part of that work must obviously come to an end. So far as reconversion of ships is concerned it is already coming to an end, and men are leaving the shipyards to seek work in the factories surrounding the ports. In that connection places like Sunderland, Greenock, Tyneside, Birkenhead and Liverpool are the areas which are likely to be the worst hit; and, of course, in the Northern Ireland development area, Belfast, and outside the development areas, Barrow. All these are areas which fill us with considerable concern.

Work has also to be provided for the employment of some of the miners who have been made redundant by the closing of uneconomic pits in certain coal mining areas, particularly in North-West Durham and Lanarkshire. In Wales there is some danger of redundancies arising from the re-organisation in the tinplate and sheet steel industries as a result of the new strip mills. In South Wales, or more accurately in Wales as a whole there is, as many of my hon. Friends are only too well aware, the very special problem of disabled workers. This is mainly the case in South Wales but the problem is also extremely grave in certain areas of North Wales, particularly in the slate quarrying and mining areas.

There are 66,000 disabled workers registered in Wales of whom 12,000 still remain unemployed. That means that the development of industry in Wales has provided employment for 54,000 of those registered as disabled. The National Coal Board and others are fully shouldering their responsibility in providing employment above ground for men who have become disabled underground. In addition to that there is the special scheme which will always be associated with the name of my hon. Friend the Member for Gower (Mr. Grenfell) for special factories for pneumoconiotic workers; there are the Remploy factories. etc.

But the main hope of providing work for disabled workers in Wales and elsewhere must lie in new industrial development. As the tide of new employment sweeps up the valleys, as it has already done in some areas, we see the best hope of providing employment for those who are disabled and who, when employed, are proving to the satisfaction of their management and their employers and the whole country that they really can do a factory job on competitive terms. Indeed, we are now hearing reports of factories in South Wales, one of them under the Remploy scheme, a subsidiary of a factory in another part of the country, where they are finding that output in South Wales is at least as competitive as that of the production in their longer established factory.

The need for this new Bill arises from the fact that industrial development is not merely a question of diverting factories from where they would otherwise want to go into the development areas. The mere exercise of Section 14 (4), the old unhappy Clause 9 of the 1945 Bill, is not enough to get the factories into the development areas. We have to pay, and do pay great attention to the question of industrial efficiency. There are many factories which can and must be built in particular areas, perhaps to be near to their source of raw material supply, perhaps to be near a parent factory, and for many other reasons. Those have to be built there and cannot be diverted or told to go to development areas. Also a high proportion of our new factory building is dictated by the export and import saving tests. That means that a considerable number of new factories are extensions of old ones and must be put up where the existing ones are, very often in the Midlands, the South, in Lancashire and in many other areas outside the development areas.

But we have become aware of a desire on the part of certain industrialists, particularly when considering factory extension programmes, to move not only the new buildings but part of the existing works, to development areas. But the cost of uprooting part of their existing works, and perhaps the establishing of a new foundry or whatever it might be, in a development area, makes the project completely prohibitive to the individual manufacturer. It is necessary in those cases to provide finance to cover the abnormal and exceptional costs of removal to and resettlement in a development area. That is the main purpose of the new Bill.

The House will have seen that the Bill also contains power to take over empty factories in development areas. I am quite sure that that power will not be opposed from any part of the House because the factories, particularly post-war factories, represent the expenditure of real resources, of building labour, of steel and other materials and of money. These resources are spared with very great difficulty, from other desirable uses, whether it be housing, education, or whatever it may be, for the purposes of factory building. Therefore, if there is any change in the contracts of a particular industrialist, if his hopes of overseas markets are disappointed, or for any reason he finds he cannot go on, it would be totally wrong that these factories should be left idle for a period when there are people needing work, and when there is important work to be done.

It would also be wrong in the view of the Government that these factories should be disposed of to the highest bidder at black market prices; and perhaps disposed of to firms who would themselves never have satisfied the capital investment test, and would never have been allowed to build a factory under present conditions.

Mr. Osborne (Louth)

When the Minister says that it is proposed to subsidise, or to assist financially, firms being transferred from an old manufacturing area to a new area, and that he will give money for the transference and also in respect to resettlement, has he in mind any time limit for that resettlement help?

Mr. Wilson

I will come to that point in a moment when I deal in detail with the Clauses of the Bill. Before I do that—and I am sure the hon. Gentleman will agree that I should—I wish to stress this point. It may be felt, I am sure my hon. Friends will feel, that the powers asked for in this Bill are small in relation to the size of the problem still remaining. But what I am sure my hon. Friends will realise is that many of the things which are being done, and many of the things which still require to be done, can be done without legislation. For instance, the House is familiar with what has been done to favour development areas in the allocation of scarce controlled materials and the help given to firms in the development areas with uncontrolled materials.

Besides that there is the question of Government contracts, which is also one of great importance. To deal with that we need no new legislation or powers. For some years now it has been the policy of the Government to see that, other things being equal, the purchasing departments should place their orders with firms in the development areas. This does not mean, however, that quotations from firms outside the development areas are considered less carefully than those from firms inside the development areas.

Mr. Lyttelton

May I ask what the President means? Are contracts let to firms in the development areas at higher prices than quoted by other areas? If, on the other hand, the prices from firms in the development areas are lower, what is the point of his remarks? I cannot follow it.

Mr. Wilson

I will deal with it in a little more detail in a moment. The right hon. Gentleman will have noticed that I said, "other things being equal," and the price is one of the things covered by that phrase. There has not been any question of giving contracts to firms in the development areas when their tender prices have been higher than the tender prices of firms in other areas. I am merely reciting what is the official Government policy, which was first announced in this House in 1934; and I am going on. to say—perhaps it will please the right hon. Gentleman—that we do not think that is enough, and that something more has to be done in this connection.

Mr. A. Edward Davies (Stoke-on-Trent, North)

What is the objection to paying a higher price in a development area, if it has a social value which is good for the whole country?

Mr. Wilson

I hope to deal with that point in a moment. I am merely describing the official Government policy since 1934. My hon. Friend can speak with great neutrality and impartiality since the constituency he represents is, I think, not in a development area.

Recently, in order to ensure that this problem was dealt with adequately, the Board of Trade have been having discussions with a large number of Government contracting departments and also with the boards of the nationalised industries. They have now brought to the attention of the contracting departments and the nationalised industries lists of possible contractors which are marked to indicate which firms are in the development areas. In order to make easier the work of Government Departments, and in order to make certain that this long-established Government policy shall be carried out, the Board of Trade have, through their regional controllers in the development areas, written a letter to all firms in the development areas asking them, in their own interests, to ensure that when they put in tenders to Government Departments and to nationalised industries they clearly indicate in the tender that the goods offered will be made in a development area; so that, other things being equal, the preference can be given to the development area firm. Even so, the Government are not satisfied that firms in the development areas are, as yet, getting their full share of the contracts which, on economic and social grounds, would be desirable.

There is a point which I am sure my hon. Friend has in mind, and that is that there are many firms outside the development areas who can get other work; whereas firms inside the development areas would be condemned to working below capacity, and their employees would be condemned to unemployment, if they did not obtain contracts. Therefore arrangements are being worked out now which will have the effect, once the competitive tender price for an item has been established, of allowing development area firms to be offered a share of the contract at the established competitive price. I am sure that should result in an increased proportion of the orders going to development areas without departing from the established procedure in the matter of settling a definite competitive price first.

I wish to spend a few moments dealing with two or three of the principal Clauses in the Bill. Clause 1 (1) deals with the acquisition of existing factories. It may well be that the right hon. Gentleman will have some point to raise on that, in which case my hon. Friend will reply to it. Clause 1 (2) deals with the creation of easements. I ask the House to note that this does not involve the compulsory creation of easements but gives power to acquire easements by agreement, which occasionally proves desirable.

The main Clause in the Bill is, I think, Clause 3 (1) dealing with grants and loans. This Clause is in very general terms. In each individual case assistance can be given, subject to approval by the Treasury, case by case. Perhaps it might help if I intimated the key purposes we have in mind. What I am about to say is not necessarily exhaustive, and certainly does not imply that every case which someone may claim falls into the category would automatically rank for financial assistance or grant.

The operative phrase in the Bill is, "exceptional circumstances." This special assistance can only be given in exceptional circumstances and not in every case where a firm goes into a development area. It deals with circumstances resulting from the physical removal of plant and stock, as in the case I mentioned a few moments ago, and it deals with the period of time. No time is set in the Bill, so that we may need to work out some period of time required for bringing up labour to a reasonable standard of proficiency. There may be three, four, six or perhaps even more months during which the "green" labour involved brings a loss to the firm in question, and one of the ways in which the facilities under this Clause might be used would be to provide some financial recompense to an employer who is faced with a period of low productivity from the labour he recruits locally. This payment will be made by the Board of Trade as part of any general financial arrangement made with a firm in the removal and settlement. We should, of course, keep in touch with the Ministry of Labour in dealing with this matter.

I would make it clear that the financial assistance envisaged in this Bill is not intended to be continuing. There is no question of a permanent subsidy or subsidies running year after year to firms in order to assist them. If I may coin a phrase well known to hon. Gentlemen opposite, this is intended to be a "once for all" arrangement.

Mr. Frederick Willey (Sunderland, North)

Would my right hon. Friend explain to the House—because it is puzzling some of us—why the Development Area Treasury Advisory Committee procedure could not have been followed in making grants in cases such as this?

Mr. Wilson

We did consider that, but we thought it right not to have to bring the whole machinery into operation but to give a grant direct, subject to the approval of the Treasury, in an individual case. Very often a firm can make a case, but it might be proved that additional expense would be involved.

I am sure the House will agree that this Bill is necessary and desirable. I am sure the House, while feeling great satisfaction with what has been achieved—satisfaction which all can share because of the contribution of all parties—at the same time must feel concern about the problem in some of the areas I have mentioned. I am sure that the House will agree that any additional power for which the Government ask in order to solve this problem should be granted. We have not asked for any sweeping or revolutionary powers in this connection. If I knew of any sweeping or revolutionary powers that would solve the problem, I should probably have come along and asked for them.

It is easy to point to the gravity of the problem and much more difficult to suggest what additional powers the Government can take to solve it. The lines on which we are working are obviously the right ones. Nobody has disputed that. They have achieved great results, and the factories already going up will provide additional employment. The powers asked for in this Bill will help, in individual cases, to bring additional firms to these areas. I hope that in one or two major cases they will be firms which can offer a large amount of employment which might revolutionise the whole situation in the area to which they go. I therefore hope that the House will welcome this Bill and give it a Second Reading today.

Mr. Collick (Birkenhead)

Before my right hon. Friend sits down, can he tell the House whether under Clause 4 it is intended to put any restriction on the grant, or is it merely a matter for negotiation and agreement between the firm concerned and the Board of Trade?

Mr. Wilson

This is a question for negotiation and agreement between the Board of Trade and other Departments, including the Ministry of Labour, who are greatly concerned in any question of paying the cost of removal and resettlement of workers and dependants. So far there has been no decision as to any limit which will be applied, though of course the Treasury will have to approve each individual case. I have no doubt that this matter can be further elucidated during the Committee stage.

4.33 p.m.

Mr. Oliver Lyttelton (Aldershot)

If I might begin upon a slightly personal note, I should like to say that the subject of the distribution of industry is one which is very seldom out of my working thoughts. As President of the Board of Trade in the Conservative Government of 1945, after the Labour Ministers had left the Coalition Government, I asked my colleagues to give the Distribution of Industry Bill, as it then was, the highest Parliamentary priority so that it should get on the Statute Book before the General Election. I mention this fact because, from the speech of the President of the Board of Trade, some new Members of the House of Commons might think that the Act was passed by the Labour Government, and that any successes achieved under it were entirely to be attributed to their action. It is fair to say that.

I hasten to add that the original framework of the Bill was the work of the present Minister of Town and Country Planning when he was President of the Board of Trade in the Coalition Government. Nevertheless, I should like to remind new Members that that Bill was made into an Act by a Conservative Government when I was President of the Board of Trade. I have given the reasons why the Distribution of Industry Act was upon the Statute Book before the General Election. I wanted to get it through quickly at that time, because it is not an uncommon feature of new Governments that they find many pressing election pledges to fulfil and there is always a danger of delay.

Except for a word or two rather grudgingly given at the end of the right hon. Gentleman's speech, his remarks mainly consisted of expressions of considerable complacency about what has been done, and also of some self-congratulation. Whoever is able to put before the House figures concerning the development areas which show a very sharp fall in unemployment, can congratulate himself, as far as I am concerned, as much as he likes. I do not seek to apportion the credit in any way. Of course, it is highly satisfactory to everybody that there should have been these great falls in unemployment in these areas.

However, we must remember that comparisons of the efforts to solve the employment problem at a time of a world boom, are apt to be a little invidious when compared with efforts made in the same direction at the time of a world slump. That is a perfectly fair point. Most of the legislation dealing with these special areas was put on the Statute Book by Conservative Governments. I am sorry to have to mention this, but the President of the Board of Trade has given the Debate one of those Socialist twists—[Hon. MEMBERS: "No."] He has indeed, and he has made implications. He has used phrases like,. "murdered Jarrow." All people make mistakes. He made only a passing reference to the fact that the present Government have closed 173 pits. It is true that with the condition of insistent world demand it has been possible to place the men who were employed there mainly in other industries. I only hope that in another phase of the economic cycle all those men will continue in employment. I repeat it is not at all a good plan to try to make invidious comparisons between measures which have had to be applied in times of world slump with those which bring success in times of world boom.

I want to refer to the other aspect. which is that which is called by economists "structural unemployment." I must say that I think that is a singularly foolish terms. One can hardly imagine a phrase which conveys to the ordinary reader or listener less of what it really means. I suppose that by the words "structural unemployment" economists mean unemployment above the characteristic over the country because the product of a particular area is, perhaps, subject to foreign competition or because what is produced is no longer in the fashion, and so on.

By the words "structural unemployment" I mean unemployment which is fixed above the characteristic of the whole country at the time. This, of course, was one of the problems within the problem which faced the Governments before the war. The White Paper on the Distribution of Industry, published in October, 1948, said: The basic industries and the Development Areas were dependent to an abnormal extent upon export markets. These industries were coalmining, iron and steel, shipbuilding, marine engineering. certain other kinds of engineering and tinplate. This feature against the main background of unemployment—the structural unemployment—has been a very great source of anxiety to all Governments. I do not think that we should feel that that problem has been solved for ever, because not only may other areas be affected—in which case they can be put into the schedule provided by the principal Act—but also the shift in world demand and increasing competition may again bring structural unemployment into the areas where we can now point to full employment. In this matter we must be unceasingly vigilant, and I think everybody in the House will agree with that.

I should like to refer to the Special Areas Act, 1934, because I think it brings the picture into proper perspective. Under that Act, about £25 million was spent in the five years from 1934 to 1939, and, if we adjust the purchasing power of money, that is strictly comparable to the £50 million which I think has been spent by the President of the Board of Trade in the period between 1945 and 1950. Of course, there was also the Special Areas Reconstruction Association, and all hon. Members will remember the work done by the late Lord Portal in these areas and also the assistance which Lord Nuffield gave in what I might call special types of finance, in which the Treasury cannot, did not, or was unaccustomed to deal. I want to put these facts before the House and remind hon. Members that the Labour Government of 1929–31 found very great difficulty in trying to resolve this very obdurate problem at that time.

Mr. Ellis Smith (Stoke-on-Trent, South)

Can we get these things correct? I understood my right hon. Friend to say that £93 million had been spent since 1945.

Mr. Lyttelton

The President will correct me if I am wrong, but much more than £50 million was spent by the private industrialists in these areas. Am I not right?

Mr. H. Wilson

The total amount spent on all the factories, and there are 1,300 of them, is £92 million. Of the completed factories, 480 have been completed at Government expense, involving £20 million. A number of uncompleted factories have also involved Government expense.

Mr. Lyttelton

There is really no confusion. The £93 million is the total amount of money spent, not by the Government alone, but the total of all the money spent. I think I am putting it too high when I say that the Government expenditure was £50 million, even when the factories are complete.

Mr. Wilson

These figures exclude land.

Mr. Lyttelton

Yes, the figures exclude land.

I want to say, on this point, that I agree with the President when he declines, as far as possible, to use compulsory powers in this matter of the distribution of industry. At the time when I was at the Board of Trade, in 1945, I took the view, and I have not gone back on it since then, that there was a unique opportunity open to the Government and industry, working together, to steer industries into the development areas or into other desirable locations. The position that arose immediately after the war gave us numerous opportunities. The President must not mind my having interrupted him on the subject of Government contracts, because we must get this matter into perspective. It is very undesirable that damage should be done to other areas, where full employment may be hanging in the balance, by undue—I repeat, undue—favours being given to the development areas. That is the reason why I interrupted the right hon. Gentleman in his speech. We must be very careful not to damage other established industries, but, consistently with that point, I agree that we should try to get work into these areas.

Let us look for a moment at the situation when the war finished. Many of our existing plants had been worked to death, and it is no exaggeration to say that. The production of certain industries was suppressed altogether, that of others was stimulated, and, at the same time, only the barest maintenance had been allowed in the interests of the war, while expansion to peace-time markets was rigorously suppressed all through the war by the Coalition Government. The export trade of the country had been smashed by two-thirds as a matter of policy, and very destructive forces had been at work, notably the President of the Board of Trade himself, who had concentrated many industries into designated plants and had shut down undesignated plants in order to make labour forces available to make weapons of destruction or to fill the ranks of the Armed Forces. That is what happened on the production side.

On the consumption side, it did not require any very great business genius to realise that, when the shooting finished, there would be years of insistent demand and that our industrial capacity, changed, distorted and destroyed as it had been, would prove much too low to cope with the flood of inquiries which would press into this country from every side. I remember saying at the time, when I was at the Board of Trade, that no more acute famine than that in textiles had ever been known in the history of the business, and I always pooh-poohed the argument by well-known statisticians—and the President of the Board of Trade should not be included among them in this context—that it would take 11 years to work off the surplus stocks of wool. This famine in textiles went over all the world.

Current production was far below current demand, and there were no stocks on which to fall back right across Europe, or in North America or India. Almost the same situation existed with regard to woollen textiles and many other industries. I only give this illustration to show that, over the whole range of manufacture, it was obvious to anyone who had studied these problems, even in the most cursory way, that we should have to have new industries, re-equip our old ones and put down new plant.

These were the reasons why, in the Coalition Government White Paper on Full Employment, use was made of the words which have been quoted in another context, but of which I would remind the House. I am not now using them in the same context, but only pointing out the fluidity of the industrial situation. Let me make use of them again in this context: There will, however, be no problem of general unemployment in the years immediately after the end of the war in Europe. In this transition period, our problems, though no less difficult, will be different. It will be a period of shortages. Though there will be risk of unemployment due to the dislocation involved in the gradual change from war to peace, the total manpower available will be insufficient to satisfy the total demand for goods and services. There were unique opportunities for re-siting industries, and the right hon. Gentleman has given an account encouraging to every hon. Member in the House, of what has been done with the powers which the 1945 Act conferred upon him. That will give every satisfaction, and my own satisfaction is only blurred by the fact that I do not believe that the problem has yet been solved, but think that we have to be ceaselessly vigilant if it is not to recur. I believe that to use compulsory powers is undesirable except as a second line of defence. I want to ask the President whether the bureau which I set up at the Board of Trade, and which gave industrial information and facts about local resources and made them available to industrialists has been kept in being? If not, I would like to ask that it should be reconstituted.

Mr. Wilson

I can assure the right hon. Gentleman that, not only has it been maintained, but it has been expanded, and that there is now a similar bureau, available in every region, by means of which industrialists can find out what they want to know.

Mr. Lyttelton

I am delighted to hear that this infant of mine is now so lusty. I think it serves a very good purpose, because it makes available to our industrialists information which it would be difficult for them to obtain if they had to collect it themselves, and, in the long run, it greatly helps the re-siting of industry in these areas.

It is necessary to say that the distribution of industry is an extremely complicated and delicate subject, and that we might quite easily do a great deal of damage by taking too rough-and-ready a view about it. I think that, first of all, the simplest part of a problem, and even that which is by no means simple, is that in regard to places where there is actual unemployment at this moment, such as on Merseyside or Clydeside. I think it is quite a straightforward proposition to found industry and build factories which will absorb that particular unemployment and which will give work to those who cannot find it for the moment in those areas. The only thing that we have to be very careful to do is to try, as far as possible, to select the type of industry to which the genius, aptitude, training, or bent of the population in these particular parts naturally fit them. That is not always quite an easy business.

I think it is quite straightforward—although complicated problems do arise—to try and put industries which absorb female labour in areas where female labour has not hitherto been very much used. I have had some very encouraging personal experiences in the last four or five years in this connection. I have been concerned with the establishment of a radio valve factory in Sunderland which now employs some 2,000 girls. We will not find, either here or anywhere else, girls who are more readily adaptable to learning a new craft, who take to it with such enthusiasm, or who provide a force of such cheerful workers. The same applies to a factory with which I am connected in Motherwell, where we have started the production of electric meters and X-ray equipment.

These cases are perfectly simple and straight-forward examples of how the development areas can be helped. In both cases of which I am speaking, there was very little light industry in the area, and there was a large force of girl labour to be drawn upon. Those girls are doing a splendid job today. That is only a small experience of my own, and I am only dragging in a personal reminiscence in order to tell the House that one cannot look anywhere for more intelligent and more quickly adaptable girls than on the north-east coast and in the Glasgow areas. Therefore, I do not feel that that sector of the problem is quite so difficult. But where the real difficulties begin is where there is already fairly full employment in an area, and where we wish to diversify it.

I wish to say right away that I regard diversification as an object in itself. But in any case we have to be careful—I think mistakes have been made, but I am not saying this in any critical spirit—that we do not put down industries in an area where employment is high and where, by so doing, it would merely unbalance the labour situation and cause a tug away from the vital industries—which are often heavy ones—towards the light industries. At this stage of our capital investment programme we cannot afford to provide the industrial population with two sets of equipment, the one being the sort of subsidiary set which they could use if their main industry suffered from depression. Therefore, it is a particularly delicate matter to try to introduce diversification into a heavy industry area where, perhaps, we have not already the full amount of necessary labour available for the productions of that vital industry.

I think that some of the warnings which I issued in 1945 have, perhaps, been overzealously followed, because we all thought—this is not a party matter—that we should be very careful in South Wales to try to set up industries which principally employ female labour, as, otherwise, we should be making an unnecessary tug upon the vital industries. If my information is correct, there would be some argument for saying that that has been overdone, and that now rather more factories are required for male labour. Perhaps we have gone too far in the direction of setting up industries employing only female labour. I hope that whoever replies to this Debate will devote a short part of his speech to that particular aspect of the subject.

I will now turn for a short while to the Bill. I need hardly assure the President of the Board of Trade that its powers seem to us to be desirable, and that we shall not give him any trouble, except on small matters of detail, during its passage through this House. I do not want to raise any Committee points this afternoon, but there are three points upon which I shall just touch. The first is that under Clause 1 the Board of Trade can acquire industrial buildings and are only barred from doing so if it is shown to the satisfaction of the Board that certain conditions—set out at the top of page 2—are fulfilled.

I think this is the wrong way round, and that the Board of Trade should provide some safeguard. The Clause ought either to be drawn so that the Board of Trade has to produce evidence to show that the industrial buildings are not used, and are not likely to be used, within three months, or that there should be some form of appeal to a body outside the Board of Trade. Generally speaking, we think it undesirable that a Government Department should be advocate and judge in its own cause. It is not a large point, and I think that very little alteration of the Clause would satisfy me.

Then I am not quite happy about the new powers for housing which are asked for. We recognise at once, of course, the tied house principle to which the Government object so strongly in other contexts, though they approve it in this, but the Board of Trade are taking central powers over housing at a time when the local authorities have ample powers of their own. This gives me the opportunity of saying that it is my experience that in these development areas the local authorities have co-operated in the very fullest manner. That is my universal experience, and I have considerable experience in the matter. Indeed, I am a little doubtful whether these central housing powers are really necessary, but they may be for the key workers and for the managements. I hope that they will be rarely used, because all hon. Members now know that in industrial areas there are many cases where the only people who can afford to live in council houses are the key workers or those in the managerial class, and that the workers who cannot afford to live in them have to subsidise those houses in the rates. This is a sort of social service of which none of us, least of all hon. Members opposite, approve very much, and we do not want to see it perpetuated by large subsidies for this type of housing.

There is a third point I wish to mention briefly. I think the President of the Board of Trade has already given me nearly all the assurances I want. The wording of Clause 3 has given rise to some anxiety that the Board of Trade could continue to subsidise operations carried on at a loss because the location of the industry had turned out to be such as to load the industry with, for example, undesirable transport costs. Personally, I do not read the Clause in that sense, but I think it would be better to introduce one or two words into it to make still clearer the intention which I understood from the right hon. Gentleman this afternoon, namely, that this power would be used only in exceptional circumstances, and only for dealing with the establishment or the transfer of an industry.

We support the Bill and hope that it will make a contribution to dealing with what will always remain a serious problem. We shall never be able to put paid to this account; at no time can one sleep upon this matter. I believe that all modern industrial thought agrees that diversification is an end in itself, and perhaps the greatest living example of the value of diversification is to be found in the City of Birmingham. I believe it is true to say that the incidence of unemployment during the time of the world slump fell less hardly on Birmingham, with its almost myriad industries, than upon almost any other city of comparable size in this country or in the United States of America.

I will conclude by saying that just as in the banking system of our own country branch banking has turned out to be a very great source of strength—because as one industry is depressed another may be prosperous—and just as the absence of branch banking in the United States was one of the causes of weakness in the American banking system, so, also, in industry, if we get diversification we are likely to be able to spread the risks of changing demand and fashion and not have to pay for these changes in terms of human suffering.

I think we should all agree that diversification is an end in itself. But it must be pursued in such a way, and with such wisdom and sobriety, that the existing industries outside the development areas, upon which the bulk of the employment of our country depends, are not damaged by artificial measures and that we do not seek to grow exotic flowers in a soil where they cannot hope to flourish. While recognising these dangers, we should do our best to prevent districts from becoming too dependent upon one industry and to embroider and diversify the pattern of the industries they carry on.

5.0 p.m.

Lady Megan Lloyd George (Anglesey)

I have no desire to enter into a controversy with the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) about the history of the development areas between the wars. The facts are too well established in the minds of the people of this country for us to need any further elucidation. If I may say so, the record of his party between the two wars has not yet been lived down. I hope I have shown myself to be sufficiently non-controversial on that matter.

This Bill is one of a long succession of Measures brought before this House in the last 20 years to deal with development areas in this country. I think we can say that the policy of building factories and steering industries into these areas has been successful up to a point. This afternoon, the President of the Board of Trade has given us the number of factories set up and figures of the employment given since 1945. No one on any side of the House would wish to minimise the efforts made and the success that has been achieved. He told us that 200,000 new jobs had been provided in these factories. On the face of it that sounds quite a good figure, but when we measure it against the background of the problem in the special areas it is not nearly as good as it looks at first sight.

The fact remains that, although much has been done, a good deal still remains to be done. This Bill has to be measured against the unemployment which still exists in these districts. The percentage of unemployment is still higher in all these areas than the average for the rest of the country. In Scotland it is 3.4, in the Northern Region 3.1 and in Wales, where the problem seems more intractable than anywhere else, 4.2 per cent. There are still 39,000 people out of work in the valleys of Wales. About 12,000 of them are disabled miners for whom special provision is being made and will have to be made. This is the position in the development areas at a time when we have full employment in this country. This is the position when we have a shortage of skilled miners, when we are unable to reach the manpower target for the mines, and at a time when we need to produce more and more coal not only for export but for our own industrial purposes.

These are fair weather conditions, as the right hon. Gentleman the Member for Aldershot pointed out in his speech. But we do not know how long present conditions will continue. It was only last week that miners' leaders of 12 West European countries met in Marseilles and one of the most urgent matters on their agenda was to urge international action to avert a coal slump. They were greatly concerned at the report of the Economic Commission for Europe, which showed that Europe, as a whole, had the greatest coal glut since 1930, although there are certain countries which still have a shortage. The picture may be overdrawn, the figures may be exaggerated, but we are certainly moving towards that position rather than away from it. We are moving away from fair weather conditions, and we have to remember that most of these development areas are dependent upon coal.

To begin with, therefore, we have to consider this Bill against that background But there is an additional reason why we should treat this question as a matter of urgency. If there is another recession, another slump, these very areas will be the first to be submerged. They will be the first to feel the full tide of unemployment. That is one of the reasons why we should drive on, without any delay, with the diversification of industries in these areas. The migration which has taken place from these areas in past years also makes it a question of extreme urgency. Six hundred thousand people moved from Scotland into England.

Mr. Osborne

That is nothing new.

Lady Megan Lloyd George

That is nothing new, but it has never been carried through on such a scale before and it has never been compulsory migration. The Scots migrate of their own accord. They have migratory instincts, sometimes to our cost and sometimes to our advantage as a country and a Commonwealth. We must acknowledge our debt in that respect not only to the Scots but to other Celts.

Something like 500,000 people left Wales in the years between the wars. The significant fact is that they are still migrating from Wales at the annual rate of 7,000. The trend has been arrested, and we are glad it has, but it certainly has not been stopped. This is a very serious business for the development areas of Wales because it has meant, and still means, that the virile young blood is leaving the Principality. That is true also of Scotland. There is a feeling in Wales that this aspect of the matter is not sufficiently appreciated in Whitehall. It is one of the matters which adds great force to the growing demand in the Principality that we should control our own affairs.

These young people will continue to leave the development areas because they are sceptical. The impressionable years of their lives were spent in the atmosphere of a depressed and decaying area, which South Wales then was, and they are frightened. They say, "We are not going to stay here," not because they would not prefer to remain in their native country and find work in the valleys in which they have been born and bred, but because they are afraid of what the future may bring. They are afraid that they too, like their fathers, may be trapped in an unemployment area. Is this Bill going to give those people in this and other development areas the confidence to stay there and build their lives there? I ask the President of the Board of Trade whether he really thinks that this Bill will provide sufficient inducement to industrialists to move into these areas? Will it achieve the object which I am certain hon. Members in all parts of the House have at heart?

I think we can measure to a large extent the scope of this Bill by its financial provisions. It is true that the President of the Board of Trade has said that no firm figure was put into the Bill but that it is anticipated that £100,000 will be spent in 1950–51. That is to be divided between all the development areas in the country. Does he really think that that will be adequate to meet their needs and to create conditions which will restore confidence to the people in those areas? I cannot believe that it will provide all these inducements, all the finance to purchase land, to assist industrialists, to give grants towards the cost of moving industries from more prosperous areas, and give grants to housing associations. The finance provided by this Bill will not cover all those requirements. It is not adequate for the purposes which the right hon. Gentleman sincerely has in mind.

The right hon. Gentleman raised a point about assisting industries to remain in the development areas. I hope very much that he will give us more information on that point, or perhaps the Parliamentary Secretary will do so. I hope we shall hear more about the steps to be taken to secure contracts for firms in those areas. After all, it is one thing to establish an industry in an unemployment area, but it is another thing to keep it going and make it prosperous so that it may continue to give employment. We all know of industries that have failed for lack of contracts in these areas, and we would therefore like to know a great deal more about the practical measures which the Government are going to take not only to steer industries but to steer contracts into those areas.

We on these benches have felt for a long time that this policy of development areas, which selects certain parts of the country for intensive industrialisation and for special treatment, is far too rigid, too arbitrary and too exclusive. The hon. Member for Portsmouth, West (Brigadier Clarke) interrupted the President of the Board of Trade earlier in the Debate and raised the question of Portsmouth. He asked upon what basis the development areas were selected. We know the main conditions that must be fulfilled. First of all, there is the high rate of unemployment. But we do not know bow high that rate has got to be.

There are areas, certainly in my constituency, and, I have no doubt, in constituencies of other hon. Members, where the rate of unemployment was at one time higher than it was in some of the worst distressed areas in this country. I have a town in my own constituency, Holy-head, where the rate of unemployment touched 40 per cent. at one time. I am glad to say that things are better there now. Members in many parts of the House have areas in their constituencies where the rate of unemployment is today higher than the rate inside the development areas.

Could the right hon. Gentleman or the Parliamentary Secretary define more clearly why some areas are included and others are excluded? It may be said that it is because a particular district is dependent upon one industry and that industry is in a state of depression. There are many hon. Members, of whom I am one, who have got areas in their constituencies that would qualify under that heading as well for special treatment, but they are not included in the schedule.

The whole of this problem must be considered against a far wider national background. It is no good our continuing to put a ring fence round certain areas in the country. If we continue to do that we shall run the grave risk of drawing people in from the countryside to the development areas, and in fact we shall accentuate the problem and aggravate rural depopulation. That is a very serious problem. When we consider this Bill we not only have to take into account those areas which are at present unemployment areas, but we also have to consider the action which we shall take to prevent other areas from becoming unemployment areas.

I should like in passing to make reference to those market towns of which we all know in various parts of the country, which are becoming dead ends as far as the provision of employment is concerned. I have four in my constituency. I will not mention them all, but the President of the Board of Trade knows them well. He can pronounce some of them, and others he cannot. There are Amlwch Llangefni, Beaumaris, and this is one which I defy him to pronounce—Llanerchymedd. There is the market town of Dolgelly which the right hon. Gentleman knows well. There is the small town to which he referred in his speech when he alluded to the disabled workers in the quarry district of Blaenau Ffestiniog. Those people have been promised assistance, but not a single stone of the factory which it was undertaken to provide has been laid. All these places had small industries in the old days, but they have not now. There is no doubt that the development area policy does not attempt to cope with this problem, and it is one which must be taken into consideration.

When the President of the Board of Trade was speaking about schemes to employ the disabled quarrymen in North Wales, he was referring to the admirable Development Act of 1909 under which these men are to be provided for. The year 1909 was a very good vintage year for legislation, although right hon. and hon. Members above the Gangway sometimes found it a bit "heady." I would commend that Act to the President of the Board of Trade. It was passed by a Liberal Chancellor of the Exchequer. Full use has not been made of that Act to provide for these areas which are in danger of becoming unemployment areas—

Mr. Deputy-Speaker (Major Milner)

I think the noble Lady appreciates that this Bill is somewhat restricted, particularly so by the Money Resolution which will be considered in Committee. It is not permissible to argue that other areas should or might be included in the provisions of this Bill.

Mr. Snow

Further to that point of Order. Before you came into the Chamber, Mr. Deputy-Speaker, I raised that point with Mr. Speaker. At that time he said he had not been listening very carefully and that he would like to hear the course of the Debate before he gave a Ruling. Subsequently I had a word with him—and I do not know whether I shall be in Order in mentioning it—and he said that he thought that as the Bill makes reference on the last page to the principal Act, then by and large, it being Second Reading, we might introduce other matters.

Mr. H. Wilson

I feel there is some argument for going rather wide, from this point of view: the Bill gives the power which can be applied to development areas. At any moment this House, together with the efforts of another place, can add, for instance, the areas which the hon. Lady mentioned to the Schedule of development areas. That being so, I should have thought it was desirable to consider whether existing powers, which can be used for those areas, are adequate.

Mr. Deputy-Speaker

I am not clear what the intervention by the right hon. Gentleman indicated, but having listened to the Debate, it is quite clear to me that this Bill is in the main restricted to further provision for existing development areas. It may be proper to make a passing reference to other matters, but it would not be proper to go into detail, as the hon. Lady, if she will forgive me for saying so, rather seemed to be doing.

Sir Jocelyn Lucas (Portsmouth, South)

I also had a word with Mr. Speaker on the matter and I asked him whether it would be in Order to raise the question of the inclusion of Portsmouth in the development areas. I understood him to say that there would be a certain latitude.

Mr. Deputy-Speaker

It all depends on how much latitude.

Lady Megan Lloyd George

I do not wish to contravene your Ruling, Mr. Deputy-Speaker. It seemed to me that as reference was made to the principal Act, and as in that Act it was perfectly competent to take certain areas out of the Schedule and to include other areas previously not in the Schedule, then it would be competent to discuss areas which might be included, and where higher unemployment exists. I shall not go into any detail, however. We agree that in the main priority must be given to all those areas which suffered chronic unemployment between the two wars and which still have a high rate, but—and this is the point I should like the President of the Board of Trade to consider—the moment has come when we must look at the picture of the country as a whole. If we are to have a balanced economy as between one area and another and as between town and country, we must have a coherent plan; and I believe that only by such a development can we hope to prevent people being driven from their homes in the way that has occurred in the past—driven from their counties and, above all, driven from their native country.

5.23 p.m.

Mr. Ellis Smith (Stoke-on-Trent, South)

My main purpose in speaking in this Debate on the Second Reading is to appeal for these facilities to be applied to other areas, to give credit where it is due, and also to deal with the background, as the President of the Board of Trade dealt with it in introducing the Bill. For many years I advocated that action should be taken first of all in the special areas and then in the distressed areas. As a result of the improved policy and of the action which has been taken, those areas are now known as the development areas.

In my view, credit should be given where it is due, to those who were responsible for the new policy and to those who applied it. In particular I want to give credit this afternoon to the conscientious civil servants who worked so hard, without a word being said to their credit for many years, in applying the various special areas reports, then the distressed area reports and then the development area policy. Great credit is due to the planning department of the Board of Trade, and any hon. Member who has not seen the planning department should certainly go to see it, because it is an example of an excellent policy being applied.

The areas with which we are mainly concerned are South Wales, West Durham, West Cumberland, parts of Scotland, and now Liverpool; and in my view there should also be included North Staffs and parts of Lancashire. In introducing the Bill the President of the Board of Trade gave some very encouraging figures. I understood him to say that approximately 1,000 new factories have been completed since 1945, that 1,359 were to be constructed and that 481 were Government-financed schemes, representing a total of approximate expenditure in the development areas since 1945 of £92 million. Since 1945 half of the factories which have been built in this country have been built in the development areas.

My right hon. Friend also spoke about the increasing number of disabled miners and the need to provide for them. He said that in these areas in 1932 unemployment was 932,000, whereas at the present time it is 144,500. While he was giving these figures I recalled that the pre-war Opposition in this House always gave credit where it was due. Surely the time has arrived when in this House also, when figures of this character are given, at least credit should be given where it is due. The state of those areas was mainly the result of generations of neglect of the mining industries, of the concentration of industry in those areas and of the loss of our markets. In the main it is again the sad story of the treatment of the mining industry.

That is 10 years ago, but, as the noble Lady the Member for Anglesey (Lady Megan Lloyd George) said, we now face a new situation. During the past 10 years development has taken place at a rate quicker than ever before in the history of the world, making pre-war conceptions out of date. We are in the 20th century, a century which demands national planning and large-scale organisation. The fundamental change in the development areas has been brought about, first of all by the many special area reports, secondly by the six years of war, and thirdly by the policy of the Labour Government and by their actions. We are now fighting for our very lives in this country and the introduction of a Bill such as this proves how out of date is our approach to these problems.

Our people throughout the country are responding magnificently to our needs. We face a new economic situation and changed relations throughout the world, and we should be concentrating all our attention and all our resources upon, and should be legislating for, those industries which are providing the country with the best and the most immediate returns. If the House agrees with that reasoning, then the industries which, in my opinion, should be receiving the consideration of this House are in this order: first, coal; second, engineering; third, steel; and then cotton, pottery, transport and power. We should be legislating and then applying our policy in a planned way to enable us to obtain the maximum output from these industries.

Mr. Osborne

What about agriculture?

Mr. Ellis Smith

Agriculture is very important. Millions of capital have been sunk in agriculture during the last five years. If the same amount of capital had been sunk in the industries I have been speaking about, we should have got a bigger and better return from the industries. Before the war millions of capital were spent in a development area, but that development area in those days was London and the south.

I am now pleading for attention to be given to applying the facilities contained in this Bill to the industries of North Staffordshire in particular. We require a 1950 conception of our needs, and not a 1930 conception such as lies behind the introduction of this limited Bill. Before the war, as the noble Lady has pointed out, in many parts of the House pleas were made for areas to be treated as what were known then as "distressed" areas. One was Kidsgrove, which had one of the largest percentages of unemployed of any part of the country. Therefore, today I am pleading that these facilities should be applied to the pottery industry in particular.

This industry is making a mighty contribution to dollar earnings and to supplying the needs of the country. This industry requires reconstruction, encouragement, and modernisation. Of its raw materials, 90 per cent. are obtained at home. The whole world market lies at our feet. Before the war we had competitors throughout the world. Relatively speaking, we have now no competitors at all, and we are producing the finest pottery in the world, which is the admiration of all who see it.

Before the war 300 factories in this area employed 60,000 people. They are still too small units of production, and it is for this reason that I am suggesting that the facilities contained in this Bill should be applied to extending and expanding those small units. We require more enterprise and modernisation in the industries that are making the mightiest contribution to Britain's economic recovery, and, therefore, I am asking that, when this Bill becomes an Act of Parliament, the facilities should immediately be applied in the North Staffordshire area in order that we can plan and expand; build 10 modern large factories within four years, and build 20 large modern factories within six years in and around these areas, where the most highly skilled people of the kind have lived and developed one generation after another. I appeal to the President to call representatives of the industry together and to provide them with the facilities possible under the Bill, and to provide the capital to build the factories; and they will give the output.

We find as a result of an examination of a Return in the Vote Office that almost £12 million was spent on services in development areas in 1949, and £6,250,000 in 1950. I am appealing to the President that some of that expenditure should be in the North Staffordshire area. The President said that he was faced in several mining areas with a hard and growing core of disabled miners and others. Anyone who knows these cases must agree that they are amongst the hardest cases we are now faced with. It is the intention of the President, I understand, not only to apply his policy inside the development areas but where it is necessary, just as he has on Merseyside, and in certain other areas.

Therefore, I say that one of the areas most urgently requiring this kind of treatment is north Staffordshire where, as a result of the effects of the strata upon the miners, they are suffering from pneumoconiosis and other industrial diseases about which the right hon. Gentleman and the noble Lady have spoken already. I am appealing that the facilities contained in this Bill should be applied in that area also, in order that the disabled men may be trained, and so that we can also introduce more diversified industry. I plead that steps should be taken not only in the development areas, where we can give the credit that is due—

Mr. Deputy-Speaker

The hon. Gentleman is now in the process of arguing what it is not permissible to argue, as I indicated, on this Bill. It is quite permissible to argue that, if and when other development areas are added, the provisions of the Bill should be extended, or that they are or are not adequate to the purpose; but it is not permissible to plead for the inclusion of other specific areas amongst the other development areas at present existing.

Mr. Ellis Smith

I accept that, Mr. Deputy-Speaker. I listened very carefully to your Ruling, but with respect I suggest that it is in order to suggest that the facilities that are proposed in this Bill should be applied in places where the President deems it is necessary.

Mr. Deputy-Speaker

I am sorry to differ from the hon. Member, but the Bill is perfectly clear that the facilities and moneys to be made available are for the benefit of existing areas. It may be—I do not know—that there may be future development areas; but it is not permissible to plead, in effect, for the inclusion of other areas as development areas.

Mr. Ellis Smith

I am not doing that. I watched myself very carefully to keep in order. I am not pleading that other areas should be included. I should have liked to do so, but I reckoned that it would have been out of order. I am prepared to leave this matter now, but what I am asking is that the facilities contained in this Bill should be applied, within limits, to other centres where the President deems it necessary.

I want to say what a pleasure it was to sit here listening to the account of the concrete results of Labour's policy applied during the past five years—what a pleasure it was compared to what we had to listen to here between the wars. I would remind the House that before the war, while we were critical of other Governments, we always gave credit where it was due, and surely the time has arrived when the Opposition should also be prepared to give credit where it is due.

5.39 p.m.

Mr. Niall Macpherson (Dumfries)

If I understood your Ruling, Mr. Deputy-Speaker, it is that what we have to deal with here is not what areas should be development areas but what sort of powers the Government ought to have in regard to development areas. I think we have also to look at one other thing, and that is what the effect of the exercise of those powers will be not only upon the development areas but also upon the rest of the country. If every hon. Gentleman were to plead that his own particular area should be included amongst the development areas, then the whole country would be a development area.

I felt inclined to ask the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) when he was speaking and inviting his right hon. Friend to provide numerous factories in his area, whether he was prepared to provide the labour for them, or whether we were to have a situation in which each hon. Member would urge that his own area should become a development area, and draw labour in from other areas. One of the things we have to watch in considering this Bill is that the measures taken do not conflict with the needs of export industries. As has been said, we want to make certain that the export industries get the labour they require, and I am rather frightened that this Bill may have an adverse effect by preventing labour going where it is required in order that we may develop those industries which will be of the greatest advantage to our exports.

As I understand it, there are three main points in the Bill. In the first place, it is clear that in a development area new building should not be erected if existing industrial buildings are available for use. It is equally clear that industrial buildings should not be allowed to remain unoccupied, or under-occupied, if there is substantial unemployment in the area. The original Act only authorised the acquisition of land for the provision thereon of premises for meeting the requirements of industrial undertakings, or of means of access; but this Bill authorises acquisition not only of land but of premises, notwithstanding that no substantial adaptation of the buildings is necessary.

If I understand the position correctly, this would allow—and may be it is intended to allow—the acquisition of premises carrying on business which has proved uneconomic, for the purpose of carrying on the same business in the same premises. I should like whoever replies to answer this. Is it intended to take over premises in which a business has not been particularly well carried on, or, shall we say, has not been economically or successfully carried on, and then to run the same type of business there? If that is so, it will give rise to an entirely new aspect of the management of industrial areas. As I see it, it would enable the Government to take over even shipyards in the event of there being no substantial business in the shipyards, or no prospect of business developing there over a certain period of time. The House is entitled to know whether that is the intention of the Government. If it is, who will run those industries?

At the present time all that happens is that the Board of Trade manage the industrial estates through industrial estate companies, who in turn simply let the factories to private enterprise, and private enterprise carries on those undertakings with assistance from the Government. Is that now to change? Are we to have some different arrangement whereby, for example, some new Government-financed corporation may be formed to carry on the building of ships for which there may be no immediate demand, in order to keep the shipyards going? I am not saying that is right or wrong; but I am saying that the House is entitled to know what is the purpose behind this Bill.

There is another question which affects my constituency and which I should like answered. My constituency contains a small part of a development area. It is an area which is, in a sense, derelict—the village of Wanlockhead, adjoining the Lanarkshire village of Leadhills. The area contains lead mines which, according to the report on mineral development, are not wholly worked out. It would appear that while under existing legislation that area could have been worked, the premises on it could not have been taken over by the Industrial Estate Company. Is that the sort of case which the right hon. Gentleman had in view in introducing this Bill? Here is an area which is entirely a one-industry area, and that industry has not been working for some time? Is it part of the purpose of this Bill to enable that industry to be got going again? There is adjoining this area a mining area where there are virtually no ancillary industries. It is true that hosiery manufacturers from Dumfries have come up and established small branch industries there, but there is no supporting industry. That is also a question which will need attention, and for my part I cannot see that this Bill will contribute to any great extent in helping to solve the problem.

The general position of structural employment, to which reference has been made, is extremely important from this angle. There are occasions when an industry is adversely affected by temporary conditions, and there is no doubt that it would be wise to help it. If it had been badly managed there would be something to be said for seeing that it was kept going under new management, though the problem there is by no means confined to development areas. The danger is that there will be a temptation to keep alive an industry which is an anachronism, or which, as a result of permanently changed circumstances, should for economic reasons be discontinued or sited elsewhere. For that we shall want safeguarding, and I do not see that there are sufficient safeguards in the Bill. It seems to be left entirely to the discretion of the Board of Trade. We want to ensure that this power of taking over premises is used not only fairly and justly, but wisely and economically.

That brings me to the second point in the grants to encourage industrial undertakings to transfer to development areas. In the same Clause there is provision for grants to housing associations. It seems to me that the whole problem of the development area, particularly in the postwar period, is that there are a lot of people with houses who do not want to go elsewhere for work. This Bill makes provision for grants to housing associations. Are those grants to be only for the key workers mentioned in the following Clause, or are they to be for the purpose of building houses for the workers in those industries as a whole? If it is to be the latter, there is not the slightest doubt that the tendency will be for labour to be drawn from non-development areas into the development areas in order to occupy the houses provided.

The noble Lady the Member for Anglesey (Lady Megan Lloyd George) referred to this question and indicated that it would mean, to a large extent, the further depopulation of rural areas. At the present time there are many men and women with work but with no houses, and obviously, if in these areas there are houses and work to go with them, the tendency will be for people to be attracted to that place. Let me give a concrete example from my own constituency. In Dumfries there is at present a very great shortage of labour, and the prospect of an even greater shortage. Yet even for the existing labour force there is a tremendous shortage of houses.

That must apply almost all over the country, and if we are to give powers under this Bill to the industrial estate companies or to housing associations to borrow or obtain grants for the building of houses we shall draw labour away from other industries which are already short of labour and attract them to the development areas. It will be said, "Of course, in that case, you can transport the whole of the industry or part of the industry."

Mr. Frederick Willey (Sunderland, North)

Surely, the hon. Gentleman agrees that it would be better to provide houses for perhaps half-a-dozen key workers, which would ensure work for, possibly hundreds, rather than to prevent the hundreds from working for want of the key workers essential to that particular form of production?

Mr. Macpherson

I absolutely agree, and that was why I asked whether the purpose of this Bill was to provide houses only for the key workers or houses for the workers at large; that is by no means clear from the drafting of this Clause. I agree that we must provide houses for key workers if we are to get new industries going, but I do not think that it is desirable to provide houses in this exceptional way for other workers as well, and so denude the rest of the country of labour.

I come to my last point, and that is the transfer of whole factories or parts of factories to the development areas. In the past, there has been a very considerable pressure exercised on industrialists to go to the development areas. I do not see how this pressure can be exercised under this Clause in the future. It is very difficult to exercise pressure to transfer existing manufacturing activities, unless the policy is also to denude the present factories of labour and so force them to move. I hope that the hon. Gentleman will deal with that. It is one thing to give facilities and grants to encourage industrialists to transfer part of their activities to the development areas, but that does involve great difficulties in other respects. The President of the Board of Trade will not be in the same advantageous position as he was when a manufacturer came to him and said, "I want to start up an entirely new industry." In that case, he was more or less directed to a particular site.

It is not going to be anything like so easy in regard to transfers. I hope that the hon. Gentleman will be more specific than his right hon. Friend was in telling the House how he proposes to attack that particular problem and arrange for the transfer of industry from one part of the country, where in many cases there may be a shortage of labour, to the development areas, because it will not be easy to persuade it to move unless the shortage of labour is so acute as to make it practically impossible for it to carry on where it is.

5.54 p.m.

Mr. J. Hall (Gateshead)

This is the first time I have had the honour to address this House, and I feel sure, Mr. Deputy-Speaker, that you and other hon. Members will give me the same indulgence as has been accorded to other new Members when making their maiden speeches.

I have been tempted to take part in this Debate because I have seen the result of the Distribution of Industries Act in an area of my constituency where more than 30,000 people have become employed in the neighbouring trading estate, many thousands of whom have become employed within the last 18 months. It as calculated that £7 million per year is paid out in wages on that trading estate, and a substantial amount of that money is spent in my constituency of Gateshead. That adds to the prosperity of the town. In the days of the depression, one-third of the bread-winners of this town were out of work, and most of the shopkeepers and business people were driven from business because of the lack of spending power of the unemployed population.

While we have reason for satisfaction at the moment in making comparison with the pre-war period, we still think that there is room for improvement because there is still a higher percentage of unemployed in that area than there is in other parts of the country. There is also the fear of recession in the shipbuilding and ship repairing industry, and we naturally seek to improve our position against any tendency of further unemployment. For these reasons, we welcome the Bill. It does provide facilities to extend industrial undertakings in the development areas.

Hon. Members opposite may be disposed to dislike certain aspects of the Bill, such as its compulsory powers. They would probably prefer the free play of private enterprise, but no one can deny that private enterprise did fail to provide employment in the distressed areas before the war. It has been the Distribution of Industries Act and the plans of the Government since that have brought much employment to the development areas. While we have a high proportion of people employed in the basic industries, there is always the danger of a slump and unemployment on a large scale. If there is a decline in the heavy industries, we also see an abnormal rise in the rate of unemployment. Therefore, this Bill, in my opinion, is very essential. It is very essential to have facilities for the establishment of alternative industries.

I had the experience of finding that a new factory could not be started because of the difficulty of obtaining premises. I also have in mind the position of another employer who had to defer planning a new industry because he could not transfer his key workers through lack of houses. I think that we can welcome this Bill because it makes grants and loans to enable houses to be built in the development areas. I do not know whether it is the intention of the Minister to acquire premises in the shipyards. There are many ship repairers becoming redundant. Certainly, there is a need for alternative employment for such workers.

While there is this need for finding alternative employment for redundant ship repairers, it would never do to take them away from the scene of their trade. We do not want to lose sight of them. If there is to be alternative employment for ship repairers, we ought to have that alternative employment on the spot, and we should not make the mistake which was made before the war of allowing our skilled tradesmen to drift out of their employment and become lost because of going to other industries. Perhaps the Minister will tell the House whether the Bill is intended to extend the facilities to provide alternative employment in the shipyard itself. The Government have proved that the drawbacks connected with the development areas and alternative employment are non-existent. It was argued that markets would be inaccessible, that wages would be high and there would be great industrial discontent if firms were moved to the development areas. We have found that this is not true, and that there is a greater harmony existing in the development areas between employers and employees. There is no sign of any industrial unrest.

In my opinion, this Bill will give additional strength to the Distribution of Industries Act, 1945, making provision for factories to be sited in areas with only one or two basic industries, which has given new prospects of employment. In the height of the unemployment period, we found that in London there was only one-third of the unemployment to be found in districts with only one or two basic industries, such as mining and shipbuilding. This leads me to believe that the Government policy of encouraging new industries for the development areas is one of the surest safeguards against stagnation in these areas. I believe that this Bill is another step towards the realisation of full employment.

6.2 p.m.

Lieut.-Colonel Sir Cuthbert Headlam (Newcastle-upon-Tyne, North)

I should like to begin by congratulating the hon. Member for Gateshead (Mr. J. Hall) on his maiden speech. He comes from a town I know very well, and he spoke tonight with a knowledge of his subject and a deep appreciation of the difficulties with which that part of the world was faced in the past.

I wish to emphasise the importance of the matters that are dealt with in the Bill to the North-Eastern Area. I do not honestly think that the Bill does very much for us, or makes any change in the present administration; it merely extends the powers of the Board of Trade contained in the existing law. I cannot see that it bring any immediate help to a district which is beginning to feel the effects of unemployment. It does not relate its proposals to the scale of the problem which may be before us before long. It is true that six new firms were approved in the North-East in 1949, but with the possibility of some 30,000 shipyard workers being redundant in the course of the next year or two it does not seem that this is a sufficient increase in the development of the area.

People always forget that in the North-East Coast we are still dependent on basic heavy industries for our male labour, and cannot really be satisfied with industries that so often do not supply work for men. I have been personally associated with the bringing of new industries to the North-Eastern area for more years than I care to remember. I was one who strongly advocated the proposition in the period between the wars.

There is no doubt about it that the origin of all that development came from the party to which I belong. [HON. MEMBERS: "Oh!"] Members opposite must admit that to be the case. The more fair-minded of them have always maintained that we on this side of the House initiated the policy and that its development has been pursued by the Labour Party in the last five years. That is perfectly true, and I do not dispute it for one moment. I welcome the increased development in the North of England, but I resented the suggestion in the course of the General Election that we on this side of the House were entirely unmindful of the distress of the North of England in the past.

I wish to ask a question in regard to Clause 1 about the taking over of factories. I do not understand what it means, when it is stated that the Board of Trade is to have power to acquire land under Section 1 of the principal Act, and there is to be an extension of these powers to include industrial buildings not in substantial use for industrial purposes. I doubt whether there are any factories of this kind in the North-East Development Area, and certainly not in places like West Durham.

Another matter that is causing a great deal of uncertainty is how it is proposed under the Bill to bring new factories into the district more speedily than at the present time. We have found that it takes a long time to get factories going, and that the building of factories is not as quick as it ought to be. Is it intended to speed things up in any way under the Bill? If that is the case, the Bill will be doing a valuable piece of work. I welcome the Measure as the continuance of the policy on which we are all agreed. I cannot see, however, that much can be done speedily if only £100,000 is to be spent in the coming year.

The policy of the development areas has so far proved successful, but I am inclined to think that it is not now being utilised to the fullest advantage of the country as a whole. In this connection, I agree with what the hon. Member for Anglesey (Lady Megan Lloyd George) has said. I think the Bill will be welcomed by all industrialists in the North of England if more can be done to provide alternative employment for men than in the past. After all, it is a comparatively new thing in the North of England for women to go out to work. They no doubt benefit the household by increasing the amount of money coming in, though I remember very well in the early days how indignant miners were that their daughters were being paid more than themselves. What is required in the North of England, and on Tyneside in particular, is some alternative work for the shipbuilding people who are no longer required, and if any new firms can be brought into the area or new work can be developed in the shipbuilding yards, I should be happier about our ability to meet the difficulties when they come along.

6.10 p.m.

Mr. Frederick Wiley (Sunderland, North)

I listened with considerable interest to the speech of the right hon. and gallant Gentleman the Member for Newcastle-upon-Tyne, North (Sir C. Headlam). I thought at one stage he was going to tempt me to repeat many of the things I said during the Election but I was glad to notice that he finished on a moderate note with which I agreed. I am sorry that the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) has been obliged to leave the Chamber because I wanted to tell him how gratified my constituents in the Ediswan factory at Pallion will be when they learn what he said about them. Although I should perhaps add that I am happily confident that those constituents will, when it comes to the day, prefer to put their trust in the President of the Board of Trade and the present Front Bench, than in the Opposition. Quite rightly, most of the people in the development areas regard these questions as being essentially political questions. but I wanted to speak on rather a different note tonight.

I have a particular interest in the development areas, because I had the pleasure of being chairman of a subcommittee of the Select Committee on Estimates which reported on the administration of those areas. Re-reading that report is quite refreshing. Among our conclusions, for example, I find that we reported to the House that all factory building schemes should be planned sufficiently far ahead— Why did we say that they should be planned sufficiently far ahead?— to enable the Estate Companies to make bulk purchases of the requisite supplies of the basic materials. It seems that there are occasions when bulk purchase ceases to be a political question.

The major problem, as we saw it, was the administration of the development areas. We came to the conclusion that there were for all practical purposes only two alternatives. One was to place more direct responsibility upon the estate companies and the other was to transfer the whole of the administration to the Board of Trade. We came down on the side of the companies, and so did the Board of Trade. In their departmental reply, the Board of Trade indicated that they agreed that the administration should be simplified, and that it should not be done by transferring the administration to the Board of Trade.

My experience has been that the President of the Board of Trade has gone a very long way towards implementing that recommendation, and in my opinion he has succeeded in improving the administration by strengthening the character of the companies and by giving greater direct responsibility to them. It has not been an easy matter from the administration point of view. I believe that the worst possible relationship that can exist when it comes to the expenditure of public money in vast developments is the relationship between a Government Department and a managing agency. A lot of the difficulties in the groundnut scheme arose from the agency relationship between the Ministry of Food and the United Africa Company. There is an element in this relationship which persists regarding the administration of the development areas and I think we have now reached the stage where we could go a step further. I should like my right hon. Friend to consider this suggestion. We might bring the seven existing trading estate companies together and co-ordinate them within a national industrial board.

I am supported in that conclusion. In September of last year when he addressed the British Association, the full-time chairman of the North Eastern Trading Estates Company—I should like to say that he has done excellent work which is very much appreciated in the North-East—expressed the same point of view. If we took this step we would get a far better and clearer definition of responsibility than we have in the present set-up. I am sure every effort has been made to define this division of responsibility, but if we created a national board we would get a more clear cut definition of responsibility. We would get my right hon. Friend closer to the effective executive head within the administration, and, therefore, a clearer realisation of policy by those responsible for administering the trading estates.

I also—and this is a personal axe I am grinding because it was a point made by the Select Committee, whose report in this respect has not yet been implemented—think it would possibly provide a formula whereby we could resort to the block grant system for the development areas. The advantage of that is that it will ensure national planning, and I believe that we should have a large measure of national planning when it comes to a question of industrial location. What is particularly important at the present moment if we take this step is that it would lead to a good deal of simplification and economy of manpower. For the past year or so the trading estate companies more and more have become companies managing properties rather than companies responsible for the construction of factory premises. A good deal of overlapping could be avoided if we centralised the administration to some extent. I said to some extent because I think it is still necessary to retain the local element in the administration.

Mr. N. Macpherson

Is the hon. Gentleman suggesting the setting up of a corporation similar to those in the nationalised industries, and does he also suggest such control, for example, for the Highland area as well as for non-Scottish areas?

Mr. Willey

I shall come to that point in a moment. The final advantage would be that it would provide a more effective relationship with the industrialists seeking advice upon industrial location. It was after all the unanimous view of the Barlow Committee that a national authority to determine industrial location should be set up. Where the members of the Barlow Committee apparently differed was on the point raised by the hon. Member for Dumfries (Mr. N. Macpherson)—the question of function. I think we should bypass the question of function by setting up such a parent body to the seven trading estate companies as I have proposed and allow the functions to evolve with experience. If we concentrate first of all on economy in administration and a more effective and simple control, at a later stage we could decide whether the function of such a body should be enlarged. I do not think I have the ingenuity to bring such provisions within the scope of the present Bill, but I hope during its progress through the House my right hon. Friend will seriously consider this matter and see whether something can be done on this cardinal question of administration.

If we turn from administration to the development areas themselves, I believe we have got to change our attitude towards them and concentrate on particular industries and particular districts within the development areas. I can only speak from experience of my own development area. In our case, as my right hon. Friend has indicated, we must, in the first instance, concentrate upon the difficulties arising in the ship repair and shipbuilding industries. But if we look at the development area, what do we find? The North-East coast for all practical purposes is divided into three districts—the Tyne, the Wear, and the Tees, If we look at the unemployment figures we find that whereas the Tyne and the Wear have unemployment running at about 4 to 5 per cent.—in such places as Jarrow, it runs up to 7 per cent.—on the Tees unemployment is well below 2 per cent.

The working party set up by the Admiralty last year reported that in the ship repairing industry redundancy amounting to 2,300 could be expected by June of this year. They have discovered that that is an under-estimate. It is quite clear from the present figures that it is. A second working party has advised the Admiralty that a further 2,000 to 2,500 unemployed can be expected in the ship repairing industry by the end of the year or the beginning of 1951.

These are matters which anyone living in the area anticipated. We all knew that this would happen because we happen to live in a development area and we knew that the first serious recession would come in ship repairing. How have we prepared for it? How does this tally with the development that is taking place in the north-east development area? We find when we look at the industrial projects approved that as much work is being provided for men on the Tees as is being provided for men on the Tyne. That is not running in parallel course with the unemployment problem in the area. It is for that reason that I believe that my right hon. Friend the President of the Board of Trade will probably have to go further than he proposes to go in the Bill as it is at present drawn.

I think it is clear that if we break down the development area and look at the problems arising out of it, we may have to ask for further powers to ensure that industry is not only located within a development area but that it is steered to those parts where it will have the greatest social benefit. In fact, we have the position in part of my own development area where there are today—not tomorrow—more jobs than men. It seems to me, from such experience as I have had, that the present powers of persuasion are not sufficiently effective in persuading an industrialist to go to that part of the development area which may be less attractive than another part. The size of the problem can be demonstrated by one figure alone. If the north-east shipbuilding and heavy engineering industries were to return to the 1939 employment figure, which was a high pre-war level, we should have to find jobs for 30,000 men. This is a matter in which we cannot delay. We have to deal with it as early as possible.

In dealing with the problem, I have three suggestions to make to my right hon. Friend. We have to recognise that it is an extremely difficult problem to provide alternative work in the shipyards when space in those yards becomes redundant. However it can be done. On the Wear we already have a new firm in a shipyard which was sterilised before the war and was re-opened during the war and has since been closed. I believe that this problem should be tackled as far as possible with the greatest good will of the shipbuilding industry. We might do that by a formula which is already there. I understand that Shipbuilder's Securities, still take their levy from the shipbuilders. Discussions should be opened with Shipbuilders' Securities to see whether that money could be turned to a constructive use. It may need legislation, and if it does this is the opportunity. It would be as well to try to carry the shipbuilding industry in this experiment and it may be that the funds are there.

If we turn from the building side of the industry to the shipping industry, I would say that the shipping industry also has to contribute to a solution of the problem. Apart from alternative work we have to use every device possible to maintain stable working in the shipyards. To do that we should again try to get the good will of the industry and get the industry to establish a replacement fund so that there would be a fund available to provide for the orderly replacement of obsolescent shipping, and thereby provide a means to ensure steady orders for the builders.

Finally, coming closer to my right hon. Friend, I think it is clear that we are going out of one phase and into another, in development area policy. We should call a halt now to the present policy of building factories. Now we have to build specialised factories and, if necessary, integrated industrial units to cater for the particular skills of the workers who may become redundant. The present new factories have served a very useful purpose in the development areas, but we can now say that they have completed serving that purpose. If we are to provide work for redundant shipyard workers we must have specialised factories. That will produce a new problem. I do not know how we shall determine the rent of a factory built specially for a particular industry. We may have to change our rental policy. Moreover, the Government should go further and make it clear that if an industry is to expand in this country in the national interest then, all things being equal, it should expand only in a development area. Secondly, if it should be necessary to provide integrated industrial units in the development areas and if private enterprise does not respond, a State-sponsored non-profit making corporation should undertake the work.

I have gone rather wide, I am afraid, Mr. Deputy-Speaker, but I now want to come to the specific provisions of the Bill and to deal only with two points which are affected by what I have said. In the first place, I think the Bill makes adequate provision but perhaps, even though this may seem rather contradictory, unnecessary provision—regarding the utilisation of industrial buildings not in substantial use. I said "unnecessary" because I believe it is quite unnecessary in regard to the typical development area at the moment. On the north-east coast we only have two building projects, at the site work stage. They cover 20,000 feet, yet the North-Eastern Trading Estate Company manages 4½ million square feet. As far as the other areas are concerned, there is no new building in a similar condition of site work only. As far as future projects are concerned, we have only one in the planning stage. That is the position on the building side. That is why I say that all this is rather unnecessary at the moment.

Indeed on the building side, we should first of all reconsider the effect of the capital cuts upon the development areas and see whether it is necessary to prune so drastically our new building. I cannot make out a case at the moment, because when my right hon. Friend talks about premises not used, I would remind him that the Trading Estate Company has nine factories on its hand at present which are not used. We could dispose of them because, as the President of the Board of Trade knows, we have an active waiting list. The difficulty is that of getting the sponsorship of the production department. Therefore, I think that this provision in the Bill is at present largely unnecessary.

If we have new factory space available we shall not persuade industrialists to take other space which, in any case, I am told is not available. But even if it were available there would be difficulties. I know this problem is not easy, but we have to tackle it realistically and do one of two things. If we cannot persuade private enterprise, we shall have to set up a State-sponsored corporation which will endeavour to expand our dollar exports. The only alternative is to say that we cannot afford this waste and that we shall have to relax the insistence of the production departments on these rigid tests.

The other point I wished to raise was, the provision regarding the grants in respect of the expenses of transfer. I asked my right hon. Friend about D.A.T.A.C. because I should have thought this was a matter D.A.T.A.C. would have been advised to deal with. I accept the obvious conclusion that D.A.T.A.C. have not been so advised because it was thought that this should be the responsibility of the President of the Board of Trade. All this, however, does not avoid the difficulty of determining what the "exceptional circumstances" are. We want a much clearer definition of that than we have had so far. The matter is not even as simple as that. We must realise that this will upset a lot of the present tenants. We have at present the difficulty of revising rental policy, and the major difficulty is that of avoiding discriminating between tenants. That is bound to arise if we give assistance to some firms and not to others.

As my right hon. Friend said, it is only once for all. I should have preferred trying to tackle the problem in a way which has been suggested on other occasions. I should have liked an examination again of the possibility of having differential freight rates. The right hon. and gallant Member for Newcastle-upon-Tyne, North, will remember that before the war this was one of the matters very widely discussed regarding the depressed areas. It was felt that the areas were prejudiced as far as mass production went by being away from the markets and having to carry increased freight charges. I should have thought that it would have been far more attractive to the industrialists to provide a running subsidy and to say, "We will overcome the disadvantage you may feel in going to a new place for production."

Having said all that, let me say at once that the experience that I have had of the administration of the development areas has convinced me that all concerned, whether in the estate companies, whether departmental officials or whether outside, have worked very hard through the past five years. They have a lot to show. As my right hon. Friend said, those areas have been transformed. Most of us who live in those areas believe that that transformation is not without political significance.

6.32 p.m.

Mr. Kenneth Thompson (Liverpool, Walton)

I welcome the opportunity of speaking in this Debate and making my maiden incursion into the Debates of the House on this subject, because I represent a division in a development area—the newest or next to newest of the development areas, Merseyside. Before I speak about it, may I pay respectful tribute to the great kindness, courtesy and assistance that have been shown to me, in common with the other newcomers to this new assembly, by the officials of the House and by all in these historic buildings during the time we have been going through the difficult process of assimilation. I am sure I speak for all new hon. Members when I say how difficult our lives would have been had it not been for this kindliness and courtesy.

The subject of the development areas, which is raised by the Bill, is one that has engaged the attention of this party in the past and the attention of the Liverpool City Council, to which the President of the Board of Trade referred in introducing the Bill. I feel that it would be a pity—I am sure he will agree with me—if any wrong impression were to be left upon hon. Members or the country as to the attitude of the Liverpool City Council to the proposals that Liverpool and Merseyside as a whole should be declared a development area.

I was privileged, as a member of the City Council, to be concerned in the discussions which took place between 1945 and the declaration of the Merseyside area as a development area, and I felt that the President of the Board of Trade was in danger of misleading the House when he declared that the Liverpool City Council was opposed to and resisted the declaration of Merseyside as a development area. Our attitude was that Merseyside as a whole might perhaps benefit from being declared a development area but that Liverpool itself, as a city, had already, away back in the bad old days of the '30s, acquired, under a private Act, all the powers and authorities belonging to the Board of Trade as a result of the 1945 Act. When operating the provisions of that Act Liverpool had been highly successful in attracting industries to and in providing work in Liverpool.

Some of us were a little disturbed at the circulation by the President of the Board of Trade, at a rather crucial stage in the General Election, of a memorandum described as, "The Employment Situation on Merseyside: Statement by Mr. Harold Wilson, President of the Board of Trade." I am bound to say that I admire his timing more than his strict regard for accuracy in some of the inferences that are made in the document. In the peculiarities of my position in delivering a maiden speech, I must resist the temptation to use language stronger than would be proper, and I am sure that he will sympathise with my very great difficulty in dealing with the matter.

The document declared that in 1948 the Liverpool Council made it clear that, while they were themselves opposed to scheduling, they would not stand in the way of the other local authorities, such as Birkenhead, Bootle, and so on. The fact is that several times in the period immediately before the scheduling of Merseyside, different members of the Government, including the present Chancellor of the Exchequer, expressed—as recently as 1948—grave doubts as to whether any advantage could accrue from the scheduling of Merseyside as a development area. This might well go on record to avoid the possibility of any wrong impression being left by the President of the Board of Trade.

In this new Bill we are concerned with furthering the provisions of the 1945 Act and making sure that the industrial resources of the country are as widely and as wisely used as possible, both now, when we need to call into our service all the assistance that we can from our industry and from the skills and aptitudes of our people to tide the country through the present difficult period and in future. If the Bill can contribute in any measure to that, I am sure that the Opposition will welcome it and endeavour to see that it is operated as successfully as possible. We are, however, concerned that any Measure such as this, which purports to assist in the scientific use of the resources of the country, should be applied on the broadest possible basis, taking into account all the different considerations that apply in any matter of national planning.

The hon. Member for Sunderland, North (Mr. F. Willey) referred to the possibility that it might now be necessary to apply different considerations in operating the provisions of the Distribution of Industry Act, 1945. The Government might also bear in mind the various other claims which are made upon the resources of the country at present while they are considering putting into operation some of the provisions of the 1945 Act and this Bill. In Merseyside we have developed industrial estates. In Liverpool we have the great Speke estate, the estate at Fazackerley, and the new estate out at Kirby. Our problem is not one of attracting new industries to Liverpool but, as the President well knows, of building factories in the city to accommodate the industrialists who are anxious to come there and provide employment for the large reserve of mainly unskilled labour that exists on Merseyside. Since the end of the war more than 10,000 of our people moved from Liverpool in search of jobs in other parts of the country. Many have come back because of the impossibility of conducting a civilised life in "digs" in a Midland town while their wives and families were living in the City of Liverpool.

The Liverpool problem is not only one of attracting the industrialists to the city, nor is it only the problem of building factories for the industrialists; it is also a problem of building factories and the houses for the people who live in the city and who can find work and employment and a full life in the new estates which the city is anxious to develop on its perimeter. The President of the Board of Trade is familiar with this problem; indeed, I think I am quoting him correctly when I say that he has pinned his political future to solving the problem of unemployment on Merseyside. No one would be more happy than I to see his political future secured at this price.

However, I must say to the right hon. Gentleman that he has a responsibility in this matter that he can solve jointly with his colleague the Minister of Health. Out at Kirby the city owns some hundreds of acres which it is anxious to develop as an industrial estate surrounded by a great housing estate. Industries are wanting to come there. Men, and women too, are waiting for jobs in those factories. There is a long journey from the centre of the City of Liverpool to these industrial estates, and I know that these conditions apply to industrial estates on the perimeters of other cities. There is difficulty in attracting even unemployed labour from the city to the factory areas on the perimeter because of the time involved and the high weekly cost of fares. Also, it has to be considered that managements are compelled to take these factors into consideration in fixing wage rates on which their costs of production are, to some extent, based. The building of a housing estate alongside the building of the industrial estate would go a long way towards solving our problem in Liverpool and, in some part, the problem of the country in earning its revenue in the markets of the world.

There is one other aspect of this matter. The Government are now really concerned with directing industries into the development areas. Indeed, in Liverpool we are not without appreciation of the help given by the Board of Trade in steering industries to the Liverpool area, both before it was declared a development area and since. In time, as world competition becomes keener and as our industries find a less ready market, the problem may be one of finding jobs, of creating new work, and it is to that aspect that I would direct the attention of the President and his colleagues now.

The development areas are those areas which have had a heavy burden of unemployment in the years between the wars. We on this side of the House are as anxious as any member on the Government side to see that those conditions do not return. Indeed, this Bill stems from the White Paper on Employment Policy of 1944 and the Distribution of Industry Act, 1945, to which hon. Members on this side of the House contributed not a little. In so far as the efforts of the President of the Board of Trade are directed to securing that end, we on this side will give the right hon. Gentleman our support.

6.45 p.m.

Mr. Hoy (Leith)

It falls to my lot to congratulate the hon. Member for Walton (Mr. K. Thompson) on having made his maiden speech in this House. The hon. Member made it with a fluency and confidence which many of us do not possess who have been here a little longer. I can assure him that in future discussions we shall look forward to hearing from him again.

In the short time I intend to take—because I know many hon. Members want to take part in this Debate—may I say that I was interested to hear the right hon. Member for Aldershot (Mr. Lyttelton) pay a tribute to the skill of some workers in Motherwell. This bore out what was said by the chairman of the National Cash Register Company, Limited, who have developed a large works in Dundee and are now employing 2,500 people there. He said that he could not have chosen a better type of worker nor one with greater skill than those whom he was at present employing. He also paid tribute to the work of the Government of the day in making the facilities possible for them to develop their work in that area. It is true that the Development Act of 1945 has played a tremendous part, not only in Scotland but throughout all Great Britain, in bringing hope and inspiration to thousands of people whose lot was a dull one in the years prior to the war.

I was also interested to hear the right hon. Gentleman and the President of the Board of Trade discuss the problem of the shipbuilding areas. Sometimes I think the smaller ports and shipbuilding areas, such as mine, are apt to be overlooked because their problem seems to be so small compared with the larger cities such as Glasgow and Merseyside. I ask my right hon. Friend to remember that these smaller ports have played a tremendous part in the fortunes of this country, and that their contribution during the war was an important one in making victory possible. The Port of Leith, which I represent, went through a most distressing time—I do not say this for a political purpose—in the inter-war years; so much so, that it was regarded as one of the blackest areas in the country.

I want the President to remember that these areas require just as much attention as the larger ports, because poverty can be a terrible thing, whether it is in a large or a small community. I do not want to appear to be raising a series of complaints but while we in the industrial part of Scotland—in Glasgow, Lanarkshire, Dundee and elsewhere—are grateful for what has been done, we feel that something further needs to be done, especially within our mining and shipbuilding areas. I hope it will be the privilege of one of my hon. Friends to say something in that respect.

The Bill is admirable as far as it goes, but I believe it ought to go further. I have no complaint to make about what it contains except that it is far too tightly drawn. Its whole purpose is to direct more industries into the areas already designated as development areas, and beyond that, it would appear, it cannot go. No one will quarrel with the powers which the Government have taken to achieve this object, but we shall come up against one or two anomalies if the Bill is to be operated in its present form. In certain areas of Scotland the boundary of a development area is designated by a railway line, whilst the land which is. available for development happens to lie to the side of the railway line which is not included within the development area. I suggest, therefore, to my right hon. Friend that before the Committee stage he should give some thought to widening the terms of this Clause so that it may embrace adjacent areas of this nature.

I should like to quote as a second example, my own constituency. I should be deluding myself and the House if I did not say that we were disappointed when we were not included in the original Act and designated a development area. I wondered how we came to be excluded, because the right hon. Gentleman who then represented Leith, was a member of the Government and a leading Minister for 14 years. I heard the right hon. Member for Aldershot (Mr. Lyttelton) say that the Bill was rushed through before the election, and I can only assume that in the rush, the constituency of his right hon. Friend who was then Member for Leith was omitted from the Act.

Our position is rather overshadowed by the fact that we are included with the municipal area of Edinburgh. Generally speaking, Edinburgh is a fairly prosperous place, but in Leith we have peculiar and special problems of our own. I remember the Special Areas Commission of the Labour Party, which included my right hon. Friends the present Minister of Town and Country Planning and the former Secretary of State for Scotland, reporting that while special attention need not be given to the City of Edinburgh, they certainly thought that in view of the conditions which obtained in Leith its claims ought to receive special consideration and action when a Bill such as this came to be drawn up. In addition to the omission of Leith from the original Act, there does not appear to be anything in the present Bill which could come to our assistance. I suggest, therefore, if I may do so and yet remain within order, that the power or provisions of the Bill might be extended to include areas such as the two I have mentioned.

My only other point concerns the money which is to be expended under the terms of the Bill. The estimated expenditure in 1950–51 of £100,000 does not alarm me or cause me to feel that the President is being profligate with the finances of the nation, but I should like to ask him this question. I know that it will take some time for the Act to come into full operation. May I take it that that £ 100,000 can be used for token expenditure in certain schemes all over the country, which means, of course, that the large amount of expenditure which would follow would be taken up in the succeeding year? Many Scottish Members could support me in saying that we could use this £ 100,000 with no difficulty whatever in the new development area which has been designated in the Highlands.

In his speech this afternoon my right hon. Friend, in mentioning a particular port in England, said that if he felt that the only way to help that town was by designating it as a development area under the 1945 Act, he would not hesitate to follow that course. That is why I am encouraged to raise the cases which I have quoted. I hope that my right hon. Friend will give them that same attention and that he will seek to extend the provisions of the Bill, or to loosen its tightly drawn form, so that he may have a little more flexibility and make it possible for a somewhat larger section of the community to enjoy the prosperity which he hopes the Bill will bring to the country.

6.56 p.m.

Mr. John MacLeod (Ross and Cromarty)

I am pleased to follow the hon. Member for Leith (Mr. Hoy), because I hope to take the House a little further north than the industrial belt of the south of Scotland, to the depopulated areas of the Highlands. I, too, particularly welcome this opportunity because part of my constituency was designated as a development area. I think it is true to say that the scheduling of that area departed from the principle that there must be a certain amount of unemployment within an area before it could be designated as a development area. I had hoped that if that was the case—and I believe that it was—the Government had realised that it was in the national interest to take people away from the industrial belts and into the Highlands of Scotland, and thus help to relieve unemployment in the industrial belts. I had hoped that at last the Government had a policy for the Highlands, but I do not believe that they have.

It was felt by certain sections of the rural area—this point was referred to by the hon. Lady the Member for Anglesey (Lady Megan Lloyd George)—that the designating of the area would draw away the people from the straths and glens, but it is interesting to find that in the area of Corpach, where certain aluminium works were established in comparatively recent times, more people have entered the area from the south than from the crofting townships. As far as I can see, however, there was no reason for the rural population to fear that people would be drawn away from the rural areas, because practically nothing has happened within that development area since it was scheduled. Surely, this could not have been merely a sop by the Government to the people in the Highlands; but it certainly appears that it was.

I agree with the hon. Lady in saying that we want a national policy for the dispersal of industry throughout the whole country rather than the designation of particular areas. A policy of this kind certainly is necessary in the vast area of the Highlands. I rather agree also with the right hon. Member for Aldershot (Mr. Lyttelton), that there must be light industries within an area where there are heavy industries, but I think that that policy can be carried a little further in the vast region of the Highlands, where we must always maintain our basic industries of agriculture, fishing and forestry. To fit in with these three, I should like to see the setting up of light industries. I should welcome the establishment of light industries at the foot of the glens, as it were, where there would be happy communities making component parts for a central industry in a larger area. On 14th March I asked the President of the Board of Trade how many industries had come into the Invergordon, Cromarty Firth area since it was designated as a development area last April. The answer was, "One" I happen to know that that was a knackery employing two skilled men, who, incidentally, came into the area. If there is any credit, it is due to the local authority, whereas no credit is due to the Board of Trade.

The Bill seeks to provide further financial assistance to encourage the establishment of undertakings in these areas. I hope there will be more encouragement than was given to one of my constituents who wanted to start a worsted mill in that area. I wrote to the Parliamentary Secretary saying that I would raise this matter. I hope it is not true that the Board of Trade refused to back this project because they felt that this man had no personal relationship with the woollen industry, and because they doubted whether his finances were sound. No businessman has ever made a success of anything without taking risks and I do not see why this should be frowned upon by the Government. Here, I must divulge to the House, as is customary, that I manufacture in a very small way within this development area. I have heard it said that the Board of Trade do not like to give financial assistance to any firm starting business unless that firm can show, or is likely to show, a profit. If that is the case, I think it is deplorable. Perhaps I ought to welcome the recognition by Socialists that the profit motive is not wrong.

Under the 1945 Act and this Measure the Government appear to be treating this area rather in the same manner as the Catering Wages Act. They fail to realise the economic and geographical differences between the Highlands of Scotland and the industrial areas, and treat all areas in the same manner. The Highland area is in direct competition with Clydeside and Dundee, which is quite wrong if we are to have a real distribution of industry.

While I welcome the Bill as it gives further financial assistance to firms to, come into the area, it seems rather ironical that we should be discussing a Bill to do that when in this very region the Government are making cuts in basic services which are of vital importance if any industry is to be carried on in that area. Why should an industrialist go into the Highland area unless he is to be given special advantages? At the moment there are no advantages in going into the Highlands. I can assure the House of that. Transport and communications are deplorable, our roads are shocking and there is no housing, although it is hoped to provide housing under this Bill. All the costs of production in that area are higher than in any other region of Great Britain. Freight charges are appallingly high. It is certainly a deterrent for an industrialist to go into that region. It appears that charges are to be raised further although I am glad to know that there is a little doubt in the mind of the Minister of Transport as to whether it will be wise to raise the rates. It will be most unwise to do that in the Highlands.

In the matter of hydro-electric power why should industrialists in this area not get preferential treatment? I understand that there is likely to be a uniform rate. If that is so, all fair competition will be lost at once. Would it not be possible for the Hydro-Electric Board to make a surcharge to industrialists in the south and lower the rate to industrialists who come to the north? After all, we in the north do not get our coal less freight charges, and it is the same principle. I know the difficulties which the Hydro-Electric Board are facing, and that the hopes of attracting electro-chemical or electro-metallurgical industries are very slight because the costs of construction of hydro-electric schemes are becoming so high that they do not even know themselves what the rate is to be when the schemes are finished.

We should put first things first in regard to the Highlands and encourage what we have already there. Is full encouragement being given at present? If, within a development area, there is an industrial estate there are advantages in that estate, because we are trying to attract industrialists to go into it. But, across the road there may be a small industry which is prospering and wants to develop. When the proprietor tries to add to his present building, if he is lucky enough to get a licence, a development charge is clamped down, which immediately stultifies his endeavours. Yet he might not find it economical to go across the road into the industrial estate. I wish to ask the Board of Trade what is the answer, because, unless the costs of going over are to be paid, it would be very uneconomical.

If the basic services are available, and the question of freight charges is tackled realistically and social amenities are provided, we can attract firms to the Highlands, but, I repeat, the mere scheduling of the Highland area as a development area on the same basis as other development areas is not enough. The Highlands can play a very important part in the economic life of the nation provided the Government have a policy which is bold and has vision and imagination. I ask the President of the Board of Trade, as I will ask other Departments when I have the opportunity, what is the policy of the Government as far as the Highlands are concerned?

7.10 p.m.

Mr. Iorwerth Thomas (Rhondda, West)

May I crave the indulgence of the House, being the last maiden speaker from Wales. There may be a certain traditional reason why I am the last, but I doubt it very much, because the tradition in Nonconformist Wales has been that they generally kept their best preacher until the last. The text at my disposal is one which Welshmen particularly can exploit to full advantage and to which they can apply their natural eloquence. While I am conscious of the fact that in making my maiden speech in this House, I have the protection of the traditional privileges accorded to a Member on such an occasion, I have no desire whatever to exploit that protected position by inflicting myself upon the House. I am in rather a dilemma. I have no desire to arouse the displeasure of hon. Members opposite, and I have no conscious desire to embarrass Measures on this side of the House.

I wish to focus the attention of the House on the question of the distribution of industry as it affects my constituency. The name of Rhondda is not new to this House. The Rhondda is synonymous with conflict, gloom and despair, and, as the House knows, Rhondda has been, in our industrial history in the past 25 years, a twin community with Jarrow, which suffered in those terrible years of depression. Rhondda was at one time one-sided in its economy and that one-sided economy became a victim of the industrial depression—I refer to the coal mining industry. The manpower engaged in that industry in the Rhondda fell, in 25 years, from 50,000 to 14,000. During those years we lost 50,000 of our population, 50,000 of our most fertile groups, whom we exported to other parts of the country to be used as manpower there.

We in Rhondda are very grateful for what has flowed from the operation of the 1945 Act. The effect of that Act has been to bring 21 new factories into Rhondda since the end of the war. That has brought about a great transformation, not only in the physical appearance of Rhondda but in the outlook and the expectation of our people. While I appreciated the benefits which have been bestowed on Rhondda as a result of the operation of the 1945 Act, it is my duty to call the attention of the House to what remains a persistently obstinate problem there.

I will sum up, briefly, in a few statistics, the progress made during the operation of the 1945 Act. I would stress the importance that we attach to male employment in our mining valleys. We feel quite satisfied that provision has been made which will in a very short time absorb all the available female labour, but the obstinate problem is the absorption of the male unemployed. Progress to date in terms of factory absorption is that we have employed in all in these new factories, 1,952 male persons.

I do not wish to discredit what has been achieved, but it is only proper that the facts should be well known. Of that 1,952, three firms which were established in the Rhondda before the war employ 473. The two Remploy factories employ 148 and the Grenfell factories—I will return to this point in a moment—are employing only 136. That reduces the net total of male personnel employed in these new factories from 1,952 to 1,195. That is the net result in terms of the absorption of the unemployed in the Rhondda, in so far as the Government have relied upon the normal processes of rehabilitation in this mining valley.

But the position is more serious than that. We are now in 1950, and the post-war honeymoon is over. We hear a great deal of criticism about the existence of queues, but queues are disappearing from the doorstep of the Board of Trade. I think the Minister will admit that already his Department are conscious of the fact that the position is hardening and resistance is now being shown by industrialists towards taking factory space in development areas. The faith we all had in the Grenfell factories has, I am afraid, been severely shattered by an examination of the results. Let me briefly remind the House of what the effect of the Grenfell factories has meant towards the solution of the problem in my constituency. We have three Grenfell factories. The first of these at Llwynypia, which is near Tonypandy, was the first Grenfell factory to be completed in South Wales. It employs at present, after two years, 68 males and two females.

Another Grenfell factory is occupied by the Bramba Engineering Company. This firm went into production on 5th October, 1949. On 1st January, 1950, it employed 61 males, and on 31st March, 1950, it employed 68 males. There is another Grenfell factory at Ferndale. This factory at present, after a year's operation, is employing only 14 males and three females. In this mining constituency there is a fourth Grenfell factory situated at Ferndale which was completed on 4th February, 1949. A period of 14 months has now elapsed since its completion and the factory has still not been let. People living in the mining communities had great expectations that this strong instrument forged by the Government would focus attention particularly upon the solution of the unemployment problem as it affects disabled persons. But it has worked out in a very disappointing manner.

What, therefore, is the hard core of the problem which now exists in our valleys? In 1948, the total unemployment figure in the Rhondda was 3,974. In February, 1950, the figures are 3,502 so that, despite all the efforts made to solve the problem in these communities—where a hard core of unemployment still persists despite the passing of two years—we have a credit of only 472 persons less on the register. But this is the core of the problem. I will take the December figures of 1949 and deal specifically with the total number of male persons registered—2,591. We have 1,441 disabled persons and of that figure 60 per cent. are over 51 years of age. Of the 1,150 able-bodied persons registered, over 34 per cent. are above the age of 51. Furthermore, of the total males registered 1,523, that is, 60 per cent., have been idle for more than 26 weeks. The number of disabled persons idle for 26 weeks is 1,042. That is to say, of the disabled persons in these areas where we have these pockets of unemployment, so stubbornly resisting any approach being made at present to solve them, 68 per cent. are disabled, and have been unemployed for more than 26 weeks.

I wish to ask the Minister this question: What contribution will this further Measure make to deal with this specific problem? It may be argued that as a supplementary to the efforts of the Grenfell factories these disabled persons will be automatically and normally absorbed into the ordinary factories when they get into full production. But can we expect a private employer to saddle himself with the responsibility of solving of what is, after all, a social problem? I know that we have in our valleys good types of employers in these new factories; men who set out to build up their manpower with the best of intentions. They are grand humanitarians. But there is still the danger that if they load their factories with too high a percentage of disabled persons it will have the result of pulling out even the able-bodied persons employed in those factories; because they will have to stand up to competition from other parts of the country. I ask the Minister whether he is prepared later to consider whether certain Clauses in the Bill can be so strengthened as to bring some hope to our valleys that this is a substantial contribution.

I would warn the Minister against one thing. I have heard pleas this afternoon for the extension and increase of the number of scheduled areas under the Bill. That is dangerous. I remember when Rhondda was known as a distressed area. Then it became known as a special area, and then as a development area. The effect of that refinement has been that, by bringing Cardiff and Newport within the development areas, the mining communities in the South Wales area were deprived of the benefits of the Act of 1945. I hope, therefore, that the Minister will resist any attempt to rope in more areas and further that possibility. I would plead with my right hon. Friend to realise that we cannot generalise on the question of unemployment. We have to discriminate between area and area and I invite him in the future to discriminate, and to see whether something can be done. Employers will handpick their employees, and the possibility of persons between the ages of 51 and 65, whether disabled or able-bodied, obtaining a job are very remote indeed.

If we are to recruit for the mining industry of the future the manpower for the pits, we must dissipate the fears in the minds of the young men in these valleys. If they see a high percentage of disabled men—who are the physical rejects from the pits—without any prospect of a job, what encouragement will that be to those young men in our valleys? Last week we discussed dirty coal. I want the House to consider today that we are discussing the man with dirty lungs, the man whose lungs are punctured with minute particles of silica rock and whose chest is clogged with coal dust. I hope that, if possible, the Minister will strengthen this Bill to give the people of our valleys brighter prospects for the future.

7.30 p.m.

Sir Ralph Glyn (Abingdon)

It is always extremely difficult, no matter how long one may have been in this House, to follow a new Member who comes from Wales and who has the natural gift of oratory which that country produces, especially when, in addition, the speaker has an intimate knowledge of his subject. Hon. Members may doubt whether I am justified in calling the hon. Member for Rhondda, West (Mr. Iorwerth Thomas) a new Member, because he showed such confidence and ability. I am delighted to follow him and to have the very pleasant task of congratulating him not only upon what he said but on the extremely attractive language which he employed. I am sure that all of us will remember his speech.

It brought back to my mind those dreadful days when in this House we discussed what we then foolishly called the distressed areas and we used to hear stories like those which he recalled. Now we have arrived at something which is far better and more full of hope. I should like to follow the hon. Member in what he said, because in discussing development area problems we are always in a little danger of thinking only of floor space and factories and people who are to be transferred, and not of the skill of the men whom we want to employ.

In the mining industry we have these men who have been wounded during their labour which was of national importance. I have often thought that while we talk about the importance to the children of secondary industries in these areas, we might occasionally think of secondary industries specially suited to men with disabilities. There are all sorts of difficulties. Recently I have had personal contact with the Board of Trade and other Departments on the question a factory extensions. All the officials have been most helpful. They have done all within their power to enable us to get the extensions carried through.

I have also been in touch with the President of the Board of Trade on the question of shipbuilding and ship repairing, about which I have a little knowledge. I am afraid that it is only natural, if one is interested in a firm which is now suffering unemployment because of the falling off of ship repairs, that one should have the dreadful thought that the Government will use all their endeavours to divert orders to the development areas, and that they will create another distressed area because we are not able to get the orders. That is an important point to remember when considering development areas. Much depends upon the amount of trade and business to be done and how it is to be distributed fairly. There are certain conditions to be borne in mind. There are the questions of freight and transport in addition to strategic considerations.

The most urgent matter is that if we have a highly skilled man who is a shipbuilder, he will be wanted in that job if a state of emergency arises. A great deal of valuable work was done during the war in the small shipyards when the enemy were bombarding for all they were worth to try to prevent us building to replace ships sunk by their submarines. Some of these small shipbuilding yards are now finding that orders are going elsewhere and that there is no alternative employment for the men. I beg the President of the Board of Trade and the Minister of Labour to ensure that where a skilled man is diverted to work in another factory which may be established in a development area, a tag should be kept on him so that in time of emergency we can ask him to come back to his work in the shipyards, Otherwise, in an emergency we shall be short of skilled men.

I think it was the hon. Member for Leith (Mr. Hoy) who said he hoped that more ships would be built. He hoped that the shipowners would take it upon themselves to build more ships. A wonderful job has been done by the Government Department concerned in absorbing all the war-time shipping. That presented a difficult problem. Shipowners have gone in for new tonnage, and vessels have been launched which are superior in every way to their predecessors.

However, there are two points to which I hope that the President of the Board of Trade will pay attention. The first is the extraordinary fact that since the war a freighter with the most modern cargo handling appliances and with a faster speed than pre-war, may spend more time in port than it does at sea. The consequence is that not so many ships are needed. They cannot be used because the wharves are congested. It would be most interesting if the Ministry of Transport or the Board of Trade could tell us the average time that a vessel is at sea using her engines and all the capital invested in her in travelling from one port to another and collecting cargo, compared to time spent in harbour.

In the development areas there is great capacity for the building of new ships, but new ships will not be built unless there is a demand for them. Therefore, we come back to the point that, in considering problems of employment, we should do all we can to make sure that a skilled man can follow his own type of skilled work. Anything less than his own skilled job is really a matter of temporary necessity—a sad necessity because I do not believe that any skilled man likes to give up the work in which he is interested. He does not like to be diverted to other work which may enable him to find employment in time of depression. We must remember that, far more than the money investments of the country, it is the natural skill of our workers which forms our wealth. I beg hon. Members never to lose sight of that fact when considering development areas. There ought to be some opportunity for skilled men to go back for refresher courses in their former employment, so that they might be able to continue their proper occupation when necessary.

There is one other point which I should like to mention in connection with this Bill. It is absolutely essential that there should be some direction in regard to what industries may go to these places, but I do not think it ought to be compulsory. I think it must be done by other means, but I am very often astonished, in discussing these matters, to find that people do not appreciate the fact that, if a section of an industry is asked to move a long way to occupy one of these factories, it adds enormously to its overhead costs, because it might be involved in extra freight costs and increased costs of supervision and administration, all of which may make it impossible for the transfer to be successful in that particular line of production.

Therefore, I feel that, in this movement into the development areas, we ought to take into account what the hon. Member for Rhondda, West, said just now—the type of people going into that area and the sort of work which they are most suited to do. including the question of the disabled men. We must also take into account the fact that, as far as possible, we ought to move a complete industry or sections of an industry, and not just bits and pieces of industries, because it is really bad for the foremen, the workmen and everybody else concerned if they do not see the production flowing through in an orderly manner and also realise their own chances of promotion depend on a proper scheme of production.

I believe that there are many other things which we have not yet tackled in regard to fresh lines which will become available as we get more horsepower, and this is, I believe, a question of more power and the most modern machines. I know that the unions concerned are adopting a different attitude to that which they used to adopt, and I hope they will always insist, as do the American unions, that if a firm goes into new production in a development area, it shall not only have power but the most modern type of machines on which men can work. I believe there is also a great field for experimenting in how far these modern machines can be fitted to suit the men, instead of always assuming that the machine tool, as it is produced, is suitable for a man of any shape or size to work. It should be possible to have adaptations of any machines today to fit men who are broad, tall or short. All these things speed production. I should like to see the development areas having all the most modern equipment and all the power that is necessary.

Finally, there is this to be said, and I am sorry to say it, though I think I must, and I hope hon. Members will forgive me if they find that I hurt some of their feelings. The old story of the "distressed" areas, the "special" areas or the "development" areas dies hard. If people go on repeating what was said during those bitter years, it will not help the recovery of those districts today, because people will hold back and say "That is a district where there is always industrial unrest, and I am not going there." Those who are employers and leaders of industry and who were in this House at that time have learnt their lesson, but let us urge that all employers and leaders of industry should also learn it.

We learned our lesson because we made our mistake here in this House, and, having learned that lesson, let us not go on talking about those evil days, but try to forget those bitter things, and remember the demand which the country makes for skilled people and modern machinery. Let us do everything we can, in the fierce competition in the world today, to forget all these hard sayings, and, instead encourage everybody to co-operate to create a new and happier life for the people.

7.45 p.m.

Mr. A. J. Irvine (Liverpool, Edge Hill)

I have noticed on one or two occasions since I came into this House that the hon. Baronet the Member for Abingdon (Sir R. Glyn) expresses views and reveals an outlook which, if I may say so, arouse a good deal of sympathy and understanding on this side of the House, and this occasion is no exception. We have all been extremely interested in the contribution which the hon. Baronet has just made.

I represent a division in the Merseyside development area, and I am naturally concerned particularly with the effect of this legislation upon Merseyside. I have no hesitation whatever in saying that I welcome the extension of powers which this Bill provides. There are few extensions, but they may prove to be quite important ones. Coming, as I do, from a development area, I am deeply grateful, as are many of my colleagues, to the Government and to my right hon. Friend the President of the Board of Trade for the work they have done in making Merseyside a development area and in the year that has passed since. We are particularly grateful for the work of my right hon. Friend the President, who, I venture to think, regards this question of the location and distribution of industry as one of special interest. If in what I am going to say I appear to be seeking for more and not to be satisfied with what we have already received, I hope it will not be taken as meaning that I am not extremely grateful for the services already rendered by the Government and my right hon. Friend in this connection.

There are four matters to which I should like to refer. I am sure that easily the most effective practical method of steering industry towards the development areas is by means of the use of the powers which exist in the Town and Country Planning Act for the control of the location of industry. I should be very grateful if we could have from my hon. Friend who is to reply some indication of how far and by what methods the use of the powers of the President of the Board of Trade under the Town and Country Planning Act is married up with development area policy. So far as many of us are concerned, it is true to say that we have received very little indication whether the powers of steering industry by means of the President's certificates under that Act are, in fact, put into operation, and we should regard it as valuable if we could be given a clear indication on that point. I would have hoped that the use of these powers by the President might be exercised in a way which would have the most tremendously valuable effect upon the employment situation in the development areas.

Let me give one example. As is the case in other parts of the country, we now have in my division the problem of unemployment in the shipbuilding and ship repairing yards. As matters are developing, unemployment in that industry is of particular concern at the moment to the finishing trades, that is to say, electricians, carpenters and painters. I should very much hope that, when those classes of workmen and tradesmen are out of work in such large numbers in particular areas, the President of the Board of Trade could impose a virtual veto, exerting his powers under the Town and Country Planning Act, against the setting up, anywhere else than in development areas, of any industrial development which would employ a high proportion of men in these particular trades. I very much hope that the powers which my right hon. Friend possesses in this connection are being used to the full, and I hope to receive his confirmation that they are.

The second point to which I wish to refer is the question of the sufficiency of the scale of the action which has been taken. On Merseyside, as my right hon. Friend knows very well—no one knows it better—we have very high hopes of the activities of the North-Western Industrial Estates Company. But Merseyside, when all is said and done, has been scheduled as a development area for over a year now and in that year, I am informed, negotiations have been completed for acquiring only two sites. At least, that was true until quite recently.

Several rather important negotiations are in progress, but I reckon that, taking into account all the factories which will be built on sites the acquiring of which has been negotiated or is in process of negotiation, those factories will not employ substantially more than 850 workers. That represents the result of negotiations which have occupied a year, and the first year from which so much was hoped. It would be a disappointment to many of us—we must be frank about these things—if that scale of activity were not improved upon because, the situation being what it is, the prospect of adding another 850 jobs in Merseyside, although a step in the right direction, is not sufficient in relation to the size of the problem which exists.

The third matter to which I think it right to refer is the effect of this legislation upon housing. I note the provisions of Clause 3 of the Bill and that the housing question is being kept in mind. But I hope that my right hon. Friend fully recognises the supreme importance in this policy of the location and distribution of industry of keeping the housing question most closely and carefully in view. Unemployment is a great social evil, but the overcrowded conditions in housing which now exist in Merseyside are an equally great social evil. There is very little to choose between them.

Suppose under this Bill when it becomes law that there is an extension of a factory in a development area which will have the consequence of bringing in, let us say, 100 workers. Unless grants of money and extra allocations of building materials are made to provide the houses for those 100 workers, then, quite frankly, as far as I am concerned, the whole project is not an attractive one, even if its consequence is that another 100 persons now out of work in the development area are, as a consequence of the change, given work. I say this because the benefit gained from the easing of the unemployment situation will be neutralised by the aggravation which will occur in the housing situation.

My fourth and last point raises, I think, a matter of quite overriding importance. I am anxious to know—and I should be grateful if my hon. Friend who is to reply could give some indication of the position in this respect—how the development area policy is married up with the overall economic policy of the Government. We want some indication as to that. In some cases, no doubt, these two policies will conflict because it may well be that the consequence of steering industries and factory extensions into the development areas will have the result of raising costs which will handicap the overall economic policy of the Government designed to deal with our balance of payments. I shall expect to hear that in a situation of that kind the overall economic needs of the country would have precedence and priority.

What I should like to have examined more fully than has, so far as I know, so far been examined is the converse proposition that in certain instances development area policy and the overall economic policy of the Government to stimulate our exports and to reduce the costs of production may run parallel and may complement each other. I should like to be told that that possibility is being worked out and investigated in a practical manner. There must be many instances where the consequence of bringing particularly selected industries into development areas can positively help to stimulate and improve the prospects of those industries in the export drive by reducing costs and thus assisting the country's economic situation as a whole.

After all, in the development area with which I am particularly concerned, there is, first of all, the great advantage of a large reservoir of labour, a good deal of it skilled and trained labour. In that area also—and the same applies to a great many other areas—there will surely be, from the point of view of our export drive and our trading policy, considerable advantages to be derived from the saving on freights due to the nearness of the docks.

I only hope that my right hon. Friend and his colleagues are investigating these points and particularly the last matter of a development area policy which is integrated with the economic policy of the country and its effort to bridge the dollar gap. I am sure that these two matters can be made complementary to each other to the common advantage of the country as a whole and the development areas in particular. I hope these plans are being made. I dare say they are, but we are left in some doubt. It is like when war comes along, we all hope that the general staffs have magnificent plans ready for every contingency. We have no idea, of course, on these occasions what the plans are, but we hope they exist. Unfortunately we have too often been disappointed in the event in military matters when the emergency arose. I am only expressing the hope that no such criticism will ever be fairly made of my right hon. Friend and his Department and that he has the plans ready which will be equal to the contingency.

7.59 p.m.

Captain Duncan (South Angus)

The hon. Member for Edge Hill (Mr. Irvine) asked the President of the Board of Trade four questions. I do not propose to attempt to answer them, but I wish to underline one of the questions he asked—the question of the relation between the provision of factories and the provision of houses for the workers in them. If we get that out of relation, it seems to me that we shall have greater difficulties in the development areas than we have already. I have lived with this problem even since I was elected to this House in 1931. I remember—before we got out of the industrial depression in 1933—the late Captain Euan Wallace going up to Durham and writing that remarkable report on his experiences there.

There came from that report the Special Areas Act, the Distressed Areas Reports and now this Bill. I only mention that because this question has been with Parliament and with Members of all parties for a long time now. This is its latest manifestation and credit should not go more to one side than to the other for anything that may have been achieved. The credit should go to all sides of this House, because in the last 20 years from time to time all sides have had to take an interest in this problem.

The powers in the original 1945 Act were for the provision by agreement or by compulsory purchase of land for the erection of buildings, the erection of the buildings, loans to trading or industrial estate companies to induce them to establish or extend factories in those areas, and financial assistance by grant or loan for the provision and improvement of basic services and so on. These powers in the original Act were substantial powers and I congratulate the Government on the way they have operated them. The Act was passed by the Caretaker Government and it has been operated successfully by a Socialist Government.

Now we have another Bill before us today, slightly extending those powers. The Bill enables His Majesty's Government to acquire existing buildings where before they could only acquire sites. It also gives them the power to transfer existing undertakings and the key workers. These are substantial powers and, together with all the other powers which the President of the Board of Trade dealt with this afternoon, they offer substantial inducements to industry to go to what used to be called distressed areas. This Bill, therefore, is really not rightly named the Distribution of Industry Bill. It is really a continuation of that old—I should almost call it age-long—policy of assisting areas where there has been, or where there is likely to be, special distress and unemployment. It really ought to be called a Special Areas Assistance Bill rather than a real Distribution of Industry Bill.

I want to deal with this matter from the point of view of one who represents a constituency adjoining a development area. I want to deal with the case of Dundee. I have a notion that the inducements to go into these areas have been great. I shall show from the case of Dundee how successful these inducements have been, combined with the fact that there has been, broadly speaking, full employment since the war, for reasons other than this Bill. A large number of industries have gone into Dundee. The area was suffering from a lack of diversity of industry. That has come to an end. There is ample diversification of industry in Dundee now.

Nor is there in fact real unemployment. Although last Friday there was a total of 2,744 men, women and children unemployed, it is important to realise the meaning of that figure. There is a turnover of 600 a week through the employment exchange. Five hundred of the men were disabled and the hard core of the unemployed is really completely insignificant. On the other hand, compared with the figure of 2,744, there were 855 vacancies at the employment exchange which could not be filled last Friday. These were vacancies for 160 men, 300 women, 75 boys and 320 girls.

One might say that thanks to full employment and the effects of the previous Distribution of Industry Act there is no unemployment and, for the time being at any rate, the reason for continued assistance for Dundee has come to an end. This was admitted in fact by the Board of Trade last autumn when they issued a declaration that in view of the labour position in the area no further new industries would be directed there for the time being. Since then the Dundee Chamber of Commerce and the Engineering and Allied Employers' Dundee and District Association have both protested to the Board of Trade about the transfer of a business from Brighton to Dundee. The business is of an engineering character and, according to them, is going to intensify the existing difficulties of obtaining engineering labour in Dundee itself. The Chamber of Commerce says: This Chamber, while it has welcomed the establishment of numerous new industries as being essential to the economic wellbeing of the area, has formed the definite opinion that from a labour point of view the programme has already passed the danger point The Engineering and Allied Employers' Dundee and District Association say: There has been a most serious drain on skilled fitters, turners, tool-setters, tool-room workers, maintenance engineers, and draughtsmen. Most of these men have been given employment with the National Cash Register Company, and other new industries. The real need is in the jute trade and in the shipbuilding trade. What is happening is that engineering labour, technically trained labour, is being attracted into the new industries and the staple industries—jute and shipbuilding and so on—are finding the utmost difficulty in keeping their own key men so that they can keep their factories going.

I therefore plead with the Board of Trade for a halt to be called at a certain stage in dealing with these development areas. I give them that example of Dundee, although I am not going to attempt to argue whether the Dundee Chamber of Commerce and the Engineering and Allied Employers' Association are right. I give it as an example, particularly, of what may happen if we try by inducements to pack too much industry into a development area so as to strain beyond the safety limit the employment position for the old industries that have been in the district for a very long time.

There must come a time when a stop must be put to the over-development of a development area. I am not prepared to say what that limit should be. The original idea of the old special areas was that they should be developed up to a stage where unemployment virtually disappeared, but that one should not go on expanding a development area beyond that limit. Under this Bill we are pumping more labour, admittedly only key labour, into an area which already has full employment. We should be very careful lest we overdevelop the scheme and give rise to cases like Dundee to which I have referred, in which we get the over-expansion of a town with all the dangers of mass unemployment and economic ups and downs.

I want to make a plea from the point of view of a man outside a development area. At present hundreds of people are living in my constituency and in others, going into Dundee to work, in addition to all the people who live in Dundee and work there also. Those people are leaving the rural areas, not only the countryside but the small towns as well. What is the attraction of an industry in a small town in the countryside? First of all, there is the homely, friendly atmosphere of the small town as against the impersonal feeling of a vast metropolis like Glasgow or Birmingham.

There is fresh air, and there is space with beautiful surroundings. One can get out of these places quickly and enjoy a game of golf or a little bit of trout fishing in the burn during the week end. How difficult it is to get out of a place like London and do the same sort of thing. With cinemas, dance halls and so on there is ample entertainment in most of these small towns. There is also a better chance of getting a decent house and a garden in which to work in the evenings.

These are the advantages of encouraging, or at any rate not discouraging, industry from staying in the small towns. In addition, from the point of view of the employer there is the contentment of labour which comes from working under contented conditions. Transport is easy. It does not arise. Most men can walk to their work, or if they do not walk they may have to bicycle a mile. In my part of the world people are going by bus 20 miles to work in Dundee, and 20 miles home again at night. That cannot be good either for the man who arrives tired at work, or for his wife who has to deal with him when he gets back in the evening tired from his work.

Let us not exaggerate this development area policy too much. What limit have the Government set upon the development of a development area? If when this development has reached a certain stage they will stop it—and there is provision in the 1945 Act to do so—I believe that in areas like South Wales and other areas where unemployment is much more likely to be a more intractable problem than in Dundee, this Bill can do a great deal of good.

I should like to add one other plea. Is it strategically wise to concentrate industry and population more than they are already concentrated? We are living in the atomic age. I do not know anything about bombs, atom or H bombs, but I am told that if one of these bombs dropped on a town the town would be obliterated. Therefore, is it not wiser with such a Bill as this to try to separate the industries out into the countryside where there are stable living conditions, decent country surroundings, fresh air and recreation, and at the same time decentralise so that in case one of these horrible things did drop we should lose not the whole of an industry in one big town but part of an industry in a small town? I say to the Government: do not drive the people away from the country towns or from the countryside to these great centres of population where, if things go wrong, even with the diversification of industry that we have got, unemployment will be of the mass variety and impossible to tackle.

8.15 p.m.

Mr. Timmons (Bothwell)

I had intended to apologise for being parochial in my speech, but after hearing other speakers I do not think I need apologise because all the speeches which have been made tonight have been more or less parochial.

I welcome the Bill as far as it goes, but it is certainly a long way off from what is required to strengthen the position of the Board of Trade in regard to the development areas. I represent a constituency in the heart of Lanarkshire which has the greatest development area in the whole of Great Britain. At the same time, it has the highest unemployment figure in the whole of Scotland. The unemployment figure for Lanarkshire, with the exception of one employment exchange area, is over 10 per cent. of the insurable population. Many factories have been built in my division, but they have not served the purposes for which they were intended.

There is one thing I am glad to note, and that is that Clause 1 of this Bill gives power to the Board of Trade to rectify the mistakes that have been made in the past in the allocation of factory space to firms who have failed to make any reasonable contribution towards increased employment. To give one instance, in my own division we have the Chapelhall Estate which is within 200 or 300 yards from where I live. In 1948 3,000 people were employed on that estate. The estate has been doubled since 1948, and scarcely 300 people are employed in the factory today. Our problem is not factory space. Our problem is to get the right employers in the factories to provide employment for our people. Certain people are coming in under false pretences. Certain assurances have to be given that they will employ a certain number of people. What check have the Board of Trade upon them?

A firm by the name of Square Grip came from the Newcastle area. They were getting allocations of steel, presumably for the factory in Chapelhall. We found that the steel was being taken away from Chapelhall railway station in lorries to Newcastle. That has been going on for two and a half years, and there are not more than 20 people employed in the factory. It is only recently that the Ministry of Labour officials investigated the position, and the labour force was increased from 20 to about 35. About a year and a half ago I was raising the question continually with my right hon. Friend about the factories which were not being used to their full capacity. The former Parliamentary Secretary came to visit some of the factories and he saw some large ones where two-thirds of factory space was not being used. That is not very encouraging.

I appeal to my right hon. Friend to give considerable and immediate attention to this problem. We do not need to wait until this Bill is on the Statute Book before improvements can be made. The factories are already there. Let the Board of Trade and the Government utilise these factories to the fullest extent or, if not, let them see that the people now in possession implement the promises they have made. At Bells-hill, in the heart of my constituency, there is a big factory with approximately two million square feet of factory space, yet the only time we have been able to say that we have a policy of full employment in this area is when there has been a war. We have never at any time been able to say that we could look forward in peace to a time when there would be full employment.

At the moment we have 10 per cent. of the insured population unemployed. That is the average throughout that area. That is bad enough, but I cannot forget the years up to 1939 when 48 per cent. of the insured population in that area were unemployed. We cannot sit quietly by and allow such a state of affairs to continue. Something must be done immediately. We need not wait until new factories are built; factories already exist. Many of these factories have provided jobs for people who in ordinary circumstances would have been signing on at the employment exchange. For instance, there is Smith's factory at Carlin; Vactric at Newhouse and Salts of Saltaire.

Much more can be done and I hope that when the Board of Trade let these factories they will ensure that they will provide employment for some of our men folk. We have solved the problem to a great extent so far as women are concerned. In the past we had to export our women folk from Lanarkshire; many had to travel long distances and long hours in order to get to work. To a great extent the Development of Industry Act has solved that problem, but I wonder what we shall do for our men.

One aspect which gives me a great deal of concern is that of the miners. My right hon. Friend mentioned disabled miners. I am in sympathy with disabled miners in their problems, but I am also concerned about the fate of miners who are not disabled, because in parts of Lanarkshire the policy of the National Coal Board for the past two years has been to close down pits. What is to happen? Where are we to put the miners? What will be done with them? We have transferred approximately 5,000 families to new coal areas, but there is the type of man—40 to 50 or 5, and even up to 60 years of age—who has been the backbone of the mining industry but who has to stay in his present area because of his family. Some of his family may be in the professions and some of the younger ones pursuing higher education. These men are not mobile and cannot be shifted to new coal areas. What is to become of them?

I should like to quote from a letter from an ex-miner, 52 years of age, who was working in the naval stores at Carfin. He was paid off, for the naval stores are closing down. He was paid off with a number of others. A friend of his tried to get him a job in another factory on the Carfin industrial estate. He turned up for the job and had to complete a form. He is a very fit, able-bodied man who spent six years in the first world war and four years in the last war. At 52 years of age he is a fairly fit man. When they discovered his age they said there was no job for him. He asked why and the reply was, "You are too old." He said, "Am I too old at 52?" and the reply was, "Anyone over 45 is not accepted." He said, "Does that mean that I have to continue for 13 years drawing unemployment benefit, until such time as I qualify for the 26s. a week pension?" What a prospect for that man.

Unfortunately, that is the apprehension felt by all ex-miners in Lanarkshire and something must be done about it. About six pits have been closed in my division in the past two years. These men are walking into the Ministry of Labour exchange and signing the register without a hope of finding anything at all. It is quite true that we have young men signing the register at the labour exchange, and obviously employers of labour will not accept older men so long as they can obtain young men. That state of affairs cannot be permitted to continue and there is not the slightest doubt that the Government must do something about it.

I want to say a word or two on the question of "passing the buck." Since I came to Westminster in 1945 I have discovered that when one goes to a Department to raise a problem they pass the buck to some other Minister, and so it continues. I do not want the Government to pass the buck in this instance. I want the various Ministers and Departments to got together and to realise that in Lanarkshire we have a human problem. The Minister of Labour can be brought into this as well as the Minister of Supply and the President of the Board of Trade.

I am satisfied that something can be done even if it means the Minister of Supply taking over one of these factories and setting up some industry which will absorb all those people about whom we are so apprehensive at the moment. At the present time there is no hope for those people and I ask the Minister and the Government, what have I to say to the people in my division and in Lanarkshire generally? We must have an answer. I appeal to the Government to bring the various Departments together and to get down to this question to see what can be done to absorb the vast amount of unemployment in Lanarkshire.

8.27 p.m.

Mr. Henderson Stewart (Fife, East)

I am glad that a section of this Debate has been allotted, as it were, to the Scottish case because in many ways our problem is unique, and it deserves, I think, our special attention. If I may I will take up the main theme of the speech of the hon. Member for Bothwell (Mr. Timmons) in a moment, but I should like first to associate myself completely, if I may, with the remarks of my hon. and gallant Friend the Member for Angus, South (Captain Duncan). My constituency also borders Dundee and what he has found in Angus, is, I know, happening and has been happening for a long time in Fife. I will give just one example—the town of Tayport. It is an old town, adequately equipped with harbour and railway facilities, and in proximity to other districts, which in by-gone days was a very prosperous place, providing a living for a great many first-class Scottish men and women. What has been happening recently? In the last 10 or 15 years the harbour and its amenities have been greatly neglected by those in authority. The council has done its best, but the movement of people has constantly been out of Tayport, in recent years into Dundee where new—one might almost say ersatz—industries have been recently established.

I cannot believe that it is good Scottish policy to draw away as it were, the blood of a fine old borough of that kind, which has all the social and economic amenities to make it once again a flourishing town. When we are talking about the distribution of industry it is wrong to concentrate only upon those old special areas and neglect entirely the other parts of the country. If we continue to neglect them they will turn into special areas, with all the trouble and anxiety associated with that.

There are more towns in my division in Fife in which people move or from which people are moved 10, 20 or 30 miles a day. Something ought to be done about that. The linoleum town of Newburgh in East Fife draws something like 200 men and women a day from other parts of the country, and from as far away as Kirkcaldy. If distribution of industry is wanted, encouragement should be given to flourishing concerns by assisting in the provision of housing for the people who would naturally work there. What applies to these towns, applies with greater force to the fishing areas, a subject on which I hope to speak on the Adjournment on Thursday.

All around our coasts, and particularly the Fife coast, we are seeing the gradual depression of the fishing industry. If distribution of industry is wanted, then we should go to these distressed towns and villages and put one or two light industries there for the benefit of the people who are feeling the effects of this depression. Under present provisions I cannot, nor can the local authorities or industrial concerns in Fife, take any action at all to encourage new industries into these fishing villages. On the contrary, we are faced with obstacles at every turn. That seems to me to be madness. I ask the President of the Board of Trade to consider this wider problem rather than the intensification of industries in one or two selected areas.

I now come to the speech of the hon. Member for Bothwell. Lanarkshire and Fife are closely associated economically. Fife contains the richest coal seam in Scotland and one of the richest in Great Britain. Soon, Fife will contain the greater part of all Scottish working coal mines. Great new pits are being opened. How are they to be operated for the good of the nation? Only by a mass transfer of miners and their families from other parts of West Scotland where the coal mining industry is gradually declining.

The hon. Member for Bothwell said that 5,000 had already moved from Lanarkshire into other parts, not all to Fife, but we are faced in Fife with a big problem. I do not ask that it should be declared a special or development area. That would not suit our purpose, but the fact is that at present we are bringing in those miners from Lanarkshire. There is work for the men, but there is not always work for their families. The Under Secretary of State for Scotland knows all about the case, because he met our people during the summer—

The Joint Under-Secretary of State for Scotland (Mr. Thomas Fraser)

I thought the contrary was the fact.

Mr. Stewart

I have not said anything, so I do not know what the hon. Gentleman means when he refers to "the fact." Let me complete my sentence. The hon. Member knows that the whole of the political parties in Fife, without exception, as well as the local authorities and the industrial concerns, are united in believing that if the present system goes. on, by which miners are imported and nothing is done to provide employment for their daughters and their sons, Fife will ultimately find itself in precisely the same position as Lanarkshire, from which it is drawing this new labour.

It is no use the Under-Secretary denying it, because I have a record here of an eloquent speech which he made when he came to Fife in June last, and met a most representative deputation from all parts of the county and drawn from all political parties. The hon. Gentleman, having listened courteously to the deputation, as, indeed, he always does, made these remarks. He spoke of having in mind the concern of those who are responsible for local government in those new developing areas—their areas will not become Lanarkshires in 40, 50. 60 or 100 years' time. I do assure you that we have these things in mind, and I think our discussion this afternoon will have served the purpose of imprinting even more clearly upon our minds your resolve that Fife shall not be denied the ancillary industries necessary for you to build up a sane economic life in your communities in Fife. That speech made us in Fife believe that it was the intention of the Government to help us to provide those ancillary industries which we regard as vital if the balance of trade in that great industrial county is to be maintained.

I looked forward to the Bill in the hope that it would contain, as well as its present provisions, other provisions to deal with the new and unique problem of co-ordinating industrial development in Scotland, but there is nothing of that kind in the Bill. On the other hand, the obstructions with which all the counties of Scotland, including Fife, are confronted are still there.

Mr. T. Fraser

What are they?

Mr. Stewart

I do not want to read the whole of the evidence of the meeting which the hon. Gentleman attended. If he has forgotten it, I shall be very pleased to let him have the typescript. They are known to many hon. Members on the other side of the Chamber.[HON MEMBERS: "No."] I beg the hon. Gentleman to refresh his memory about the case that was presented to him by his own political friends in Fife. I see at least one of them among the hon. Gentlemen opposite. They all supported the county councils in this matter.

Mr. Malcolm MacMillan (Western Isles)

Would the hon. Member tell us what the obstructions are?

Mr. Stewart

Perhaps I may take up that point. We desired to set up a trading estate in Leven, to give one example. That proposal has been turned down by the Government. We are not permitted to do it, although we regard it as necessary. We are prohibited. That is the obstacle. I do not want to quarrel about this; it is not a matter that we should quarrel about.

Mr. T. Fraser

The hon. Gentleman said "We"—meaning "We in Fife," I suppose—"want to build a trading estate and the Government will not let us." That is not so. Some people in Fife want the Government to build an industrial estate in Leven and the Government have said that the time is not yet, because employers of labour in Leven are complaining that they cannot get labour to man existing factories in Leven and say that it would be madness to create additional employment. The hon. Member said that he entirely supported his hon. and gallant Friend the Member for Angus, South (Captain Duncan), who said that we should not put any new industry in, if the sole result was to take away employment from existing industries. That is what would happen if we established an industrial estate in Leven.

Mr. Stewart

That statement confirms what I said. The Government have refused to allow us to do what we think is right. As to the reasons that the hon. Gentleman gave, let me give him this reply, in which I speak for all the local authorities and political parties in Fife. We have the experience of the opening of a new, small factory, which we did on our own in Leven. A very large number of women workers appeared, seeking employment. They were on no employment exchange list at all. I assure the hon. Members that our case is well worth consideration.

The County of Fife, with its peculiar, developing conditions should be regarded as a new type of area deserving the attention of the Government. It is what I would call a developing area and not a development area, that is to say, an area of the kind which we all know and where the Government are trying to develop all the resources of the nation. It is clear that in such a developing area conditions exist which are not found elsewhere. Those peculiar conditions demand the introduction, gradually—I do not ask for them at once because there is a lot in what the hon. Gentleman has said, but I ask for them in principle—of special measures after rather special consideration.

Mr. Hamilton (Fife, West)

Will the hon. Member say whether, in his opinion, Fife as a county is better off now than it was when his party was in office; and will he give us evidence of any unemployment among these Lanark imports, particularly among the wives and daughters of the miners who are being imported?

Mr. Stewart

The hon. Member is trying to import party politics into this matter. I am trying deliberately to avoid them. This is not a matter of party politics. The Under-Secretary and I have been into this matter, and I am not really disagreeing with him tonight. I am inviting the Board of Trade to consider a new idea, that this kind of area is unlike any other, being neither a development area nor a non-development area but a developing area, which needs special plans.

When the Under-Secretary was invited to Fife he made a concession in saying that he would supply to the Fife planning authority facts which they did not then possess. I am not sure that they possess them now, but I am not authorised to speak about that. He wanted Fife to have the figures so that Fife could plan. It is impossible for a local authority of that importance to plan unless there is behind it the recognition of the Government that special developing conditions exist there. I hope that when the hon. Gentleman replies he will treat that suggestion as a constructive one and, I think, a friendly one, and that if he is not able to accept it tonight he will at least give me the assurance—I speak for a very great industrial community—that he will give it his very careful consideration.

8.42 p.m.

Mr. Snow (Lichfield and Tamworth)

It is a pity that we had some carping comments from the back benches opposite this afternoon when my right hon. Friend the President of the Board of Trade gave his record of the administration of the 1945 Act. The nation as a whole will welcome this very fine achievement in the provision of more employment and more industry in the development areas. However, I must admit that the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) swallowed the bait or, should I say, rose rather swiftly to the dry fly cast in his direction by the President of the Board of Trade in connection with his implication that it was the result of a Labour policy and of Socialist propaganda over the years that there should be rationalisation.

The right hon. Gentleman was wrong in resenting that implication by my right hon. Friend. I have listened to quite a lot of the speeches of the right hon. Gentleman the Member for Aldershot during the last five years and, normally, he is very fair in his comments on industrial matters, but when he resented the remarks of my right hon. Friend I think he should have remembered that year after year Socialists up and down the country were advocating that there should be encouragement for industry to go to areas where it did not exist but ought to exist. We claim, I think quite rightly, that the results of the 1945 Act, for which the right hon. Gentleman claims some sort of God-parentage, show that the Act has achieved what we advocated year after year.

Mr. Lyttelton

"Resentment" was far too strong a word. I thought it a little ungracious of the right hon. Gentleman not to mention the fact that the 1945 Bill was made into an Act of Parliament by the Conservative Party. Actually, it was I who got it through the House of Commons.

Mr. Snow

While conceding the technical correctitude of that remark, if it had not been for the stimulus of the Labour element in the Coalition Government, that Bill would never have been brought forward. Indeed, as I understood the speech of the right hon. Gentleman, it seemed that he was arguing that the old distressed areas resulted from world trade recession. I think that is wrong. The old distressed areas, now called development areas, are a monument to the rigidity of Conservative economic doctrines.

The hon. Baronet the Member for Abingdon (Sir R. Glyn) said, in his persuasive way, that it was not profitable to keep on reminding the public of the bad old days when these distressed areas were permitted or when they grew. The. hon. Baronet is always courteous and has more than his fair share of charm. He nearly had me for a moment, but I remembered how, day after day, in the "Daily Express" there is a little column entitled "Planners at Work". That column always picks out some irritating little stupidity that crops up due, they allege, to the official mind. Yet the record that my right hon. Friend gave this afternoon was the result of planning, was the result of that very doctrine which is decried by the Tory propagandists. The nation will welcome the news and the record that my right hon. Friend gave this afternoon, and will understand that there is merit in industrial planning.

Now I turn to rather new ground, the administration at regional level of the Department of my right hon. Friend. I realise that the scope of this Debate has been rather limited by yourself, Mr. Deputy-Speaker, and other occupants of the Chair. I will do my best to keep in order, and in so far as the administration and the system of administration at regional level in the Board of Trade is the same, whether it is in a development area or outside, I think I can keep in order. As I see it, the only difference is that in the development areas there are commissioners who are responsible to the regional board of industry and the regional controller of industry.

I have had some experience in trying to stimulate industry in Portsmouth during the past few years. My recollection is that the organisation at regional level, not only at the Board of Trade but in the Departments related to the Board of Trade, was getting top-heavy. I still have that impression. Looking at the official publication, "Notes on Government Organisation" I see a list of the kind of committees which exist at regional level. I do not wish to be indelicate, but there seems to be a sort of administrative constipation. There is a Labour Preference Committee, a Distribution of Industry Panel, a Physical Planning Committee, a Regional Board for Industry, and several others. They are all very fine, but they were designed more for the economy of war, when there was a great shortage of raw materials, than for the situation which is developing now, where we want far greater flexibility in the stimulus of industry than is necessary outside the development areas.

We have the situation now where the President of the Board of Trade has informed the English National Council of Development Committees that in his view the scope for development boards or associations or committees should be aligned with the regional areas which are administered by his Department. I think that is wrong, because it does not appear to me to be illogical to suppose that the people at local level have a better mental picture of what is needed to maintain a high level of prosperity in a given local area.

I believe that the Board of Trade, through its regional offices, carves up the regions into so-called economic survey areas. These, I believe, are, broadly speaking, the catchment areas for employment figures. If that is so, why is it not possible to reconsider the administrative set-up which is the present state of affairs and to have aligned with the economic survey areas bodies which represent the local authorities, the trades unions and the industrial interests of those areas? I believe that many of the officials at regional level could be cut out and more direct contact be made with the Board of Trade at national level.

I do not wish to associate myself with Tory Press propaganda about "hordes of officials." On the contrary, I have received very great help indeed from regional controllers, both in the south of England, in region No. 6, and in the Birmingham area. But we all know what goes on in these committees, whether it is a committee which embraces representatives of the trades unions, industrialists and the Ministry, or whether it is a committee composed only of officials. A speech by an hon. colleague of mine just now drew attention to the "passing of the buck," as he described it, between the various ministries, one of whom has to be nailed with the responsibility of sponsoring a project. The fact is that if we could simplify the regional set-up and provide more simplicity, bearing in mind the national investment problem, at the economic survey area level I believe we should get a far greater and more colourful development and extension of trade.

I have been looking at the 1950 Estimates for the Department of my right hon. Friend and I see that the cost of his regional organisation has been dropped from the 1949 figure of £514,418, to an estimated figure of £386,700. That is a very welcome drop, but I believe that a still further reduction in administrative expense at regional level is both desirable and possible.

It is not just a question of officials or the Government having a plan in their minds about the development or expansion of industry in any given locality. Many other people—shopkeepers, providers of transport and other services—want to know what the regional office has in mind. I think that not enough information is issued as to the sort of development that a regional office has in mind.

Let me give the House an example. In the Rugeley Armitage area, in South Staffordshire, there is a coal pit—it is at Brereton—which has an anticipated life of only four years. With some difficulty I have found that, if additional borings give the necessary favourable indications, the National Coal Board have a plan to sink another shaft in the locality which will increase the employment level in the coalmining industry there. With any luck, if everything goes well and the new borings turn out in the manner hoped for, in four years' time, as the old pit dies out, so the new pit will come into operation.

I have a letter from my right hon. Friend saying that in that very area he would give encouragement to the setting up of industry which would provide employment for women. I suppose that there is some overall plan for this economic survey area. In Command Paper 7540 reference is made to regional research units. If there is a regional research unit in this area, they should consider the publication—I give this example because I think it is applicable over the whole country—of who they have in mind so as to give the people who could provide retail distribution points or other services some idea of what they can do or what they should think of doing when these plans mature. Wage levels which exist in that area will be affected because, as my right hon. Friend knows, certain employers virtually have a monopoly of employment in the area at present. I think it will be very helpful indeed to provide a little more competitoin between employers.

I should not like anything I have said to be construed as a criticism of my right hon. Friend's administration, but I do say that the administration at regional level needs reconsideration. In my view it needs to provide a good deal more scope for consultation between local authorities, trade unions and industrialists at a local level.

8.56 p.m.

Mr. Chetwynd (Stockton-on-Tees)

In the few minutes remaining, I should like to bring the Debate back to the broad general principles underlying this very modest Bill, bearing in mind its relation to the more important Measure, the Distribution of Industry Act. In my view there are four main reasons why we need this Measure today. First, we have still to solve the deep rooted social problem which arises from the fact that the development areas as we know them are often tied to one or two basic heavy industries. There is still the need to give a more diverse and varied industrial employment in those areas. The second reason is to remove certain impediments to the working of the 1945 Act which have hindered development in the past five years. It is quite clear that after the first post-war rush of new industrial projects into the development areas they are now coming forward much more slowly and much more inducement is needed to get them to take their places in the development areas.

Thirdly, there is still the great overriding economic necessity of bringing all the people who can make a useful contribution to our economic life into production today. In the development areas, as everyone has testified, we have a very adaptable labour force which can give of its best at this time and help that increased production which alone will see us through our difficulties. Fourthly, this lies a little ahead in some places, but already on the Tyne and other shipyard areas this has become of great importance, we have to meet a possible recession in the basic industries of shipbuilding and ship repairing. We also have to think of what industries can take the place, to some extent, of the mining industry, where, for one reason or another pits are closed down.

A great work has been done in the last five years and there is great work to be done as there are still one or two substantial pockets of unemployment which all our efforts have failed to solve. This is aggravated by the fact that it is the elderly, or more elderly, part of the male population which is out of work today. Prolonged unemployment is more prevalent in the development areas among people who are more than 40 years of age. More than 74 per cent. of those who have been out of work for more than six months in the development areas are more than 40 years of age and that creates a tremendous problem. In addition to the age factor, we have to take into account the fact that many of the men are only capable of light employment through industrial disability of one kind of another.

The record of progress made since June, 1945, in the north-east development area, with which I am most familiar, has been truly remarkable. There has been an absolute transformation of the scene. Some 285 new factories have been completed, 84 are still under construction, and 436 are approved; 10,400 men and 11,600 women are at work in these new factories and a further 33,000 jobs will be provided when all the factories under construction are completed. A further 26,000 people have been found work either by converting war factories or ordnance factories to industrial estates. All that is to the great credit of the Administration, of the industrialists and all those people who have pulled together to make this policy such a success. But even so we cannot be complacent about these results. There is still the problem of this hard core of unemployed to meet and there is the possibility facing us in the future of an extension of further unemployment in the basic industries.

The real teeth in this new Bill are in both subsections of Clause 3. One of these empowers the Board of Trade to make grants in "exceptional circumstances" towards the losses incurred in establishing a new industry or transferring an old industry to a development area. We should all like to have more information as to what the President of the Board of Trade means by "exceptional circumstances." The figure of £100,000, which is the proposed expenditure in the first year, if spread over all the development areas, can easily be absorbed by the transferring of one or two major industries. We shall have to use some caution and tact in how we make use of the term "exceptional circumstances."

I should like to see whole factories move from an over-developed area into a development area because it is much more economic in the long run to do that provided allowance is made for the expenses of disruption, etc. Where there is a branch factory in a development area and a parent factory in London or another part of the country, the overheads in running both those places are enormous. If there should be any sign of a recession the subsidiary in the development area would be the first to be shut down, and the other factory in the over-developed area would carry on. I should like to see more attention paid, and I think that is probably the purpose of this Bill, to the transporting and transferring of industries as a whole into these areas.

The other important provision is Clause 3 (2), which empowers the making of grants or loans to housing associations: "where the Board are satisfied that the grants or loans will further the provision in a development area of dwellings for persons employed or to be employed in the area." If this wide Clause is used properly and fully it should enable us to do an enormous amount of transferring of workers into development areas and from one part of a development area to another part. Local authorities are certain to be somewhat worried by this provision. They will wish to know what is the scope of it and why they themselves cannot be entrusted with this job of building houses instead of it being given to special housing associations. They will also wish to be satisfied that any houses granted under this provision will be additional to their quota under the normal Ministry of Health procedure. My hon. Friend would do well if tonight he gave us some further indication of what use of that Clause is in mind.

We are faced with the administration of the Act in addition to this Bill, and there are certain things which can be done now which will give a stimulus to the development area policy while awaiting the provisions of this Bill to take effect. The first to give more encouragement to the trading estate companies. They are already offering great enducements to industrialists to establish themselves there and they are being and can be a valuable source of advice and encouragement to industrialists who have established themselves in development areas or wish to do so. Not only that, we must encourage the old-established firms in the development areas because we have so far only touched the fringe of the problem, and if the basic old-established industries were to falter then with the best' will in the world developments since 1945 would not help to hold the situation.

There must be a drive with renewed vigour to finish all those factories which are now at some stage of development and construction. Finally, if with these new inducements and with all the inducements and priorities for raw materials and Government contracts which exist under the old scheme, we still cannot get private industrialists to take over factories and work them to reduce this hard core of unemployment, I urge the Government to be prepared to step in themselves to bring in the right kind of industries and do the job if other people are unwilling to do it.

Sir William Darling (Edinburgh, South)

Before the hon. Member sits down, may I ask him if it is his view that all that can be done for £100,000?

Mr. Chetwynd

No. If the hon. Gentleman had been listening more carefully he would know that I said that while we are waiting for this Bill and the time in which the £100,000 may be expended, all these things can be done under the provisions of the main Act.

9.6 p.m.

Mr. Erroll (Altrincham and Sale)

The Debate today has been notable for the absence of rancour on the part of hon. Members opposite. Some of us on this side of the House feared that they might indulge in long diatribes against the action taken during the inter-war years. However, it seems that with the passing of the years hon. Members opposite are coming to recognise the honest and sincere efforts made by previous Conservative Governments to cope during the pre-war years with the difficulties and urgent problems of the special areas. If my records are right, this is the first Bill relating to what are now called the development areas to be introduced by a Labour Government, all previous legislation having been passed by Conservative Administrations. We are indeed glad that the last Labour Government made full use of the foundations which were laid, and developed those areas as successfully as they did.

We all particularly appreciate the remarks of my hon. Friend the Member for Abingdon (Sir R. Glyn), who urged us to forget the labels which can be attached to the past histories of certain towns as they served only to perpetuate old memories, and did no good to those towns or to the industries which might be attracted to those locations. There is, naturally, a difference of emphasis between the two sides of the House. There is a tendency for hon. Members opposite to bring to bear, from their past experience, their own solutions to the difficulties; whereas we on this side of the House are more concerned to see an expanded economy in which there will be more prosperity, rather than merely to buttress up certain areas from a possible depression in the future.

This small and modest Bill is really only an extension of the 1945 Act. Several hon. Members, some on this side of the House—for example the hon. Member for Anglesey (Lady Megan Lloyd George)—complained that the Bill did not do anything like enough. It seemed to me that the hon. Lady had not studied the 1945 Act, because this Bill is virtually only an extra Clause to that existing Act. It seeks to give the Government power to do certain things which the previous Act did not permit them to do. As I see it, there are three new purposes achieved by the new Bill. First, the Government, or the Department, is given power to take over factories in development areas which may be unused and unoccupied. But the Bill, and the speech of the Minister for that matter, are silent on what is to happen to those factories after the Board of Trade have taken them over. I hope very much that they will be transferred to other private enterprises and not used for the purpose of setting up State factories to operate in those areas.

Mr. Collick

Why not?

Mr. Erroll

The hon. Member asks, "Why not?" For the very good reason that we on this side of the House have had enough experience of the extravagance of State enterprises already not to wish for more. Second, the Bill enables additional provision to be made for transferring key workers. It is to be hoped that hon. Members in all parts of the House will play their part in persuading key workers, and other workers, to move to new parts of the country. We can only overcome the special problems of the development areas if there is a reasonable mobility among the people who must move to man the new factories.

Third, the Bill gives the Board of Trade power to pay compensation for the cost of the transfer of plant from existing factories to new factories in the development areas. This is a non-recurring cost and it certainly seems reasonable that it should be met out of public funds. Although the cost of the transfer may be paid from public funds, I hope that the concerns transferring their plant will be free to use whatever form of transport they like and that there will be no restrictive provision written into any undertaking given by the Department that, for example, they must use the railways or the road services provided by the British Transport Commission. If any such restrictive covenant is introduced, it will merely mean that the amount of the subsidy will be greater than it would be if the firm was free to use private hauliers or, better still, their own transport operating under a "C" licence.

The areas themselves are extremely diverse, and that has helped to provide diversification in this Debate. We are apt to complicate the issue by thinking that all development areas are of the same nature. It is essential to distinguish between those areas where the main industry is heavy engineering or shipbuilding—industries which are of great importance to our export drive and for which the main markets are overseas—and the coal mining areas, in which the predominant industry is an extractive industry. The engineering area may well expect to continue for 100 years or more with periods of prosperity and periods which are not so prospersous, but all those areas in which an extractive industry is predominant, must ultimately undergo a major change as the natural resources of the region are used up.

There are also the special problems of the Highlands which have been referred to by several Scottish Members, and the particular difficulty of one area in South Wales where the older tinplate works will become unusable because of the natural development of the tinplate industry and especially because of the vast new works which are being erected by the Steel Company of Wales. During the Debates on the Iron and Steel Bill, in the last Parliament, there was much argument about the allocation of steel plants and whether new, efficient plants should be put up regardless of the effect upon old, well-established and perhaps less efficient plants, or whether the older plants should be subsidised by the new.

We have now had, in the opening speech of the Minister, an inkling of the Government's decisions in the matter. It is apparently the intention of the Government to provide alternative work in those areas where the older tinplate factories will ultimately be closed, because they will not be able to compete with the new works of the Steel Company of Wales. This redistribution of industry cannot be undertaken in one or two areas or in a spurt of enthusiasm by any Government, of whatever political party or colour. Full redistribution must take something like a generation. There are problems of skill, traditions, supplies and markets.

All these matters take time to arrange and to secure. The first and most important task is to study the nature of the people who are to be employed in the factories authorised under the Bill. The problem as it affects women appears to be approaching solution. My right hon. Friend the Member for Aldershot (Mr. Lyttelton) referred to the excellent results achieved by installing a factory in Sunderland and another in Motherwell almost exclusively for the employment of women workers. He bore testimony to the excellent quality of these workers, and I, too, in visiting development area factories, have noticed the same excellent quality of the female labour which has been attracted to this work. Here, indeed, the problem seems well on the way to solution.

It is, however, very much more difficult in the case of the employment of men. In those areas which are engaged in the manufacture of capital goods, such as engineering goods mainly for export, the problem is to provide alternative employment for the men during periods of contraction of the normal market for their production. There is thus the temptation to set up in the development areas factories which will not be fully occupied during periods of boom, but will be a kind of stand-by or reserve of capital production equipment for the lean times in the staple industries of the area. We are thus in danger of seeing a kind of double-banking of capital equipment in these areas, and, while that may be desirable, its great cost in terms of the resources of this country cannot be ignored.

The problem is rather easier now in those areas in which the extractive industries predominate, because, within broad limits, it is possible to estimate the life of the mines and make good provision well in advance for alternative industries when the mines are no longer paying propositions. Indeed, the initial steps to be taken are seen already in the present use of factories for disabled mineworkers, which would form the spearhead of a new industrial development in these particular areas. It was interesting to hear what my hon. Friend the Member for East Fife (Mr. Stewart) said about the establishment of secondary industries to take the place of coalmining, which is undergoing such rapid development in that part of the country. That is, indeed, looking far ahead, but Scots folk do that, and we are grateful to the hon. Gentleman for his vision.

We must also look at the amount of employment which is being provided in the new factories in these areas. The employment is not so very great, considered numerically. In fact, it might even be judged really disappointing in terms of numbers of men and women for whom employment has been found. It is not unnatural that there should be a temptation to concentrate upon that production which employs most people, regardless of whether it is the most suitable for the area or not. But the indications so far are that that temptation has been resisted. We have, instead, a very high capital cost per job created, compared with the rest of the country. Nevertheless, that exceptionally high capital cost is probably justified in view of the special and exceptional circumstances.

In the matter of the transfer of workers, we are up against a real difficulty. Workers are finding it particularly difficult to get homes in the development areas, and it is, therefore, excellent that there should be in the Bill some provision for houses for meeting the needs of the workers who are to be transferred to the development areas. Nevertheless, the problem of providing additional employment in the development areas is aggravated by the impossibility of transferring willing but unemployed workers to other areas which have not sufficient workers at present. If only there were more houses, we should see quite a number of willing workers voluntarily transferring to areas where there are jobs waiting for them; but, of course, were they to move, they would go to the bottom of the long housing lists and would have no chance of ever having homes of their own. In this way does one problem aggravate another. If only there could be more houses, the development area problem would be eased quite considerably.

I want now to turn to a particular group of workers who have very special problems surrounding their transfer, namely, the managers for the new factories, particularly where those works are extensions of existing factories in other parts of the country. It is not just a question of unwillingness on the part of managers to transfer, but of very real physical difficulties which they are up against. They may be offered a substantial rise in salary as an inducement, but when that has been taxed at the full rate it leaves little enough additional reward. Then there are other problems which a manager has to face, such as schooling for his children. In addition, he has often greater difficulty in obtaining a suitable house because council housing lists are barred to him—however willing he might be—and because other forms of housing are impossible to obtain except at very high rates. If a little more flexibility could be provided so that managers willing to transfer might be allowed to build homes for themselves, there might be less reluctance on their part to transfer.

Even if a firm does pay the additional salary which is the minimum reward that a manager requires, and pays for the new house which is needed, and, possibly, any other additional expenses, those things still represent overheads and an additional charge upon the efficiency of the new factory in the development area. Some may disapprove of managers taking up this attitude, but the fact remains that they do, and it is something which cannot be left out of account. In large part it springs from discriminatory Government policy over the last four years.

From the transfer of men, I now pass to the transfer of the factories themselves. It is, as the President of the Board of Trade pointed out, comparatively easy to set up a brand new factory with a brand new works in a development area. But, as he added, such a company and such an undertaking might not, in fact, qualify for preferential treatment in a development area. It is understandable therefore, that the Board of Trade should have tried to encourage firms in other areas to set up extensions in development areas. This, of course, is a particularly difficult task. I hope that the President of the Board of Trade will not be influenced by the advice given to him by the hon. Member for Edge Hill (Mr. Irvine), who suggested that no extensions should be allowed outside the development areas and that all firms wishing to extend should be compelled to go to development areas sites. That, of course, would be the worst possible policy.

Mr. Irvine

I desire to make it abundantly plain that I only made that recommendation in the very special circumstance of industries with a very high proportion of workers equivalent to the number of workers unemployed in the development area.

Mr. Erroll

I am grateful to the hon. Gentleman for that further explanation, but, nevertheless, the position is a delicate one and calls not only for discretion, but for a complete understanding of the manufacturer's position.

I hope that the right hon. Gentleman and his officials will always be prepared to meet the reasonable objections and difficulties, particularly of reputable firms. They know the difficulties involved in splitting into two locations when, hitherto, they have been in one. I have in mind a particular works in West London which has specialised in the manufacture of delicate scientific and engineering equipment, and which, desiring to expand in order to meet a new and lucrative North-American dollar market, was told that if they wished to expand they must go to Newcastle or South Wales. It is quite impracticable for them to do this; doubtless they will win through in the end, but only after 18 months or two years of delay while the case is argued out.

Not only will it involve extreme difficulty in the transfer of staff, but they do not have the managers readily available to double up on management and provide a competent works manager both in London and in South Wales or wherever the other place is to be. Inevitably, what would be involved would be a great deal of travelling by the existing executives so that their efficiency would be lowered considerably by reason of spending long hours every week in the train travelling between the London works and, say, the Newcastle works. That is an important factor to consider, particularly where a firm is engaged in the export industry.

Such a firm might, however, be able to transfer to a location near at hand, for example to Portsmouth. Some reference has been made to Portsmouth by hon. Members on both sides of the House. That would have the added advantage, from the point of view of the Government, that such a transfer would not have to be subsidised in any way out of public funds

Mr. Manuel (Central Ayrshire)

In the earlier part of his speech the hon. Gentleman indicated that available new factories should be handed over to private enterprise. He is now making out a case that private enterprise should not be asked to go to the development areas. Would he not agree that if private enterprise will not go into these factories the State should use them to solve unemployment in the development areas?

Mr. Erroll

I am not suggesting that they should not be asked to go. I am saying that they should not be forced to go. In any case, it would be unwise to build factories before there is a firm agreement that they would be occupied.

Now I want to come to the reference by the President of the Board of Trade to the competitive position. He suggested that it had been Government policy for a number of years that the orders of Government Departments should be directed to factories in development areas, "other things being equal." I presume that that means that there will be a state of free competition between all the factories producing a similar article, whether they are in the development areas or outside. If that is to be the case then it would be automatic for a Government to place an order with the person who sub-milted the lowest tender. However, I feel that there may be some preference shown to development areas even where "other things are not equal."

There has, however, been a consideraable extension. The practice is no longer confined to Government's Departments. All nationalised boards have been instructed to direct their orders similarly to development areas. If that is to be done let us hope that a fully competitive position is preserved between the development area factory and a factory in another area. If that is truly preserved maybe no harm can come of the arrangement. We cannot afford to see nationalised industries, supposed to be maintaining themselves in an efficient state, having to contribute by means of a hidden subsidy to factories in the development areas.,

Some reference has been made to subsidies. The whole of the 1945 Act is, of course, a subsidy, as is the Bill which we are discussing tonight. But the important thing is, as the President said, that there should be no continuing subsidies to the factories once they are established. That is why I hope the House will not agree to suggestions made that there should be preferential transport rates for firms in the development areas and, as one hon. Member suggested, special low rates for electric power to factories established in the Highlands development area.

Mr. J. MacLeod

Will the hon. Gentleman say why he does not think that that should be so?

Mr. Erroll

Because it is essential that such factories should remain fully competitive in home and overseas markets.

I now come to the problem of diversification in development areas. This, indeed, is the greatest problem of all. We have to secure diversity in types of employment, between skilled and unskilled, and between men and women. We have to secure diversification in markets, home or export, and in the types of goods made, whether for capital works or for consumption. Success in such a problem can only be achieved with the full co-operation of the directors and the managers of the firms concerned. Many hon. Members have referred to areas which were near development areas, and suggested that they should be accorded favourable treatment under this Bill or under an extension to it.

Of course, we are all liable to think of the next slump, if it comes, taking much the same pattern as the last slump. But that does not follow at all. The pattern of the next trade depression, should it come, may be entirely different. At such a time we might find a temptation to extend development areas so as to cover the entire country, so that we would all be subsidising industry wherever there was a moderate degree of unemployment. All Britain, indeed, in such circumstances might become a development area in its special meaning which we use in connection with this Bill. Britain, however, can become, instead, a developing area, in which the whole of Britain is one great prosperity area. We can become a prosperity area if—and this must be the wish of us all—the qualities of enterprise, thrift, hard work and good government are applied for the benefit of all.

9.32 p.m.

The Secretary for Overseas Trade (Mr. Bottomley)

The Debate has been interesting and, if somewhat wide, certainly useful. I should like to join with the other hon. Members who have already referred to the maiden speeches which have been made today. Those of my hon. Friends the Members for Gateshead, West (Mr. J. Hall) and Rhondda, West (Mr. Iorwerth Thomas) showed that they had great practical knowledge and experience, and their speeches have been of value to us all. The hon. Member for Walton (Mr. K. Thompson) spoke with much fluency. I agree with him that his speech was non-controversial, but I am afraid that I could not exactly agree with his line of thought. Nevertheless, it was a worthy contribution, and I am sure he will forgive me if I say that he at least showed that under the 1936 Act, the Liverpool Council did not do so well in tackling unemployment as we have been able to do with the development area scheme.

There has been an absence of rancour in the Debate, and I am glad of that. Speeches which have been made by the hon. Baronet the Member for Abingdon (Sir R. Glyn), not only this afternoon but in the past, have been noteworthy in this connection. However I am bound to join in feeling with many of my colleagues, for I suffered as they did during the inter-war years when there were many months and years of unemployment, either through the lack of policy or, if there was a policy, the misguided use of it by the party opposite.

I want at once to pay tribute to the right hon. Member for Aldershot (Mr. Lyttelton) who certainly made a worthy contribution in promoting the Measure in the earlier stages which have now led to the presentation of this Bill. But I am bound to say—and I am sure he will agree—that he has not always been supported by his colleagues in his noble endeavour. If I might refer to the 1945 Measure, I would say that he certainly was not able to retain Clause 9 which many of my hon. Friends thought was so important. Indeed, one distinguished Member on the Conservative side of the House, in talking about the Bill at the time, said it was democracy and Socialism run mad, so hon. Members opposite can scarcely claim that they have been in accord with the principles which we on this side of the House have desired to follow. It was Sir John Wardlaw-Milne, then Member for Kidderminster, who said that.

This afternoon my right hon. Friend was challenged on several points. I should like to pick up some of them and I think I ought to make one correction at once. The right hon. Member for Aldershot suggested that my right hon. Friend had said that he deprecated compulsion. My right hon. Friend did not quite say that; what he said was that the problem could not be solved by compulsion alone. He said that the right course was to steer industry, and I think we have been successful in that. Indeed, it is of interest to know that as a result of that policy many excellent schemes are already contributing to the success of the distribution of industry. I could refer to many of them, but time will not permit of more than two being mentioned.

In one development area in Scotland we were able to persuade the subsidiary of an American firm to come along and, as a result of the work they are doing, we are now saving dollars because we do not have to import the goods they make and, equally, they are now manufacturing articles which are being exported to earn us the currency we require. In another case a factory in the East End of London, which was bombed, is now making detergents which are vital for our export trade and for our own internal use. At the moment that factory will this year have a larger output in value than the whole of the area of the Cumberland coalfields to which we looked at one time for help in order to assist these distressed areas.

Some of the points raised in the Debate are general and I shall deal with them later in my speech. I should like to make particular reference to the right hon. Member for Aldershot, who talked about the process of diversification of industry and said it should be done in such a way that we do not introduce too much light industry so as to over-employ on the female side at the expense of male employment. Clause 3 (1) of the Bill is designed to enable the Board of Trade to offer inducements to firms to go to the development areas, with a view, especially, to employing male labour. There is, of course, nothing to stop them going there at the moment and we are sorry that more male employing factories are not established. It is hoped that by this Measure more of that sort of industry will be encouraged to go into these areas.

Another point put to me was whether Clause 3 (1) would enable the Board of Trade to subsidise firms. I want to say right away that there is no suggestion of a subsidy. We regard the Bill as clearly indicating the exceptional nature of cases and provision of limited scope to cover the removal and incidental costs—a once-for-all payment, as my right hon. Friend put it. I was asked about the administration of Clause 4. The amounts to be paid under Clause 4 will follow the lines of the present scheme of grants and allowances administered by the Ministry of Labour under the Employment and Training Act. This scheme, as the House knows, provides for the payment of fares, household removal expenses and lodging allowances where appropriate; and the Minister of Labour himself decides the individual cases which qualify for assistance and the payments are to be made by the Ministry to the individual worker.

The hon. Lady the Member for Anglesey (Lady Megan Lloyd George) asked what practical steps the Government would take by way of contracts to steer firms to development areas and also to keep them there. In that connection my right hon. Friend said earlier that he was not satisfied that firms in the development areas were as yet getting the full share of the contracts which, on economic and social grounds, would be justified. Arrangements are therefore being worked out which will have the effect, once a competitive tender price for an item has been established, of allowing development area firms to be offered a share of the contracts at the established competitive price. It is hoped by that means to cover that matter.

The hon. Lady also asked if the financial provisions were adequate for the purposes which the Bill is designed to meet. Many other hon. Members also raised this point. The figure of £100,000 for the financial year 1950–51 is only an estimate. We cannot be sure how many firms are going to take advantage of the facilities offered. The period will merely cover the initial stages of the process, and possibly the figure may later go beyond £100,000. As a result of experience gained of this matter this year, we shall be able to get ready for the next financial year, when proper provision can be made to procure the money necessary for these developments.

My hon. Friend the Member for Sunderland, North (Mr. F. Willey), who has done such exceptionally good work as a member of the North Eastern Estates Company, made a useful speech. He talked about estate company organisation and suggested a national corporation. This, of course, raises very large and important organisational questions. We are all the time keeping under close review the whole of the administration of development area policy with a view to improving our methods of work in every way possible. The work of the estate companies, the relationship between them, and the responsibility of the central Government in general policy decisions is most important. My right hon. Friend and I are continuing to give all the thought we can to this problem, and if my hon. Friend has any specific suggestions to make we shall be delighted to have them and give them full consideration.

My hon. Friend also wanted to know about the north-east coast position and how we were going to find jobs for the 30,000 men from the shipyards. He suggested that we might find alternative work for the shipyards and that there should be a replacement fund. He suggested also specialised factories and integrated industrial units. We will consider this and shall get in touch with the Admiralty and the 'Ministry of Transport to see what can be done. As regards the first point, steps have already been taken, and Departments are in consultation. On his third point, this can be done under existing powers if it should be needed, and it probably could be done to meet the needs of such firms as are dealt with in Clause 3 of the Bill.

My hon. Friend the Member for Edge Hill (Mr. Irvine) wanted to know what was the position if a factory wanted to develop in an area already overdeveloped. Had we any power to prevent that, and to direct it to a development area? There are powers in existence already. If we think that a factory is going to an over-developed area, we can refuse to give an Industrial Development certificate, and by that means the firm concerned would understand that it could more easily develop in one of those areas about which we have been talking during this Debate in the House today.

The hon. Member for Altrincham and Sale (Mr. Erroll) talked about the need to see that the buildings which are purchased are controlled in a way which will give the best possible results. He also wanted them controlled in a fair manner. Existing buildings which may be taken over will be dealt with in the same way as new buildings. They will be transferred to the industrial estate company and they will be available either to private enterprise or to public enterprise, according to the demands by either, in accordance with the employment potential and the social value to the community.

There were general appeals for special consideration. One hon. Member observed that we might finish up by making the whole of the country into a development area. We must look at each case. In response to the many appeals that have been made I can only say that, in the case of Stoke-on-Trent, which was raised by my hon. Friend for that constituency (Mr. Ellis Smith), in the case of Leith, raised by the hon. Member for Leith (Mr. Hoy) and in many other cases that have been mentioned, including the Medway area with which I am connected and where we have our problems, all may be considered at the time if the circumstances warrant it. If the unemployment situation is acute it will be looked at and, in the context of development area policy, it can be scheduled. I am certain that none of these districts can be compared with the old distressed areas, because today we find a development which is adding to the wellbeing, joy and contentment of millions of our countrymen.

The Distribution of Industry Act in 1945 was passed at a time when industrial and economic conditions in the country, and especially in the development areas, had undergone great changes due to the war. The Board of Trade established a research and intelligence organisation not only at the headquarters level but the regional level where we have been working closely in co-operation with the Ministry of Labour and the Ministry of Town and Country Planning, and, in the case of Scotland, with the Department of Health at regional headquarters. An attempt is made by the research workers to look at the local aspect of problems and to fit it in with national aspects. It gives to the Government of the day and to employers generally an insight into the trend of employment in those localities. It has been able to assist in the drive for increased production in textiles and other industries. It has been able to help us in concentrating on the need to export and to produce essential goods at home. We have dealt not only with the short-term position but we have made provision for our long-term policy.

A committee has been established under Sir Henry Clay to study the whole problem. It is sitting with university representatives and representatives from Government Departments considering the problem of the development areas and of the country as a whole. We must know what internal industrial and economic changes are taking place. It is with that end in view the Bill is linked with our general full employment policy without which all these methods would be just attempting to deal piece-meal with the situation, as indeed was the case before the war and in the inter-war years.

I can only say finally that it will be our endeavour to study continually and to make sure that we provide, as the Bill does, remedies for dealing with the special problems such as the hard core of the development areas at the moment. By introducing Bills in this House I am sure that we can look forward to a continuing policy of trying to solve this terrible problem about which we are all concerned. If we had all been as much concerned about it in the past as we ace today we should not have such an acute problem at present. I think we can say that, with the Bill given its Second Reading, we can look forward to it going to Committee where, I am sure, many of the other points already contributed can be further considered, with, I hope, complete satisfaction.

Mr. J. MacLeod

Not one word has been said about the Highlands of Scotland, an area which was designated as a development area. No development whatever has taken place in that area since it was designated, and I should like to know the reason why. I have put that point to the Minister.

Mr. Bottomley

The hon. Gentleman did send us a letter, which is receiving attention. It deals with a particular case which I do not think it is necessary to debate in the House. On the general question, there is less than three per cent. unemployment, and he knows that the policy followed as the result of the Act means that we cannot schedule it as a development area.

Mr. MacLeod

It is scheduled as a development area.

Mr. Bottomley

Yes, but although it is scheduled as a development area we cannot deal with it in the way we can the other areas. In connection with Lanarkshire, to which special reference has been made, the hon. Gentleman knows that there is a demand for labour there and not a shortage, and, therefore, to bring any further industry would only compete with the already existing shortage of labour, and for that reason it is not necessary to pursue it further. My hon. Friend the Joint Under-Secretary of State for Scotland dealt specially with Scotland, and if the hon. Gentleman had been here to listen to his speech he would know that an answer was given.

Question put, and agreed to.

Bill accordingly read a Second time.

Committed to a Committee of the whole House for Tomorrow.