HC Deb 02 May 1950 vol 474 cc1645-60

Considered in Committee [Progress, 26th April].

[Major MILNER in the Chair]


Question again proposed, " That the Clause stand part of the Bill."

7.4 p.m.

Mr. Manningham-Buller (Northants, South)

The last time we had an opportunity of saying anything about Clause 3 of this Bill was a week ago. At that time I questioned the President of the Board of Trade about the grants which could be made under the Clause. I asked him in what manner the House would be kept informed of the grants made, the total of the grants and also the manner in which they were divided between the specific purposes. It would be interesting and important that we should know to what extent the grants made were devoted to subsidising what we called last week " green labour." The right hon. Gentle. man, in answer to my inquiry, indicated that he was giving serious consideration to this question. A week having elapsed I again ask what are the intentions of the Government with regard to giving this information?

In my opinion it would be wrong for the matter to be left to be inquired into by the Public Accounts Committee, maybe many years after the grants were made. In my view there should be some form of return made to this House so that hon. Members may be kept informed of the nature of the expenditure made under this Clause. I therefore ask again whether further information on that point can now be given?

Captain Duncan (South Angus)

I wish to support my hon. and learned Friend in this request. The control over public expenditure is a most difficult thing. In this case of course the public expenditure will not be large, but it is none the less important from the point of view of principle that there should be adequate control of public expenditure of any kind. I hope that the Parliamentary Secretary will now be able to state that, by means of a return or by some other satisfactory way, the public will know what has been the expenditure on these schemes.

The other point I wish to raise is about the meaning of the word " loss." This Clause deals with the transfer of a business; that is to say, a business which exists in a particular area may wish to transfer to a development area perhaps 100 miles away. I know what the President of the Board of Trade said last week about " green labour," but does he also mean that the word " loss " can cover the loss to the firm during the time when it is out of production? If a firm is to move it has to dismantle its machinery and re-establish it on new concrete foundations in the new factory. It has to transfer its labour and maybe get houses built for its key workers under subsection (2) or in other ways. There is bound to be a time during which the firm is out of production and, therefore, is not only not making a profit, but is not covering its expenses at all. I am not objecting to that within reasonable limits, but I think we ought to be quite clear about the meaning of the word " loss " in subsection (1).

The Secretary for Overseas Trade (Mr. Bottomley)

We agree with the observations that the maximum control over public expenditure is necessary and we have every sympathy with the suggestions of the hon. and learned Member for Northants, South (Mr. ManninghamBuller), which were supported by the hon. and gallant Member for South Angus (Captain Duncan). The difficulty is to find a way in which we can deal with it without causing embarrassment to the firms concerned, and possibly stopping them from moving to a development area.

What I would propose is that in the Estimates presented to Parliament particular grants should be described in as much detail as possible. By putting in categories of expenditure—" green labour," for instance could be one—Parliament would have an opportunity of examining the matter most carefully. Then, of course, there would be in addition to the Estimates the Statutory Appropriations Account which would be available a few months after the expenditure; so that the suggestion that it might be years afterwards is not appropriate in this case. With regard to questions raised in the House we could go more into detail without giving away too much, otherwise we would be again in difficulties. I am sure none of us would want to be an embarrassment to those who have shown sufficient enterprise to go to a development area.

On the suggestion about possible loss as a result of transfer from one district to another, I would say that transfer is a physical removal, which ought not to take long. To the extent that there is a loss, this is a matter which would be considered; but whatever the compensation payable it would be subject to Treasury scrutiny. That is in keeping with the observations already made that we should exercise the closest care and attention.

I should like to make one other observation about Clause 3 (2). I think that there was a lot of doubt in the minds of hon. Members as to the real purpose of this provision. Many hon. Members referred to some houses which have been provided by loans to the housing associations. We could have built those houses ourselves under Section 1 of the principal Act. In fact, we are building some in certain cases at present. But this would have meant that, to bring them within the scope of Section 1 we should have had to buy the necessary land. That is sometimes a rather cumbersome procedure. We avoided that in other cases by asking housing associations to do the work for us on land which they own. We have provided them with funds by means of loans which are specifically covered in the Civil Estimates. Section 3 of the principal Act does not provide sufficient cover for this useful little piece of machinery. This Clause really puts the matter beyond any doubt by giving us the necessary statutory authority to continue to operate in that way.

Mr. Manningham-Buller

I am not in the least satisfied with the hon. Gentleman's reply. Indeed, it seemed to me to depart considerably from what was said by the President of the Board of Trade on the last occasion we considered this matter. The hon. Gentleman will realise that the Estimates will not give any information about how this money is expended. Indeed, I should have thought that in the Estimates the heading could relate only to the estimated amount which would be spent in the year on expenditure, or losses, arising in connection with the establishment or transfer of businesses. That is not enough. We want to see how the money is spent. In view of the Bill, it would be assumed that there would have to be some provision in the Estimates for the payment of these amounts. That is one thing: another thing is to know how the amounts are expended. We must have some information about that.

The hon. Gentleman referred to information being damaging to the firms. If the expenditure is legitimate and properly made, I fail to see in what respect it could be considered damaging to the firms. Could it be said to be damaging to the firms to have a contribution made to their expenditure in travelling to a development area? I should have thought not. I should not have thought that it could be said to be damaging to firms to have a contribution made for loss sustained in effecting a transfer. I ask the hon. Gentleman to give more consideration to this matter. A mere provision in the Estimates which, in any event, must be made, does not really give this Committee any control whatever over the expenditure of this money. It does not give any information as to the manner in which the money is expended. It is true that that could be ascertained, it may be after a long time has elapsed. by the Public Accounts Committee.

I suggest to the hon. Gentleman that there should be some form of report to the House of Commons every year about how these rather exceptional powers are exercised, so that hon. Members can, if they wish, raise matters in connection with them. They are unusual powers. I do not object in the least to the President of the Board of Trade having them, because I think they can serve a very useful purpose, but I say that they ought not to be exercised without information being given about the manner in which they are exercised. I ask the hon. Gentleman to say that he will give further consideration to this matter between now and the Report stage.

7.15 p.m.

Mr. John MacLeod (Ross and Cromarty)

On an earlier occasion when we discussed this matter, the hon. Member for Ayrshire, South (Mr. Emrys Hughes) referred to the rents of houses for key workers which may be too high for the workers to pay. I hope that the Government will be able to give some assistance to reduce these rents and that they will act in the closest co-operation with the local authorities. Without houses for key workers, we shall not get any development. This involves the solution to the whole problem of development.

There is one other point on the question of an industrial estate being established in a development area. Under this Clause, assistance will be given to an industry which comes into a development area. What would be the position of an industry within a development area which wanted to move into an industrial estate in the same area? Would assistance be given to a firm which wanted to do that? That point may arise in certain areas. I should like to thank the Secretary for Overseas Trade for the reply, by letter, which he gave to points which I raised during the Second Reading.

Lord Malcolm Douglas-Hamilton (Inverness)

I should like to mention one specific point on the question of rents for houses in development areas. Recently, I asked the Secretary of State for Scotland about rents in Inverness. This matter raises the same principle as that mentioned earlier by the hon. Member for Ayrshire, South (Mr. Emrys Hughes). Workers in a factory in Inverness were offered houses to rent. Some were Swedish type houses and other were ordinary council houses. The rents of the Swedish houses were almost double those of the ordinary council houses. I should like to know whether, under Clause 3 (2), it is possible to give some kind of compensation to councils, or to arrange some kind of equalisation fund to enable them to offer houses to workers at rents similar to those for normal council houses. It is invidious when workmen in the same factory are offered houses to rent at such varying figures.

Mr. Chetwynd (Stockton-on-Tees)

welcome this Clause as a whole, because I think that perhaps it will prove the most important in this Bill. It should encourage firms who, otherwise, would not be able to move, to take their works into a development area. However, I should like my hon. Friend to clear up a small point on subsection (2) which is causing difficulty. That is the point where it states: … 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. I should like to know how widely that phrase is likely to be interpreted. It would appear that the housing associations could, with the consent of the Treasury, provide dwellings for all kinds of persons to be employed in a development area. But, as I understand the position, this provision deals solely with key workers who will move in with particular firms. It would be useful if we could have some clarification about that.

If it is intended to refer to key workers, that should be specified in the Clause, because in Clause 4 key workers are specifically mentioned. If we put the two together—" workers " in one Clause and " key workers " in the next—it seems that there is room for doubt. It will antagonise certain local authorities if housing associations can get provision to build houses for workers of all kinds, whereas they themselves are restricted very tightly at present.

Mr. Emrys Hughes (South Ayrshire)

I would like to repeat the question which, unfortunately, owing to the procedure of the Committee, was not answered during our previous discussion. I was agreeably surprised to find support coming from hon. Gentlemen on the other side, because I thought they had risen to refer to certain animadversions which I had made about landlords.

I suggest that this is a burning question, and is likely to be a burning question when developments occur as the result of the passage of this Bill. For example, in my constituency, we recently had a new factory introduced from Yorkshire. To get that factory established it is was necessary to introduce certain key workers. The management of the factory appealed to the town council to have the key workers allotted houses in their housing scheme, and this put the local authority in some difficulty, owing to the fact that there was already such a large waiting list for houses under the control of this authority.

The noble Lord the hon. Member for Inverness (Lord Malcolm Douglas-Hamilton) referred to Swedish houses, which are likely to become part of these development areas in Scotland. There is a certain anomaly there, and I would ask the Secretary of State for Scotland not to repeat the mistake made by the Scottish development operations. We do not want too many different kinds of rents, which result in ill-feeling, and I hope the Board of Trade will agree to give us some assurance that there will be special financial consideration to meet and prevent these difficulties.

Mr. Bottomley

I want to say right away to the hon. and learned Member for South Northamptonshire (Mr. Manningham-Buller) that there is some substance in what he has said regarding an inquiry so that public expenditure could be carefully examined, but I am bound to say again that we are concerned with individual firms, and, if we do agree to what he has suggested, it will be possible for one firm to make a comparison with another, with some competitive advantage resulting therefrom. If there were a way in which we could make a general statement without in any way penalising individual firms, we would like to do it, and, if I can leave it at that, I will have another look at it to see if it is possible to meet the hon. and learned Gentleman in that sense.

With regard to the housing situation, the local authorities and the Ministry of Health are in the main responsible. The particular houses to which we were referring were those for managerial key workers, and it is true in some cases, as my hon. Friend has said already, about the variation in the high cost. I am now advised that we have been able to keep to the economic rent, except in some cases, where a person who has had a reasonable, or perhaps more than reasonable, income has been able to have a house built in an isolated area, resulting in the provision of a rather expensive type. When, subsequently, some managerial key worker has come to take it, the rent of the house has necessarily been much higher than it might have been had it been built in other circumstances. I can assure my hon. Friend that, in this connection, the local authorities will have a responsibility for housing generally. In connection with the managerial key workers, I think we have provided houses at economic rents in the development areas.

Sir Peter Bennett (Birmingham, Edgbaston)

I only want to emphasise one point. My own organisation has gone into the development areas, but the problem has been whether, in fact, a firm could go there at all unless there were not only adequate houses for the workers but special houses for the management. If firms had not been able to make some provision in that respect, the factories would never have gone there. Good as the labour is, it has to be trained and given the " know how." Unless that can be done, it is quite impossible, with the best will in the world, to utilise some of the factories which have been provided.

Without that provision of houses, we might just as well not have the factories there at all, and I think that those concerned with this problem will not consider that it is anything in the nature of favouritism. It is absolutely essential not only to have workers for the factory, but the management as well, but the latter will not go there unless they can be persuaded that they are going to have something in the direction of housing to which they have been accustomed. We simply cannot ask men in comfortable circumstances to go there and live in some places quite unsuitable to their needs, and, in that respect, I would confirm what the Minister has said about it being absolutely essential as part of the programme.

Question put and agreed to.

Clause ordered to stand part of the Bill.


Motion made, and Question proposed, " That the Clause stand part of the Bill."

Mr. Snow (Lichfield and Tamworth)

There is a point concerning, this Clause about which I would like an explanation. In the third line, it refers to employment in an industrial undertaking wherever carried on. I am interested in this, because it rather implies that, if there is a factory requiring to be manned up in a development area, under this Bill it will be possible to attract labour from outside that development area. If that is so, who is the arbiter in this matter? What is the overriding consideration? Is it to man up the factory, or is it, as I rather think it might be, to reduce unemployment in an area not scheduled as a development area?

Let me give an example of this. In the City of Portsmouth, part of which I once had the honour to represent, the unemployment rate is in the neighbourhood of 4,000. I see that the hon. and gallant Member for Portsmouth, West (Brigadier Clarke), is not in his place, but he drew attention to that fact the other day. During the lifetime of the last Parliament, Major Bruce, who then sat for Portsmouth, North, and myself tried to get the local authority interested in expanding industry in Portsmouth. In spite of a unanimous recommendation of a representative committee of trades unions, employers and local authorities, the Portsmouth City Council turned its face against planning its industrial future. We then considered that the Department of my hon. Friend might exercise their authority through the regional boards for industry, but these regional boards are very remote from the Economic Survey areas into which each region is divided. Therefore, we have a situation in Portsmouth where the local authority is not prepared to give consideration to industrial expansion or the relief of unemployment, and where the regional board for industry is very remote indeed. One is inclined to think that, under the terms of the Bill, we may be given a new opportunity to relieve unemployment in an area not scheduled as a development area, and, at the same time, man up a factory which needs manning up in that development area.

The Parliamentary Secretary to the Ministry of Labour (Mr. Frederick Lee)

The point raised by my hon. Friend is, of course, covered by some of the provisions of this Clause. We have the facility under a previous Act to remove people who are now unemployed into a development area. [HON. MEMBERS: " Order."] If hon. Gentlemen opposite are interested, Clause 4 gives to my right hon. Friend the facility—

Mr. Manningham-Buller

The hon. Gentlemen should address the Chair, and not the benches behind him.

Mr. Lee

—to finance the removal of people already in employment and who agree to go into a development area, in precisely the same way as if they were unemployed. By that method, we believe that we can assist the development areas in general, because, by the removal of key workers to undertakings opening out in these new areas, we shall be able to assist the managements in training the " green labour." It is largely for that reason that Clause 4 has been inserted in the Bill. I believe, of course, that it could have the effect mentioned by my hon. Friend in that it could draw people from areas where there is already unemployment. But, largely, the provisions which we seek are intended to enable my right hon. Friend to treat key workers, for the purposes of this Measure, as if they were, in fact, unemployed.

7.30 p.m.

Under the 1948 Act, we already have the power to assist them financially and if the Committee agrees to Clause 4 as it now stands my right hon. Friend would be able to assist the managements of industries which agree to remove either the whole or part of their undertakings to a development area in this expensive initial stage, because, before productivity can really gain momentum, considerable expenditure is required. For those reasons we hope that the Committee will agree that under these exceptional circumstances it would be fair and proper for us to have the power to assist financially key workers who are necessary for the opening of new factories or parts of new factories in development areas.

Mr. Chetwynd

I should be glad if my hon. Friend could clear up the particular point of a key worker in a development area who has been unable to find a house in that area, and who has been travelling at week-ends to and from his home, some 100 miles away. The Clause says: in the course of their removal pending their resettlement. Can my hon. Friend say whether, under this Clause, there is any means whereby such a key worker can be helped financially? It will be realised that at the moment, and pending his getting a house—perhaps under the provisions of the previous Clause—such a man is involved in considerable expense in travelling to and from his home every week or fortnight, as the case may be. If this Clause were wide enough to cover such people, it would give particular relief to key workers. I know of firms who are in difficulty because, having moved to a development area, they cannot retain their key workers owing to the expense involved in travelling to and from their homes.

Question put, and agreed to.

Clause ordered to stand part of the Bill.

Clauses 5 and 6 ordered to stand part of the Bill.


In this Act expressions have the same meanings as in the principal Act except that the expressions industrial building " and " industrial premises " shall not include any building used as a warehouse or for any agricultural purpose, and the expression industrial process shall not include any process used for the preparation or preservation of any agricultural produce.—[Mr. Manningham-Buller

Brought up, and read the First time.

Mr. Manningham-Buller I beg to move, " That the Clause be read a Second time."

The Committee will appreciate that the effect of Clause 1 (5) of the Bill amends the Distribution of Industry Act, 1945, to the extent that, quite apart from the power given in this Bill for the acquisition of land including an industrial building, there is power to acquire land of any description with the buildings upon it. That being so—as I indicated last time we discussed this Bill in Committee—it would appear that a great deal of Clause 1 is really unnecessary.

The point I wish to raise is that, in view of that alteration of the original Act, it is now possible for any building to be compulsorily acquired. Clause 1 contains power compulsorily to acquire land, including industrial buildings. I think the whole Committee had in mind those buildings to which one normally refers as factory buildings or premises. But, in fact, under the definition contained in the 1945 Act, an industrial building includes any building designed or suitable for use in the carrying on of any industrial process. That definition would, of course, include a warehouse used by factors in the process of the distribution of goods throughout the country which might be suitable for any industrial process. It might also apply to modern farm buildings which could be used for industrial purposes.

While I am not seeking by this new Clause to limit in any way the proper operation of this Measure, I am suggest ing that for the sake of clarity there should be some additional definition on the lines suggested in the new Clause, bearing in mind that the effect of Clause 1 (5) is to widen the power of acquisition under the original Act to land of any description, and, therefore, to buildings of any description upon that land. I think that the inclusion of some words of this sort—I do not suggest that these words are necessarily in the correct form —would not only act as a signpost to those endeavouring to operate this Act, but would also be a useful guide to those who may be affected by its operation.

Mr. Bottomley

I am not suggesting that the hon. and learned Gentleman, in moving this new Clause, had in mind what I propose to say, but I think that if we were to accept it it would prevent the Board of Trade from acquiring certain classes of buildings either by agreement or by compulsion.

Mr. Manningham-Buller

To save time, may I say that I moved this new Clause with a view to raising this point. I am not—nor, I am sure, are the Committee—asking the hon. Gentleman to give the arguments which might be advanced against the drafting of the Clause. If he would meet the points I have raised between now and the Report stage, I would willingly ask the leave of the Committee to withdraw the Clause.

Mr. Bottomley

If I agreed to that we should have many new Clauses dealing not only with agriculture and other associated industries, but with a wide variety of industries. What we are trying to do is not to interfere with bona fide warehouses at all. I think we make that quite clear. Indeed, if we look at page 2 of the Bill we find that lines 7 to 9 refer to something like this: or in connection with any such process for the time being carried on by the occupier of the building.

Mr. Manningham-Buller

Industrial processes.

Mr. Bottomley

I think it applies to industrial processes, but I can say quite emphatically that it will apply equally to any bona fide warehouse. Therefore, what we have to guard against is somebody who may try to evade the matter. It is possible that he may put some agricultural implements into an industrial building which is not being used, but which could be used with very good reason for industry generally. There are other ways in which the building could be occupied, if we accepted this new Clause, which would be detrimental to the requirements of industry generally. Therefore, although I have looked at this as sympathetically as I can, I think it is necessary to reject the new Clause if we are to be sure of getting these potential industrial buildings used for the purposes the Bill has in mind. We must protect ourselves against those who might practise evasion.

Mr. Manningham-Buller

That reply is not very satisfactory. The hon. Gentleman has drawn attention to lines 5 to 7 on page 2 of the Bill but he only read out the words: … for the carrying on of any … process or in connection with any such process…. Whereas in fact that proviso is limited to " any industrial process " and an industrial process is defined in the original Act as the making of any articles or part of any article etc. It is a very full definition.

I fear the hon. Gentleman has really not understood the point I put to him. It may be entirely my fault, but perhaps he would have been wiser to have left the point, which is really a legal point, to the Solicitor-General. It is a point which requires consideration, perhaps chiefly from the drafting point of view. I suggest it is necessary here, as a matter of drafting, to extend the definition. Whatever he may say, the proviso on which he relied in Clause 1 is strictly limited to an industrial process. That proviso will not operate at all unless it can be shown under Clause 1 (1, a) that the process is an industrial one. The hon. Gentleman talks about the possibility of evasion, but one really does not create a farm building by putting a plough in it. Whether a building is a farm building or not or whether is it a warehouse or not is of course a question of fact and can easily be determined and often is determined in the ordinary course.

7.45 p.m.

What I am saying is that in view of the Amendments made to the original Act by subsection 5 of Clause 1 of this Bill the power of acquisition now goes far beyond the power of acquiring only land with industrial buildings upon it. Therefore, there should be some definition to carry out what is clearly the hon. Gentleman's intention to make sure that there is in fact no acquisition of buildings which are not, in the sense he uses, industrial buildings. I do not suggest that this new Clause is particularly apt for the purpose, and the point is not met by talking of possible evasion. I ask the hon. Gentleman to have a further look at it between now and the Report stage. He does not avoid the point being raised again, possibly by a new Clause, by saying he will not do that. He might save himself a good deal of trouble if he says he will look at it.

Mr. Mikardo (Reading, South)

It would not be fair to make a point about the drafting of this new Clause, because its author very modestly described it as possibly not the ideal way to meet its purpose. If I do make such a point it is not to criticise the Clause as it stands on the Order Paper but to indicate how tremendously difficult it would be to provide any such Clause through which it would not be possible to drive a coach and horses. As I am not a lawyer I am diffident about saying that, but to anyone familiar with industrial nomenclature it seems that it would be difficult to draft a Clause of this kind.

Take for example the simple words " used as a warehouse." The hon. Member for Edgbaston (Sir P. Bennett), with his great experience, will know that in these days almost every factory is partially used as a warehouse. If one therefore says " used as a warehouse " and cot, " used substantially or only as a warehouse " it creates all sorts of difficulties. The hon. and learned Gentleman, the Member for Northants, South (Mr. Manningham-Buller) said in his speech that a farm building is surely only a farm building. The new Clause does not mention a farm building but it says " for the preparation or preservation of any agricultural produce." This could be very wide indeed. I am open to correction, but I think agricultural produce is anything which grows or is bred on the land. The preservation and processing of agricultural produce, therefore, would include all work in cotton, all work in wool, all work in leather and all work in rubber, because rubber is an agricultural produce and indeed it would mean including a very large part of our industry.

It seems that the Parliamentary Secretary is right in saying that, however carefully one drafted this new Clause, there would be bound to be arguments about definition and opportunities for evasion which hon. Gentlemen opposite I am sure would not want to encourage in any way.

Mr. Bottomley

I agree with the hon. and learned Gentleman the Member for Northants, South (Mr. ManninghamBuller) that it is very much a legal point. It is because we feel there will be a good deal of argument on this that we think it would be impossible to apply it practically. The words I read out were those designed, so I am advised, particularly to protect warehouses the use of which is ancilliary to industry. I am advised that Clause 1 (1) of the Bill provides that, if the building is used substantially, the protection, which the right hon. and learned Gentleman requires, is given.

Earl Winterton (Horsham)

Much as we should welcome my hon. and learned Friend the Member for Northants, South, into the Privy Council he has not yet received that honour.

Mr. Bottomley

May I say that I am in charge of this Bill and as such I have a right as a Minister to speak for the contents of the Bill—

Earl Winterton

The hon. Gentleman has misunderstood me. What I said was that much as we should welcome our hon. and learned Friend as a Privy Counsellor, and I hope he will eventually become a Member of the Privy Council, his correct designation is " hon. and learned."

Mr. Bottomley I beg the noble Lord's pardon.

Question put, and negatived.

Bill reported with an Amendment; as amended, to be considered Tomorrow.