HC Deb 30 April 1958 vol 587 cc389-420

Order for Second Reading read.

3.57 p.m.

The Minister of Labour and National Service (Mr. Iain Macleod)

I beg to move, That the Bill be now read a Second time. I hope that the House will not think I have taken a lease of this Box, because this is the third time within an hour that I have appeared at it. This is a short Bill and I hope, within reason, to make a fairly short speech. It is also an important development in distribution of industry policy, and I am sure that the House will want to satisfy itself that this is the correct principle before it gives a Second Reading to the Bill.

I am glad to see the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) in his place because he, as President of the Board of Trade in the Coalition Government, presented the Distribution of Industry Act, 1945, to the House, it was carried into law by a Conservative caretaker Government and it has been operated ever since by Labour and Conservative Administrations. That seems to me, on the whole, to be a reasonably neutral parentage for distribution of industry policy. There were, of course, earlier attempts in the 'thirties to encourage the setting up of new and diverse industries started by the Commissioners for Special Areas in those areas that were hard hit by the inter-war depression.

The main powers of the 1945 Act were powers for the Board of Trade to acquire land and to build factories for letting. Secondly, there were powers to acquire derelict land and, if necessary, to undertake the clearance of those sites. Thirdly, there were powers to allow Government Departments to make grants or loans towards the improvement of basic services and, finally, there were powers given in Clause 4 of that Act to the Treasury to make grants or loans to industrial undertakings in the Development Areas. It is on this last power that the new Bill builds.

We should also note, on the negative side, that the Board of Trade has important powers in the use of industrial development certificates, but, of course, the refusal of an I.D.C. does not necessarily mean that the development will take place in an area where the Board of Trade would like to see it, because it is open to the developer either to acquire existing industrial premises or perhaps to shelve his development altogether.

There can be no question that the distribution of industry policy, as operated under the 1945 Act, has been a very great success. Many of the areas which were hard hit by the depression in the 1930s and 1920s and scheduled under the 1945 Act, with the additions later made to it, have had a period of prosperity for some years now, but still the rates of unemployment in the Development Areas are higher—although in some cases, very little higher—than the average for Great Britain.

I do not yet have all the April figures for the Development Areas, but in March, in all Development Areas taken together, unemployment was 3.1 per cent, while for the whole of Great Britain it was 2 per cent. Unemployment in the Development Areas varied between 4 per cent. on Merseyside, the highest, to 2.1 per cent. in the North-Eastern area, the lowest. I wanted to see whether over the past rather difficult year the Development Areas had done better or worse than the rest of the country. In March, 1957, the Development Areas' average unemployment figure was 2.5 per cent., while for Great Britain it was 1.7 per cent., so the Development Areas have done a little worse over the past year than the rest of the country.

A good deal of Concern is now expressed about unemployment, and I fully share the anxiety felt about some parts of the country, yet many of the speeches made in last Friday's debate—and I dare say that it will be so with some of the speeches today—tended to push the position a little out of perspective. I will state, without comment, the position of unemployment since the war. Including the latest figure for April, 1958, the average figure has been 325,300. If anyone wishes to argue it on a party basis, up to October, 1951, the average was 338,500, and from November, 1951 to date, 312,900. I do not comment further on those figures, but they stand as a record to be compared against many of the speeches about unemployment over recent months.

As the House is familiar with our argument, whether it acepts it or not—and I do not think that hon. Members opposite accept it—I do not intend to give our general analysis of the present position. However, I will say that we feel that the major problem of unemployment today is not a lack of demand in the economy as a whole, but some areas of high and persistent unemployment which cause a great deal of concern. Those areas exist inside and outside the Development Areas, and our powers for dealing with them are very different, because where there is this sort of unemployment outside Development Areas the only powers available are the use of the Development Fund or the factory building powers of local authorities under Section 20 of the Town and Country Planning Act, 1944.

In our opinion, although very useful, these arrangements are not enough. We do not think that the time has come yet for a general reflation, but we think—and this Bill is only one of half-a-dozen measures that we have been putting before the House—that what we might call "selective reflation", if there is such a term in economists' jargon, is appropriate. If there is not such a term, there ought to be, for it expresses exactly what I mean.

In his Budget speech, my right hon. Friend the Chancellor mentioned this Bill, provision for graving docks, and the relaxation in difficult areas of the strict limit on general bank advances. Last Friday, in a short but very good debate on unemployment, I announced some modest but useful improvements in the Resettlement Transfer Scheme. All those measures are designed to deal in different ways with the same problem, that of spotty but sometimes severe unemployment. Of those measures, this Bill is the most important.

It was always intended, and the right hon. Gentleman the Member for Bishop Auckland made this clear in his Second Reading speech—which I read again the other day—that the 1945 Act and distribution of industry policy were meant to be flexible, and Section 7 of that Act laid down procedure for both adding areas to and removing areas from the Schedule.

In the debate on 24th February, my right hon. Friend the President of the Board of Trade—who, as the House knows, is abroad, or he would otherwise have moved this Second Reading—invited the opinion of hon. Members on the subject of adding some areas and taking other areas out of the Schedule. The answer he got from hon. Members whose constituencies were in the Development Areas was roughly to the effect that this might be a good idea for other Development areas, but not for the one with which they were especially concerned.

Quite apart from the merits of altering the Schedule to the 1945 Act together with its additions, the difficulty is that the procedure laid down in that Act, consultation with every local authority in each area affected to be followed by affirmative Resolutions of Parliament, is too cumbersome for this immediate problem. So we have rejected that approach to our present problem, although if hon. Members stand aside for a moment from their constituency interests they will see that such a proposal has a good deal of merit. It was clearly the intention of the 1945 Act that in due course such adjustments should take place.

After all, it is clear enough that it would be a day of rejoicing and not of sorrow for a Minister to be able to come to the House to say that an area had done so well over the years that it no longer needed the special protection of the 1945 Act. Just as we are delighted to see hospitals for infectious diseases and sanitoria being closed because there are no patients to fill them, so we would be delighted to report that an area was no longer to be a Development Area.

Already, about 18 per cent. of the insured population live in Development Areas which consist, in the main, of those areas where heavy unemployment occurred before the war. I suppose that it would have been enough to have added to the Schedule a collection of places which caused concern and where there was localised but high and persistent unemployment, but I do not think that anybody would have seen that as a satisfactory answer. The machinery of the Development Areas as laid down in the 1945 Act does not seem appropriate to us in this new and rather special problem.

I think that the Socialist Government realised this in their White Paper on the Distribution of Industry in 1948. I quote from paragraph 90, under the heading "Unemployment Pockets": The Government has throughout maintained the principle that to justify scheduling it must be shown that an area not only has a high rate of unemployment, but that the numbers of unemployed are high in the aggregate. This principle alone might be taken to dispose of the claim to Development Area status of such places as Nantlle Valley and Blaenau Festiniog in North Wales and Camborne and Redruth in West Cornwall, where, though the rate of unemployment is much higher than the national average or even that for the Development Areas, the number of persons unemployed or liable to unemployment is not significant in the national total. There are, furthermore, obvious objections to scheduling areas with very small or sparse populations since the whole conception of a Development Area implies some degree of interchange and mobility of labour between neighbouring industrial centres and a labour market large enough to provide industrialists with a balanced labour force. That argument, made ten years ago, is, on the whole, still sound, although I am not sure that I would necessarily accept it in relation to North Wales.

It is for those or rather similar reasons that we did not see further scheduling as an answer to these localised problems of unemployment. In this respect at least, scheduling has been proved to lack flexibility, and because it is flexibility above almost everything else that we must have if we are to deal with so many different problems, we put this Measure before the House.

The Bill provides the extension of the power, to which I have referred, under which the Treasury can at present make grants or loans to industrial undertakings in Development Areas. We now propose that those grants or loans should be available not only inside but outside Development Areas. We further propose an important modification of the Treasury's powers in giving financial assistance. At present, grants or loans can be made only to industrial undertakings, but there may be other types of projects which could well provide useful employment and we do not wish to rule them out by definition, as we would have to do, at the start of this exercise. We do not want to be debarred from encouraging a project, if it will help in giving employment, simply because it is not an industrial undertaking. We therefore propose that the scope should be widened to embrace any undertaking by way of trade or business. It is important to note that this power also amends and extends the 1945 Act itself and that, therefore, the Development Areas can benefit from this extension.

Mr. J. Grimond (Orkney and Shetland)

This may be important from the point of view of my constituency. Can we be told whether these powers can be used to assist authorities like the Herring Industry Board or the Crofters' Commission in carrying out capital undertakings, not necessarily through private individuals, but possibly through the Board, or whether it will be confined, if not to industrial undertakings, then to purely private enterprise undertakings?

Mr. Macleod

I had better look into that important question which the Leader of the Liberal Party has put. In general, the object is that the scope should be as wide as possible so that any reasonable project should be entertained under the procedure with which I am about to deal.

There are several points which hon. Members are bound to have in mind. First, we have deliberately concentrated on D.A.T.A.C., to use the initial jargon of the times—the Development Areas Treasury Advisory Committee. It seems to us that this method of giving grants or loans is the most flexible method that we can use and, therefore, the one best adapted to this problem.

If the House grants us these powers, the machinery is available and is ready. D.A.T.A.C. is already in existence and will be able to give help and advice on the commercial and financial aspects of applications for financial assistance.

Mr. Hugh Dalton (Bishop Auckland)

Who is the present Chairman?

Mr. Macleod

The present Chairman is Mr. Slimmings, who is a chartered accountant.

A great number of Departments are concerned in this matter, and appropriate arrangements have been made by my right hon. Friend the Prime Minister, at both ministerial and official level, for co-ordination and co-operation between all the Departments concerned, and through the use of similar machinery we will keep the progress we make in solving the problem of local unemployment, to which the Bill is directed, under review.

The House is bound to want to know whether we intend to publish a list of places which, in our view, will qualify. Of course, there will be such a list, but the House will readily appreciate that there is a difficulty here. It is essential that we should keep the procedure as flexible as possible. I do not think that it will be possible to lay down fixed criteria which would be equally applicable to all localities. Indeed, it seems clear that both the problem and, therefore, the solution, will vary from place to place.

I, as Minister of Labour, will be closely in touch with the President of the Board of Trade in the selection of areas, but our examination—necessarily rather a preliminary one—does not lead us to think that we could find any formula, or that any formula could be devised, which would meet all cases equally. That is our present view, but my hon. Friend the Parliamentary Secretary to the Board of Trade will return to this point in his winding-up speech, when he has heard what hon. Members have to say.

I now come to the question of what will be done under the Bill. As it stands, the Bill is only a recipe. It may be the right one, but the proof of the particular pudding will be in the cooking. [HON. MEMBERS: "The eating."] The cooking first.

Mr. John Diamond (Gloucester)

On a point of order. The right hon. Gentleman has said that this question is to be dealt with by D.A.T.A.C., whose Chairman is a chartered accountant, and he also says that the first thing that has to be decided is the cooking. Is that a responsible statement for a Minister to make?

Mr. Speaker

That is not a point of order.

Mr. Macleod

The name of the Chairman of D.A.T.A.C. sounds most appropriate to any culinary activity.

In the Explanatory Memorandum to the Bill we make it clear—and it is really obvious—that no precise estimate can be given of the amount of money that we shall require. It was not possible to give it in the 1945 Act. We do not know to what extent we shall be able to persuade industrialists and others to take advantage of the Bill. All the same, we intend to use it firmly.

The House will wish to be assured that it is the aim of the Government, in exercising these extended powers, that sound development which will reduce unemployment shall not be frustrated for want of capital. Section 4 of the 1945 Act lays down certain conditions for the giving of assistance. The first condition is that the undertaking cannot, for the time being, obtain capital on reasonable terms from some other source, and the second is that the undertaking has good prospects of commercial success. That is to make sure, as far as possible, that the industries that we wish to encourage will take root, flourish and grow in the communities which they join. Subject to those conditions it is the Government's wish that sound projects should not be held up simply for want of finance. We will not hesitate to come to Parliament for the money required to provide the financial assistance recommended by our Advisory Committee and approved by my right hon. Friend the Chancellor.

Some of the doubts which have been expressed to me about the Bill—some of which are mentioned in the reasoned Amendment of my noble Friend the Member for Dorset, South (Viscount Hinchingbrooke)—can be summed up in the argument that the Bill is a blank cheque. In fact, the advances will be made from the Treasury Vote, and they will need to present Supplementary Estimates and obtain parliamentary approval for the expenditure. As in the 1945 Act, all the projects must satisfy them of their future prospects, and also that without such assistance the capital cannot be obtained on the requisite terms.

Viscount Hinchingbrooke (Dorset, South)

I should like to raise a point about the lack of provision of finance for a particular concern, which ipso facto, has to be a going concern with reasonable prospects of profit. If such lack of provision of capital is due to a credit squeeze, and the Government's instructions to the banks that they shall not make an issue of capital to such a firm, or supply it with credit, would that be a condition on which the firm could apply to the Treasury for money?

Mr. Macleod

I cannot answer for what view D.A.T.A.C. will take of any inquiry, but my noble Friend will recollect that in the Budget speech of the Chancellor it was laid down that any advances made for areas about which there was special concern—not necessarily precisely the same list as that with which we are concerned—should not be held within the strict limit of bank finance which had been agreed following the measures of September last.

It is another criticism of the Bill—again, mentioned in the reasoned Amendment—that public money might be used for purposes that are difficult to defend. Public money has been used in this sort of way certainly since the 1934 Special Areas Act, and more particularly since the Distribution of Industry Act, 1945. Public money is inevitably also involved in all the various schemes for training and resettlement with which my Ministry has been concerned for many years. I do not think that it is reasonable to suggest that we should try to obtain specific sanction from Parliament for all the details of our proposals. That would be bound to destroy the speed and flexibility which are at the heart of this operation. We could not then act swiftly in any locality where serious unemployment had occurred and was likely to persist.

The Bill is in no way a departure from Government policy. We have always made it clear that although we think it right to maintain a restrictive attitude towards credit we are very ready and anxious to help in areas in which special problems arise. It is to that specific problem that the Bill is pointed. We intend to act with speed and decision in this matter, and the Bill seems to us an essential weapon to have in our armoury. On that basis I invite the House to give it a Second Reading.

Mr. Alfred Robens (Blyth)

As the Bill does not extend to Northern Ireland, can the Minister say how he proposes to help Northern Ireland, where unemployment is over 10 per cent.?

Mr. Macleod

I should have thought that that point came outside the immediate terms of the Bill. All previous Measures of this sort have excluded Northern Ireland. If the right hon. Gentleman would like my hon. Friend to make a specific reference to that point when he winds up the debate, I am sure that he will be very glad to do so.

4.23 p.m.

Mr. Douglas Jay (Battersea, North)

We welcome the Bill as at least a positive and useful, if rather minor and timid, act of the Government towards revitalising the present stagnant economic life of the country and checking the growth of unemployment which has been going on in recent months. The Government have sunk back into a state of lethargy in economic policy recently, and have talked from time to time very much in the language of Neville Chamberlain and Stanley Baldwin in the 1930s. The public will be glad to see even this faint glimmer of light amid the encircling gloom.

Dame Irene Ward (Tynemouth)

The original Special Areas Act, and all the thought which created this new type of machinery which the Distribution of Industry Act made use of, came out of Baldwin's own brain.

Mr. Jay

As the hon. Lady knows, extremely little was done under the first Act of 1934. However, it is a tribute to the Distribution of Industry Act, 1945, that even the present Government should recognise it as the right foundation on which to build. Indeed, the Minister of Labour this afternoon paid a direct and positive tribute to that Act. Like almost every great reform introduced into this House, that Act had the honour of being opposed by doctrinaire Tories at the time, and it is, therefore, appropriate that even this very minor Bill should have the very minor credit of being opposed by the very minor group of Tories led by the stern, unbending figure of the noble Lord below the Gangway.

Evidently the Minister of Labour, in introducing the Bill, has won a victory not merely over the noble Lord but also over the Treasury, with the Board of Trade adopting a rather lukewarm, neutral attitude. Nevertheless, I hope that the House and the country will not imagine that the Bill is anything but a rather small step.

What it does, as an alternative to extending the Development Areas, is to extend only one part—and a rather small and unimportant part—of the 1945 Act. By far the most important provision of that Act, as it has turned out, is the power to build factories and set up industrial trading estates, with Government finance, in the Development Areas. This is only a guess, but I should estimate that 90 per cent. of the new employment and production brought to those areas has been achieved by the construction of factories and trading estates under that most important single part of the Act, and that not even all the remaining 10 per cent. has been achieved by Section 4, which the Government are now extending.

I remember that when we were preparing the first Distribution of Industry Bill, in 1945, most of us thought that what subsequently became Section 4 of the Act would turn out to be more important than has proved to be the case. We then had only the pre-war days of depression to guide us, and we did not realise that in full employment conditions the possession of a factory would be a much greater incentive to a developing industry than the loan of money. Thirteen years of experience of the operation of Section 4 have shown us two things; first, that it was not such an important part of the Measure as we had thought; and, secondly, that the lending of public money for these schemes—which, ex hypothesi, had been thought too speculative by private finance—has proved much less risky from the Treasury's point of view than we then feared, and failures have been a good deal less frequent.

The Minister can correct me if I am wrong, but I think that the only really large development which has been mainly financed through Section 4 has been Solway Chemicals, at Whitehaven. That has been a notable success. The only major miscalculation which has turned out badly is Durham China scheme in the Tyneside area.

However, the Government are now extending the power to give loans outside the Development Areas; secondly, applying them not merely to industrial undertakings but to trade or business; and, thirdly, doing so whether or not the project in question is thought to comply with the phrase, in the original Act, the proper distribution of industry. All those changes widen the definition, and, therefore, the powers, of the Board of Trade and the Treasury to make loans. I gathered from the Minister that the insertion of the words "trade or business" is simply to extend the previous phrase "industrial undertaking". Perhaps we can have some elucidation of this point later. Presumably it is to bring in certain activities such as distributive trades, and it may be that office work and the dry docks about which the Chancellor spoke are also to be included in the phrase.

I also take it that the removal of the condition about the proper distribution of industry is designed for the same purpose, and that it is the word "industry" to which the Government do not wish to be bound in future.

I have always thought that it was perhaps rather a pity, incidentally, that the phrase "financial assistance" ever got used in this Act. It rather suggests to ignorant people—the noble Lord's Amendment shows that there still are ignorant people about. [HON. MEMBERS: "Oh."] Yes, it suggests—[Interruption.]—I am coming to the noble Lord and his Amendment in a moment—that subsidies have been used as part of Development Area policy.

I should imagine that in 90 per cent. of the cases the Government have arranged loans which have been or will be repaid and upon which interest has been earned. If this were all worked out by the accountants of whom one of my hon. Friends spoke, I think we should find, even from the financial point of view, that the loan of this money had been a good investment from the point of view of the Treasury.

In his Amendment, the noble Lord talks about the burden on the taxpayer. Of course, there is no burden on the taxpayer at all. Quite apart from the human and social aspects, there has been a profitable investment. What is far more important is that the use of this finance as loans rather than as grants has served to emphasise that the purpose of the whole operation was not solely abolishing unemployment, although that was much the most important, but the re-equipping of semi-derelict areas and building their industrial capacity. Some small part of the money may have gone for grants, so perhaps the Minister who replies to the debate will tell us the total of outright grants spent under Section 4 in the various areas since the scheme has been in force. I suspect that it has been very small, and perhaps even negligible.

The Government have decided to make unemployment the main criterion for selecting new areas, but not to put into the Bill any actual percentage of unemployment as a test. If we are to tackle the problem in this way, both those decisions are probably right. The distribution of industry policy is, after all, a branch of employment and production policy, and not physical planning. Therefore, unemployment seems to be the right criterion.

Mr. Sydney Silverman (Nelson and Colne)

In a great many cases the degree of unemployment is the proper yardstick for discriminating between places that need assistance and those which do not, but it is not always a good yardstick. If we looked only at the figures of unemployment in places like North-East Lancashire, where towns depend upon one particular industry, like cotton, which is doing very badly, we might come to a conclusion which would be contrary to the facts. In those areas we do not leave the people there unemployed, but drive them away. Therefore, the drift of population from the area is as good a guide in cases of that kind as is the unemployment among the people who remain there.

Mr. Jay

I am not sure. It may be a good guide. I am also not sure that that is the purpose of a distribution of industry policy. It may be the purpose of other policies.

For the reasons I have given, I think that the Minister is right not to try to put a rigid percentage of unemployment into the Bill as a criterion. I am not sure that the Government are not, perhaps inadvertently, by varying the phrase about the "balanced distribution of industry", inhibiting themselves from taking diversification, of which my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) is really thinking, as a criterion occasionally, as well as unemployment, in areas outside the Development areas. That is a point which we can look at later, in Committee.

Nevertheless, though we welcome the Bill so far as it goes, I should have preferred to tackle the problem much more boldly by frankly scheduling new areas as Development Areas, as well as widening the definition. That would have extended to those areas not merely the power of making loans, but the far more important power to build factories and construct trading estates. The Board of Trade would not have been compelled to use those powers, but they would have been available if needed. Why should not North-West Wales and perhaps Barrow-in-Furness be scheduled as Development Areas today?

I suspect that the Board of Trade—I say this because of the many Answers to Questions that I have heard—and the Treasury have become rather befuddled during the last few years by the belief that the more Development Areas there are the more concentrated their efforts will be in the worst parts. I wish they would get that cobweb out of their heads. It assumes that there is some sort of limited quantity of effort, and that the more of it that goes into one area the less can go into another.

That is utter nonsense. There is no such limit, unless an artificial one is imposed by the Government regardless of the needs of each area. That is not the way the problem was conceived by the Labour Government and it should not, in my opinion, be so now.

Mr. Raymond Gower (Barry)

Surely the right hon. Gentleman would agree that there must be some limit. If every part of the country is scheduled as a Development Area, no part of the country is a Development Area.

Mr. Jay

The limit should be the needs of the area and the extent of underemployment. I was going to say that the aim should be to develop any area that has surplus labour and needs to be developed. If a district within a Development Area is fully employed, the effort can be automatically relaxed in that area.

This fallacy knocking about in the head of the President of the Board of Trade, of the limited amount of effort available, allowed him to make the extremely unfortunate remark the other day about descheduling the North-East Coast. It so disturbed public opinion in the area that he had to withdraw the idea within a few weeks. I thought that he would have known he would have to do it. If Ministers would visit these areas rather more frequently they could keep in touch with the feeling in them.

It is nonsense to say that we shall be better able to help North Wales or Barrow if we deschedule the North-East Coast. We ought to give the help that is needed to North-West Wales, Cornwall, or elsewhere, whatever the situation may be on the North-East Coast, West Cumberland, or anywhere else. That is why I should have preferred to see the Development Areas extended. No doubt one day, when full employment as a policy is no longer questioned by anybody, it may be possible to deschedule some areas, but the Government have pushed that position off to the far distant future by their deflationary policies in the last two years. The memories of people in the scheduled areas are far too distressing for any descheduling to be thinkable today.

It is a remarkable commentary on the President of the Board of Trade's knowledge of feeling in these areas, and his sensitiveness to economic prospects, that he should have made that speech about descheduling the North-East Coast, when more shipping is now laid up than at any time for the last twenty years. Only within the last few weeks we have heard of orders being cancelled and of a very important shipbuilding contract being lost to the Clyde.

Because we welcome the small advance which is made by the Bill, it does not mean that we are at all satisfied with the Government's present conduct of the distribution of industry policy as a whole; very far from it. The Government are not pushing hard enough or, at either end, either encouraging development in under-employed areas or steering industries away from congested areas. It is extraordinary that we should have to argue these points after the undeniable success of the distribution of industry policy immediately after the war, to which the Minister paid a tribute today. If we need an argument for pressing on more vigorously it is worth while looking at the achievements in the first early years.

I believe that Government-financed buildings in the three main Development Areas have created employment for about 50,000 people in each area. Over the areas as a whole, the building of privately-financed factories encouraged by the Government has, by and large, run neck and neck with building by the Government. I would mention the British Nylon Spinners' factory, at Pontypool and Paton & Baldwin's factory, at Darlington. Direct employment from new undertakings is thus up to a figure of about 300,000 people over the whole country. After 1945 this new employment capacity came into existence, but it had always been recognised that there is a multiplier effect, in the sense that each new factory job gives more employment in the service and distributive trades. This has usually been estimated at about one for one.

There is no serious doubt, therefore, that the post-war distribution of industry policy as a whole has found work for at least half a million people in the Development Areas who would not otherwise have been employed. If we think of the effect of that on the families concerned there must be very few Acts of Parliament passed through this House that have brought more rapid results, in terms of human happiness, than the Distribution of Industry Act. It was described on Second Reading by one Conservative hon. Member as Socialism and bureaucracy run mad and as the very antithesis of private enterprise. We now find that the noble Lord the Member for Dorset, South has not merely forgotten nothing since then, but does not seem to have learned very much, either.

When we look at that achievement we ought to pay tribute, in passing, to some of those who made the Act possible. My right hon. Friend the Member for Bishop Auckland (Mr. Dalton) did more than any other person—

Dame Irene Ward

And Mr. Baldwin.

Mr. Jay

I shall be very glad to leave people in the North-East and elsewhere to judge who was more effective in this respect.

Dame Irene Ward

They do.

Mr. Jay

We must remember also the very many both large and small private firms which have co-operated vigorously in this enterprise. But I have often felt that the real heroes of the whole story are the skilled workers, the technicians and the foremen who have gone a long way to some unfamiliar part of the country, trained a large labour force and built up enterprises, to the credit of everybody concerned.

Mr. Gower

Will not the right hon. Gentleman be magnanimous and appreciate the extent to which trading estates, like the one at Treforest, have contributed to this result, even before 1945? Will he pay tribute to Lord Portal, who was Commissioner for the Special Areas and did splendid work before the war?

Mr. Jay

I would certainly pay a tribute to Lord Portal, but most of the factories in Treforest were built either during the war or afterwards. All that is history.

During the last few years the Government have begun to let things slide. Unemployment has begun to rise again and, worse than this, the old unbalance between distressed areas and congested areas has begun to reappear. We all know that the unemployment percentage in Wales has risen to 3.8, or nearly 4 per cent., and to 3.6 in Scotland. The Minister said that it was 4 per cent. in Merseyside. Of course, there is more than 10 per cent. of unemployment in Northern Ireland. In London and the Midlands the figure still remains at 1.3 or 1.4 per cent.

Has the Minister compared the percentages with the figures of absolute unemployment in Wales and Scotland, with the figures of only three years ago and with those of July, 1939? In Wales—and I am taking the figures for February which are the latest ones in the Statistical Digest, but that does not make much difference—there were 22,000 people unemployed in 1955. There are 36,000 this year and there were 106,000 in 1939. In 1955, unemployment was only one-fifth of the pre-war level and now it is one-third. In Scotland, it was 62,000 in 1955, 79,000 this year, and 190,000 in 1939. In 1955, it was less than one-third of the pre-war figure and now it is nearly half.

That shows rather startlingly how we have slipped back in these last three years, since Tory freedom began to work, towards the old days of depression and decay. No wonder people in those areas are beginning to be alarmed. This decline is quite clearly due to two causes: first, the general stagnation policy of the Government which is creating unemployment over the whole economy; and, secondly, their failure to steer new developments energetically from the congested to the under-employed areas. Ministers are too nerveless and flabby to do this, even after the demonstration that it can be done.

Obviously, we will never fully develop the under-employed areas if we reduce the whole country to stagnation. The new phrase, selective reflation, may be a good phrase, but it cannot work by itself. Stagnation has three effects: it starts unemployment in the congested areas, increases unemployment in the underemployed areas, and cuts down the number of new industrial development schemes coming forward.

We also believe that there has to be much more effective steering of new industrial developments away from the congested areas. That was how the problem of the old distressed areas was nearly solved in the years after the war. In 1945 about 13–15 per cent. of the population of Great Britain lived in the areas scheduled under the 1945 Act. The Minister said it was about 18 per cent. now, but let us suppose it was 15 per cent. in 1945. For several years after the war, when the first impulse was given, 50 per cent. of the new factory building was located in those areas and from 1945 to 1950 inclusive the percentage was over 30 per cent.

That was the fundamental change which brought new life to those areas. The Minister now says that the population of the Development Areas is 18 per cent. of the population of Great Britain, but the proportion of new development approved and going to those areas fell from the original 50 per cent. at the end of the war to about 25 per cent. in 1952, around 20 per cent. from 1953 to 1957, and in the last quarter of 1957—if my arithmetic is correct—it was actually under 15 per cent. Perhaps the Parliamentary Secretary will tell me when he replies whether I am correct. It appears that in the last three months of last year, for the first time since 1939, the Development Areas were getting actually a lower proportion of the total industrial development in the country than their population percentage.

That is why unemployment is growing again in the under-employed areas, both those which are scheduled and those which are not scheduled. I think that the Minister's heart is half, if not wholly, in the job. But if they are to do the job, the Government must have the courage to restrain new factory building in the congested areas, particularly London. I know that during the last year or two the Board of Trade has evolved a doctrine that extensions of existing factories must normally be approved, even in the London area. If we admit that, we shall have lost the battle from the start. The great majority of new factory building, as all experience during the war and afterwards shows, is in extensions. The steering of these new developments away from congested areas is every bit as much needed in the interests of those areas as in the interests of areas such as Scotland and Wales.

I know only too well that the problem in an area like Battersea, or anywhere in Central London, is not employment but housing. New office employment is being created all over London at present. It is the inflow of people to London seeking new jobs which overloads all the public services in the London area and makes it quite impossible for London public authorities to solve the housing problem. When, in the postwar years, a well-known firm in Battersea, a firm known to the Minister of State, Board of Trade, decided to put up an extension not in Battersea but on the Jarrow Industrial Estate, I rejoiced for the sakes of both Jarrow and Battersea.

This, incidentally, is why the suggestion made in the debate on Friday about the transfer of workers from one home to another can touch only the fringe of the problem by giving grants to workers to move, for housing accommodation does not exist in London for them and there is no land on which to build. The root of the matter is that in these congested areas there are more jobs than houses and in the under-employed areas there are more houses than jobs. It is therefore physically impossible to solve this problem by trying to move workers about geographically from one place to another. It can only be done by locating new extensions in areas where labour already exists.

We learnt this hard lesson during the war, and it seems a pity that we should have to learn it over again. The task is to distribute industry properly throughout the country, not to give selected aid to a few selected areas. It was Ernest Bevin who invented the rather odd phrase, "distribution of industry" and insisted on calling a Bill by that name rather than calling it "the location of industry". He understood this problem profoundly, as he understood many other things. He was perfectly right and that is still the inspiration which should guide us today.

We welcome the Bill for what it is worth, as a small step in the right direction. But something much bolder is necessary—something much bolder than we are ever likely to get from the muddled brains and nerveless hands of the present Government—if depressed areas are not to appear again. We in the Labour Party believe that far more energetic use should be made of the industrial development certificates to steer new developments to these areas. "Steer" was another word used by Ernest Bevin, and I still think it a good one. We also want to see more Government-financed factories built in the existing areas and, wherever necessary, new areas scheduled as Develpment Areas. It can be done; it has been done. All the powers are there, or, could very easily be taken. All that is needed is the will and energy to get on with it.

4.54 p.m.

Mr. E. M. Cooper-Key (Hastings)

We on this side of the House welcome the terms of approval of the Measure as voiced by the right hon. Member for Battersea, North (Mr. Jay). I welcome the Bill as a sensible adaptation of what has succeeded before in giving relief to the Development Areas. The modern problem has shifted from the general areas, of heavy industries to other localities which, for various reasons, have been left behind in the general post-war economic advancement of the country.

I try not to lose an opportunity in this House of reminding Ministers and, I hope, also the gentlemen in Whitehall, of the changed circumstances in many areas since the war. Those are the coastal resort areas, especially those of the South of England, which have never fully recovered from the combined effect of war damage and enforced evacuation on a very large scale during the war of 1939–45. It is a fact that, far from benefiting from the general trend of prosperity since the war, those localities, largely peopled by elderly persons and those on fixed incomes, have suffered severely from the effects of inflation.

It is also a fact that distress, hardship and unemployment have moved from the homes of organised labour in the industrial centres and are now to be found elsewhere, especially in middle-class areas. It seems to me that this Bill is essentially one that can provide assistance to those parts of the country. In my constituency, for instance, unemployment is a major problem. Figures have been given by other hon. Members of unemployment percentages of 2.1 per cent. and 4 per cent., but in Hastings the proportion of unemployment to the insured population is roughly 5 per cent. or 6 per cent., about five times the national average.

Mr. Gerald Nabarro (Kidderminster)

Is it not a fact that in those seaside towns there is a large element of the population engaged on seasonal employment? Is the percentage my hon. Friend quotes based from a winter or a summer census, or from what time of the year?

Mr. Cooper-Key

Except for the three main summer months, June, July and August, it is fairly stationary between 5 per cent. and 6 per cent. of the total insured population of the town.

It is in the power of the Minister to bring relief to these areas. I therefore welcome this Bill as a vehicle for such help. I hope that when my hon. Friend replies to the debate he will announce that the terms of the Measure include these areas. Such a gesture would go some way to soften the really murderous blow which my right hon. Friend the Minister for Housing and Local Government has directed at these resorts in his Local Government Bill as it now stands. These areas need a shot in the arm. The Government could do something to attract light industry and private enterprise to open factories and modernised hotels and to provide up-to-date amenities, such as congress halls, in these areas. That would go some way to add to the financial strength of the local community and, in a wider context, it would add to the sum of national attractions which the Parliamentary Secretary to the Board of Trade, with his new keen interest in the tourist trade, will appreciate.

I do not believe that it is socially or economically in the national interest that these areas of very restricted spending power should be allowed to drift into what between the wars were termed depressed areas. Unless something is done thoroughly and immediately, I feel there is every likelihood of that happening.

4.59 p.m.

Mr. Cledwyn Hughes (Anglesey)

The Bill in my view marks the first really constructive step this Government have taken to tackle the unemployment problem in areas such as my constituency, which are not scheduled under the Distribution of Industry Act. Therefore, I give it a very warm welcome.

Our experience in North-West Wales has been that local initiative, however intelligent, however enterprising and however energetic, is nevertheless not sufficient to solve the problem. It is only fair to say that local initiative, with the assistance of funds from the Development Commission to build factories, has met with a certain limited success, but it has not reduced or halted the rising unemployment in the three North-West Wales counties. In Anglesey, for example, although we have one small factory and one medium-sized factory built through funds from the Development Commission, the unemployment figure has risen progressively in recent years and stands today at over 11 per cent. of the insured population. My hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) in his intervention made a valid point when he referred to the emigration of unemployed people from these districts, because if they had stayed at home the present unemployment figure would be doubled.

There have been three major obstacles to industrial development in the areas under discussion. First, the local authorities are not equipped with the experience or the machinery or the funds to make contact with industry on a broad front. It is perfectly true that the Board of Trade has its machinery, but the fact is, that the Department has not succeeded in providing us with the industry which we need. The Board of Trade knows, or should know, well in advance what are the plans of all firms in this country for industrial expansion. It tells us that it informs industry from time to time what are the needs of our areas but—and I am trying to look at the situation as objectively as I can—it seems to me that it stops there.

Since 1945, industry has expanded in this country either in the Development Areas or in areas where expansion is not necessary and where there has always been a high level of employment. I know that the officials of the Board of Trade are anxious to help us and the Welsh Office of the Board has always shown great concern, but I do not think the Bill will be effective unless there is a thorough overhaul of the machinery of the Board of Trade and a determination within the Department to use the powers which are available to it.

The second obstacle which we have encountered has been the delay which has occurred between the application to the Development Commission for a loan to build a factory and the start of building operations. I realise that the bona fides of potential industrialists have to be examined carefully and that the terms of the proposed lease have to be agreed and so on, but I hope that under this Bill the machinery will be speeded up. The third obstacle which has faced us has been that of the non-availability of capital and high interest rates. This is a point which I made on the debate on unemployment on 24th February.

Mr. Nabarro

The hon. Member has left out, surely, the most essential factor of all, which is the adjudication by the Board of Trade of the marketability of the products which the new factories will make, and the question whether a factory is likely to be permanent, based on the value of its products in the national economy.

Mr. Hughes

We are anxious to induce industries of substance and repute to our areas, and one of the things which the Board of Trade does is to investigate the entire scope of the work which the proposed factory will carry out, including the marketability of its product.

I was referring to the lack of availability of finance and to high interest rates. I was glad that in his Budget speech the Chancellor said that he accepted the validity of this point and proposed to relax restrictions on bank loans in unemployment areas. From my experience in this matter, bank managers have been ham-strung for far too long. They are afraid to move an inch nowadays. I think that their opinion should carry far greater authority. Few people know the needs of their areas as well as do bank managers. I am afraid that the bank manager has been turned into a cipher concerned merely with making small overdrafts a little smaller. Mr. Clore and Mr. Fraser manipulate millions of pounds, and I am sure that they get a lot of fun and profit out of it, although I am dubious about the benefit which the country gets from their activities. No economic stringency seems to deter them. At the same time, areas such as Anglesey and Caernarvonshire have failed to get industry for the lack of a few thousand pounds.

I hope that the Bill will create a new situation for us, and I should like to know what it will do in practical terms. In his Budget speech the President of the Board of Trade was rather vague. He merely said that … there are one or two places where we are anxious to get on with the job without delay."—[OFFICIAL REPORT, 16th April, 1958; Vol. 586, c. 93.] That sounds all right, but what does it mean in practice? The needs are simple and fairly obvious. First of all, the Board of Trade should use all the powers at its disposal to induce industrialists to establish factories in these areas where they are most needed. The second need is that the areas in question should have the power to provide the facilities which the potential industrialists will require.

Section 4 of the Distribution of Industry Act, 1945, with which the Bill deals, is rather limited in its scope. The Minister should remember that local authorities in these areas are poor. He knows the product of a penny rate in Anglesey; it is very low. These local authorities will have to provide for the improvement of basic services. The Parliamentary Secretary knows that provision for these comes under Section 3 of the 1945 Act, and it is a pity that we cannot have that Section, too.

When he replies, will the Minister confirm that, if industry goes into these areas under the provisions of the Bill, the district councils will be given subsidies under the Housing Act to enable them to provide additional housing accommodation where necessary? This is a matter of considerable importance, because council house building has slowed down and even halted in some places since subsidies were withdrawn. The inquiries which we have received in Anglesey from industrialists lead me to believe that if advance factories were erected in Anglesey they would very quickly be tenanted. I ask the hon. Member to say that the Bill will provide for advance factories in the worst pockets of unemployment.

Will the Minister be good enough to indicate exactly what steps it is proposed to take to induce industries of substance and repute to go into the areas in question? I have said that the existing Board of Trade machinery seems rather cumbersome. The Minister of Labour said in his opening speech that he did not know what advantage industrialists would take of the Bill. That seems rather vague and it is really not good enough because the Bill will not be truly effective until we have a bridge between industry and these areas and unless the Government use their powers to induce industry to move. Merely to pass the Bill to make the provisions of Section 4 available to places such as Anglesey and areas in Scotland is not sufficient unless the Government use the powers they have to induce suitable industry to move.

Lastly, will the Minister confirm that the provision of dry-dock facilities, which the Chancellor mentioned in his Budget speech, will be available to unemployment areas outside scheduled areas? I am thinking in particular of the Port of Holyhead in my constituency which has deep-water berths and which is being investigated by a number of oil companies. I think that was the very point which the Chancellor had in mind in his Budget speech.

I welcome the Bill most warmly, I hope that it will have a speedy passage to the Statute Book, and I hope that when it becomes law it will be applied imaginatively and constructively.

5.11 p.m.

Mr. Cyril Osborne (Louth)

I regret that the right hon. Member for Bishop Auckland (Mr. Dalton) has left the Chamber, because I want to pay a tribute to him. Some time ago I read his autobiography and I was struck by the interest which he took in these problems in the '30s and the work which he was able to do when the Labour Government came to power in 1945. Of all the work which he did for his party, much of which I opposed and some of which I thought was foolish, I believe that the one thing which has given him most lasting pleasure is that which he was able to do for production in the areas which suffered so bitterly in the 1930s. Had he been here I should have liked to say that to him.

On the other hand, I rather regret what was said by the right hon. Member for Battersea, North (Mr. Jay), who played party politics with unemployment. [Laughter.] It is not a laughing matter for those who are unemployed. I ask the right hon. Gentleman to re-read the speech made by Oliver Lyttelton on the Second Reading of the Bill in 1945. No one contributed more in the House than Mr. Oliver Lyttelton to the passing of the Act, partly because he understood the needs and saw the possibilities. It is a great pity if we start to play narrow, party politics over an issue like this. We all have the interests of the unemployed at heart, and I hope that we shall have no more talk like that.

I support the Bill wholeheartedly and I congratulate my right hon. Friend on bringing it forward, but I want to issue one or two warnings which I hope the House will not think out of place. The Bill says that it is To enable the Treasury to give assistance … for reducing unemployment in localities suffering from a high rate of unemployment". What do we mean by "a high rate of unemployment"?

The right hon. Member for Battersea, North did the House, the Government and the country a disservice by what he said today. There is a great danger in exaggerating our position. We in this country have an immense amount for which to be grateful, even over unemployment. The Minister said that the highest rate of unemployment in a Development Area is 4 per cent., on Merseyside. The unemployment figure for the United Kingdom as a whole is 2 per cent. The figure for the United States is 7 per cent., Germany 8 per cent, and Canada nearly 10 per cent. From that angle alone we in this country have much for which to be grateful, and I think that the right hon. Gentleman was doing the unemployed a disservice in exaggerating and saying that the Government have done nothing for them. On world figures, from the free world, we have much of which we ought to be proud.

Mr. Jay

That may be true, but it is no comfort to those who are unemployed in this country to know that more are unemployed elsewhere. The purpose of our speeches is to get the Government to do something for the unemployed here.

Mr. Osborne

I will come to that in a moment, but I thought the right hon. Gentleman was playing his party game.

I fear that much harder and leaner times are ahead for all of us in every industry and that more unemployment will come to this country unless we have more efficient production. On Monday my work took me to two board rooms in different parts of the country and in different trades. There I found that the overtime which has been worked for many years is now falling off. I had some figures worked out. One man who had been earning £20 is now earning £15; the £15 man is down to £12; and the £12 man is down to £9, because overtime has disappeared. That will react on all the rest of the trade in the country. In another place I found that already there was a fear of systematic short time and a four-day week.

Mr. S. Silverman


Mr. Osborne

I will explain in a moment. In many industries there is a fear that we shall be faced with a shorter working week. These figures will not be reflected in the unemployment figures, and therefore do not indicate the real problem facing the nation.

I turn to the next question. Neither this Measure nor any similar Measure can stave off the high unemployment to which the Motion refers. If we are honest, we shall say that such Measures can do a little, and that such little as they can do is to be welcomed. We welcome the Bill, but it cannot stave off the high level of general unemployment that may become a reality in the next twelve months. I say to the right hon. Member for Battersea, North that no legislation introduced by any party in this country can guarantee full employment in a free society. This nation must export one-fifth of everything it produces in order to pay for the foodstuffs and raw materials that we need to keep us going.

No Government can make the foreigner buy our goods if someone else's goods are better and cheaper, and no Act of Parliament can stave off the unemployment that will certainly come to us if our goods are not efficiently produced to keep our prices down and our quality high. No legislation from any party can solve that problem, and it is just that problem that I want to put over to the House and the country. The person who will decide whether we are to have the high unemployment of which the reasoned Amendment speaks is not any hon. or right hon. Gentleman in this House but the foreign buyer, the man who will say, "I will not buy your goods because other people's are more attractive."

I will give the House three examples of the problem which we should consider against this Bill as touching the fringe of a much bigger problem. A few days ago, the chairman of the P. & O. Steam Navigation Company warned his shareholders that the tankers that were being bought in this country were 25 per cent. dearer than the comparable tankers which he could buy in Japan. The tragedy is that in the first quarter of this year no British shipbuilder has received one single order for a new ship from anyone, at home or abroad. For the first time, British shipbuilders have been beaten by both Japan and West Germany in the amount of tonnage launched.

Mr. Nabarro

I am sure that my hon. Friend would not wish to present a one-sided case to the House. Surely, it is not only a matter of cost in ship production. I am sure my hon. Friend will agree that one reason for the fact that no new orders have been taken in the last few months is simply that the average load in British shipyards today is three years. That is the length of the order books.

Mr. Osborne

My hon. Friend can always make his point. This is the first time I have made a speech for six months, and I hope he will allow me to continue and make mine? In answer to the point he made, the fact is that during the first quarter of this year, there have been serious cancellations, and the shipbuilders, both employers and men—and I hope my hon. Friend will listen as well as talk—fear that unemployment may result from even greater cancellations, when this three years' arrears of orders could melt away almost overnight.

Another point I want to put is that in Germany, the Netherlands, France, Spain and Denmark there was a higher production of ships in the first quarter of this year than ever before recorded, and at a time when we were wondering what was to happen to us. The other most significant point about what is happening is that Russia, for the first time since before the war, has applied to Lloyds to have her ships re-registered. Why? It is because she is going into the export market, and will be able to sell her ships at any price she likes.

This is the background against which we must look at this Bill, but the other side of it affects the Lancashire trade. The Lancashire Master Cotton Spinners' Association issued some figures a little time ago which rather frightened me. They showed that in 1957 the average hours of spindles worked in the whole industry in Lancashire was 2,124, in Japan 4,867, in India 5,932 and in Hong Kong 8,158. If these figures persist, we shall not be faced with pockets of unemployment, with which this Bill is designed to deal, but the whole country will be in a very serious strait, and that is the prospect that I want the House to face.

My third example comes from the coal trade. The coal miners are the last people who ever thought that unemployment would affect them, but the shadow of unemployment is now beginning to appear even in the coal mining industry. Why is that? It is because our costs are too high. Now that the freight rates across the Atlantic have dropped from £6 to £1 per ton in the last twelve months, the Americans can now ship into the Western European market supplies of coal at prices below our costs. The Poles, who themselves have been selling coal to us until quite recently, are now offering coal on the European market at prices below those at which we ourselves can produce it.

There is nothing that this Bill can do to stop that, and I want the message to go out from this House to our people that, if we are to beat unemployment in either any of these local pockets, with which this Bill proposes to deal, or even in its wider aspects, that is the fact that we have got to face. It is a tragic imposition on the ordinary decent people of this country to tell them that we can pass an Act of Parliament and guarantee full employment, because we cannot do so.

There are two other points I should like to make. The first is in regard to the reasoned Amendment tabled by my noble Friend the Member for Dorset, South (Viscount Hinchingbrooke). I regret that he has put down that Amendment, and I will tell the House why. I think it may be interpreted outside to mean that neither my noble Friend nor my other hon. Friends who have signed their names to it have any sympathy for the sufferers of unemployment, and I must say that that is not true. I think that the Amendment might give the impression that the noble Lord and his friends are indifferent to the unemployment problem. At least, I should like to assure hon. Gentlemen opposite that that is not true of the Conservative Party as a whole.

It is not true especially of the Prime Minister, and if any hon. Gentleman requires proof of that, I ask him to get HANSARD and read the speech which my right hon. Friend the Prime Minister made when he was a back bencher in April, 1936. At that time, and this is a point worth making, my right hon. Friend the Prime Minister voted against his own party in company with such distinguished Members of this House as Mr. Willie Gallacher, Mr. D. N. Pritt and Mr. James Maxton on behalf of the unemployed. I believe that the tremendous interest and sympathy for the unemployed of the Prime Minister is as great and keen today as it was then. I think it is grossly unfair to him for any hon. Gentleman opposite to pretend that we have no interest in the unemployed or any sympathy with them in their sufferings.

On Monday night, I watched the T.V. "Panorama" programme presented by Richard Dimbleby, who gave the greater part of his programme to the unemployed in South Wales, Northern Ireland, Tyneside—especially Jarrow—and the Clyde. If this Bill can help, even in a tiny way, the money will have been well spent, and I therefore support it. This Bill is especially designed to help to relieve local pockets of unemployment.

May I put this thought to the Minister and the House? It seems senseless to me for us to try to eliminate these local pockets of unemployment if, at the same time, by our inaction in another respect, we are actually creating other pockets of unemployment. I was in Yorkshire on Monday, and I found that half the unemployed in Bradford, for example, are Pakistanis, and Pakistanis are still coming into Yorkshire at the rate of hundreds a week. This is a pocket of unemployment that is growing. Therefore, I want to plead with both sides of the House, difficult as this problem is, to realise that we must one day face this question of controlling immigration.

I put a Question to the Home Secretary on 17th April, in which I asked him— … if he is aware that of Sheffield's 2,100 unemployed 575 are coloured; and, in view of the official announcement that, of the 1,600 unemployed Pakistanis in the East and West Yorkshire Ridings, 1,300 had never been employed in this country and are drawing National Assistance, if he will take steps immediately to reconsider this matter with a view to controlling all immigration in order to safeguard the jobs of workers already in this country."—[OFFICIAL REPORT, 17th April, 1958; Vol. 586, c. 33.] I support the Bill wholeheartedly, and I should like to see the local pockets of unemployment eliminated, but one thing I do not want is that we should send out from this House a message that we can cure unemployment by legislation. We cannot; we can help, and the first thing we have to do is to deal with the flood of new labour now coming into this country. I support the Bill and I wish it well.

5.28 p.m.

Mr. W. A. Burke (Burnley)

I shall be glad to have from the Minister some clarification about the position of the North-East Lancashire Development Area, and particularly of one part of that area.

The Bill, as we have been told by the Minister, is not a general replacement of the 1945 Act, and for that we are particularly glad. The Bill gives the power to the Treasury to make grants to people or industries outside Development Areas, as well as inside, as hitherto. Clause 1 provides that undertakings within the area or elsewhere may receive these grants, and from that I take it that the powers of the 1945 Act will still apply inside the Development Area, and, in certain cases, outside.

Therefore, I hope that this new Bill does not mean any abandonment of the powers of the earlier Act or any loss of its use inside the Development Areas that have already been created. In the Budget debate on 16th April, the President of the Board of Trade said that the original purpose of the 1945 Act had been fulfilled, but, later, he stated that he would have scrapped many of the present development orders, except that the pressure of public opinion made him change his mind about it. He did go on to say that because he did not intend formally to deschedule certain areas, he would seek fresh powers. Because the President of the Board of Trade could not formally deschedule certain areas, that does not mean, I hope, that he will neglect those same areas.

North-East Lancashire was the Development Area to be scheduled last of all. However, although I assure the Minister that we are thankful for some small mercies, we have, so far, being the last, had least of the benefits of the 1945 Act. On the other hand, there were some encouraging words in what the President of the Board of Trade said in the Budget debate. He said that today's problems should be met in a different way. They can occur both inside and outside Development Areas. He went on to say: In future, we shall confine assistance to places inside the Development Areas where it is really necessary."—[OFFICIAL REPORT, 16th April, 1958; Vol. 586, c. 192.] That is really my case. Inside the Development Areas, there are some places where the powers of the 1945 Act, or this new Bill, need to be used, because they are places where assistance is still vitally necessary. The purpose of the 1945 Act did not rest solely on unemployment statistics. It seems to us, today, that the Government are resting the possibilities of future help on unemployment figures solely, whereas the 1945 Act was based upon the threat, in certain areas, and the continuance of unemployment, not at a particular level or at a particular time, but over a period.

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