DISTRIBUTION OF INDUSTRY (INDUSTRIAL FINANCE) BILL

HC Deb 30 April 1958 vol 587 cc421-518

Question again proposed, That the Bill be now read a Second time.

5.44 p.m.

Mr. Burke

I was saying that the purpose of the 1945 Act did not depend necessarily on the level of unemployment at a particular time or in a particular place, but depended more on the threat of unemployment and also upon the need to replace industries liable to depression by industries not so liable.

It was because of the need to replace the cotton industry—which, of course, is liable to periods of depression—with industries not so liable that North-East Lancashire was made a Development Area in 1953. It is still the claim of North-East Lancashire that the cotton industry needs to be replaced by industries that are not so much dependent upon the export market. It was then, and is still, the case that North-East Lancashire is one of those places where, as the President of the Board of Trade said, assistance is still really necessary.

The cotton industry, upon which North-East Lancashire is largely dependent, could, in the opinion of the people in that area, still be capable of making a great contribution to the national wealth, but because the Government's economic policies have not protected the cotton industry in the way which we feet that it might have been protected the Govern- ment ought to face up to the consequences of their lack of protection of the cotton industry and bring new industrial life into the areas which are suffering largely because of the decline in the cotton industry.

The people in North-East Lancashire are thankful for the help that has come their way. The Mullard Company has built a new factory and in Burnley we are about to get a new Michelin Tyre Company factory. While these additions have produced about 2,300 jobs, we have lost jobs at the rate of about 1,000 per year in Burnley. For instance, the cotton textile industry has lost 4,600 operatives in four years—that is to say, there has been a decline of about 10 per cent. of the insured population in the textile industry alone. That means that labour becomes available for other kinds of occupation. During the last two years eight mills have been closed in Burnley, three within the last six months or so.

On 12th December I asked the President of the Board of Trade what he proposed to do about this matter, and he told me that he was making inquiries. I do not know whether the Minister who is to reply to the debate can tell me the result of those inquiries. Of those mills that have been closed only two have been reoccupied. Obviously, that means that there is a great amount of accommodation available which could be used. About half a million square feet of floor space has been provided in new factories. Against that, we have lost the accommodation of those eight mills which more than wipes out that benefit.

Burnley was perhaps the most important weaving town in the world. It had at one time a population of 100,000 and 100,000 looms. The population has decreased and the cotton trade has dwindled. As a consequence, there are few towns that have lost population so heavily. The thing that disturbs them is not so much the loss of population, but the loss of insured workers. On Friday, we were told that the Ministry of Labour has a scheme for transferring labour from parts of the country to other parts and to help workers financially in doing this. Up to the present people have been leaving Burnley of their own accord. We do not want facilities to enable people to leave Burnley, but industries brought into Burnley which will enable the people to stay.

At one time, the Board of Trade told us that a factory would be built in the area, but it could not say whether it would be near the most populated area. The Board of Trade said that if a person has to travel a reasonable distance a day, that is all right. We said that it was all right; but now they have to travel not a reasonable distance during the day, but apparently have to leave the area. It is wrong that a town which was built to house 100,000 people should be allowed to go down year after year at the rate of Burnley's rate of decline and that its insured population should also go down because of the failure of an industry which the Government might have protected.

According to the March figures, the importation of cotton cloth has gone up by 19 million square yards. That is 4½ million square yards more than our exports. This is only the third time in 200 years' history of the cotton trade that this has happened. It has happened three times very quickly. It happened in June, 1957, October, 1957, and it has happened again. In other words, this country is ceasing to be an exporter of cotton, but is becoming a net importer. It is estimated that the home market could take up each quarter about 400 million square yards of cloth. But the home market plus the net import market is a good deal higher than that. Something has to go—either the home production or foreign importation. The Government have decided that foreign importation shall stay. If that is so, they must face up to the consequences and give us some new industries to replace the declining cotton industry.

I hope that this Bill does not mean that the Board of Trade is not going to improve the area and that the Ministry of Labour will be allowed to empty the area. I hope that as a consequence of the Bill we shall not lose the powers under the 1945 Act, but that they will be used a good deal more fully than ever before.

5.52 p.m.

Viscount Hinchingbrooke (Dorset, South)

It was no surprise to me to hear the right hon. Member for Battersea, North (Mr. Jay) welcome the Bill. If I were sitting on the benches opposite, and accepted the philosophy and policy of the Labour Government, I would grasp the Bill by the scruff of the neck, stick it into my Pandora's box and pull it out during the next period of Labour rule and implement it 1,000 per cent. in favour of collectivisation, inflation and gigantic take-over bids in industry.

I do not want the House to think that I am opposed to the principle of aid in the distribution of industry. The Acts that were passed in 1945 and 1950 undoubtedly have been of immense benefit to the country, particularly to those areas where it was difficult after the war to envisage a large-scale return to civil work without aids of this kind. Incidentally, after this Bill is passed the title "Distribution of Industry" will become a misnomer, because the process is now generalised and there are now to be no isolated areas which are defined for specific purposes.

I am not moving, but speaking to, the reasoned Amendment which is on the Order Paper in the name of some of my hon. Friends and myself. It is, like all Gaul, divided into three parts. There is the political problem which is presented by the publication of this Bill; there is the fiscal problem; and there is the problem of parliamentary control. I propose to say a word in due course about each of these three aspects.

First, I would like to make a comment arising out of what was said by my hon. Friend the Member for Louth (Mr. Osborne). Incidentally he illustrated his speech in favour of the Bill with a series of examples of calamitous situations in industry which arise directly out of the past period of over-full employment and inflation and not out of a period of underemployment and deflation. I thought that his speech lost in effect through selecting those series of examples. The Bill does not help him with them.

My hon. Friend regretted that I was here this afternoon seemingly advocating a return to unemployment. I deny that as much as I deny that the Government, in producing a Bill dealing with unemployment, postulates the possibility of a return to unemployment. I admit that the word appears rather nakedly in my Amendment and I should like to explain it to the House. It should not be thought that my hon. Friends and I, in attempting to frustrate this Measure, are trying to produce again great lines of unemployed men queueing before the soup kitchens and human fodder queueing for the dole and financial relief.

There is no doubt that the country, and even people in industry who are sometimes supposed to be violently reactionary in their views, recognise that long-term structural unemployment is a human disaster, is a manifest sign of inefficiency and incompetence and is a denial of greatness in a nation. It is clear that this is so today, whatever may have been the case in past years, and that a return to the kind of structural unemployment we had before the war cannot and will not be tolerated in this country ever again by any Government.

I observe—and the right hon. Member for Battersea, North referred to it—that there is no figure put in the Bill for an acceptable degree of unemployment. Whether a figure should be put in is a matter for debate in Committee. We have had examples in the past of figures given in Government publications. This debate has been brought on at such short notice that one has not had time to do the necessary research and I apologise to the House for not being able to say categorically, for example, that the Coalition White Paper on "Full Employment", in 1944, contained a figure. I believe that there was a figure in it. If the figure was not in the White Paper itself, it was given in a speech made by the then Minister of Production, to whom reference has been made in the debate, after the publication of the White Paper.

The figure of 6 per cent., I think, was given as a tolerable limit of unemployment. Certainly, Lord Beveridge, in his famous book, "Full Employment in a Free Society", mentioned the figure of 4½ per cent., 1½ per cent. of which was estimated to be the seasonal limit, 1½ per cent. the estimated number of people who would be changing their jobs at any one stage and 1½ per cent. the estimated number of people who might be temporarily stopped. It is true to say that in recent years these speculative figures have been jettisoned. I recall that the present Leader of the Opposition—or was it Sir Stafford Cripps?—gave a figure of 3 per cent. as being a tolerable limit of unemployment.

But, generally speaking, both political parties have abandoned the idea that the mention of any particular figure is either desirable or possible. We can only look at the facts, and the facts today are that unemployment is now 2 per cent., having been down to about 1 per cent. or just above, until very recently.

There is a theory, of which hon. Members have perhaps heard, called the theory of the 5 per cent. spread. Crudely, it is to be explained as follows—that with our present knowledge and the statistics which we amass in this country, and with the refined techniques of administration, which we have developed here probably more than in any other country in the world, through my right hon. Friend's Department and in other ways, a spread of 5 per cent. between inflation and unemployment has been established. That is to say, we can have a 5 per cent. annual inflation and no unemployment, or we can stop inflation altogether and have 5 per cent. unemployed.

Of course, we can have any combination between the two according to the policies adopted. Some people might suggest that a suitable limit today would be 3 per cent. unemployed and 2 per cent. annual inflation, wiping out debt in fifty years. Others—and they would perhaps be on the other side of the House—might say that 2 per cent. unemployment was the absolute limit and that 3 per cent. annual inflation was acceptable.

Mr. S. Silverman

Could we not have no inflation and no unemployment?

Viscount Hinchingbrooke

Not according to the theory of the 5 per cent. spread. It cannot be brought below the figure of 5 per cent. at the moment, although as time goes on we hope that we may be able to refine our techniques in this country even further and reduce that 5 per cent. to 4 per cent., or even 3 per cent.

Looking back over the experience of the last few years, I sometimes think that a perpetual inflation of 5 per cent. annually is worse than a 5 per cent. unemployment figure provided that the unemployment is not structural.

Mr. C. W. Gibson (Clapham)

Not for the unemployed.

Viscount Hinchingbrooke

Certainly, more far-reaching damage is done to the country by a perpetual 5 per cent. inflation than by 5 per cent. unemployed who are temporarily stopped, or are moving from one part of the country to another in search of new jobs, or who are unemployed seasonally. I hope that better statistics and techniques may be available before long and may reduce the figure. For the present, however, we have to work on this figure of 5 per cent.

I think it became clear some time ago, certainly in the autumn of last year, when the Government acted decisively, that the nation had had enough of 5 per cent. inflation. Anyway, under various influences, the Government brought it to an end, or began to bring it to an end, last September. But according to the theory I have propounded it is axiomatic that unemployment must rise if that 5 per cent. inflation is slowed down. It is a see-saw which cannot be escaped, and when my right hon. Friend the Member for Monmouth (Mr. P. Thorneycroft) sat heavily on one end of the see-saw last September my right hon. Friend the Minister of Labour must have known at the time that his figure—or shall we say his figures?—would be elevated as a consequence.

That introduces the political problem which lies behind the Amendment which I have on the Order Paper. My hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), in the second of two speeches which have greatly impressed the House since his resignation, put Sir Francis Drake's poetry into lucid prose. I will quote from my hon. Friend's speech in the Budget debate: It has been a paradox of recent years—a paradox more easy, I hope, to recognise than I find it to describe—that in the midst of virtually full employment, with standards of almost every kind steadily rising—by whatever test we apply to them—still there has been over these years a deep-seated public malaise, an anxiety, a sense of insecurity, a sense of uncertainty—even of discontent—which contrasts so paradoxically with the progressive and prospering economic environment in which we have lived. I do not think there is any one cause which can be assigned for this phenomenon, but I believe that the main cause is that we seem never as a nation, or as a Government of either complexion to have pursued any one objective long enough or with sufficient determination or firmness. We seem to have operated in these years always on too narrow margins and too subtly to have readjusted and changed our course; never following a policy through to massive success in the achievement of a known and predetermined aim. I think that people have sensed and felt that, and this malaise to which I refer is largely the result."—[OFFICIAL REPORT, 16th April, 1958; Vol. 586, c. 217–8.] I wholeheartily agree with that sentiment expressed by my hon. Friend. I want to ask whether the publication of the Bill is meant to imply that the Government are running away from the policies of last autumn and taking fright too soon. I want to ask a rather more dangerous question. Is this Bill a precursor of measures designed to take the lid off industrial expansion and to bring it to boiling point, as was the case in 1954 and 1955? If that is so, I say advisedly that I do not think that that policy, even if it scored a success then, would score a success a second time if it were repeated now. That is, shortly, the political problem which is presented by the Bill. How is the allegiance of the Conservative Party on these benches and in the country to be retained and exalted and made enthusiastic if the Government veer from pillar to post and from course to course?

That brings me to the fiscal problem, which I think I can express fairly shortly. By the credit squeeze, by exhortations, by instructions to the banks, by instructions to the Capital Issues Committee, by hire-purchase regulations and all the rest of the paraphernalia of control, we have slowed down inflation in recent years, but by the inexorable law about which I spoke just now we have also increased unemployment.

It seems to me that by this Bill, certainly if it is implemented on a large scale, either by this Government or by the next, we shall be using the taxpayers' money to reduce the unemployment which we have otherwise deliberately created. Quite a lot of the taxpayers' money might be used in the implementation of the Bill. I have the figures beside me. They rose to about £13 million or £14 million a year in 1946 or 1947 and since then they have been running between £7 million and £4 million annually. It is conceivable that if the Bill were implemented on a big scale a very large quantity of money passing through the Estimates would be used to correct and mitigate what had been designedly achieved in another field of public policy. It seems to me that the Government are robbing Peter to pay Paul. Perhaps I ought to say they are robbing Peter to pay Iain.

Are we getting into the position where we have Budget surpluses annually to hold down inflation, the proceeds of which surpluses are used to let up on inflation? In other words, are we getting into a position where the public sector is chasing its own tail and, in the process, enlarging its sphere of influence and grabbing more and more from the private sector? I should like to know what are the prospects of fundamental remissions of taxation while this sort of process goes on.

The President of the Board of Trade may be judicious and circumspect in the application of public moneys to these ends. But this is the old problem. While we trust our own people, we must not put on the Statute Book something which can be used by others we do not trust. We must face the fact that this is an enabling Bill and that it contains only two safeguards. One is the Advisory Committee of the Board of Trade, to which reference has been made this afternoon, and the other is the assured solvency of the recipients of the money. The vast majority of businesses and trade in this country are solvent. The vast majority of advisory committees are capable of being packed.

Another Government, with a philosophy different from ours, a philosophy of production, production, at any cost, might rule that 1 per cent. or even ½ per cent. unemployment was intolerable. Maximum figures not being mentioned anywhere in the Bill, they might be allowed by another Government to soar to hundreds of millions of pounds, and the powers given by the Bill might be used in a series of mass bribery bids in industry.

We are not justified in putting on the Statute Book a Bill which may bring in train these undesirable possibilities, and I am sure that if the country had had more time to appreciate some of the nervous thinking which has gone into the Bill, its rather too early presentation and the lack of clear belief and understanding behind it, we should have seen a different picture.

That brings me to the last problem, the insistent need for a safeguard to be written into the Bill. I should like a term to be set to the operation of the Bill or a maximum figure stated of the expenditure envisaged in the Bill, or both, as is done in the case of the Nationalised Industries Loans Act. I am aware that the moneys voted under the Nationalised Industries Loans Act are charged on the Consolidated Fund and do not pass through the process of Supply and go to the Select Committee on Estimates, but who thinks that the Estimates Committee is effective in checking expenditure of this kind? It is not allowed to touch the basic policy behind the expenditure of money and it can look only for economy and for value in the services given.

Who thinks that the Committee of Supply is the slightest use these days, as it is organised, to forestall the wholesale expenditure of public money? It used to be, but we deserted that, and now thousands of millions of pounds go through on the nod while the Opposition select a topic of the day of a polemical character. There is no parliamentary check, once a Bill of this kind has passed into law, on the expenditure of money under it, except the affection and trust between back benchers and their own leaders.

Mr. Iain Macleod

Surely there is the safeguard that the Treasury will have to come to the House for a Supplementary Estimate for the money spent under the Bill.

Viscount Hinchingbrooke

In this year that may be so, but next year it will be in the main Estimates and will go through the process which I have described.

Mr. S. Silverman

Will there be no Supplementary Estimates then?

Viscount Hinchingbrooke

It is true that Supplementary Estimates are bounding up from year to year and that the limits which some Ministers set to the degree to which the Civil Estimates can rise are soon surpassed.

The character of the industries, trades and businesses which are to be assisted should be reviewed periodically by Parliament. If the House does not agree to insert any limit of time, amount of expenditure or degree of unemployment in the Bill itself, then I think that Parliament should approve, by means of an affirmative Resolution, the localities which are to be assisted and the character of work involved. My right hon. Friend the Minister referred to the speed with which we may have to act. Well, Parliament, if it stirs itself, can act with speed, also, and it is not beyond the wit of the Government to bring a Statutory Instrument to the House scheduling some of these areas, industries and amounts, and let it go through on an affirmative Resolution, or be thrown back at the Civil Service, as the case may be.

In conclusion, I own to a profound feeling of philosophic doubt and disappointment about this Bill. Inflation has been stopped by squeezing the private sector, and yet since the resignation of my right hon. Friend the Member for Monmouth the public sector is now being allowed to expand. Is that the practice, policy and purpose of the Conservative Party, that this should continue year by year unchecked, that remorselessly, by budgetary surpluses, the private sector should be squeezed and the public sector enlarged? I cannot believe that it is so.

I had hoped that, if the brakes had been too hastily applied last September, squeezing the private sector, and manifest unemployment was going to arise again in different parts of the country, the Government would have released the brakes where they had originally applied them and not have kept those brakes on and projected further expenditure through the State machine. I had hoped very much, since the end of the war, that, under the influence of my right hon. Friends, the Conservative Party would institute a grand recessional of State power. Since the war we have had a disproportionate amount of State control, direction, and guidance.

I quite agree that unemployment must be stemmed, but it can be stemmed by more subtle techniques than those of centralising through the taxpayer a great quantity of money and disseminating it with State influence through the Departments. I was hoping very much to see that after the initial benefits of my right hon. Friend's policy last year had begun to take effect some further return would have been made to private enterprise, private freedom and a reduction of the power and influence of government.

6.19 p.m.

Mr. John Taylor (West Lothian)

There have been at least three main surprises in the debate so far. The first was the speech of the hon. Member for Hastings (Mr. Cooper-Key), making a plea for his constituency. I had not thought that a place like Hastings would be within the scope and purpose of the Bill. The second one was the hon. Member for Louth (Mr. Osborne), of all people, protesting against party politics entering into this matter. I should have imagined that the hon. Member was just about the most astute politician in this place, and to hear him objecting to the use of party politics in any debate whatever on any subject under the sun must surely be an exercise in mental gymnastics which even he has not very often surpassed.

The third surprise was the speech to which we have just listened from the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke), or at least, some parts of it. I do not propose to comment on his speech at any great length, because many hon. Members want to speak, and some of us have constituency or district and area problems, and indeed national problems, to which we wish briefly to draw attention. All I can say about the noble Lord's speech is that it is full of very useful quotations, but I am afraid those selected will be used mostly from this side of the House as ammunition in future. However, this House always has a great affection for the undaunted supporter of lost causes. No matter what the cause may be, the hon. Member who persistently, consistently and courageously sticks to his point of view against the flowing tide always has our affection. To that extent the noble Lord has not surprised us, and many aspects of his speech contained what we expected from him. The mantle of the former Member of Parliament for Orpington, the late Sir Waldron Smithers, now falls on the worthy shoulders of the noble Lord.

I now wish to turn to the general problem which the Bill is designed at any rate to alleviate, as it affects my own native country of Scotland, which has always had a percentage level of unemployment about double that for the United Kingdom as a whole. In the 'thirties when we sought to put geographical boundaries to depressed or distressed areas, that was not possible with Scotland because all Scotland was a depressed area. Fortunately that is no longer so. There are "hard core" areas, as in other parts of Britain, areas of regular, steady permanent scheduling as depressed areas, which have remained substantially the same. The Clyde, Tyneside, Merseyside and South Wales are all "hard core" areas, and they remain such. There has been a recurring theme in this debate up to now, at least from this side of the House, that although it is wise, prudent and sensible to extend the scope of special legislation to deal with areas in which unemployment trends are obvious, and in which unemployment is developing where it has not developed in the past, we should still maintain the provisions of the earlier Acts to deal with those "hard core" areas.

Because of changing industrial techniques, it is essential that legislation of this kind, inadequate and timid as it may be, should provide for areas in which unemployment trends are obvious, and in which future unemployment, if they are left alone and without assistance, is likely to be heavy, permanent, and, to the area concerned, disastrous. I want to speak particularly about one of these areas. It is difficult to give it a name because it is a very extensive area. To call it "East-Central Scotland" would scarcely be geographically adequate. To call it the Forth Valley would seem to be including rather more prosperous areas such as the City of Edinburgh and places on the Firth of Forth to the East.

It is that area which includes all my constituency, part of Stirlingshire, which was mentioned in detail by my hon. Friend the Member for Stirling and Falkirk Burghs (Mr. Malcolm MacPherson) in the debate last Friday, parts of Fife on the other side of the Firth of Forth as represented by my hon. Friend the Member for Fife, West (Mr. Hamilton), and parts of Midlothian and North Lanarkshire. All that area is one in which new techniques are causing the demise of the industries which gave it a previous prosperity which is now hastening to an end obvious to all.

I have spoken many times in the House about the problem of the shale oil industry and the steady decline of this, the world's first oil industry. I have tried to persuade the Government to save it and give it a life of another quarter of a century by fiscal means alone, but the Government have steadily, steadfastly and consistently set their face against that course. Only last week this industry suffered a still further recession, and another 300 workers are redundant in an industry which has already suffered several recessions in the last two years. The shale oil industry affects areas outside my own constituency, in the neighbouring County of Midlothian, in the Calder area, where, as in many of the areas I propose to mention, there is no alternative industry, and no new industry has been brought in within the last forty years.

There are also in my constituency docks which are threatened with closure. I fear very gravely that that will be the result of recent inquiries. There will be not merely the effect upon local unemployment among the dockers, because they have a guaranteed week, but there will be an indirect effect on industries which use the docks and, finding their facilities gone, will take their businesses to other parts of the country or will close them altogether. To quote a case in point, I had from a firm using the docks a letter in which, in the course of stating their point of view and trying to persuade us to retain the docks—so far as we can persuade policies in these matters; and it is not entirely a matter for the House, although the final decision does rest with the appropriate Minister—they say: It does appear that unless we obtain an unexpected share of foreign trade within the next two months and if the dock closes we will be forced to close down all our activities and withdraw from the West Lothian area. After such a long association, with so many employees who have given long and devoted service to the company, this would be a step which would cause us considerable distress. These are consequential effects of these minor recessions—if they can be so described—which take place when an area is in industrial decline, or at least in industrial difficulties.

It is similar in the Stirlingshire area, which has hitherto been reasonably prosperous because of the steady demands for the products of the light castings industry. My hon. Friend the Member for Stirling and Falkirk Burghs made that case in detail on Friday, and I need not go over it again. It is the same in the constituencies of my hon. Friends the Members for Lanarkshire, North (Miss Herbison) and Fife, West. With the closing of existing industries and recessions in industries which proved to be rather too light—so light that the first puff of adverse wind blew them away—there is a problem in those areas which looks like being of long-term character unless legislation of this kind can be passed to assist them.

There is also another strange factor which we must take into account when considering this type of legislation. We once regarded the coal industry as being the most stable industry in the country. That is no longer the case. In my own and neighbouring constituencies, smaller pits, which are uneconomic, having reached the end of their useful life, are, rightly and inevitably, closing. There is a tendency to concentrate pits into the larger producing pit agencies. The pit which you, Mr. Speaker, once knew extremely well some years ago is still in operation, but its days are numbered. That applies to a good many pits in the area. The result of this, obviously and inevitably, is that the younger people, who generations ago would on leaving school have gone into the mining industry, are regarding that as the last industry they would propose to adopt as their career. They are travelling very long distances to alternative, less useful, less economically desirable industries which are much less in the national interest. The problem is that even in the coal mining areas there is this decline, this steady reduction in the industry and in the manpower in it.

It is areas of this nature which we hope the Bill will help, if it is applied to such areas. I make the plea for that area because it has never at any time had any substantial influx of new industry. Here and there there have been a few small factories which have not come within the scope of Scottish Industrial Estates Ltd., except for a very small corner near the constituency of my hon. Friend the Member for Lanarkshire, North. Otherwise an odd factory here and there with a very small employment potential is all we have had. The area requires a large-scale influx of steady and permanent industry.

Mr. S. Silverman

Is any part of this area already a scheduled area, and, if so, how much?

Mr. Taylor

Yes, part of it is. It is difficult to say what percentage of the insured persons live in the scheduled area. I should say 50–60 per cent. reside outside the scheduled part of the area. Some of it is not scheduled and never has been scheduled for the reason that in the past those industries were steady industries and did not have any great unemployment percentage. It is for that reason—I mentioned it at the beginning, but probably inadequately—that I do not think that the Bill is effective for areas of this description which have a new and increasing unemployment problem which they have never had before to any large extent but in which, unless they are dealt with, there will be a very heavy unemployment problem in the future.

I am making the plea in order that areas like this shall not be overlooked. In my own constituency the figure of unemployment is nearing 5 per cent. and it is increasing week by week. Once it has set in, a 5 per cent. spread is impossible to control. The weakness, in my view, in the whole of the theory known as "the 5 per cent. spread" is that one cannot control unemployment once it establishes itself. It is a snowball business and quickly gets out of control, and the more unemployment there is in an area the greater unemployment there will be in that area in a few months' time, unless something very drastic is done.

So, although the problems of the Clyde and other parts of Scotland have been adequately, frequently, eloquently and, I hope, effectively brought to the notice of the House within the last year, I make this plea for this area, which includes my own constituency, not only because it is a local, constituency interest, and it is our duty, of course, to state those things, but also because the Government must look at the changing pattern, distribution and location of industrial activity in the nation and find out where new techniques are drawing workers away, and where old industries of the first industrial revolution are dying and the industries of the new industrial revolution are not being located to replace them.

That is the main contribution I wish to make to this debate, and I make it with as much sincerity as I can, because while we talk of percentages and of 5 per cent. spreads and so on, we may be inclined to forget that it is people who comprise those percentages, human beings of flesh and blood, and when we come in contact with them, in the areas which are now being affected, and which we fear will be affected, they make a deep impression upon our minds. We regard it as a privilege to be able to speak for them, and I hope we do so effectively.

6.35 p.m.

Mr. J. C. George (Glasgow, Pollok)

I am delighted to be able to follow the hon. Member for West Lothian (Mr. J. Taylor), who always speaks with such deep sincerity and such eloquence upon the problems in and around his constituency. He has rightly drawn to our attention the fact that statistics do not compose the whole problem of unemployment. It is the daily life of people with which we are dealing today.

I have what is perhaps a rather unusual experience for a Member on this side of the House, the experience of lengthy unemployment. I have taken part in miners' strikes extending for seven months. In the 'thirties I lived in the mining areas, and I have seen the corroding effects of unemployment. Therefore, it is wrong to say that we on this side of the House cannot appreciate the deep human problems of unemployment. Many of us know them.

I set myself the task, way back in September, of trying to keep track of the Press notices about unemployment in Scotland. For some years, as the House well knows, it has not been a matter of great moment, for we have had full employment. Indeed, it has been said to have been over-full employment. I started to keep newspaper cuttings from the two main newspapers. In recent weeks I have been swamped by a deluge of them. I could not possibly keep pace with the comments made about unemployment in Scotland. I think that that is a matter of great significance. It is quite evident that the fear and apprehension at serious unemployment expressed in the Press is but a reflection of the fear and apprehension felt about it in the country.

It is true that in Scotland in recent months we have seen the shadow coming back, in greater intensity in some parts than others. When we speak about this problem of unemployment it raises fears, anxieties and apprehensions. But we should keep a balanced mind. The first thing we should do is to look at the country as a whole and compare its fortunes, as my hon. Friend the Member for Louth (Mr. Osborne) so ably did, with those of Europe and the rest of the world. We see, nationally, that we are extremely lucky with 2 per cent, unemployment and we Conservatives can face the world and say we have done our job well by the nation.

Then we study the Scottish problem and we see that we in Scotland are not so well placed as the nation as a whole. Unemployment has risen to about 3.6 per cent. As the hon. Member for West Lothian very rightly pointed out, we have a hard core which continues steadily to be double that of England's, an intractable hard core which is associated with the predominance of older industries in Scotland. In Scotland, 70 per cent. of our people are employed in the older industries compared with the figure of 50 per cent. employed in the older industries in England and Wales. It is because of this very high percentage in the old industries that we have that steady and higher hard core of unemployment. It is there and it is with us, but we cannot just take this percentage of unemployment in the country as a whole. We must look deeper into it than that. Can we feel comfortable about 3.6 per cent. and say that we are quite happy about it? Because with that 3.6 per cent. we have in Scotland "black spots," areas of great anxiety where much more than that 3.6 per cent. is found. We have a number of such areas in Scotland. It is for that reason I welcome the Bill, because I believe that if it is energetically applied it can do something to help those black spots.

We see them developing in other areas. The hon. Member for West Lothian mentioned the shale oil industry. Dundee is becoming now an area of great anxiety. There is 6 per cent. unemployment, and the area will endure a high percentage of unemployment unless something is done about it. I believe that this Bill can help. Greenock, which the Minister knows very well, is another area of anxiety, with an equally high level of unemployment of an intractable nature, and one we cannot see being readily cured by the expansion of existing industry or by the attraction of new industry in the normal way. Unless something unusual is done, Greenock and Dundee will remain black spots and areas of real anxiety for a long time. In the Dundee area, 6 per cent. of the men are unemployed. In the Greenock area, nearly 7 per cent. of the men are unemployed, and they are, I think, two of the areas which the Minister of Labour had in mind and the Chancellor had in mind and the President of the Board of Trade had in mind in bringing forward this Bill.

Apart from those two or three black spots with a relatively high percentage of unemployment, we have the amazing fact that in Scotland, in the Development Areas themselves, we have more than 50 per cent. of the total unemployment, 43,000 out of 80,000. That is the point I want to put to the Minister.

We have been very successful in the Development Areas in Scotland in the last three years. Comparing them with all the Development Areas in the United Kingdom, we have done very well indeed. In 1955, we built more than 5 million sq. ft of new factory space in Scotland; in 1956, again over 5 million sq. ft. Last year, in 1957, we saw a rather dramatic and alarming drop in the Development Areas, a fall from 5 million to 1.8 million sq. ft. in the first half of the year.

In the new jobs provided we have been lucky as compared with the whole of Britain. In 1955, we had 51.6 per cent. of the new jobs created in Britain in the Development Areas. We had 54.2 per cent. in 1956. We had 48.9 per cent. in the first half of 1957. However, that 48.9 per cent. represented a fall from 5,821 new jobs provided in 1955 to 550 new jobs provided in the first half of 1957.

That is in Development Areas where the Government already have power to do a great deal. I know that in the economy we have been fighting inflation, that in the fight against inflation we have had to tighten up in many ways, but I cannot see the logic of bringing in a new Bill to tackle new areas of unemployment if we are not, at the same time, taking vigorous action within the Development Areas where, I repeat, in Scotland there is over 50 per cent. of the total unemployment.

Leaving that problem, I turn to the Bill. It is not a tremendously big Bill. In a way, it is a Bill which forearms the Minister against what may happen in years ahead. I do not know whether the Government are thinking in terms of millions, tens of millions or hundreds of millions of pounds. I do not know the scope of the Bill, but I would ask the Government, who must be looking forward to schemes being presented to them, what is to be done about initiating the schemes? We have the Bill; we have unemployment. How can we make the two meet in a factory or any industry providing jobs? Who takes the initiative? Are we satisfied that we have a scheme by which we can induce people to come along, either by the Government's efforts or by local efforts? What sort of scheme have we in mind for inducing industry to go into these areas? In Scotland, we leave it to the Scottish Council, which has done a great deal for our country. We must always have great respect for the work done throughout the areas by those vigilant men who give so much of their time to helping the expansion of industry in Scotland.

On the question of the attraction of new industry, I would draw the attention of the Minister to a remark made by Lord Polwarth, a few days ago, in connection with the difficulties of bringing new industries to Scotland. If I may paraphrase him, he said that a difficulty which the Scottish Council has experienced over a long period in the establishment of new industry in Scotland is the complicated procedure whereby new undertakings have to consult various Government Departments before they can get clearance to go ahead and that this is very deterring compared with the procedure in other countries. I wonder whether the Minister would look at that complaint and consider what can be done about it?

In wondering what can be done about unemployment in Scotland, I looked at the process which we have to go through. We are not all rabid Nationalists. We are not all out for maximum devolution; indeed, sometimes I think that we have gone too far with it. When we look at the problem of serious unemployment, I wonder whether the present set-up is the right one to handle it quickly and efficiently? We have to deal with the Ministry of Labour and the Board of Trade. I often wonder whether London is suited to handling a serious problem in Scotland which should be dealt with quickly, and whether, in this area, we should not have a Minister with special duties to deal with unemployment.

The areas I have mentioned present the human problem to which the hon. Gentleman the Member for West Lothian referred, and in those areas there is great apprehension about the future. It is not easy to see how this Bill will cure that apprehension. For instance, the City of Dundee has depended for years upon the jute industry, which is gradually dying. What will replace it? How can this Bill be applied quickly to the provision of alternative employment in Dundee?

Sometimes I think the employers in such cities are slack in doing something for themselves. The decline in jute became obvious some time ago, and they should have been ready with new industries, or should have been studying ways and means of keeping industry alive in that town. This was not done, and there is unemployment. How can we use the money which is available to cure that unemployment? This is one aspect: how we can bring together money and the unemployed to form a new industry and relieve the trouble? I wonder whether we do enough in Scotland to deal with unemployment. It is not just a question of taking work to the workers. We must arrange for transfers.

I have looked at what has happened in the training and transfer of workers to other jobs and I find that the Ministry's schemes are not very popular. Last Friday, I was glad to hear of the additions suggested by the Minister but, generally speaking, the training schemes of the Ministry are not very popular. The average number concerned is about 2,000 at a time, and those people are mainly ex-Service and disabled men. The unemployed worker does not readily go for the Ministry's scheme of training for employment elsewhere.

Two or three weeks ago I had the good fortune to be in Luxembourg and I saw what the European Coal and Steel Community is doing in this respect. It has been facing problems of unemployment in various countries and has accepted the responsibility for making people unemployed by its acts. The High Authority has drawn up a re-adaptation scheme, and where men become unemployed because a factory or a mine cannot be run efficiently under the High Authority they are not left to find their own jobs through the labour exchanges. The re-adaptation scheme comes into practice, 50 per cent. of the cost is met by the High Authority and the other 50 per cent. is met by the Government of the country concerned. The men concerned are re-trained for a new job, and up to now, at any rate, have been successfully put into new employment.

While welcoming the Bill as a step forward in taking work to the workers in black spot areas, I urge the Minister to reconsider whether we are doing enough in taking the workers to the work by re-training.

6.51 p.m.

Miss Margaret Herbison (Lanarkshire, North)

I find it impossible to be enthusiastic about the Bill. I say that advisedly because the action of the Government in the Development Areas in Scotland, as well as in some other Development Areas, over the past few years has not resulted in the employment one would have wished to see in those areas.

I say to the hon. Gentleman the Member for Glasgow, Pollok (Mr. George) that Dundee is one of the Development Areas and that if the Government had used the Distribution of Industry Act, as they could have done, something more drastic could have been done to meet the serious problem now facing Dundee. What I fear about the Bill is that it will raise the hopes of people in areas where there is unemployment which are not scheduled as Development Areas. Unless the Government act differently from the way they have been acting in some of the Development Areas, those hopes will not materialise.

In moving the Second Reading of the Bill, the Minister spoke about acting swiftly. He said the Government were anxious and ready to help, and ended by saying that they would act with speed and decision. My hon. Friend the Member for West Lothian (Mr. J. Taylor) and many others of us on this side of the House over the past few years have been urging the Government to act with speed and decision in the Development Areas in Scotland, and we feel strongly that they have not done so.

The hon. Gentleman the Member for Louth (Mr. Osborne) seemed to be sorry that my right hon. Friend the Member for Battersea, North (Mr. Jay) had introduced politics. Politics is the expression of opposing philosophies and the application of those opposing philosophies to the problems before us. It would be surprising indeed if we on this side of the House were not ready at all times to put forward our plans for facing the problems that are with us.

The Minister also said that unemployment was spotty but that it was severe in those spots. My hon. Friend the Member for West Lothian has spoken not only about his area but about other surrounding areas. The whole of my constituency is in a Development Area, and the Bill will not help it. My complaint is that the Government already have within their power measures that would have helped my area, but they have not used those powers to the extent they might have done. I do not think unemployment is spotty in Scotland. It is a sickness found throughout my country. In some cases it is much worse than others, but it is causing great concern throughout Scotland.

When one looks at the pronouncements of the Scottish Council for Industry and of the Scottish Trade Union Congress it is clear that for a long time both bodies have been saying to the present Government that they are not convinced that the Government are doing sufficient to deal with unemployment in Scotland. The plans which both bodies have put forward to the Government time and time again have been disregarded. Now we are getting small measures, such as this Bill and the announcement made by the Minister on Friday to help workers to move from one area to another.

The latest unemployment figures given in the Digest of Statistics for February, 1958, show that in Great Britain there are 424,500 unemployed with only 209,000 vacancies. In other words, the vacancies are half the number unemployed. So even if we could move every unemployed worker to a place where there is a job, there would still be more than 200,000 workers unemployed.

I believe in a certain degree of mobility of labour if we are to aim at completely full employment, but human beings are not inanimate objects like chessmen on a board. They are people with souls, with feelings. Men and women have families, and sometimes it is impossible for them to move. That is one reason why it is important that work should be brought to areas rather than that whole populations should move elsewhere for their work.

Another physical difficulty is housing. The Lanarkshire County Council has a rule that there must be ten years' residence in the county before anyone can get a local authority house. Of course, houses are built for key workers, but unemployed people are not all key workers; in fact, the majority are not. So, first, there are the human considerations to be borne in mind, and, secondly, there are physical considerations such as housing.

The position in Scotland of vacancies as compared with unemployed is much worse than in Great Britain generally, since there are six unemployed people to one vacancy. Does the Minister by his statement on Friday want to continue the great exodus of Scottish people to England which has taken place during the last few years? Is that the way to solve unemployment? Is it worth while to leave great areas of Scotland derelict, as will be the case if these are the only two measures of which Ministers are thinking? It seems to me to be a cock-eyed economy to spend money in moving workers from one place to another.

I believe that the hon. Member for Pollok is just as disturbed as are some of us about unemployment in our country, although he tried to say how much better off we are than some other countries. That is no comfort to the people who are unemployed.

Mr. George

It is true.

Miss Herbison

It is our duty in this House to try to take measures which will prevent unemployment growing in Britain to the extent that it is doing in America, Canada and some other countries.

The hon. Member for Pollok wondered what could be done to improve the position. There are two things in particular. From this side of the House, time and time again we have asked for advance factories to be built, but time and time again the Government have set their face against that. Only last week, in answer to a supplementary question, the Parliamentary Secretary to the Board of Trade said: I recognise that this method may have been appropriate in 1945 and the years immediately following the war, when factory accommodation of any sort was in short supply, but our experience today is that firms prefer to have factories tailor-made to suit their individual requirements".—[OFFICIAL REPORT, 22nd April, 1958; Vol. 586, c. 766.] The Scottish Council for Industry does not believe that, and my experience in my constituency proves that to be quite wrong. When a factory became vacant, we had more than one reputable firm ready to take it.

Perhaps the Minister will pay some attention to what I found in the United States of America only a few weeks ago. I went to Hazleton in Pennsylvania, which is an anthracite mining area. I went there because it is very like my area and that of my hon. Friend the Member for West Lothian. Coal mining has been decreasing in the Hazleton area, and the town decided that it must have a new industry. With the Government in America believing in great private enterprise, the people of Hazleton knew that they could not hope to have any Government help, and so the citizens themselves built an advance factory. Immediately they got a tenant for it, they built a second advance factory and found a tenant for that. When I was there, a fortnight ago, they were clearing the land for a third advance factory.

I hope that from now on we shall have the support of the hon. Member for Pollok—and I am sure that it will be very valuable support—in trying to get advance factories built in these areas in Scotland to get the industry that we want.

Mr. William Hamilton (Fife, West)

Would his help not be just as valuable in trying to get a steel strip mill, which he opposed some time ago?

Miss Herbison

I could not agree more.

Mr. George

I did not oppose the strip mill. I opposed the demand for a strip mill in Scotland not being based on objective facts.

Miss Herbison

The hon. Gentleman says that his opposition was because; the demand was not based on objective facts, but he gave all the reasons why it was stupid for us to ask for a strip mill in Scotland. There is no doubt about that. Advance factories could help the areas which are already scheduled as Development Areas.

There is a second point which was made very strongly by my right hon. Friend, the use of industrial development certificates. If more use were made of industrial development certificates, there would be much greater hope not only in Scotland, but in Wales and in those areas in which my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) is so interested.

I am glad the figures have been given about building in Development Areas. At present, there are 3.6 per cent. unemployed in Scotland, while in London and the South-East area the figure is 1.3 per cent. One would imagine that there would be a far greater degree of new factory building projects in Scotland than in London and the South-East, but that is not the case. Those under construction in June, 1957, in London and the South-East, measured in square feet, were more than double those being built in Scotland.

The Bill may help a little in some areas which are not Development Areas, but its only chance of helping even a little is if the Government are determined to use the provisions of the Distribution of Industry Act, 1945, much more actively than has ever been the case since they came to power in 1951.

7.5 p.m.

Dame Irene Ward (Tynemouth)

I add my support for the Bill and congratulate my right hon. Friends on their decision to introduce it. I come from a Development Area, but I should never want to take a dog-in-the-manger attitude, because since I first entered the House of Commons I have always considered that the things most important to the happiness of the people were good jobs, good homes, security, and wages which would enable them to live happy and full lives.

I have watched with great concern the growth of unemployment in some areas, but, like my hon. Friend the Member for Louth (Mr. Osborne), I regret that the right hon. Gentleman the Member for Blyth (Mr. Robens) should have given a political slant to his speech. I enjoy political battles, and often indulge in them, but, looking back over the years at the many contributions made by so many hon. Members in an effort to solve the problems which have faced us since the 1930s, I always regret the tendency to enter into party strife in this matter.

I recollect that when I was first elected to the House of Commons, part of my then constituency, Wallsend-on-Tyne, had 89 per cent. of the insured population unemployed. I hear a murmer from some hon. Members opposite about how many Tories were included in that number. I remind hon. Members that I defeated the Socialist Minister of Labour, Margaret Bondfield. I live in that part of the country and I am proud of it and profoundly grateful to all those who have helped to make the North-East Coast much more secure and prosperous than when I was first elected to the House of Commons.

Having been here for a very long time, I want to make some observations for the sake of the record. I fully appreciate the measure of the work done by the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) in the Distribution of Industry Act, 1945, which undoubtedly greatly added to the earlier Special Areas legislation. It was a very great improvement upon the knowledge that had been gained. I am, therefore, grateful to him for the part that he played.

For historical reasons it is necessary to point out that when we were faced with very serious unemployment in the 1930s the first thinking, and the first taking of special action to develop new methods of helping the situation—which we are adding to now, in a new way, by the present Bill—came under the Premiership of Lord Baldwin, as he afterwards became, when he set up the special commissioner inquiries. From listening to some of the debates in the House I have come to realise that all this history is quite new to many of my hon. Friends, and also to many hon. Members opposite. I have great admiration for my right hon. Friend the Minister of Labour, and I support his political outlook and philosophy, but I realise that he was not here in the 1930s, any more than was the Parliamentary Secretary to the Board of Trade, who will wind up the debate tonight.

It is, therefore, right to point out that at that time of very grave unemployment the back benchers in the House of Commons were overwhelmingly Conservative. We sent out these special commissioners to examine the problems and make recommendations, which they did. We started with the Special Areas Act, which was the first Measure whose purpose was to try to induce industrialists to go to these very difficult areas. We had the Team Valley Trading Estate, on the Tyne, and the Treforest Estate, in South Wales.

That was only the beginning. I am sure that a great deal of the thinking and the action was immature and probably ineffective, but I want to put on record the fact that, however hard we may fight for what we think is the right action to take, or whatever may be the differences in our political philosophies, in the 1930s we were not sitting back without thinking what could be done to assist the unemployed

It is only right that that should be put on the record. [Laughter.] It is all very well for hon. Members opposite to snigger, as I can hear them doing. All I say is that we felt a very great sense of responsibility in the 'thirties, and I would also point out to hon. Members opposite that in 1935, after four years of a National Government, with predominantly Tory back bench support, we won the 1935 Election. It is not true to say that the country regarded us as having no heart or sympathy for the problems that we had to face. I am proud to be here to see a further development of this process—because that is what I regard the Bill as being.

I know that the right hon. Member for Bishop Auckland has taken a great interest in the trading estate at West Chirton, in my constituency, and I am grateful for the part that he has played, but the major reason for our success was that we seized the opportunity of the Special Areas Act and the Distribution of Industry Act, through the Chairman of the Trade and Commerce Committee of the County Borough of Tynemouth at that time—Alderman Irvine—and a very active, knowledgeable and vigorous Town Clerk. I am excluding myself from this, because I had nothing to do with the constituency at that time. If any hon. Member wants to know what part local authorities can play in industrial development, members of the County Borough of Tynemouth will be delighted to receive him and tell him the story of the achievement of that local authority, which based its work on the legislation which has been passed.

Many hon. Members want to speak today, so I shall raise only one specific point. I wondered whether I should take part in the debate, but from my experience in this House, over the years, I have come to notice that if one fails to put a point at the proper time, many years afterwards, when some new Ministers and different civil servants are in office, it is pointed out that when the debate took place on such-and-such a date the point was not made, and the Ministers and Whitehall assume that there was no controversy. That is why I want to mention the problem of dry docks.

In his Budget speech, tied up with this new move forward, the Chancellor of the Exchequer—who is the principal figure, because the Treasury must supply the money—mentioned that finance would be available for the building of new dry docks. I was very glad to hear that, because the River Tyne is the premier ship repairing river in the United Kingdom, and I know that there are one or two tremendously exciting new developments now under discussion. My hon. Friend the Member for Langstone, (Mr. Stevens) pointed out that dry docks can be built only where there is water. He was a little apprehensive, as I am, about the position of the dry dock owners, who have long traditional associations with ship repairing, and who have expressed some anxiety as to what the Chancellor had in mind.

If it were so decided that a dry dock should be constructed in a suitable part of the country, I take it that under the Bill it would be possible for permission and support to be given by the Government to the detriment of Tynemouth. I do not want to do any special pleading, but this is a very important issue as between the Development Areas and the new areas that may be affected by the present legislation. I take it that the Chancellor of the Exchequer could say that a new dry dock on the Tyne would not receive the support of the Treasury Advisory Committee because the level of unemployment was not sufficiently high to warrant Government agreement to the construction of a dry dock there, and that the Government would prefer it to be built somewhere else.

We are anxious that in this effort to deal with pockets of unemployment we should not in any way do anything to destroy the traditional and strategic water routes which have supported the United Kingdom for many years; I do not know when the first dry dock was built, but I do not think I would be wrong if I were to say "for many decades." The traditional contribution to ship repairing on the River Tyne should not be altered, and although I fully realise that our anxieties are probably unnecessary, I am raising this point in case, in years to come, somebody should say that on 30th April, 1958, when this important matter was discussed, nobody raised this point.

One of the advantages of the Bill is that there is an independent Treasury Committee on which are represented the Admiralty, shipping and shipbuilding interests as well as, I presume, trading interests. It is an independent Committee. However—and I know that hon. Members opposite who represent the Tyneside feel just as strongly as I do on this point—there is quite a problem connected with descheduling. Hon. Members opposite as well as some of my hon. Friends have pressed the President of the Board of Trade not to de-schedule our area.

The Tyneside enjoys a high state of prosperity, though we recognise the difficulties of the shipping position. It is impossible to live in my part of the country without feeling some anxiety on that score. At the same time, I do not think that it does an area any good to be over-anxious. It is very difficult to retain a proper balance, and to argue for the interests of an area while, at the same time, safeguarding the rights of that area, so that nobody should feel that we do not view our future with the greatest confidence.

The psychology of the men who went through the period of unemployment in the 1930s, and of their sons, is a very important factor in these discussions. I fully agree with my hon. Friend the Member for Louth, who spoke about retaining our competitive position in world trade. Let me refer to the miners in Durham. The right hon. Member for Bishop Auckland, naturally, paid a great deal of attention to that part of the country when he was Chancellor of the Exchequer. A great many new industries have grown up in Durham County. Nevertheless, if we want the miners to go all out for full production it is a very bad thing to suggest that there is, or is likely to be, any trade recession at all, because the psychological factor will operate, and this affects all of us. I say that advisedly.

It is a little difficult to argue for as much support as we can get to expand our industries and, at the same time, not to let it be thought that we lack any confidence in the future. We do not lack that confidence. We feel that the Minister of Transport, in giving us the Tyne Tunnel and adding to our communications—

Mr. Speaker

Order. To discuss the Tyne Tunnel is not in order on the Second Reading of this Bill.

Dame Irene Ward

I am obliged, Mr. Speaker. I shall not develop my remarks on the Tyne Tunnel. We have won that battle, and I am grateful for it.

The fact remains that we have got confidence in our area and we view its future, along with the development of nuclear power, with hope. In this connection, we should not forget the assistance that we have had from Sir Claude Gibb, and I would not like to underestimate the work done by Sir John Jarvis in Jarrow; he did a very good job for us.

I welcome the Bill because, as I say, it builds on what has gone before, and I am very glad to know that the Government—which, though I knock them about sometimes, I support because I favour the underlying philosophy of the Conservative Party—are taking this matter in hand and are acting speedily, and that the knowledge of the past is helping us to build for the future. I am quite certain, from the small experience that I have had, that any advice and help that we or the local authorities or the industrialists or the trade unions can give will be welcomed.

I welcome the Bill. I hope that it will do something for those who, when the black days have gone, will still find the future fraught with anxiety. I hope that it will bring some confidence to those who have not got jobs to know that the matter is being considered seriously and helpfully by the House of Commons today.

7.30 p.m.

Mr. Goronwy Roberts (Caernarvon)

We can all join with the hon. Lady the Member for Tynemouth (Dame Irene Ward) in paying our respects to those hon. Members, on either side, who in the past twenty years did their best to find a solution to the gross and disgraceful problem of unemployment which distorted the economy of the country for so long.

It is for that reason that I have been very glad to listen to words of praise and appreciation of the work done by my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) in this connection. He was the pilot through this House of the 1945 Act, and, as Chancellor of the Exchequer, was largely responsible for its brilliant implementation. In seconding those words of praise, I would associate with him my right hon. Friend the Member for Gower (Mr. Grenfell), Father of the House and "father" of the Grenfell factories. They, too, were a significant contribution to a very difficult aspect of the general unemployment problem, that of the disabled and partially disabled.

As one who helps to represent an area with the highest percentage of unemployment in the whole country, I extend a cautious welcome to the Bill. I express the hope that it will lead to the establishment of new industries in counties like Caernarvon, Anglesey and Merioneth. At the same time, I profoundly regret that the Bill is so restricted that all it does is to apply one Section of the Distribution of Industry Act, 1945, to unemployment areas, the Section which offers financial assistance to firms to enter those areas. This may help, but I am sure it will not solve, the problem of areas like North-West Wales.

The true solution of the problem for Gwynedd in North-West Wales is to schedule the area as a Development Area. The Minister of Labour seemed to us to be three-quarters convinced that that is so. I hope that after the debate a new look will be taken at the problem of North-West Wales from the point of view which I have put forward, namely, that the real solution for chronic unemployment in those two counties is to schedule the area.

All the conditions for scheduling are there. The position in Caernarvonshire is in every respect what it was in South Wales and Wrexham when those areas were scheduled. It is true that the numbers are lower in our areas than they were in those areas, but this is not a matter of a few hundred men. Even numerically our unemployed are very considerable, about 5,000 in Caernarvon and Anglesey alone. At the present time the percentage in those areas is the highest in the country.

What were the conditions for scheduling which the framers of the Barlow Report and of the legislation of 1945 and 1950 had in mind? Those conditions were mainly four. The first was the decline of a local, traditional, heavy industry, and it was usually coal. If we apply that to Caernarvonshire and Merioneth and substitute quarrying for coal, that condition is satisfied in regard to North-West Wales. In 1939, more than 9,000 men were employed in our slate quarries. By 1948 it was down to about half, 4,600. Today it is a bare 3,400 or only a little more than one-third of the pre-war figure.

The second criterion was lack of diversification of industry in the depressed areas, which meant that the failure of one industry could throw an entire community into economic catastrophe. That has been the case for years in the slate-quarry areas. Townships like Ffestiniog, Bethesda, Trevor and the Nantlle Valley depended exclusively upon quarrying, just as the towns of South Wales depended exclusively upon coal and perhaps one other industry. These towns now depend upon quarrying, which is dwindling, and upon National Assistance, which is mounting.

In this connection I should take issue with the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke)—I am sorry that he is not in his place—who seemed to think that what he called "over-full" employment was the only cause of inflation. Has he or any of his hon. Friends ever thought of the inflation caused by the need to pay doles and public assistance to nearly half a million idle men? That is inflation in a double sense because it costs between £100 million and £150 million annually, entirely unbacked by any sort of production. In the areas of which I speak one of the main sources of income has for years been unemployment pay and National Assistance.

The third reason for scheduling was to improve basic services such as water supplies, sewerage, roads and housing. That condition again applies with overwhelming force to areas like Anglesey and Caernarvonshire. The fourth reason for scheduling was to enable Development Areas to create new industrial sites and access to them and to improve amenities by clearing industrial waste. Certainly our quarrying areas would qualify under that head. That is the case for scheduling North-West Wales, or part of it, as a Development Area.

The mistake made by the Bill is to apply parts of the Distribution of Industry Act to our area instead of applying the whole Act to parts of our area. Failing the scheduling of those three counties, the Minister could have included in the Bill two other Sections of the 1945 Act. They would have strengthened the Bill enormously. The first is Section 3, which provides financial assistance for improving basic services like water supplies and sewerage. It is precisely these areas which need help because without proper services industry cannot enter these areas.

The application of Section 4, which is all the Bill amounts to, may, in fact, be nullified by the absence of Section 3. It is no good saying that the normal forms of grant aid will settle this problem. Take the case of the Lleyn Rural District, in my constituency, which covers an area of exceptionally high unemployment. During the past few years it has courageously embarked upon a water scheme costing more than £1 million. Of course, the scheme is grant-aided, but the rural district must find about £400,000. As a proud though apprehensive member of the ratepayers of that district, I think the Minister must agree that that is a tremendous burden to place upon a rural district which bears the highest percentage of unemployment in Great Britain.

The final stages of this scheme have been held up for months by the Ministry of Housing and Local Government. The Minister for Welsh Affairs tells us to do something to help ourselves. We embark on a vitally necessary but costly water scheme and the Minister for Welsh Affairs tells us we are going too fast. Both Ministers, by the way, are the same man. No water from that brook.

There is surely a case for applying Section 3 of the 1945 Act to areas of that type to improve basic services. There is also a case for applying Section 5 of the parent Act, which makes provision for redeeming derelict land. As my right hon. Friend the Member for Gower knows, that Section had the dual purpose of providing industrial sites and access to them and of improving amenity. Both objects would be admirably served by applying that Section to the slate-quarrying areas.

One of the consequences of the slate-quarrying industry, as many hon. Members who have visited the area know, is the vast tips of slate waste which litter the countryside for miles around the actual works. They are wasteful of land and of beauty. Some of them cover hundreds of acres. One such encroachment in my valley, the Ogwen Valley, overwhelmed an entire village, Bryn Llys, one of the most charming hamlets in Wales. Section 5 would clear those tips and improve amenity. It would be useful and congenial work for our people. It would enhance the beauty of some of the loveliest valleys in Wales and so aid the tourist industry.

I welcome the Bill. I hope it will be administered with imagination and boldness. I wish that, in addition to Section 4, Sections 3 and 5 of the parent Act had been included in the Bill. I repeat that the real answer to the problem of North-West Wales is scheduling. Even today I hope the Minister, who has spoken with sympathy and encouragement of our area, will consider adding to the Bill the Sections I have mentioned and so strengthen it for the purposes for which it was designed.

7.42 p.m.

Mr. J. A. Leavey (Heywood and Royton)

I, too, am glad of the opportunity to welcome the Bill. It is some comfort that in doing so I find myself in company with virtually all hon. Members who have addressed the House, with the exception of my noble Friend the Member for Dorset, South (Viscount Hinching-brooke). I think that he is probably more nearly in step with the rest of us than his speech perhaps suggested.

I would go so far as to say that in some respects I have sympathy with some of the points of view that my noble Friend expressed. I think it was a reasonable point to take that the limits of expenditure which might be involved in the Bill are not known. The last sentence of the Explanatory and Financial Memorandum says: It is not possible to form any estimate of the increase in such expenditure which is likely to be incurred as the result of the Bill. Were my noble Friend present, I would say that to that extent I have some sympathy with his point of view.

Before I go on to make one or two general observations about the Bill, there are two specific questions that I wish to address to my right hon. Friend. They are points of detail, which I hope he will be able to answer. The first is: what is meant by the phrase "a locality"? Secondly, I think that the House would welcome some indication of the criteria by which the Board of Trade will, in due course, decide whether a specific case is deserving either of a grant or a loan.

As I understand, the Bill is born of the fear that in our struggle to master inflation, which has been a post-war malaise that successive Governments have tried to master, we may see a most regrettable growth of unemployment where it now exists and the development of new and unwelcome pockets of unemployment. There have been some exchanges this afternoon between hon. Members on opposing sides of the House on the subject of our attitude towards unemployment. I readily accept the point made by the hon. Lady the Member for Lanarkshire, North (Miss Herbison) that it was almost inevitable that we should find ourselves indulging in what might be termed party conflict when matters of policy conflict were involved.

Having said that, I must go further and say that I regret that again and again, over the years, we are offered a point of view by hon. Members opposite that our attitude towards unemployment is less worthy than theirs. I should have thought that if it was nothing else it was at least transgressing a tradition of this House that we do not impute dishonourable motives to political opponents, or to anyone else. My hon. Friend the Member for Pollok (Mr. George) has suffered the grave unhappiness of continued unemployment. He spoke at length on that and I shall not try to develop that theme in detail.

Today we struggle under a great question mark. It was the peg on which much of our debating of the Budget was hung. It is the question of whether we in Britain as it is today, and as we hope it will be in future, and in the world as it is today, can have stable prices, a stable cost of living, or perhaps even a reducing cost of living, a healthy balance of payments position, a £ which continues to command respect in the world, a solvent and respected system of social services, and not only full employment but useful employment. I suppose it goes without saying that it is the hope of everyone here that we can find the means to have all those blessings at the same time.

An extension of that observation, I suppose, is that in a great part of our debate this evening, and whenever we discuss economic, and social matters which are closely associated with economic matters, we find ourselves debating that possibility. I have said that I welcome the Bill and I am very glad I can accept it in company with virtually all hon. Members who have addressed the House today; but there are one or two points on which I should like some positive assurances if, in due course, it is possible for my right hon. Friend to give them.

I should like to be assured that when the Bill is put on the Statute Book and starts to be put into effect—I certainly think that it will provide a job where, hitherto, a job had not existed and will produce a wage where only unemployment benefit had hitherto existed—it will not be made an instrument by which the Government will distort the pattern of demand in any particular area. All of us in future will bring such pressure to bear as we can on the Government to implement the Bill if it should happen that we are concerned with areas where unemployment has developed.

I am sure that we shall neither serve the long-term interests of our constituents nor meet the long-term needs of the country in a changing and competitive world if this Bill is used to preserve artificially a demand for goods and services which is not in the nation's long-term interest. I hope that it will not be a Measure which will turn back the clock in the sense that funds will be provided to perpetuate activities creating a demand which in the wisdom of the Board of Trade should not be sustained.

Where there is a potential and desirable demand there is no doubt that the powers provided in the Bill should be used. It is one of the many duties and burdens laid upon Governments in this country to strive as far as they can to ensure that the people are given the opportunity to be useful. It is the Government's responsibility to see that being useful is a rewarding function.

I have suggested that I have one apprehension about the Bill, and I have tried to put that apprehension to my right hon. Friend, but in that context I remind him that in Lancashire, and particularly in the cotton industry, we have the two qualifications which I believe are called for in the Bill. I am convinced that we have a vital role to play in the industrial life of the country, and we have the threat of unemployment. Indeed, unemployment in one form has already arrived. I hope that when the Bill becomes law such industries as the cotton industry and such areas as Lancashire, which, I am the first to admit, have suffered from having all their eggs in one basket, will be considered for help under the Bill.

I do not want to detain the House further, since most views in support of the Bill have been expressed, but I believe that the Bill could mean a great growth in confidence in those areas where there is a threat of unemployment, uncertainty and uneasiness. In a world which I am convinced will be increasingly competitive, it is a lack of confidence, a threat, an uncertainty which is probably the most demoralising single issue from which communities, large and small, are inclined to suffer.

The phrase, "I do not wish to detain the House for long," has sometimes been used to preface a speech of considerable length. I do not wish to make that mistake, and I simply say again that I very much welcome the Bill and congratulate my right hon. Friend on introducing it.

7.53 p.m.

Mr. William Hamilton (Fife, West)

I should like to welcome the Bill for rather different reasons from those given by the hon. Member for Heywood and Royton (Mr. Leavey) and others. I welcome it because it can do no harm, and we are grateful for that from the Government. To the extent that it will increase flexibility in the distribution of industry, it is welcome. I think we all agree that with a dynamic economy we have to have a policy which matches that dynamism. I am bound to say, however, that the policy which the Bill seeks to adumbrate seems to be in conflict with previous policy declarations of the Government.

Before I come to that, I want to refer to a point about flexibility which has been made several times in the House in the last few years. As long ago as 1952 the Cairncross Committee reported on means of promoting economic expansion, with particular reference to Scotland, and among its recommendations were that, industrial growth should come first, ahead even of the need to reduce unemployment in other areas. The right hon. Gentleman has had a spate of special pleading today and I want to try to avoid that if I can, except for saying that I think the Government, of whatever complexion, must get down to the problem of deciding which areas they will encourage. Is the criterion to be the percentage of unemployment or is it to be the future economic prosperity of the country? In other words, are we to concentrate on areas which are declining or on areas which are developing?

It is no secret that among Scottish hon. Members there is a conflict of opinion on this point. I have taken the view that the Government, whether it be a Conservative Government or a Labour Government, ought to pay some attention to areas which are developing. My area is developing but it has problems of unemployment. It seems paradoxical that that should be the case. There is unemployment among women, in particular. Certain mining areas in Fife are developing and other areas are declining. We are trying to bring miners from the West of Scotland with their families into developing areas, and some of them are unwilling to come because there is no employment for their wives and families. The President of the Board of Trade has admitted that this area needs some alternative industry for women.

There is an apparent contradiction between the policy adumbrated in the Bill and policy statements made by the Government over the past few months. It is all very well for the Government to say, "Now we shall deal with the spots of unemployment." It is easy to say that, but it is not as easy to do it when the atmosphere has completely changed from one of expansion and optimism. From the end of the war until 1955 there was a period of expansion and there was optimism. There was no talk of recession and there were no debates in the House on unemployment between 1945 and 1953–54.

The atmosphere has changed. There are feelings of apprehension throughout the country. Restrictions are the order of the day. We have a big question mark over the recession in America and its effects on this country. We have increasing difficulties in the export market. It is in that atmosphere of fear of insecurity that the Government are seeking to remedy some of the ill effects of their own policy.

The reasoned Amendment, to which the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) spoke, shows that it has undoubtedly been deliberate Government policy to increase unemployment. There can be no doubt about that. The speech of the Chancellor of the Exchequer did not inspire any confidence in me. He forecast more unemployment this year and a likely decline in production. He went on to say, having said that some unemployment was inevitable, that nobody on the Government side wanted to see mass unemployment. I hope that is true. They are all very careful to say that, but outside bodies very often express the feelings that many politicians dare not express, and I want to quote one or two of them.

The Manchester Guardian of 25th September, 1957, said this about the measures which the right hon. Gentleman the Member for Monmouth (Mr. P. Thorneycroft) introduced: Is the Government now prepared to push its policy to the point of causing unemployment, if this is necessary to save the £. Mr. Thorneycroft did not actually say that in so many words in Washington yesterday, but the things he did say seemed to bear no other meaning. The Financial Times of 10th October, 1957, said something similar, when it wrote that the means by which this policy could be pushed through was a rate of 5 per cent. unemployment, and we have had that figure bandied about from the other side of the House today, suggesting that we cannot cure inflation unless and until we get 5 per cent. unemployment.

The Cohen Report said almost the same thing, but this Report has not been mentioned today. The Minister was very careful—indeed, all Ministers since that Report came out have taken similar care—not to say that he supported its conclusions. Not one Minister has said it. I should like to ask the Minister of Labour whether he supports the conclusion in paragraph 135 of the Cohen Report, which says: No one should be surprised or shocked if it proves necessary that the percentage of unemployment should go somewhat further. In The Tablet for 1st March, 1958, Mr. Colin Clark said of that statement: This statement, probably the most controversial in the Report, should not have been made … to demand a positive increase of unemployment will not only arouse furious resentment: it is also bad economics. He went on to deal with some other subjects.

It is in that context that the Bill has been introduced. Here we have a situation in which the Chancellor in his Budget statement, and the previous Chancellor last September, said by policy and by statement that unemployment will increase and must increase if inflation is to be curbed. Yet the Government bring along this Bill and say "All right, we now have measles, but we are going to try to rub out the spots." That is exactly what the Government are saying.

In my constituency, there is grave apprehension about this problem among the coal miners, textile workers and others. I should like to think that the Bill will solve the problem, but I fear that it is like trying to cure cancer with a couple of aspirins. The fundamental point is to get at the root causes of unemployment, many of which are psychological. The epitaph which I fear we shall have to put on this Bill is that it does too little and is too late.

8.4 p.m.

Mr. Gerald Nabarro (Kidderminster)

The hon. Member for Fife, West (Mr. Hamilton) fell into the same error as so many hon. Members on the Opposition benches this afternoon, of exaggerating the extent of unemployment today. It is true that there are pockets of unemployment, several of them malignant in character and unlikely to be cured by either political party or by any measures that could be taken of a legislative character, save, possibly, only by the removal of these unemployed people to other parts of the country.

The best possible example of that was given by the hon. Member for Caernarvon (Mr. G. Roberts) in his plea for the scheduling of three counties in North Wales. The decline of the slate quarrying industry in North Wales cannot be cured by taking factories there.

Mr. Robens

Why not?

Mr. Nabarro

The right hon. Member for Battersea, North (Mr. Jay) asks, "Why not?" He was not here this afternoon to listen to his hon. Friend's speech, but the plain fact is that the unemployed quarrymen in that part of Wales are accustomed to heavy work, and most of the factories that might be attracted to an area of that kind would be of a light industrial character. It is not only a problem of taking factories to areas where unemployment exists, but also—and I do not believe that anybody has stressed this point so far—of taking suitable industrial processes to those areas so that they might gainfully employ the type of labour which exists in surplus in that district.

There are several areas which can show a malignant form of unemployment due to a declining industry. It may be an extractive industry or a manufacturing industry, and I have already given an example of the extractive industry.

My hon. Friend the Member for Pollok (Mr. George), who spoke earlier, referred to Dundee, and gave an example there of a very old industry, the jute industry, which has tended to decline during the last two or three decades and which, so far as I can see, will go on declining for a long time ahead at a gradual pace.

The reason is simple. It is technological advance in the form of alternative products. Imperial Chemical Industries can now produce a product of a type of polythene for packaging and wrapping purposes far more cheaply than, for example, the jute manufacturers in Dundee can produce hessian; and who wants to use hessian for wrapping products of a modern and progressive character if one can use the best packaging materials of its kind—polythene—which is so much more attractive and much cheaper? With that technological advance, inevitably there will be declining industries.

I should like now to put this matter of unemployment over the whole country into proper perspective. At the last Census—and my right hon. Friend will correct me if I am wrong—there were about 433,000 people registered as unemployed out of a total working population of approximately 23,200,000. Against the 433,000 people registered as unemployed, there were about 209,000 unfilled vacancies for jobs. The hon. Lady the Member for Lanarkshire, North (Miss Herbison) suggested that the whole difference between the 209,000 and the 433,000, namely, 224,000, ought to be employed and found jobs.

What palpable nonsense. When the right hon. Member for Blyth, now sitting on the Front Opposition Bench, was Minister of Labour, he was willing to admit that on whatever day in the year one takes a census there were always tens of thousands of men and women moving from job to job. There must be a short period of transition or translation from job to job.

In fact, opinion still varies as to what constitutes full employment, but we have very nearly full employment today. We are very nearly in balance in the industrial field. If I were asked, I would say that with a working population of 23,200,000 people, it is hardly feasible to keep the economy in balance, and my interpretation of full employment in such conditions would be a figure of about 400,000, representing about 2 per cent. or slightly less.

I do not believe that most people who have studied this problem would quarrel with that assessment. I am sure that my right hon. Friend does not. When we get down the figure of registered unemployment to something less than 200,000 in relation to a working population of 23,200,000, I say that in such conditions our economy was grossly overstrained and we were suffering from all the vicissitudes which arise from a period of over-full employment, though I am the last man in the House to say that the threat of inflation may only be checked by a policy of under-employment.

I agree that there are party politics in this matter. My hon. Friend the Member for Louth (Mr. Osborne) deplored the fact that party politics had been introduced into the debate. I feel quite the contrary. If I had to listen to vicious, biased, highly party-political speeches of the kind made by the hon. Lady the Member for Lanarkshire, North and feel that I was expected to be timidly receptive to all the barbs and gibes which she hurled at the party to which I belong, without reply, I should regard that as a very sad state of affairs indeed. I propose now to reply to one or two of the points made by hon. Members opposite.

The right hon. Member for Battersea, North, in opening the debate, grossly exaggerated not only the unemployment position today, but also the effect of what even his more enlightened policy, as he seemed pleased to call it, of the location of industry, might be. We have had location of industry legislation in this country for thirteen years. It has been operating successfully for that period. The number of men and women employed in Government-finance factories in Development Areas after thirteen years is 190,000. I do not disparage that figure at all, but it is no more than that. Out of a working population of 23,200,000, 190,000 men and women have been found employment in Development Areas in Government-financed factories. That represents ¾ per cent.

As for the figure of 300,000 to 500,000 additional jobs in Development Areas, to which the right hon. Gentleman referred, that, of course, relates for the most part to factories erected by private funds and without Government assistance. That is the sort of policy which we ought to encourage. We ought not to encourage a call on public funds for Development Areas. I want coercion or persuasion of every kind to be brought to bear on firms requiring additional factory space to go to Development Areas without a call on public funds.

Mr. Jay

Does the hon. Gentleman not realise that sensible people want both and that, ever since the distribution of industry policy was started, at least half of the new employment has resulted from private firms induced, persuaded or steered into these areas by the Government? Therefore, the relevant figure is about 300,000, even if one takes no account of the secondary effects of the policy.

Mr. Nabarro

What I am trying to do is to put the matter in proper perspective. Putting the figures at their highest, giving the best interpretation to what the right hon. Gentleman says, it is between 300,000 and 500,000 new jobs out of a total working population of 23,200,000.

Mr. Jay

Quite a lot.

Mr. Nabarro

I agree that it is quite a lot, but it is really marginal, a matter of 1½ per cent. only. It can be no more than marginal.

Mr. Jay rose—

Mr. Nabarro

I did not interrupt the right hon. Gentleman once. I sat and listened to his highly-coloured statements without interruption, but I will give way to him once more.

Mr. Jay

I only want to have the facts clear. If the hon. Member is right in saying that the total occupied population is about 24 million—

Mr. Nabarro

It is 23,200,000.

Mr. Jay

—and if the Minister of Labour is right in saying that 18 per cent. is the ratio of the Development Areas to the population of the whole country, then the total employed population in Development Areas is, presumably 4 million or 5 million. Three hundred thousand is a far more than marginal proportion of that.

Mr. Nabarro

I find the right hon. Gentleman's logistics and statistics as bad as his party politics. He has, of course, failed to take into consideration the Schedules published at the end of the 1945 Act.

That Act provided not only for scheduling but for descheduling, also. It set out in advance a number of areas which it was thought at that time might suffer from unemployment in the ensuing years. What has happened is that the schedule of areas has, very largely, been inflexible in character, for, so far as I am aware, no area has yet been de-scheduled. I think I am right in saying that, and I am glad that I have hon. Members in general agreement with me about it.

If we are to go forward on the basis of conceding requests, from every side of the House, that this or that area shall be added to the scheduled areas, we shall finish up with a state of affairs wherein a grossly excessive percentage of the industrial areas of the country is scheduled under the Act. Therefore, not only should we try to put the matter in proper perspective and appreciate that anything done under the Bill can be only strictly marginal in character—I have no desire to discourage it; it is very useful—but we must really look also very carefully at the provisions of the main Act. If we are to schedule new areas for development purposes, we must, at the same time, deschedule approximately equivalent areas elsewhere.

Mr. Robens

Why?

Mr. Nabarro

Because, if one goes forward, as I see it, with a general level of unemployment over the whole country, according to the published figures, of only 2 per cent., then, if we continue adding more and more areas to the scheduled list without reducing the original list, we shall arrive at a state of affairs whereby industrial firms are directed, if they require factory space, to far more areas than, logically, should be placed in a position to receive them. That is the crux of the matter, I think. Does the hon. Member for Nelson and Colne (Mr. S. Silverman) wish to interrupt?

Mr. S. Silverman

Obviously, having sat here since half-past two and not having interrupted anyone so far, I could not resist an invitation of that kind. I understood the hon. Member to say, a few minutes ago, that his main point was that firms should not be encouraged by financial assistance at the public expense to go to areas where it was socially desirable that they should go, but that they should be directed there—coerced, or persuaded, were the words he used—not being given any assistance, which really means directed.

Mr. Nabarro

Oh, no. The hon. Member is misrepresenting what I said. I will repeat that passage from what I said ten minutes ago. I would persuade firms—

Mr. Silverman

Without money.

Mr. Nabarro

—or coerce firms, by one means or another, to go to the Development Areas, without assistance from public funds, if I could do so—and it should be in only a small number of cases that it would be necessary to provide any public money.

As my hon. Friend the Member for Pollok, asked earlier, it is important that we should know how the Act has been operating during the last thirteen years. I have made many applications for industrial development certificates for new factories and there has never been much difficulty with the Government Departments concerned. As I understand, the principal control is exercised, in some detail, by the Board of Trade simply through the provisions, repeated in the Bill, that planning provisions must be adhered to and an industrial development certificate obtained.

So long as we have those two safeguards, it should be possible to operate the Bill and the main Act simply on the basis of attracting firms with money to these areas, without any major call on public funds. So that we may judge the efficacy of a policy of that kind, I should like my hon. Friend the Parliamentary Secretary to the Board of Trade to tell us, when he replies tonight, what the operation of the main Act has cost since 1945. I believe that the figure has not so far been given. How much money has been used in financial grants and how much money has been used in loans to companies which have gone to these areas?

Subject only to those comments on the operation of the main Act and this Bill following it, I hope that the House will regard it in its proper perspective as making only a marginal contribution towards reducing unemployment in small pockets in various parts of the country, for, after all, as my hon. Friend the Member for Louth expressed so graphically, we cannot cure economic depression or loss of national or international trade by mere measures of location of industry and acts of that kind. That is merely a matter of taking in each other's washing. What matters is the overall level of our national trade.

The Bill will make a small contribution and I welcome it on that ground. But I wish right hon. and hon. Members opposite, first, would not grossly exaggerate the extent of unemployment or even under-employment today and, secondly, would not arrogate to themselves a panacea under the general heading of "location of industry" for the cure of our national and economic troubles.

8.20 p.m.

Mr. Sydney Silverman (Nelson and Colne)

I find myself in the very unusual and not altogether—I hope he will not mind my saying it—welcome position of agreeing with a great deal of what the hon. Member for Kidderminster (Mr. Nabarro) has said. First, I entirely agree with his repudiation of the rebuke which his hon. Friend the Member for Louth (Mr. Osborne) attempted to deliver to my right hon. Friend the Member for Battersea, North (Mr. Jay) for bringing politics into this matter. When I heard the hon. Lady the Member for Tyne-mouth (Dame Irene Ward) repeat the rebuke and in the course of her speech say that she had defeated "Maggie" Bondfield in 1921 in a constituency that had an enormous degree of unemployment, I thought that we had perhaps reached the limit of impertinence. Of course, politics enters into these matters. Why should it not?

Mr. Nabarro

Hear, hear. That is what I say.

Mr. Silverman

I was saying to the hon. Gentleman—I hope he will recover from the shock shortly—that I was agreeing with him. I have heard so much in the twenty-odd years that I have been a Member of this House about keeping this, that and the other out of politics. We were told that we must keep unemployment out of politics; we must keep old-age pensions out of politics; we must keep poverty out of politics; we must keep national health out of politics; we must keep housing and slum clearance out of politics; we must keep foreign affairs out of politics; and we must keep national defence out of politics. What in the world will be left in politics if we keep out all the things that hon. Members opposite wish to keep out, [Interruption.] My hon. Friend is mistaken; even the Rent Act was recommended from the Government Front Bench as a non-partisan non-political attempt to deal with a purely economic heritage which accumulated during the years since control was first imposed in 1914 and with which politics had nothing whatever to do.

At the same time that we are told to keep out of our party representative politics in a Parliamentary representative democratic system all the things for which politics are important, we are told that we must at any moment be ready to smash the world to smithereens in order to preserve the party representative Parliamentary political system. The whole point is that these questions, especially the question of poverty and unemployment, are approached by people who are interested in politics from fundamentally different points of view.

The hon. Member for Tynemouth spoke about the 'thirties and the problem of unemployment in those days. She mistakes what the controversy was about. Nobody has ever suggested, or hardly anybody has ever suggested, that members of the party opposite, which formed the Government during those dreadful miserable years, liked unemployment or the spectacle of people living on unemployment payments or depending on them. Nobody supposed that they were less humanitarian than the rest of us. Nobody supposed that human suffering meant less to them than it means to us. It is wrong to suppose that that was what divided one side of the House from the other. We were prepared to concede—although sometimes when we look at the measures that they recommended it requires an enormous effort to make the concession—that their intentions were right.

What we said was that their whole analysis of politics and economics as the causes of these ills was mistaken and the remedies which they intended, and perfectly sincerely intended, to cure them were themselves more likely to increase them than do any good. When the hon. Member for Louth took pride in minimising the amount of unemployment in this country now—and, indeed, he is right when he says that it is much greater in other countries—he was again mistaking the point.

I will not invite the hon. Member to do it tonight, but will he endeavour some day to consider why there should be any unemployment in the United States of America? We can understand why this should be so in Canada. One can say that Canada may have vast riches, but it is under-populated and has not enough capital investment and its resources are not fully deployed. But why should this be so in America? What does America lack? It has all the raw materials that it needs. It has the most fertile land in the world. It has a highly intelligent, industrious and progressive-minded population. The Americans are technically the most advanced people in the world. They have the best tools, they have power and they have factories. Why should they have unemployment?

Mr. Osborne

May I interrupt the hon. Gentleman?

Mr. Silverman

Yes, if the hon. Gentleman will not be too long.

Mr. Osborne

He has asked me a question. The answer is quite simple. In a free society in which the buyer has a final choice of what he wants, there will always be a fluctuating demand. This is essential in a free society. Therefore, from time to time there will be a shift over from this demand for one series of quality goods to another. During that time there must be unemployment. The only person who can guarantee full employment in a free society is a prison governor, and I do not like that type at all.

Mr. Silverman

The hon. Member is learning, but it is taking him a long time. Perhaps he has progressed as he has gone along. What he is now saying, however, is exactly what his party denied in the 'thirties.

There have been a lot of comments and criticisms about the Cohen Committee and attacks upon it. I am making no attack upon it. I congratulate the Cohen Committee. I feel delighted that at the end of 30 or 40 years of propaganda of this kind we have at last found a noble Lord who is a judge and an accountant and a professor of economics all unanimously agreeing on the diagnosis about unemployment that the Socialist movement has been preaching for 40 years and that everybody on the other side of the House has always denied; that is to say, that if there is an unplanned society, there must be unemployment or inflation. That is what the Cohen Committee has said. That is what we have been saying the whole time. That is the essence of our case.

Mr. Osborne

That is why the hon. Member wants a prison society.

Mr. Silverman

That is why I want what the hon. Member chooses to call a prison society. I do not know what he means by that, but when the Cohen Committee and the hon. Member talk about a free society, they are talking in technical terms. They mean a society in which there is no central ownership of basic materials or basic services, no central economic plan and no power in the community to control the economic resources of the community for the benefit of the community. That is what the hon. Member means by a free society.

Mr. Osborne

That is why we are not Communist.

Mr. Silverman

No, it is not why we are not Communist. It is why we are not Socialist. The whole difference is that hon. Members opposite have always been very keen about objecting to any property controls. Their passion for freedom has not always extended to things of the mind or things of that kind.

When the hon. Member talks about the Communists, it is true that the Communists, like the Socialists, believe in a planned society. To that extent the hon. Member is perfectly entitled to make his point; I am not quarrelling with that. What I am saying is that it is perfectly possible to combine the fullest civil and political liberty with economic controls of basic resources and basic wealth in the interests of the community; and that not merely is it possible to combine, but that there can never be true liberty without them. Leon Blum was right when he said that there would be no democracy without Socialism, and there can be no Socialism without democracy. Until we learn that, we shall not begin to learn what this problem is.

Now, let us get back to the Bill. The hon. Member for Kidderminster, with whom I have to some extent agreed, unexpectedly—as unexpectedly to me, no doubt, as it was to him—was inclined to minimise the amount of unemployment now existing or the amount of unemployment to be expected. On the one hand, he was saying that we must always have some unemployment and that we could not possibly have a free society unless people were free to starve and free not to be employed.

On the other hand, the hon. Member was saying that we must not consider that there was any unemployment at all, because at any given moment, even in full employment, there will be found people who are changing their jobs, and on any given census day one can always find some people who at that moment do not have a job to do. That is not, however, the Government's view. They would not have introduced the Bill today unless they were satisfied that the danger of growing unemployment is a real one. That I understand to be the motivation of the Bill. The effect of the Bill in dealing with the situation is another matter. There may be even more agreement between the two sides of the House about that before we are finished.

The point is that the Government, having decided to hold back investment and to hold back production, having decided, to use the jargon that they have used, that the time has come for reflation and that, therefore, unemployment must be expected to grow, are fearful that that unemployment will show itself in so many black spots as to be incapable of concealment; and they are trying with this Bill to defeat in odd spots what is intended to be the general effect of their policy.

The Minister asked for a definition of reflation. I can tell him, Reflation occurs when somebody tries to blow up a balloon that he has already burst. That is what the Government are doing. They saw the balloon of inflation expanding and they could not stand the sight of even apparent prosperity and so they caused it to burst. That was the deflation.

Mr. Osborne

They let it down.

Mr. Silverman

They let it down, but they are afraid that too much air is escaping through some odd spots and they are now trying to patch up the balloon. If the hon. Member for Louth agrees with me, obviously I must be careful of what I say next.

Will the Government succeed? Here one is up against the fundamental criticism of the whole of the distribution of industry policy, and for a moment I want to say something which may not be entirely popular on my own side. I agree with those hon. Members, from whatever side of the House they have spoken, who said that if the whole economy is going down it cannot be built up by redistributing it. Ultimately, questions of employment depend upon the general economic policy, the natural economic policy and its success. If that is all right, even the hard hit areas will benefit in the general prosperity. If that is not all right, nothing that can be done by way of relocation is likely to cure it, because we should never be prepared to spend enough on doing it. That has been the history of the matter.

Much has been said during this debate about the relocation of industry in the middle 'thirties. One of my bitterest memories of listening to debate after debate in this House twenty years ago is of my comrades and friends on this side of the House compelled by the exigencies of their own constituents' needs to haggle against one another, plead, argue and fight one another for the odd crumbs which the Government of the day were prepared to give them under these various redistribution of industry Acts.

Mr. Osborne

It is happening today over iron and steel.

Mr. Silverman

Yes, it is happening today, and I do not want to see it repeated. I do not say that during those years there were not improvements and ameliorations in the worst-hit areas. Of course there were in the worst-hit areas, but where were those hardest-hit areas? They were in areas whose industry was single and had broken down—South Wales with miners unemployed, Durham with miners unemployed, Tyneside with the shipbuilding and ship repairing industry at the lowest possible ebb, and Jarrow murdered by people who were perfectly ready then to exercise controls in their own private interests but are ready today to deny them to the State for exercise in the interests of the community.

These things were bad because the main industries were bad. When between 1945 and 1950 prosperity returned to these black areas, it was not because my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) extended his powers—although I am glad he extended them. It was because trade generally was good, because we tried to control our resources, because we tried to plan our economy, not only by these methods of assisting people to distribute industry more evenly but also by raising the whole level of the economy of the country. Within three years of the end of the war we were producing 60 per cent. or 70 per cent. more than the country had ever produced in history before, and these areas profited by it. Their success, their returning prosperity, was not caused by the Distribution of Industry Act at all.

Let me give an example to show that this is really right. My hon. Friend the Member for Burnley (Mr. Burke) gave an account of his constituency. I listened to it with the greatest possible sympathy Why should I not? His constituency neighbours mine so closely that one can pass from one to the other without knowing which of them one is in. I am not going to give for Nelson and Colne the figures corresponding to those which he gave for Burnley. I do not need to do it because in a recent debate, when the Government were asking for more money to build new towns, I gave them; because there did not seem to me to be much common sense in taking money to build new towns while the old towns which were there already were being continually drained of their populations.

This trouble in north-east Lancashire was just as bad in the middle of the 1930s as any of the troubles of the special areas, and we were never scheduled, for reasons which are well understood and which I do not need to recapitulate now—the part-time which did not get into the figures; the uninsured women's labour which did not get into the figures; the system of payments which kept a good many people off the unemployment registers. Between 1945 and 1950 Lancashire and the cotton industry were prosperous. My right hon. Friend's Act did not apply to us. We were as prosperous as Tyneside or South Wales or any of the other areas to which it applied, without any of that assistance. Cotton was prosperous: the nation as a whole was prosperous.

After that period, from 1951 onwards, the drain of population which has been going on from all that part of Lancashire for twenty-five years, and which was suspended for only five years between 1945 and 1950, has gone on; but for the past four or five years we have been a scheduled area. My hon. Friend the Member for Burnley says his constituency has gained something by it and lost more during the same time. I do not think my constituency has gained by it at all, but without arguing about one constituency against another, taking the area as a whole, the figures are quite plain, that the drift of population away from all those towns has been continuous in spite of the Distribution of Industry Act; and the Government have had in respect of that part of Lancashire all the powers that they are now taking for other areas, and many more powers.

Why are my hon. Friends so optimistic? Why are they so trustful? Why do they think they will get any more out of the present limited expansion of the Government's powers and their application to unscheduled areas than we have had in the scheduled areas out of the much greater powers which the Government have had all the time? This is camouflage. It is insincere.

The Parliamentary Secretary to the Board of Trade (Mr. F. J. Erroll)

Not insincere.

Mr. Silverman

I should not say it is insincere, says the hon. Member, but I have to challenge either the good faith of the Government or their intelligence, and they can choose for themselves which they would rather have criticised, because they cannot in intelligent good faith believe that these extra powers which they are now taking to themselves, if they are going to be used in the way their general powers under the main Act have been used in north-east Lancashire for the past four or five years, are going to do any good whatever.

I do not want to prolong the debate. It seemed to me that, though the Bill is too poor and mean and insignificant a thing to be worth voting against, it was at any rate well to put it in its right perspective and against the proper national and world background.

8.45 p.m.

Mrs. Patricia McLaughlin (Belfast, West)

I welcome this opportunity of being able to express my own personal approval of this Bill and to say that I am sorry that I disagree with the hon. Gentleman the Member for Nelson and Colne (Mr. S. Silverman). The Bill does not apply to Northern Ireland for the very good reason that we have had for a number of years all the measures, and more, which are contained in this Bill, and, although they have not solved the problem in our area, without them we would have been much worse off than we are today.

The point I want to make tonight is that when industries are encouraged to go to areas where there is unemployment, and when, in the months to come, various industries are being advised which areas are the most suitable, I hope that it will not mean that the people in those areas will expect their unemployment problem to be solved quickly, and to be solved by this Bill alone, because it cannot be done.

I was grateful to the right hon. Gentleman the Member for Blyth (Mr. Robens), who managed to slip in a request to the Minister of Labour for information about employment in Northern Ireland. I have sat through this debate because this is a national problem, not a local one. If the Bill produces sensible measures, we ought to welcome it and do our utmost to see that it is made to work.

It is frightening to realise that so often we pass legislation here and the country expects it to be a panacea for all ills. That is the last thing that this Bill could be, nor is it intended to be. We shall have to consider the problem of transport and the facilities available in the areas concerned. The hon. Lady the Member for Lanarkshire, North (Miss Herbison) suggested the building of advance factories. None of these things will necessarily solve the problem, as I can say from experience. I can assure the House that the people of Northern Ireland are anxious to help in any way in which their experience can be of value in areas where factories will be set up under this new legislation.

Tonight, we have listened to points of view from all parts of the United Kingdom, but it is no use trying to get an expanding economy and starting new industries in areas where they are needed unless the economy is sound. I assure everyone here that I feel great concern for every person without a job. Hon. Members on all sides of the House know the importance of work to a man who has not got it. At the same time, we have to remember the point of view of the industrialist. Unless the economy is sound and there is a possibility of firms expanding and going to new areas; unless our £ is strong and we are able to get markets abroad for the things we shall be making in these areas—for we cannot ourselves consume them all—we shall merely alleviate the condition temporarily.

The difficulty today is that we must have certain restrictions on industry. We must have the credit squeeze. We must hold the Bank Rate. We must impose and relax restrictions in accordance with need, and it is difficult to hold the balance between what will help an area to expand and what will prevent an industry overspending if it is not one which is suitable for a certain area.

These problems will take some time to solve. Speaking with long years of experience in a part of the United Kingdom where these problems have existed for a long time, I add my welcome to the Bill and hope that it will be a great success in the areas to which it will apply, although in my area we need even stronger measures.

8.55 p.m.

Mr. W. E. Padley (Ogmore)

There seems to be general agreement that the Bill can have only a limited effect; indeed, the hon. Member for Kidderminster (Mr. Nabarro) used the expression, "marginal effect". Of course we welcome the Bill. With 120 to 130 men in every 1,000 unemployed in Caernarvon and Anglesey, those of us who represent industrial South Wales are in favour of the expansion of Governmental powers in any way to deal with the situation in North-West Wales.

But this is a tiddler of a Bill when one considers the problem which the Government's general policy is creating. The fundamental fallacy of the argument of the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke), who gave us Tory philosophy in all its nakedness, was the belief that it is possible to deal with structural unemployment, fractional unemployment, when there is a substantial volume of general unemployment. The truth is that the only hope of dealing with structural and fractional unemployment is when the general state of affairs in the country is one of an expanding economy.

The Minister of Labour talked about selective reflation. The truth is that in recent years, and especially since last September, the aim of the Government has been to curb industrial activity. The Budget was aimed at curbing industrial activity and there was an expectation, even in the Chancellor's speech, that general unemployment would rise in the coming months.

I found the Minister of Labour unduly complacent about existing Development Areas, and I can give illustrations from my own constituency. When the noble Lord was talking, I could not help remembering that the Maesteg Valley, in my constituency in the 1930s, had 63 per cent. unemployed and Caerau, at the top of the valley, had 90 per cent. unemployed. At that time, there were children's boot funds and the miners' agent made the B.B.C. Appeal of the Week on its behalf.

In the post-war period, the rejuvenation of the coal mining industry, the provision of the factory at Cymmer and the four advance factories in Maesteg Valley, the paper mill and the general prosperity of the Mid-Glamorgan area made the Maesteg Valley reasonably prosperous. Unemployment ran at just above the national average, until recently. Some months ago, the Cymmer factory closed down and, despite my representations to the Board of Trade, no new tenant has been forthcoming, largely because of the general trend in industry and commerce.

Three or four Government establishments in my constituency have also been closed down. Three weeks ago, the Tondu coke works, at the bottom the Maesteg Valley, closed down and on Saturday I was told that two of the four advance factories are to close down in the first week of July. If that happens, if my representations to the Board of Trade and those of the trade unions and local authorities do not succeed, Maesteg will be back in a matter of weeks to an unemployment position three or four times as bad as that of the national average.

Those two advance factories were tenanted by a light engineering firm, which has been doing well. There are still orders for the goods which those factories produce. The problem did not arise in the Progress Drilling Machine Company in the Maesteg Valley. It arose in the parent factory, in London. It was the products being made in London for which the market fell off and it was in London that the redundancy occurred. As those of us who have represented South Wales and other Development Areas have argued so often, when there is a recession there is always a danger that it is the branch factory in the Development Area which closes. I would sound a warning that if the Government's general policy of deflation goes much further there is a real danger of a substantial closure of branch factories in Development Areas.

It is all very well to talk about the national average unemployment figure having risen from 1 per cent. to 2 per cent., and saying that it does not very much matter whether it goes up to 3 per cent. It must be remembered that the unemployment ratio in the Development Areas is geared to the national average, and that any increase in the national figure is likely to produce an even greater increase in the figure for the Development Areas. I have made representations to the President of the Board of Trade about the problems of the Maesteg Valley, and I hope that the Parliamentary Secretary will assure the House tonight that the Government intend to use not only the provisions in this tiddler of a Bill but also the powers which they already possess under the principal Act.

In the end, we come back to the point that, unless there is an early reversal of the Government's general deflationary policy, Bills such as that which is now before the House will not succeed in guaranteeing full employment for our people, especially those in the scheduled Development Areas.

8.56 p.m.

Mr. B. T. Parkin (Paddington, North)

The debate has continued upon a very high and animated level. There is some advantage in being called at this late hour if one wants to address only a few questions to the Parliamentary Secretary as to the way in which the Bill is to be implemented. Hon. Members on this side of the House have made very moving pleas, and have addressed very profound criticisms to the Minister, but we have not as yet had an opportunity of discussing exactly what the Board of Trade proposes to do with applications for assistance under the Bill.

Hon. Members opposite have varied in their opposition. A number of them have been opposed to the Bill, or have felt that it would not bring about any profound results. The hon. Member for Louth (Mr. Osborne) and the noble Lord the hon. Member for Dorset, South (Viscount Hinchingbrooke) are in agreement, although the noble Lord asks for a remission of taxation from Budget surpluses and the hon. Member for Louth, with his deep and passionate sincerity, says that Conservatives do not like unemployment, and gives the whole case away by adding, "I think that this is money well spent, for it will help to remedy unemployment in difficult areas." This surely ought not to be regarded as money spent as a sort of charity or palliatives in difficult areas; it is supposed to be an investment, and to give a return in building up an effective balanced industry. If it does not do that it is money thrown away, and it does not add up to a policy.

Hon. Members on this side of the House have some reason for doubt about the Government's policy, because they have already been warned, not in this House but by way of a very important speech made by the Home Secretary to Conservative Party supporters, in which he promised them that before the end of the life of this Parliament the Government would dismantle all the remaining controls and planning machinery which might help a Socialist Government to carry out their policy. The Conservative supporters were promised a sort of scorched earth policy between now and the General Election. Now, along comes a Bill which claims to increase the powers of the Government to deal with problems of unemployment and the location of industry. We are therefore entitled to wonder whether the intention is not to soft-pedal a little the intervention of the Board of Trade and to make this more and more a generalised Treasury matter, so that when a Treasury decision is made to restrict credit or expenditure the whole of this work will come under the axe.

Since the Bill offers a rather powerful form of patronage, it is right that we should ask how the Board of Trade proposes to implement it. The Bill refers to grants and loans. What are the Government's intentions with regard to grants? May I elaborate my question in the form of a submission as to what I think ought to be the purpose of a grant? If the Board of Trade is trying to encourage industries to move into certain areas where there are pockets of unemployment, the Government ought to offer to the manufacturers a grant on the same principles on which subsidies are offered in agriculture. A subsidy is offered to a farmer as a reward for acting against his better judgment. If the national interest requires that a certain line of agricultural produce should be expanded, the farmer who in the ordinary way of business would say, "It is not something that I wish to grow on my land because my forefathers have found that it does not pay well", is offered a subsidy perhaps for potatoes or for ploughing up or for something else. It takes the form of an insurance against things going wrong.

The manufacturer says, "Why should I go to this area? It has certain disadvantages." Those disadvantages could surely be listed, and the Board of Trade could discuss with the manufacturer how best he could be compensated for being sent to a certain area when he may think that he would do better elsewhere. Perhaps transport, the accessibility of raw materials or the distance which the finished product has to be carried may make that little marginal difference in cost which the hon. Member for Louth is so right on insisting is important.

Would the grant go towards a modern factory? Would a new building receive compensation for the disadvantages of transport in a certain area? As for the smaller units of production, surely nothing would do more to improve efficiency than a considerable increase in the number of small and efficient factories to cut out the moving about up and down old staircases and the multiplication of labour which small manufacturers have attempted to tolerate because they dare not tie up such a large proportion of their working capital as would be required to build a new factory.

One of the disadvantages which the manufacturer will quote to the Board of Trade will be the quality of labour available and training facilities. We want to hear from the Minister what he is prepared to do about re-training local labour; not only that, but what about the training of apprentices? It is a very serious matter for a manufacturer entering a new area to ensure that youngsters entering his industry get the same sort of training which they would get in another part of the country where the local technical colleges and methods of training have been well established for generations. Surely the Board of Trade would be in contact with the Ministry of Education in that respect.

I hope the Minister will find an opportunity to expound afresh what is the creative and positive approach of the Board of Trade to the Bill. If he is enthusiastic about it, he must be dying to get assent to the Bill in order to launch his scheme. How are the industries to be selected, and—a point that I should love to develop, but I must not because of the lateness of the hour—how are the people concerned to be selected? What sort of criteria will there be? One gets many applications, as happened in the case of the trading estates at the end of the war. A lot of extremely unlikely-looking characters turned up and wanted to function in these areas, some of them busily spoiling Perspex. Some of them worked well but some did astonishingly badly.

What will the criteria be? How do we estimate the likely value of a new process or of a new development? What are we to do to avoid stagnation in industry? This is the sort of thing that happens. A group of chaps have a new idea. They wish to make a new product and they have the technical skill to develop it. They propose to start a firm and they want to get a factory. They have the idea and the technique; all they want is to get on and make the profit. Is that what they do? No. They find that they have to become commercial travellers, advertisers and crystal gazers to see what the economic trend is likely to be. They have to read the financial newspapers and get down to all sorts of jobs other than that of coming to the point of producing their product.

Surely the Parliamentary Secretary will feel, the theological doctrinaire principles of his party notwithstanding, that he can enter into a partnership with those people, with energetic firms, and that the Bill may give an opportunity to develop it. This is an enormously wide field, and I hope that we shall be able to get an enthusiastic reply from the Parliamentary Secretary.

9.7 p.m.

Mr. F. H. Hayman (Falmouth and Camborne)

I do not want to prolong the debate but I come from Cornwall, the county which was referred to by the Minister of Labour and by my hon. Friend the Member for Battersea, North (Mr. Jay). Moreover, I come from the constituency in Cornwall which had the worst unemployment during the inter-war years. The facts are known to the Minister of Labour and to the President of the Board of Trade, who was good enough to write to me a few weeks ago on the subject of industrial development certificates.

We are concerned about something which the hon. Member for Kidderminster (Mr. Nabarro) mentioned, the ease with which he was able to get industrial development certificates for industries in which he has an interest. That brings me to the observation that many new factories have been going up in recent years between Reading and London, where there is already a surplus of factories.

In my constituency the basic industry was tin mining, which has almost passed out as an extractive industry in the normal process of that kind of enterprise. We managed in the last generation to absorb a great proportion of our population in newer and different industries, although there still remains the hard core of older men who, for one reason or another, were unable to adapt themselves to the new conditions. Again, there is in my constituency, and, indeed, the rest of Cornwall and in Plymouth, a fear of growing unemployment and of insecurity.

I thank the Minister for bringing in this modest Bill. I hope that in due course it will be followed by something larger and something which, perhaps, will cause direction of industry to counties such as mine, to North Wales and the Scottish areas which have been referred to in the debate. Immense sums of money have been invested by local authorities, with the help of Government grants, in all these localities. If these public services are allowed to decay there will have been a great wastage of public money. The question has been raised whether people in areas such as these would be able to adapt themselves to newer industries with different techniques. I say with pride that in my constituency that has been proved possible.

It may not be generally known that the Chancellor of the Exchequer was a member of a firm which built a big new textile factory in my constituency, in my own town, after the war. There have been several extensions. It brought a new type of industry to the town and everyone has been satisfied that the workpeople have been able to adapt themselves to the new techniques. I had the privilege of going over a much smaller factory ten days ago. There I saw a textile factory making outer garments for ladies. It started in 1948 with six employees. It has trained youngsters and now there are 115 employees. The raw material comes from Scotland by passenger train and much of the goods made in the factory go back to Scotland by passenger train. The manager told me that he had the utmost satisfaction in his dealings with British Railways.

In a comparatively remote area like Cornwall there is little chance of mobility of labour. We have engineering works and a ship repairing yard, but the nearest available posts for many of their workers are 200 miles or more away. Some of the most vitally important and highly skilled men in the ship repairing yard at Falmouth are being offered, and are taking, jobs in Bristol, Avonmouth and even further away because they are frightened of the insecurity of employment in the ship repairing industry. This is at a time when a large new dry dock, capable of taking some of the largest tankers in the world, is to be opened by the Duke of Edinburgh in a fortnight.

I am grateful for the Bill as a small instalment of something for the areas which have small pockets of unemployment. I hope the Bill, when it becomes an Act, will be administered with imagination and generosity.

9.15 p.m.

Mr. Douglas Houghton (Sowerby)

I will not detain the House for more than a few minutes, although I have listened to most of the debate. It is significant that the House should spend the whole day discussing unemployment. On very few days in the last nine years in which I have been here has the House felt so concerned about this problem as it feels at present.

It seems to me that this is a Bill to deal with chronic local conditions. In so far as it is medicine at all, it is curative rather than preventive medicine. The concern which some of us have is that the Bill will not operate outside the development areas until there is a high rate of unemployment and it is likely to persist. The combination of a high rate of unemployment and the expectation that it will persist constitutes grave local conditions.

Mr. Osborne

That is very gloomy.

Mr. Houghton

It is very gloomy indeed. It is not until those conditions exist in combination that the Bill can begin to operate, with all the delays inevitable in surveying the prospects, putting forward plans, making applications for assistance under the Bill and all the other administrative problems which necessarily arise in connections with projects of this kind.

In most cases to which the Bill will be applicable, that will be much too late. In constituencies like mine and those of other hon. Members on both sides of the House the anxiety in the minds of local people is the danger of these conditions developing and the absence of action to prevent them from developing. In a constituency like Sowerby, where industries were founded many years ago, the historical reason for an industry going there at all was probably to get water power, and that is no longer necessary as part of the processes of local industry. The terrain is difficult and communications are not easy, and yet if those communities are to survive, new industries must go there. How are they to be atracted there? The Bill does not touch that problem at all.

What is needed is a comprehensive industrial survey of Britain. I suggest that what is needed is a study of the reasons for the constant flow of industries into the enormous conurbation of the London area, providing the most fantastic problems of housing, communications, transport and local services, apart from the strategic dangers which, I admit, are now more widespread than they were a few years ago.

London can no longer supply the demands for its own labour. More and more people are required in this area if industries around London are to be manned and expanded. Yet in other parts of the country there is a drain away and there is stagnation. It is very unhealthy indeed for a township, a community, long-established, well-balanced, with its own traditions, its own civic life, its own religious and social activities, if the young people are to drift away from that township because there is no future for them.

I suggest to the Minister that there is much more to be done than the Bill provides. Although the Government may have political objections to going further along the path of industrial planning—I hope they have not—I believe that that will be necessary before many of the problems of some parts of the country can be solved.

It is a tragedy to see stagnation in communities which were once alive and virile, which have developed skills and crafts, and which have contributed enormously in the past to Britain's export trade and her growing wealth. If those communities are to be left derelict it will be a very sad thing not only for them, but for the country. We cannot afford to concentrate all our industrial activities in a few areas of the country. We must keep them spread. There is every reason for encouraging the decentralisation of some of the huge concentrations which we now have and encouraging the development of these areas where there is land, labour, still enthusiasm and great strength of character and integrity which can go into any form of industry which can be taken there.

I sincerely hope that we shall not lose sight of this wider problem, although we are discussing at the moment the narrow issues arising where localities are in some difficulty. It would be far better if we were to look ahead and see what is the likely rate of decline of any particular industry and what will be needed to strengthen the industrial, social and economic life of these communities.

My final word is on how we can get people to develop new industries and open new factories in these areas or other areas when the general economic atmosphere is one of pessimism and restriction. That seems to me to be quite fundamental. The hon. Member for Louth (Mr. Osborne) made a very gloomy prognostication as to the likely course of the level of unemployment, due to external conditions and not only to the Government's internal policies. He spoke of the new pattern of world trade, the precarious economy which we have in this country, the knife-edge on which we live all the time and the problem of how we are to maintain our standard of life in this new world which, in many respects, is so strange to Britain, which has taken so much for granted over the years.

I make this plea not only from the constituency standpoint, though we all have our constituency responsibilities, but from the wider aspects of our advance to a higher level of industrial activity and greater wealth. All these things will come together. We cannot cure local conditions while the health of the body politic is indifferent.

9.23 p.m.

Mr. Cyril Bence (Dunbartonshire, East)

When I first heard the announcement that this Bill was to be introduced, I wondered whether each of the different Departments of State knew what the others were doing, because in the last twelve months the Ministry of Supply has been doing its best to create as much unemployment in Scotland as it possibly can.

We have several Ministry of Supply establishments in Scotland. There is, for instance, the Royal Ordnance Factory at Dalmuir, where about 400 men are being told that the only employment that can be provided for them is south of the Border. Here is a factory belonging to the Government and the taxpayer in respect of which the Government decided to take away its activities and transfer them elsewhere.

There has been some running down of the factory, but the displaced men have no hope of finding employment in an area where there is already heavy unemployment, and are being told that if they wish to be retained in the employment of the Ministry of Supply they can only be employed south of the Border.

I agree with my hon. Friend the Member for Sowerby (Mr. Houghton) that the increasing movement of labour, and especially skilled labour, from Scotland to the Midlands and the Metropolis, which has been going on during the last few years, is absolutely stupid. Why should we provide the taxpayers' money to pilot industries to certain areas, or even to expand industries in Scotland, already existing or to be created?

The astonishing thing is that the money which the taxpayer will provide under the Bill towards the financing of this process can be given to other industrial establishments. I wonder what that may mean. I do not know whether it is possible within the terms of the Bill to finance the building of an hotel on some famous salmon fishing waters, to give employment to some of the lassies in the area who cannot find employment in any other direction.

I do not know whether it could go as far as that, but the Minister says that it is possible for the Bill to be used to build an hotel in the Highlands of Scotland. If a finance company could build an hotel on some well-known water which has good fishing, but which had not been very well patronised because of the lack of hotel accommodation, it might well be that the taxpayer would be financing the building of such an hotel. When there is accommodation there, the owner of the water will receive an increased revenue for the fishing rights, because the taxpayer has helped to provide an hotel for the guests.

I am a very keen angler myself. I remember that years ago, when I used to go fishing in Wales, I took a tent with me and went to a river from which the nearest hotel was seven miles. I used to go to the owner of the water, and he would say to me that I could fish there; there were no wealthy people about and no hotel for them. I was prepared to walk seven miles for a weekend's fishing. Of course, the provision of taxpayers' money to build hotels in such places would greatly increase the value of fishing rights in Scotland and Wales.

I am quite sure that the industrial workers in Clydebank who have been told that, for the purpose of Government economies, the Royal Ordnance Factory at Dalmuir is being closed or passed over to another company for operation, would not happily accept that. Those men and their families, in the interests of saving money, are to be employed south of the Border. They would not see the thing in a very good light.

The people of Clydebank will not readily appreciate the purpose of a Bill which comes from a Government, one Department of which is creating unemployment and another Department of which proposes to finance industrialists to create employment. It seems a hopelessly stupid contradiction between two Departments of State, and I suspect that the Bill is really little more than window dressing.

We have just had the laying down in John Brown's yards, in Clydebank, of the "Brittanic." Work on it has been postponed for twelve months. The project has not been cancelled, but, of course, at the next annual meeting of the Cunard Company the company will no doubt regret that work must be postponed for another twelve months. During the whole of last year there were 15 cancellations of orders to British shipyards. In the first three months of this year, there have been 14, about 160,000 tons of shipping. That clearly demonstrates that, although there is a three-year order book today, if cancellations go on at that rate, the three-year order book can, in six months, become a twelve-month order book. A very difficult situation, a rotten atmosphere, is being created on the Clyde.

The Cunard Company says that it has to postpone the replacement of this large ship, which is to cost £8 million, because its revenue was down £2 million last year and that the system of taxation and investment allowance means that the company just cannot afford to build up the reserves for the replacement of these high cost vessels in modern days. Do I take it that, under the Bill, it would be possible for the Cunard Company, to maintain employment in John Brown's shipyard, to have Government financial assistance in carrying on its capital construction programme in an area where there is unemployment?

Would it be possible for the company to make up, as it were, the deficiencies it can demonstrate to the Treasury accountants, in proving that it cannot do the job, so that it may carry on and relieve unemployment on the Clyde? Will the Cunard Company or P. & O., as consumers of capital goods, be able to get a grant under the Bill to enable them to build ships on the Clyde, if there is a threat of growing unemployment? Will the Treasury tax these companies to a degree which enables them to demonstrate that they cannot undertake new capital construction and then, through another Department, hand out taxpayers' money to enable them to carry on?

It is a crazy system, if that is the case. On the other hand, if there is unemployment in John Brown's shipyard, or Harland and Wolff's shipyard, in Belfast, and they are not in a position to take on orders for ships at the current market price for taxation reasons—I am not arguing the merits of the taxation system—will they be able to get a grant under the Bill?

I am all in favour of the diversification of industry, but I am not in favour of the expansion of one industry at the neglect of another. Shipbuilding is a great industry and must not be neglected. For goodness' sake, do not let us take our eyes entirely off the value of shipbuilding to the United Kingdom. The United States is laying down a sister ship to its Blue Riband liner. West Germany is laying down a ship for the North Atlantic route, and so are Greece and France. Surely there is justification for giving assistance, if we want to, in this form to the shipbuilding and merchant shipping industries, to maintain our prestige and enable Britain to hold her own in the world in shipbuilding.

I have the figures for freights in the last twelve months. They make extraordinary reading. We have ships laid up all over the country. My hon. Friend the Member for Falmouth and Camborne (Mr. Hayman) said that a number are laid up in the River Fal.

Mr. Hayman

Thirty.

Mr. Bence

Thirty ships are laid up in the Fal. A tremendous quantity of British shipping is laid up. If there is cancellation of orders, will it be possible, under the Bill, for British shipbuilders to get grants to start rebuilding ships and to compete in the markets of the world? Will it be possible for merchant shipping companies to receive Treasury grants to keep the merchant ships flowing? Are we introducing a method of subsidising merchant shipping and shipbuilding? If there is a continuation of the fall in freight rates, and the cancellation of shipbuilding orders goes on at the rate that has been happening since January this year, in less than eighteen months the shipbuilding industry will be in a bad way. If the shipbuilding industry on the Clyde gets into a bad way, unemployment will be back to its prewar level.

This is a serious problem. The Bill has no more powers to deal with Development Areas than the Act of 1945. The only difference is that under the Bill financial assistance can be given to economic enterprises or enterprises that are not described in the Schedules to the 1945 Act, but, frankly, I am very suspicious about that. It is doubtful whether we can assess whether a public enterprise will, over a reasonable period, guarantee employment to a given number of people. I doubt whether any non-industrial or even industrial activity can give assurances about the number of people to be employed over a given period.

Lastly, may I comment on the idea expressed by the Minister that the Bill will help industrial activity and established firms, or those who propose to go into industrial productivity in areas where there is high unemployment. I do not think that that is good enough. Something greater than that has to be done. Anyone who has been engaged in industry in the congested areas of the Midlands and the South knows—and this is true at every turn, because of the congestion on the roads and the railways—that every leap forward in productivity in the factories has been frustrated by clearance from the gates. On every side, the traffic jams on the roads from the factories in the Midlands and the South are hopeless. We must think in terms of dispersing and getting some industrial production out of this huge conglomeration in the South.

It is tragic to think that the population of Scotland is about one-third of the population of the conurbation around London, this great area of small industrial plants and commercial properties. I cannot see the Bill helping either in propping up the industries in the Development Areas and elsewhere or fulfilling something which must be done within the next twenty years: that is, a reallocation of some part of our industrial activity to spread the transport and delivery of products and to spread our population out of this area.

It is sickening to some of us who have been in industry in the Midlands to see our products piled up at the factories and in the yards. I have seen a factory working short-time because road transport cannot get the goods away from the factory gates. This was particularly the case with motor bodies. I saw it between 1945 and 1951, when, because of the tremendous crowding on the roads, motor bodies were stacked up and we had to stop the production lines until we could get some of them away. On the other hand, transport routes in Wales and Scotland are uneconomic because there is not enough production capacity in those areas to sustain a good, fast freight service by road and by rail.

Therefore, the Bill is to me merely a scrap of paper. I cannot see that it will do anything. The most likely thing that it might do is to add to the values of fishing rights on fishing waters where there is no hotel, but where the Trust Houses or some other company might get together and get a grant from the Treasury to open a hotel by those waters and increase the value of the fishing rights. As far as I can see, the Bill is almost useless.

9.38 p.m.

Mr. Malcolm MacMillan (Western Isles)

I regret having to detain hon. and right hon. Members much longer, but I am conscious of having at least two sympathetic hearers in the chief actors in this debate tonight. I refer to the Minister of Labour and to the former Minister, my right hon. Friend the Member for Blyth (Mr. Robens), both of whom know the Western Isles constituency. Both of them have been there for different reasons at different times. Perhaps, for some of those reasons, I might expect less sympathy from the Minister of Labour, but for other more enduring reasons I am sure that I shall have a lot of natural sympathy in appealing to him tonight to make sure that whatever benefit can come from this Measure shall be directed as far as possible to solving the problems of that area. I should like to have from the Minister an assurance that there will be a direct application and impact upon the problems of the Western Isles as a result of the anticipated passing of this Measure.

Like my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman), I have very real memories of the debates in this House in years before the war when in the Western Isles we had a gloomy record which few places in the country achieved—a record of very high, persistent unemployment and lack of prospects of new industries to relieve that unemployment.

One hon. Member from Wales has tonight mentioned a figure of 16 per cent. We also reached that level and, unfortunately, passed it in my constituency. As late as 1937 we suffered under an unemployment burden rising to 68 per cent. That by no means accounted for all the people who were unemployed, for there were, in addition, those who were in the transitional stages, those on local relief and all the others who were not included within that figure.

I regret to say that even the figure of nearly 38 per cent. which the Minister of Labour has most recently published is not in itself a true figure showing the conditions in the Islands at present. A very large number of my constituents are not Class 1 insured persons at all, as the Minister well knows. Many of them—almost all members of the Transport and General Workers' Union—are weavers in the Harris tweed industry, producing a product known all over the world for its quality. In times of unemployment these many hundreds of men and women do not qualify for unemployment benefit at all.

My right hon. Friend the Member for Blyth, shortly after he became Minister of Labour, spent a week in the Islands with me. We went round and saw these men at work, and he also saw men of that industry who were unemployed, and he well knows what a catastrophe it can be in an area dependent almost entirely on a single manufacturing industry when suddenly a slump hits it and there is heavy unemployment without even recourse to unemployment insurance benefit.

That is a desperate situation for any section of our community to be in. I estimate that at this moment about 2,300 men and women in the Islands are unemployed, and a very large number of them, in addition to those who are registered unemployed, have no unemployment benefit of any kind but have to fall back on National Assistance. So far there is no prospect of relief through new industry coming in, and no prospect of these people coming under Class 1 insurance, without the introduction of new legislation.

Today the Minister mentioned a number of conditions which he thought must apply before aid could be given; and I should like him to clarify the situation. I want to know exactly what are the conditions which must be satisfied in my constituency in order to enable my constituents to take advantage of this Measure. Can he or the Parliamentary Secretary to the Board of Trade say definitely that something will be done or can be done as a result of the Bill, some- thing practical and effective to reduce unemployment and to bring within insurable unemployment at least some of those who are now unemployed? Can we be given any sort of assurance that we shall have some benefit from the Measure? I think that is what every hon. Member wants to know, because there is a great deal of uncertainty.

A lot could come from the Bill with the fulfilment of certain conditions, but, equally, awfully little could come of the Bill. After all, the part of the Distribution of Industry Act which is virtually being extended here is the part which in the past has been least effective in providing employment and in contributing to our prosperity. The part of the 1945 Act which has been most effective is that part which provided the advance building of factories and all the rest of it; though in some areas unemployment is growing even where the main part of the old Act has in the past been effective. I do not base very much expectation upon the mere extension of the less effective part of the Distribution of Industry Act. I do not really like to place too much hope upon it; but I am certainly anxious to hear anything the Minister has to say which will sweep away my pessimism on that point, and I hope he will be able to give us some practical assurance.

I know that we have the good will of the Minister of Labour, and, for that matter, of everybody in the House. I do not think there is any hon. Member—apart from an occasional archaic oddity on the front bench opposite; below the gangway; apart from the very odd person in this House, odd in every sense—who does not want to see the reduction of unemployment to the lowest possible figure, if only to solve a human problem, quite apart from all the other considerations.

We have assurances of good will from the Minister; but is that really enough? We have had any amount of expressions of good will. As long ago as 1936 a number of my hon. Friends and myself, with the support of some hon. Members on the other side, convinced the House that there existed economic and social distress in the Highlands and Islands of Scotland; and unanimously the House accepted that urgent measures must be taken to mitigate their distress, that measures must be taken to provide insurable employment and raise the standard of living. Any amount of goodwill was expressed from all sides of the House. I have known many another such occasion.

Nevertheless, through all these years since I first represented the area in 1935, there has been a high level of unemployment there and little of lasting effect to reduce it. Today unemployment has suddenly leapt up again from a high enough figure in 1956 to almost double what it was then. With a constituency figure of from 35–38 per cent. of unemployment, even at this time of night I should feel extremely guilty if I did not speak out and ask the Minister to give us some clear, practical evidence that the Bill will apply in that area in a way which will substantially reduce the unemployment and give insurable employment in decent conditions of work to the men and women there.

It is an area where, because of poverty and neglect, there has been no accumulation of capital through the years. It is an area which is not able to finance its own production. It is an area which is lacking in the basic services such as the Government alone can provide. Private enterprise, if it wants to flourish there, must take some initiative. Private enterprise must, however, have these basic services, and can certainly do nothing until the Government, in the first place, ensure that the basic services exist and then provide aid by way of capital, as well as the conditions in which employment and prosperity can be developed.

Even in the good will that the Minister has expressed, he has alarmed us. On Friday last and in the Budget there were statements about resettlement, about helping people to come out of the areas of unemployment and to go off to other areas in greater comfort, with a little more help to emigrate, and so on. But what does one do in an area which suffers from high and persistent unemployment and a lack of prospect of new industry and, at the same time, the heaviest drift of depopulation of young people of any part of the country? Do the Government want the young people to go away? Does it not want the industry to go to them to stem the local depopulation? I put that to the President of the Board of Trade as well as to the Minister of Labour. One cannot continue to take young people out of that area and also hope to revitalise it, whatever new industries are provided. New industries need the essential labour on the spot of the young people. The Government and the Minister are responsible for providing the answer.

There we have these factors: lack of local accumulated capital, heavy and persistent unemployment, and heavy depopulation, with an ever-ageing population. What is the answer to that problem? Surely in the several years they have been in office Ministers have had a chance to do something about the problem? I ask whether the Bill will at least mitigate the serious conditions, the crisis conditions in that area. Can the right hon. Gentleman give us examples of how it will help with practical effect? That is what we want to know. We know we have his and everybody's else's good will; but I am afraid that is not quite enough for us when we still have over 30 per cent.—it is nearer 40 per cent.—of unemployment in an area where the prospect is pretty grim indeed unless Ministers face up seriously to their responsibility for this very serious problem.

It is small wonder that in the Isles there is a cynical frustration felt now. We have had so many offers of good will, so many promises through the years by Governments, that, with the rising prosperity and standards of the country as a whole, some of it must come to us. The opinion has rightly been expressed in speeches on both sides of the House tonight that we must have a healthy economy, and prosperity throughout the country if the special areas are fully to feel the impact of prosperity and benefit. There has been full employment in the country, but we have still had 20 per cent. unemployment in the Isles. Now that our unemployment rate is nearer 40 per cent. than 30 per cent. there is a still deeper sense of frustration and despair. As the promised prosperity eludes them, there grows a feeling that there is discrimination against them; and certainly a sense of almost studied, callous neglect. I hope that the Minister will put an end to that sense of unfairness and discrimination tonight.

9.50 p.m.

Mr. E Fernyhough (Jarrow)

I am sorry to delay the House, but I promise to be brief. As an hon. Friend of mine has said, when we talk in terms of a small percentage of unemployment it is a question of the victims who are suffering from that disability. I am sure that if those of us who tend to speak in percentages had to live with those victims, we should understand how anxiously they grasp at any thread which they feel will give them hope of being able once more to take their places in society.

I represent a constituency where unemployment almost murdered the town. The scars are still there and they will be there for many a day. As a result of the 1945 Act things have undoubtedly been better since the war than they were in the inter-war years, but unemployment is again raising its head in my constituency. The latest figures, men and women together, show that there are over 1,000 unemployed, but there are projects which could go ahead under the Bill provided that it is administered with enthusiasm, imagination and generosity. I want the Parliamentary Secretary to the Board of Trade to tell me how far two projects which have been contemplated for some time in my constituency, but which are being held in abeyance, are likely to benefit from the Bill when it becomes law.

I refer to two new dry docks. Everybody knows that the size of ships and tankers is growing year by year, and many of those going in for tanker construction now think in terms of 60,000, 75,000 and even up to 100,000 tons. This increase is due to technical improvements and also to the fact that as a result of Suez it was found that by constructing tankers of 100,000 tons it would be as economical to bring the oil round the Cape as in smaller tankers through the Suez Canal. At the moment, even though tankers of 75,000 or 100,000 tons are constructed, we have not the necessary dry dock facilities. Two such dry docks have been planned in my division, but those who are going to undertake their construction find, because of the credit squeeze and the dear money policy, that they cannot contemplate going ahead with them at this time.

In his Budget speech, the Chancellor said this was the type of project which it might be possible to help under this Bill. All I want the Parliamentary Secretary to tell us is that the two projects I have mentioned will comply with such regulations as may be laid down, and thus qualify for the assistance which would allow a start to be made. I think the Minister and everyone else in the country appreciates how desirable it is to have these facilities which are lacking at present. If they cannot be provided because of the Government's policy in another direction, perhaps the hon. Gentleman will be able to give me a satisfactory answer which will enable the projects to go ahead with such help as the Bill can give them.

I welcome the Bill. I hope it will do all that its sponsors pretend it will. If it can give to the previously Distressed Areas the same aid and the same measure of economic salvation as did the 1945 Act, undoubtedly it will turn out to be one of the best Bills which this unpopular Government have introduced.

9.54 p.m.

Mr. Alfred Robens (Blyth)

I suppose that it must be quite twenty years since this House has spent so long discussing unemployment with such apprehension in the speeches of hon. Members. That is a very significant fact. It shows that while the incidence of unemployment is not high, in areas which were known as special areas before the war unemployment is raising its ugly head to a height which is making everybody in those areas take due notice of it, and is concerning them very much indeed.

Hon. Members on all sides of the House have expressed their alarm and their fears. The very fact that the Government have had to introduce the Bill is an indication of the failure of their economic policy—[HON. MEMBERS: "Oh."]—it must be the failure of the economic policy of the Government, because if production had gone on apace and had continued to increase there would have been no need for the Bill.

The Bill is designed to meet special circumstances. It is not designed to meet the unemployment problem of the country as a whole. The Minister of Labour was perfectly right when he said that the overall unemployment figure of 2 per cent. was not something which caused anybody considerable alarm, but that it was the 10 per cent. in Northern Ireland and the high percentage in the Western Isles, to which my hon. Friend the Member for the Western Isles (Mr. Malcolm MacMillan) referred, and in other parts of the United Kingdom which caused alarm.

The Bill would not have been necessary if production had been running at a higher pace than it is at present, because the circumstances, such as those described by my hon. Friend the Member for Ogmore (Mr. Padley) would not have arisen. My hon. Friend referred to advance factories built in his constituency which had been, or were about to be, vacated because they happened to be branch factories of companies with their main factories elsewhere, and who, because of a reduction in trade, were closing the branch factories, the advance factories, first. One can well understand that an industrialist will certainly not restrict production at the main factory, if he can avoid it, but will close down the branch. That is his view of the economics of the situation, but it is an indication that the Government have failed to maintain a rise in production, so far as that is within their power, and these are the consequences of that failure.

If hon. Members want further proof, they have only to read the speech of the right hon. Gentleman the Chancellor of the Exchequer, who indicated only a few days ago that we must expect a further but moderate rise in unemployment. It is because unemployment in this country is likely to start hardly in the heavily populated and employed areas but in those areas which were difficult areas before the war, and which have defied successive Governments to produce a period of over-full employment in any one of them, that this debate is being held, because that is why the Government have introduced the Bill.

Unemployment in those areas for which the Bill is designed will not be cured until the Government decide to have an expansion of industry, the keys of which they hold in their hands. When they decide to have an expansion, very little will be required to be done under the Bill, because industry will automatically do the task for them.

Nevertheless, we welcome the Bill because it is a genuine attempt to try as far as possible to mitigate the effects of the policy which the Government have been carrying out. The powers which the Bill, as it stands, gives are of no value unless backed by efficient machinery and efficient administration.

I was struck by the speech of my hon. Friend the Member for Lanarkshire, North (Miss Herbison), who pointed out that, although her constituency was within a Development Area, unemployment in her constituency was still running at a rate very much higher than the general average. She made the valid point that even under the Distribution of Industry Act the Government had failed in these last years to provide in her constituency the full employment which is the intention of most hon. Members.

Therefore, it is the effectiveness behind the Bill and behind the main Act which will help the situation, although it will not do so until the Government themselves change their whole economic policy. I have no doubt, and we will discuss this at greater length when we come to discuss the Finance Bill, that we shall not be able to meet the problem of unemployment, which has been put so graphically from all sides today, until the Government change their economic policy.

I asked the right hon. Gentleman why Northern Ireland had been excluded, but I gathered from the hon. Member for Belfast, West (Mrs. McLaughlin) that she felt that it was because Northern Ireland had already got all the machinery it needed to deal with the problem. Nevertheless, it is clear that if the machinery is available there is something wrong somewhere when successive Governments have not found it possible to bring unemployment in Northern Ireland down to reasonable proportions.

Mrs. McLaughlin

I was trying to make it clear in my speech that in Northern Ireland we already have the powers which the Bill will give when it becomes law. I also pointed out that in special areas the Bill might not be an answer to everything, as the powers contained in it had not been a complete answer in Northern Ireland. We are looking for further measures.

Mr. Robens

That is what I gathered from the hon. Lady's speech originally. That is why I said that she emphasised what I am now saying, namely, that only energetic administrative action behind the Bill will solve the problem.

In the city which the hon. Lady, with other hon. Members represents, administrative action is necessary in the case of the problem now affecting Short and Harlands, in relation to the number of aircraft workers who will be displaced in the next few weeks. If the present contract for Canberras were allowed to tail off much more slowly, and if the order for the freighter could be put in much more quickly, the great unemployment which is obviously coming could be relieved.

That is a purely administrative matter. I doubt whether I know all the reasons why that simple administrative action has not been taken, but it will have nothing to do with the powers which Northern Ireland already possesses, or with the Bill that we are now discussing. I am saying—and the hon. Lady has confirmed my view—that there must be keen, energetic administrative action if the principal Act and this Measure are to be effective.

Mr. Alan McKibbin (Belfast, East)

I and my Ulster colleagues would very much welcome any project which would relieve the immediate problem of redundancy in Short and Harlands, and we should be very glad to get further orders for Canberras. But I feel that it is more important to ensure a lasting and progressive industry. If an early decision could be taken about Service requirements for freighter aeroplanes it would help, as Short and Harlands have a design for such an aircraft which would meet both civil and military requirements.

Mr. Robens

I appreciate that short interjection by the hon. Member for Belfast, East (Mr. McKibbin). I agree that every effort should be made to drag down the very high figure of over 10 per cent. unemployment in Northern Ireland. Hon. Members on this side of the House are ready to help, as they have always been, although they have very little chance of representing a Northern Ireland constituency. Nevertheless, we are always ready to help, because unemployment should not be left in patches for fear that it will spread and we shall all suffer. I hope that the Parliamentary Secretary will tell us something about the administrative actions which the Government propose to take in implementation of the Bill.

I am sorry that the Bill does not carry out the provisions of Section 1 of the principal Act. I should have thought that it would have been a useful provision to be able to build advance factories, because it has been found throughout the years that the provision of such factories makes it far easier to get firms to move into these areas. I should have thought that the Bill might have been improved if the provisions of Section 1 of the principal Act had been included in it.

I also think that the right hon. Gentleman and the Parliamentary Secretary will have to pay a good deal of detailed attention to industrial development certificates, because if they are awarded indiscriminately their virtue will be destroyed. Equally it seems to me that the extensions which are now being granted—indeed, I presume that no permission except building permission is necessary—to factories in areas which are already well catered for is one of the ways in which the areas about which we are concerned will be starved of employment possibilities. Something must be done about this aspect because it is the most natural thing in the world for any manufacturer, if he wants to increase his capacity, to enlarge the existing buildings in which he already carries out his business. It is not easy, because many difficulties arise from his point of view, to persuade him to go into a factory in an area where employment is required rather than to extend his existing factory.

One has to face the fact that this is a great social problem. It has been mentioned already in the debate, but it must be said again. It is socially wrong that one should drag people from different parts of the country to places which are already over-populated, where housing facilities are not available, leaving in their wake whole areas—to describe them as derelict might be an exaggeration—where all the facilities for a large population are not being used to the full. It is a misuse of our national assets and it is very undesirable socially.

I admit that the right hon. Gentleman the Minister of Labour has frequently considered the transfer of workers, and from time to time has improved and facilitated the arrangements for the transfer of workers. But here again I would say that, whilst it is right that we should facilitate the transfer of workers if they are to go to some other town for their employment, it is not a particularly good method of dealing with the employment situation generally. Again, it is not socially desirable if a man has to leave his wife and family while he lives in lodgings and probably gets home only occasionally. It is better that we should seek to employ people in the places where they live. We must have a flexible system to enable this to be done.

As the hon. Member for Louth (Mr. Osborne) said, the changes in production in the last twenty years have been phenomenal. Of course, we must be ready to change the sort of things we make and the way in which we make them, but it is important that we should carry these changes, new techniques and new factories into those areas which have been dependent upon a single industry for the whole of their existence. This has been the worst feature of British industrial life during this century. It was graphically described by my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) and my hon. Friend the Member for Burnley (Mr. Burke). As my hon. Friend the Member for Burnley said, within the last few months six or eight mills have closed down completely. Two were taken over, probably for warehousing accommodation and, therefore, do not account for the employment of much labour. Anyone who has been to those Lancashire towns knows how well those mills are built. Yet they are empty and useless and people are moving away.

It seems so crazy to have an industrial system whereby when an industry, because of events outside its control, changes from the manufacture of one product to the manufacture of another, a town or a group of towns should suffer these social consequences and this high unemployment. Therefore, we must make every effort to take work to the people. No matter how inconvenient it may be to industrialists, we should not permit anything to prevent work being taken to the people. This cannot be done by Act of Parliament. I do not believe it is possible to legislate for this situation, but it can be done administratively, and it can be done by pressure being brought to bear by Government Departments upon industrialists when they are discussing plans for extensions or for new buildings.

The right hon. Gentleman will surely have to give consideration to what is happening as the result of the change in the defence programme, such as the closing down of Royal Ordnance Factories. Empty capacity will also become available in the naval dockyards. I hope that we shall not leave it to lie idly by. Whilst it may not be, and probably is not, situated in Development Areas and probably would not be covered by the Bill, there is still an obligation on the Government, particularly as they were owners of the capacity and employers of the people, to make sure that these things are not left derelict and that the Government are not responsible for the social consequences of unemployment brought about by a complete change in the kind of work on which people have existed for many years. A very good example is Woolwich Arsenal. When one considers the position twenty years ago and now, the comparison could hardly have been imagined by people who worked in that place in those days.

We welcome the Bill because it will enable the Administration to do things for areas which are suffering high unemployment and which those areas could not get unless they were scheduled as Development Areas. I think we are all agreed that we do not want the whole United Kingdom to become a scheduled area. It is much better to pick out these areas and to utilise the new authority which the Bill will give.

In welcoming the Bill, I hope that the Parliamentary Secretary will say something about dry docks. This point has been raised by my hon. Friend the Member for Jarrow (Mr. Fernyhough). It is also a matter which affects other hon. Members—

Dame Irene Ward

And me.

Mr. Robens

—and the hon. Lady the Member for Belfast, West, who I know has a great interest in the dry docks there. I hope that the Parliamentary Secretary will tell us about dry docks. The Tyneside and elsewhere, where new dock facilities are required, will expect to have an indication tonight of what the Bill will give them in relation to the new dry docks which are contemplated.

While I say that the Bill is welcome for what it does, in the position in which we find ourselves, and while we give the Bill an unopposed Second Reading, I stress, on behalf of hon. Members on this side of the House, that we do not regard it as an alternative to a full-employment policy.

10.14 p.m.

The Parliamentary Secretary to the Board of Trade (Mr. F. J. Erroll)

We have had a very broad debate. The Bill has been generally welcomed, although with reservations, on both sides of the House. There are those who think that it goes too far and those who think that it does not go far enough.

We make no attempt to claim that the Bill will be a universal panacea for unemployment wherever it may be seen to occur. On the other hand, it is not a piece of mere window-dressing, as was suggested by the hon. Member for Dunbartonshire, East (Mr. Bence).

It is inevitable in a debate of this character that there should be a general review by some hon. Members of policy in Development Areas as a whole. I hope that the House will agree that I should not try to reply to the broader aspects of the matter. The Bill, while it embraces Development Areas to a limited extent, is primarily concerned with giving aid to localities outside such areas. I feel that it would be a pity to spend my time in discussing Development Area policy generally when there are points which I wish to make and which relate more closely to the Bill.

Mr. S. Silverman

Before the Parliamentary Secretary goes on, if he is not to say anything more about Development Area policy, will he at least give the assurance for which my right hon. Friend the Member for Battersea, North (Mr. Jay) asked in his opening speech for the Opposition, that nothing done under the Bill will take away what otherwise would be done by the Government under statutory obligations in the Development Areas?

Mr. Erroll

I think I can give that assurance straight away. There was no intention of taking away from the Development Areas by a subtraction process and giving to other areas.

In a debate of this sort it is inevitable that many hon. Members should concentrate on unemployment and problems of unemployment. The impression might go out from the House that Britain was a depressed country with massive unemployment. The right hon. Member for Blyth (Mr. Robens), in his winding-up speech for the Opposition, referred to the length of the debate and its attention to unemployment, but I would remind the House that the economy as a whole is strong and buoyant and that, generally, there is full employment throughout the country—

Mr. Ernest Popplewell (Newcastle-upon-Tyne, West)

Factories are closing.

Mr. Erroll

Plenty of new factories are opening.

Mr. Popplewell

We should be extremely interested to hear where they are, particularly in the Development Areas and those areas which have unemployment creeping up to 5 per cent., 6 per cent., and even 10 per cent. Will the hon. Gentleman tell us where those factories are?

Mr. Erroll

I would ask the hon. Member to look at the Answer I gave recently to a Question about the number of industrial development certificates which have been granted. That shows in general terms the sort of new building which is either taking place, or is about to take place. It is still on a very substantial scale.

The debate today has provided a number of back benchers with opportunities for making points with special reference to their constituencies. I do not think anyone could claim that today the Front Bench, on either side of the House, has hogged the debate. Rather more than 20 speeches have been made by back benchers and many interesting points were made. If I were to devote only one minute to each speech, that would take twenty minutes, so I hope that hon. Members will forgive me if I am not able to do full justice to the points they have made. I will look into them most carefully after the debate and see that they are taken care of so far as possible.

In opening the debate, my right hon. Friend the Minister of Labour emphasised that the Bill extends existing powers for lending money to firms in Development Areas, to those setting up in needy places and elsewhere, always provided that the purpose for which the money is required will contribute to the reduc- tion of a high and persistent rate of unemployment. The Bill is deliberately a flexible one and we have made no attempt to define in numerical terms the localities which will qualify, nor is there a limit to the type of business which will receive a loan. This Bill, however, will not suddenly make available a fine new factory for any locality with industrial ambitions and only a handful of unemployed. The tests are fairly stringent, because the Bill is to deal with unemployment which is at a high rate and is likely to persist.

The purpose of the Bill is to help those places where both conditions exist, but no place which satisfies them will be excluded from our considerations. That particularly applies to that part of Great Britain which is represented by the hon. Member for the Western Isles (Mr. Malcolm MacMillan). If ever there was a locality which qualifies for consideration under this Bill, it is his constituency. Neither would the Bill be a source of finance just for anyone who would like to embark on a commercial venture with Government capital. Not only will we have to be satisfied that the project will contribute to a reduction of unemployment, but under Section 4 of the Distribution of Industry Act, 1945, which the Bill amends, the Treasury will require to be convinced on two grounds: first, that the project will ultimately be able to carry on without further assistance; and, secondly, that the capital cannot be obtained elsewhere on the requisite terms.

With the Bill, which I hope the House will approve, the Government will be able to give practical help where it is most needed. My noble Friend the Member for Dorset, South (Viscount Hinchingbrooke) suggested that the Bill might be used to bring the economy up to boiling point. There is no question of doing anything of the sort. We intend to use the Bill to give practical help where it is needed, and no more.

Mr. Hugh Dalton (Bishop Auckland)

Freezing point?

Mr. Erroll

I am far too enthusiastic to be interested in freezing point.

Conditions vary so much in different localities and the needs of individual projects vary so completely from one another that it would be undesirable, in our view, either to define conditions in figures or to limit the scope of the Bill by listing exclusions. On the other hand, if hon. Members wish to make particular additions to the Bill, we shall be glad to consider any suggested Amendment and to see that it is studied as fully as possible.

I should like to explain briefly to the House how we intend to implement the Bill. Amongst many hon. Members, the hon. Member for Paddington, North (Mr. Parkin) particularly hoped that I would spare a few minutes to explain how we intend to implement the Bill.

I will begin by emphasising that both my right hon. Friend the President of the Board of Trade and myself intend to take a special interest in seeing that these powers are vigorously and sensibly used.

Mr. Dalton

And visit the areas.

Mr. Erroll

Where time permits we shall undoubtedly visit the areas, but to begin with, at any rate, it is more important to be at headquarters, to ensure that the organisation develops as smoothly as it ought. We shall, of course, keep in touch with my right hon. Friend the Secretary of State for Scotland and my right hon. Friend the Minister for Welsh Affairs.

The first and most important matter to be considered is the provision of finance. Loans or grants under the Bill would be made from the Treasury Vote. The present D.A.T.A.C. Vote, which is Class VI, Vote 5, provides £100,000 only for loans for the financial year 1958–59. It is limited by its wording to industrial undertakings in Development Areas. The Treasury will need to present a Supplementary Estimate to obtain additional funds. They may either widen the ambit of the present Vote to cover transactions authorised by the Bill, or ask for a new and separate Vote. These matters are for the Treasury to determine and are still under consideration.

The Explanatory and Financial Memorandum to the Bill states that it is not possible to form an estimate of the increase in expenditure. I am sure that hon. Members will appreciate that it is much too early to be able to make an estimate. We cannot yet tell how many serious applications we are likely to receive. Parliament—and here I think I am reassuring my noble Friend the Member for Dorset, South—will have the usual opportunities of scrutinising both the initial Supplementary Estimate and the annual vote for future years. Following the ordinary practice we should not propose to publish details of individual loans made, although aggregates and totals will be made available to hon. Members as required.

My hon. Friend the Member for Kidderminster (Mr. Nabarro) asked about total expenditure since 1945 because he thought that this would provide a guide to the sums of money, possibly the maxima, which the House may be asked to approve. This may help to reassure my noble Friend. Expenditure under the Act since 1945 on factory building amounts to £70 million, giving employment to about 190,000 people over the twelve years.

Mr. Nabarro

That is the figure which I gave.

Mr. Erroll

Loans under D.A.T.A.C. total about £6.9 million. These figures represent expenditure incurred both by the former Socialist Government and by the present Government, and I think that it is within reasonable bounds.

Mr. Jay

Will the hon. Gentleman give figures relating to D.A.T.A.C. to show the figures for grants, if any, so that we may compare them?

Mr. Erroll

Yes. I understand that the grants are very small, if not nil, but I should be glad to have the opportunity of getting the exact figures for hon. Gentlemen opposite if they wish.

The procedure under the Act will be for the Treasury to receive applications for assistance, whether by loans or grants, and to refer them to the Advisory Committee, which, after considering all the financial circumstances of the applicants, will recommend to the Treasury what assistance shall be given. Perhaps I may remind hon. Members that the Statute requires that the loan or grant may be made by the Treasury, to quote from the terms of the Act, in accordance with the recommendation of the advisory Committee appointed by them". Thus, while the Treasury is not compelled to make a loan, if it does decide to make a loan it must be in accordance with the recommendations of the D.A.T.A.C. Committee. This scrutiny of applications by an independent body constitutes a very important safeguard in the use of the powers now being sought.

One or two hon. Gentlemen, including, I think, one of my hon. Friends, mentioned the possibility of the Committee being packed, but I think that is hardly likely to be a serious matter. I do not think it is likely, because the Labour Party has itself had six years' experience of operating this legislation and has made many of the appointments to D.A.T.A.C. In my view, the independence of these gentlemen is the best guarantee of their integrity. It is, indeed, a safeguard for whatever Government is in power that it has to accept the recommendation of this independent Committee.

Mr. A. Woodburn (Clackmannan and East Stirlingshire)

I hope that the hon. Gentleman is not trying to persuade the House that there was so little money spent in order to reassure certain of his hon. Friends that the Bill will be useless. I hope that it will be used as widely and as well as possible.

Mr. Erroll

My right hon. Friend the Minister of Labour made reference to the terms on which and the way in which money would be made available, and if the right hon. Gentleman looks up what he said I think he will be reassured on this point.

As it is already in being, the Advisory Committee will be able to take up applications as soon as the Bill becomes law. Statutory conditions preclude giving assistance to companies which could reasonably expect to raise elsewhere the finance they require. In fact, to quote from the 1945 Act, the person carrying it on or proposing to carry it on cannot for the time being, and without assistance under this section, obtain capital required for the purposes of the undertaking on the requisite terms. The Capital Issues Committee and the banks know that it is consistent with Government policy that finance should be made available to the promoters of sound development for the purposes mentioned in the Bill, and later, when negotiating with applicants, D.A.T.A.C. will put those applicants on inquiry to ensure that they have explored the ordinary sources of finance before applying for assistance under these provisions.

Having said that, I should like to make the point that prosperous firms will not necessarily be excluded if they can satisfy the Treasury in this respect. On the other hand, the terms on which assistance may be given are not subject to any statutory restriction, and it will be the policy of the Treasury not to limit the discretion of the Committee on the form of assistance, the rate of interest payable or the terms of repayment which it should recommend. The Treasury has general powers which it has already used to prescribe favourable interest rates in special circumstances.

Mr. S. Silverman

Is the Treasury represented on the Advisory Committee?

Mr. Erroll

No, it is an independent Committee, but its secretary is provided from the Treasury.

It is not the intention, however, to compete unfairly with private sources of capital finance or with the banks as suppliers of working capital, but every application will be considered on its individual merits. Different companies have different needs, and the policy will be applied as flexibly as possible in order to fulfil the purpose of the Act.

A number of hon. Gentlemen referred to non-industrial activities, since the Bill does not confine the powers to industrial undertakings. I should like to emphasise this important extension of the powers which we hope will be made available both inside the existing Development Areas and outside to localities where there is a high and persistent rate of unemployment. The Bill widens the scope of the 1945 Act to include non-industrial undertakings. This will enable other providers of employment to receive financial assistance. There is a number of possible types of business, such as insurance companies, mail order businesses, hire-purchase companies, or research establishments which might possibly qualify.

As regards assistance to hotels and holiday camps, perhaps I might briefly reply to the points put by the hon. Member for Dunbartonshire, East. This, too, is possible, although, of course, the possibly seasonal nature of the employment that such projects would give would have to be taken into account in considering any such applications.

Mr. J. T. Price (Westhoughton)

Do I take it that included in this range of companies or undertakings which will qualify for a preferential rate of interest on loans are to be hire-purchase companies? Would that not create a very wide gap for abuses of all kinds, because of the high rates of interest charged by hire-purchase companies? Their record is not particularly clean in certain respects.

Mr. Erroll

No, I had not in mind financing hire-purchase companies as such, but rather financing the provision of premises where they might carry on, say, the collection of hire-purchase instalments in an area which could benefit from their being placed in, say, Cornwall rather than the City of London. But, there again, I do not think that hon. Members need have any anxieties on the point, since any such application would, of course, have to be subject to the same scrutiny by the Advisory Committee, which would require to be satisfied that the money would be properly spent for the purposes for which it was asked.

Turning to dry docks, which were referred to—

Mr. Malcolm MacMillan

An important matter was raised earlier and a reply was promised. The hon. Member for Orkney and Shetland (Mr. Grimond) asked a very pertinent question, having regard to the problem in the Highlands and Islands, that is, whether agencies like the Herring Industry Board or the Crofters' Commission would be empowered to promote undertakings in the areas of their responsibility. Could we have an answer now?

Mr. Erroll

I am trying to do justice to as many of the points raised as possible, and I have that one on my next page of notes, as a matter of fact.

Dry docks—

Mr. Dalton

Will these provisions—[HON. MEMBERS: "Oh."] It is not an unimportant matter in places where men are unemployed. Perhaps I may be allowed to put the question. Will this also cover—I hope that the answer is "Yes"—hotels in places where American tourists might be brought in?

Mr. Erroll

It is quite a treat to see a flash of the old temper we saw in earlier times, when we used to enjoy harrying the right hon. Gentleman when he was standing at this Box.

The answer about hotels is quite simple. The test is unemployment. Would the hotel project relieve unemployment at a high rate and of a persistent nature? It would not be possible to use the Bill to finance hotels which would simply be for the object of assisting the tourist trade. The Park Lane hotel project, for example, would obviously be ruled right out of order.

Getting back to dry docks, which, I am sure, interest at least two hon. Members who spoke, perhaps I may deal first with what was said by the hon. Member for Anglesey (Mr. C. Hughes). I would remind the hon. Gentleman that my noble Friend the Minister of State for Welsh Affairs visited the Isle of Anglesey only a few days ago so that he might acquaint himself at first hand with some of the problems there.

In our view, dry docks would qualify. They qualify already if they are to be erected inside Development Areas, but the Bill would make it possible for money to be provided for a dry dock in a locality outside a Development Area, subject again to the standard qualification, if it would contribute to the reduction of a high and persistent rate of unemployment.

I should like to go further on this theme because under this Bill assistance would be given to foreign firms who wished to set up business in this country if their applications can meet this—

Mr. Robens

Dry docks?

Mr. Erroll

I am off dry docks.

Mr. Robens

I should like to press this matter a little before the hon. Gentleman leaves dry docks. Will he say a little more about them? Perhaps I may put the matter by way of an example just for illustration. Messrs. Harland and Wolff's dry dock project will cost £4 million to £5 million, and my understanding is that Harland and Wolff, because of other commitments, are not in a position to put anything towards the dry dock but would regard a rental as being a way by which they could pay. Would the Treasury finance this dry dock project and rent it to Harland and Wolff?

Mr. Erroll

Of course, it is quite clear. I should have thought, to the right hon. Member by now that this Bill does not include Northern Ireland.

Mr. Robens

I said that that was by way of illustration.

Mr. Erroll

I am sorry I did not take that point. In this case, it is very difficult to say, in advance, exactly what sort of case would qualify. One has to remember that the object is to alleviate a high and persistent rate of unemployment, and then the other test is the test by the Advisory Committee which looks at the financial aspect of the matter. As the right hon. Gentleman referred to a case by way of illustration only, I can give him only a general reply, also by way of illustration. These are very practical matters to which we intend to come just as soon as the Bill is an Act. We intend to press on vigorously, and then D.A.T.A.C., in existence and ready to examine applications—

Mr. Edward Short (Newcastle-upon-Tyne, Central) rose—

Mr. Erroll

I must go on. [HON. MEMBERS: "There is no time limit."] Yes, but I must get on. I have another Bill to speak to, as well.

Mr. Short rose—

Mr. Deputy-Speaker (Sir Charles MacAndrew)

Order. If the Minister does not give way, hon. Members must resume their seats.

Mr. Short

This is a matter of considerable importance to Tyneside. There are two projects, one for a dry dock at Hepburn, and the other for a mercantile dry dock at Jarrow. The Chancellor referred to dry docks in his Budget speech. Will the Minister tell us whether the Treasury will give us some type of assistance, or whether there will be assistance under this Bill? It is quite ambiguous. There are these two schemes already, but the firms do not know what financial assistance they will get. Will the hon. Gentleman be a little more specific?

Mr. Erroll

I will not be more specific tonight.

Dame Irene Ward

Oh, yes, my hon. Friend really ought to be. The question has been specifically put by several hon. Members both on this side of the House and on the other side of the House, and I really do think that it is up to the Minister to have a proper answer available for us.

Mr. Erroll

I thought that I had given quite a good answer in general terms—

Dame Irene Ward

No. My hon. Friend has not.

Mr. Erroll

—to the House.

Mr. Short

On a point of order. The hon. Member for Tynemouth (Dame Irene Ward) put this point and asked a specific question many hours ago. Surely we are entitled, as a matter of courtesy, to a reply from the Minister?

Mr. Deputy-Speaker

I do not know about the matter of courtesy. It is certainly not a point of order.

Mr. Erroll

I have answered by way of illustration.

Mr. Jay

It was just to illustrate the matter in the interests of the Minister. Is it not quite clear that what he has to say is that this dry dock on Tyneside would come within the scope of the Bill?

Mr. Erroll

Yes, in general terms it certainly would, as I have already said much earlier. I can answer only in general terms, because the success of an application depends on the view taken of it by the Advisory Committee. It has to be studied by the Committee.

I referred to foreign firms and I point out that, equally, local firms able to expand and give greater employment can apply for finance. The widening of powers to permit loans or grants to be made to undertakings by way of trade or business, whether or not industrial, applies inside as well as outside Development Areas. In this respect, the Bill increases the scope for giving help to relieve unemployment in Development Areas.

I want to refer to the point made by the hon. Member for Orkney and Shetland about the Crofters' Commission and similar bodies and whether they would qualify. The position is that the Crofter's Commission—to take that as an example, although I am here including other similar bodies—would have to carry on or propose to carry on an undertaking by way of trade or business before it was eligible for help and assistance under the Bill. It is unlikely that the Crofters' Commission would carry on such an undertaking and, of course, the Commission, like everybody else, would have to show that it could not obtain the finance on requisite terms from any other source, including, of course, other Government sources.

My hon. Friend the Member for Hastings (Mr. Cooper-Key) referred to seaside resorts. The short answer to his question is that, again, if the appropriate conditions are met, they are eligible. The unemployment problem in those cases is usually seasonal, especially for women, but where there is a substantial number of men and women unemployed for most of the year, applications from suitable small industries could be entertained. The difficulty would be to avoid encouraging industries which might expand and threaten, either by absorbing labour or by spoiling amenity, the continuance of the tourist traffic on which the area mainly depended. However, I must remind hon. Members that the unemployment in the seaside area would have to be at a high rate and be persistent.

My hon. Friend the Member for Heywood and Royton (Mr. Leavey) asked how we proposed to define "locality". The basis for localities, as mentioned in the Bill, will be employment exchange areas or groups of areas. We will thus have a complete mosaic covering the whole of the country, with no gaps.

Views on what is a reasonable distance of travel to work vary widely from locality to locality and it is judged in my right hon. Friend's Department according to local custom and facilities available. Obviously, it would not be the practice to give assistance to an area with a high rate of unemployment if the neighbouring area, with good transport facilities, was doing extremely well. Here, we must decide each case on its merits. For example, in the remote parts of Wales and Scotland, there may be no practice of travelling to work, but in urban areas journeys of up to ten miles may be commonplace.

Several hon. Members referred to the sanction which the Board of Trade possesses in refusing to grant industrial development certificates. This matter was mentioned by the hon. Lady the Member for Lanarkshire, North (Miss Herbison), the hon. Member for Falmouth and Camborne (Mr. Hayman) and the hon. Member for Sowerby (Mr. Houghton) and several others. This is a control which we exercise as vigorously as circumstances permit.

My right hon. Friend the President of the Board of Trade referred to his use of this power in his winding-up speech in the House on 24th February of this year. We have to strike a balance between permitting development where a firm wishes it to take place and using our powers of persuasion to secure that a firm will go to an area which we would like, bearing in mind all the time that if we are over-aggressive in this matter the firm may decide not to develop at all and just stay put where it is.

As part of this policy we are determined to prevent industry from the North of England from coming down into London and the South-East corner of England. Virtually no new firms have been allowed to set up in London and South-East England. Extensions certainly are permitted, and very often for good reasons. An extension very often enables a firm to reorganise its layout and increase its output without employing any more staff. I am not talking idly from one or two examples; I was so concerned about this matter when I came to the Board of Trade that I asked for a special investigation to be made of a large group of I.D.C.s granted over a three-month period two or three years previously, so that we could look at the subsequent history and see whether the firm had really developed as it had expected, and if the reasons given on its application—which at the time seemed to merit granting the I.D.C.—had been borne out by subsequent events.

Mr. Popplewell

The hon. Gentleman has raised a very important point, which affects a factory in my constituency. Aveling-Barfords has developed in Newcastle, but it has one factory in Grantham. It is reducing—not entirely closing—the factory in Newcastle, and going back south. That seems to belie what the Minister is saying. Will he examine this matter, because there is a suspicion that instead of the Ministry being helpful and enabling Aveling-Barfords to keep its factory in Newcastle, it lacks the cooperation it is entitled to?

Mr. Erroll

I will look into that matter and write to the hon. Member, but he must realise that this sanction is limited to new construction, and it may be that the firm in question has existing premises to move into. There is no control over such movements.

The great advantage of the power which we have is that its existence is generally known and nowadays firms come to us or our regional controllers at an early stage in a proposed development. They normally have informal discussions with us, which enables us to interest the firm in moving to a locality which we would prefer to see it go to. We operate this procedure as consistently as possible, and the result of my investigation was that in almost every case the application and the grant of the certificate were fully justified in the light of the subsequent history of the firm which had been permitted to expand in the London area.

I have tried to cover as many as possible of the points which have been raised. I realise that there must be a number left unanswered in a wide-ranging debate such as this, but I hope that the Bill can now be given a Second Reading.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 38 (Committal of Bills).