HC Deb 18 December 1958 vol 597 cc1320-8
Mr. Speaker

Concerning the first of the subjects to be discussed on the Adjournment, in view of yesterday's debate I would hope that it can be concluded in shorter time than I originally allowed for it, when I did not know that there would be a debate on unemployment the previous day.

12.16 p.m.

Mrs. Patricia McLaughlin (Belfast, West)

As you so rightly say, Mr. Speaker, we had an opportunity of discussing part of this matter during the debate yesterday, but the need for further development of industry in Northern Ireland is obvious and I must take a little time today to ask for further information on this matter.

We have at present in Northern Ireland great difficulty in getting sufficient diversity of industry. It has been made more difficult because of the situation which has occurred both internationally and nationally. We accept fully that our industry depends upon the state of international trade in general and upon the state of the United Kingdom economy in particular. There are, however, several points that were not answered in yesterday's debate and about which we might usefully speak today and on which we should continue to speak on future occasions until satisfactory answers have been achieved. I hope that today, however, we shall hear something that will help to bring cheer to Northern Ireland this Christmas.

I turn first to the aircraft industry. The aircraft industry in Northern Ireland is the only industry there in which the men now employed in it can be usefully employed, because there is no alternative for them if the aircraft industry fails to be maintained. We understand fully the problems that generally affect the aircraft industry in Great Britain, but this is a Government-sponsored and Government-controlled concern and we surely have a right to demand that we should get a fair share of anything which the Government can produce. We want to know why orders are not forthcoming after months and, indeed, years of delay in choosing a successor to the Beverley aircraft.

There is also the question of our textile industry to which I referred in yesterday's debate. My right hon. Friend the President of the Board of Trade has kindly said that not only will he look into the question of stocks in America, but into the question of stocks at home, which is our major problem. I have some literature about it, but will not take the time of the House to read it. I can, however, assure the House that the problem of getting home retailers to keep stocks is getting difficult. Therefore, it is the manufacturers who must hold stocks. That, too, is difficult for those who work on small capital.

We have felt for many years that it would be a good thing if we could have a number of people from Her Majesty's Government coming across as a united body, not only to examine our difficulties., but to look into the good parts and the parts of our country which can be developed satisfactorily as a profitable industrial concern. This has been spoken of many times in successive conferences of the Ulster Unionist Members in Belfast, and, indeed, on many platforms.

We eventually achieved the Northern Ireland Development Council, under Lord Chandos, who has shown tremendous enthusiasm and who has made a great effort to bring more industry to Northern Ireland. However, he is essentially concerned with new industry and I make a plea for the existing industries which are having a difficult time in present circumstances.

We need industries which use a high proportion of labour to raw material in the product. We also need a number of small industries as well as a fair modicum of large concerns. We know very clearly that this is a difficult matter, as the President of the Board of Trade pointed out yesterday. We know that our services and all those other things which must go around and flow around an industry are not always so readily available in smaller pockets of communities spread here and there throughout the country.

However, we feel that the problem has been discussed too much and that not enough has been done to consider it from a regional point of view and to solve it as a regional problem. I wish that I had time to refer to the various areas where certain new concerns could be grafted on to existing industries and where the present firms could be helped by the injection of capital or by a stimulation of trade which would make it possible for them to expand. They are already working on very small margins and in many cases with practically no profit at all.

We are still considering what can be done about transport costs and especially the cost of importing coal. Yesterday, one of the things which I did not have an opportunity to mention was that our coal seems to be corning to us from much greater distances before reaching the port of embarkation in this country and that those costs, I am informed, have increased by as much as 15s. a ton. Perhaps I can be given a reason why coal cannot be drawn from those coalfields from which we used to get it and from where we always got it before the coal industry was nationalised.

Another factor which has made it difficult to develop industry in Northern Ireland is that too much has been made of the difficulty of establishing industry in Northern Ireland because of the strip of water which separates us from the mainland. It has been thought that that has led to extra costs and extra difficulties. We are now slowly developing direct trading. For instance, there is now a system, not as widespread as it might be, but becoming more popular, of having ships come with direct imports from Australia and returning direct exports from Northern Ireland. That is the sort of idea which could be usefully explored and expanded and which might do a great deal to help, possibly more than one would expect.

Our failure has been in continuing to think in terms of the past. It is always thought that because something has not been successful elsewhere it cannot be successful in Northern Ireland. Britain has to do much re-thinking industrially and we must have increased efficiency if we are to expand our economy generally. Northern Ireland recognises that. Northern Ireland might in some cases be used as a testing area for new ideas and new methods of attaining industrial efficiency and expanding overseas trade.

The time has come when the people of Northern Ireland are no longer prepared to wait, and all hon. Members must be made aware of that. The Government must appreciate that, whatever else happens, we shall continue to put the case for Northern Ireland as firmly and as strongly and as steadily as we can until satisfactory ways have been found of pulling together the industrial capabilities of Northern Ireland and bringing them to a level comparable with that of other parts of the United Kingdom.

I hope that the Parliamentary Secretary will be able to say something which will be of good cheer and practical for the people of Northern Ireland. I hope that when I go home I shall be able to say that this quarter of a century of unemployment which has be devilled this part of the United Kingdom is now being recognised as something more difficult than is the case with any other part of the United Kingdom, and that in 1959 there will be a determined drive to help us to expand our industries, to improve those industries that we already have, and to revitalise the old and bring in the new so that Northern Ireland gets an opportunity to share in the expanding economy which we confidently expect next year.

12.24 p.m.

Mr. A. G. Bottomley (Rochester and Chatham)

It gives me much pleasure to support the plea of the hon. Lady the Member for Belfast, West (Mrs. McLaughlin) that the Government should do something to reduce the very serious unemployment in Northern Ireland. I can tell her that, in the past, my constituency, Rochester and Chatham, helped in a practical way when Short Bros. were sent to Belfast. That was done by the Labour Government to reduce the appalling unemployment in Northern Ireland at the time.

The Northern Ireland Government did not themselves adopt the distribution of industry legislation which the United Kingdom as a whole used to solve pressing unemployment problems. The growing unemployment in Northern Ireland is the joint responsibility of the Northern Ireland Government and Her Majesty's Government here.

The hon. Lady should understand that, whatever plea she makes to the Government, her hopes will not be realised. Since the war there have been two shattering events in my constituency which have upset the industries and the communities of Rochester and Chatham. The first was the sending of Short Bros. to Belfast under the provisions of the distribution of industry legislation. However, other industry was then brought in and is now flourishing. The second event was the announcement this year that the Royal Navy was to leave Chatham. To date, no industry has been brought into the area to provide alternative employment.

While I join with the hon. Lady in pressing the Government to do something about unemployment in Northern Ireland, I warn her that they will do as little as they have done for my area.

12.26 p.m.

Mr. Montgomery Hyde (Belfast, North)

I want very briefly to support the plea of my hon. Friend and colleague the Member for Belfast, West (Mrs. McLaughlin) that there should be further development of industry in Northern Ireland. I cannot agree with the right hon. Member for Rochester and Chatham (Mr. Bottomley) that our hopes will not be realised. With my faith in the Government, I believe that they will be realised.

My hon. Friend referred to the need for an injection of further capital to stimulate trade. The salient feature of our economic difficulties in Northern Ireland is the shortage of capital compared with that of Great Britain. Our population is approximately 2.5 per cent. of the population of Great Britain, while the amount of capital invested in companies registered in Northern Ireland is only 1.15 per cent. of that invested in a similar manner in Great Britain. That shows that in Northern Ireland we have less than half the capital invested per head of the population compared with the rest of the United Kingdom.

Finding investment opportunities in Northern Ireland is a major problem. Today, there are only 33 public companies registered on the Belfast Stock Exchange compared with 65 in 1914. That is because more than 90 per cent. of our industrial concerns in Northern Ireland are private companies and are not likely to attract money from local investors in Great Britain, except in very special circumstances.

English finance companies are willing to put up money for long-term risk capital, but, naturally, they expect to obtain some control of the company in question, and that proposition is resisted by the proprietors of those companies in Ulster. No doubt for the same reason, local companies are reluctant to raise money by public issue.

The solution which I suggest is not new and I have not heard any official reason why it should not be put into operation. It is worth close study, and it is the setting up of a Government-sponsored industrial finance and development corporation. We have the Chandos Development Council, which does excellent work, but that is primarily concerned with new industries.

The objects of such a development and finance corporation can be briefly summarised. The first is to provide new firms with capital, or to help them to obtain capital from the public by forming themselves into public companies and issuing shares; secondly, to provide existing firms—and this is very important—with additional capital, or help them to raise it from the public in order either to increase their scale of operations, or to put their finances on a sound basis where they have been crippled through being forced to rely on bank overdrafts and consequently become under-capitalised; thirdly, to provide cash resources for the proprietors of our private companies in order to meet death duties; and, finally, to assist in and arrange for financial reconstruction and amalgamations, especially of private companies wishing to become public companies, and to make public issues of their shares.

Such corporations have been set up with conspicuous success in various parts of the Commonwealth, notably South Africa and Canada. They have also been set up in the Republic of Ireland. I am convinced that if something in the nature of a finance company, with a capital of between £2 million and £3 million, were set up in Northern Ireland. it would be a tremendous help towards solving our present economic difficulties. I most sincerely implore Her Majesty's Government to give this question their special consideration.

12.30 p.m.

The Joint Under-Secretary of State for the Home Department (Mr. David Renton)

My hon. Friend the Member for Belfast, West (Mrs. McLaughlin) is to be congratulated on making such full use of her Parliamentary opportunities, and we are glad that she should do so. We shall take good note not only of the interesting points she made in her eloquent speech last night. but also those that she has made today.

The House will have noted that in yesterday's debate my right hon. Friend the President of the Board of Trade devoted an important part of his speech to the problems of Northern Ireland. Although, constitutionally, industrial development is primarily a matter for the Government of Northern Ireland, in practice there is the closest co-operation between our two Governments at all levels. United Kingdom Departments do all they can to help the Departments of the Government of Northern Ireland in their efforts to encourage the development of industry in Northern Ireland.

My hon. Friend referred to the importance of the visits made by Ministers. My right hon. Friend the Home Secretary and I have been to Northern Ireland on separate occasions this year, and I am glad to say that, soon after his recent appointment, my hon. Friend the Parliamentary Secretary to the Board of Trade made arrangements to go to Northern Ireland early in January to see things for himself, to confer with the Minister of Commerce of the Northern Ireland Government, and to meet business men and all those who are concerned with the problems of industrial development there.

This House has great sympathy with the efforts of the Northern Ireland Government to overcome the difficult facts of geography, and we greatly admire the results so far achieved. But for those efforts the distressingly high unemployment figure would have been even higher. Ulster has comparatively few natural resources, but makes up for this by the enterprise and initiative of its people, and by offering exceptional inducements to attract industry.

Here I would like to deal with the point made by my hon. Friend about the injection of capital. By making grants which are generally of at least 25 per cent. for new industries and for the development of existing enterprises, and by providing Government-owned factory space, the Government of Northern Ireland are able to attract new development there, and each new development involves the injection of fresh capital. I hope that that will help to improve the position referred to by my hon. Friend the Member for Belfast, North (Mr. Hyde), about the capital invested per head of population.

Those inducements continued to bear fruit even during the recent period of credit restriction, but the expansion of industrial activity which may be expected to result from the measures which our Government have taken in recent months, in order to stimulate the economy in general, should benefit Northern Ireland as well as the rest of the United Kingdom.

The efforts of the Northern Ireland Government to attract and furher develop industry in the way that I have mentioned are supplemented by the work of the Board of Trade in steering industry to Northern Ireland by suggesting to firms with new development projects that, if possible, they should go where there is unemployment. As my right hon. Friend described in yesterday's debate, a number of such suggestions made by the Board of Trade in respect of Northern Ireland have been taken up.

As a result of the Board of Trade's influence, together with the efforts of the Ministry of Commerce of Northern Ireland and the Northern Ireland Development Council, under Lord Chandos, every firm with a new project which might conceivably be developed in Ulster is made aware of the advantages which Ulster can offer.

My hon. Friend the Member for Belfast, West asked me to say something about the aircraft industry. I understand that in regard to the future development of the Britannia, whether in Ulster or elsewhere, it is important that the question of export credit guarantees should receive consideration—and it has done, as the House knows. The normal maximum term for which export credit guarantees can be given is five years, but an exception has been made in the case of such large civil aircraft as the Britannia. In those cases seven years is the period. That should be of some help to Northern Ireland.

As for other aircraft developments, there is to be a debate later today in which the future of the whole aircraft industry will be discussed. I will, therefore, confine myself to saying that the Government are well aware of the serious effect which a withdrawal of activity from Short and Harlands would have upon the employment position in Belfast, and that in regard to the air freighter contracts, to which my hon. Friend the Member for Belfast, West referred yesterday, we are anxious to do what can be done. But I have no further statement to make at this moment. The matter is under close and immediate consideration.

My hon. Friend the Parliamentary Secretary to the Board of Trade has asked me to say that among the various other points which my hon. Friend the Member for Belfast, West mentioned, that concerning stocks will be carefully considered.

In conclusion—since I understand that there is a need not to prolong this debate, in view of yesterday's debate—I would simply say that in overcoming the difficult facts of geography to which I have referred the people of Northern Ireland have shown great initiative and skill. With the help of the Dollar Exports Council and Lord Chandos' Council a vigorous sales effort is being made. The Government of Northern Ireland have shown themselves willing to give every encouragement and assistance to those firms who are willing to help themselves, and I can assure my hon. Friends that Her Majesty's Government will continue to give most serious consideration to any proposals which the Government of Northern Ireland may make to assist the further development of industry in that loyal part of the United Kingdom.

Mr. Bottomley

Is not this most unsatisfactory? Surely the hon. Member for Belfast, West (Mrs. McLaughlin) is aware that a reasonable answer has not been given to the case she presented yesterday and this morning. Why do we have a second-hand reply from a Minister who is not responsible for providing trade and employment?

Mr. Speaker

Order. I think that the Home Office is responsible for the affairs of Northern Ireland.