HC Deb 27 June 1958 vol 590 cc832-8

Not amended (in the Standing Committee), considered.

3.43 p.m.

Mr. Douglas Jay (Battersea, North)

As we have not a great deal of time left for this Bill, and we are anxious to expedite it—though we feel that it is a pity that the Government have tagged it on to the end of today's business—I prefer to refrain from moving the new Clause standing in my name. I would only express the hope that the Parliamentary Secretary may deal with the point about an annual report in the course of his remarks on Third Reading.

3.44 p.m.

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

I beg to move, That the Bill be now read the Third time.

This is a short but important Bill, which was very extensively discussed both on Second Reading and during the Committee stage. I hope that hon. Members interested in it will be prepared to be self-denying in their wish to make speeches, so that we can, if possible, secure the Third Reading before the House rises today.

The Bill amends Section 4 of the Distribution of Industry Act, 1945, so as to extend to places outside the Development Areas the powers which the Government possess to make loans or grants. To qualify, such places must, in the opinion of the Board of Trade, have a high rate of unemployment, and the unemployment must be of a persistent character. Loans or grants will be made for both industrial and non-industrial purposes. This latter point is a new development, and, incidentally, the Bill will make this additional provision available for places inside the Development Areas.

Assistance could be given to such places in a variety of ways, but we think that the most helpful and flexible method would be by way of loan or, in some cases, by grant, to the person carrying on or proposing to carry on the employment-creating enterprise in the district. Loans can be tailor-made to suit individual requirements, and this work will be carried out by the Development Areas Treasury Advisory Committee. The Treasury will make loans or grants only on terms recommended by D.A.T.A.C., which will consider the particular needs and requirements of the individuals concerned.

We are determined to ensure that the Bill will be an effective instrument in the alleviation of localised unemployment. Of course, there is no need for hon. Members to fear that public money will be lent without the most careful scrutiny and examination of each particular case under Section 4 (2) of the 1945 Act. Each applicant will have to satisfy the Advisory Committee, in respect of his project, that there are good prospects of its ultimately being able to be carried on successfully without further assistance under this Section, but that the person carrying it on or proposing to carry it on cannot for the time being, without assistance under this section, obtain capital required for the purposes of the undertaking on the requisite terms. I come now to the new Clause which was tabled by the right hon. Member for Battersea, North (Mr. Jay) and his hon. Friends. We have most carefully considered the suggestions which have been made about publishing a report on the results achieved by the Bill once it is on the Statute Book. At first sight, it seems the obvious thing to do, and the Government would like to be able to show what has been achieved. But there are certain practical difficulties.

In the first place, the individual loans are a confidential transaction between the lender, that is the Treasury, and the individual borrower. Firms might not wish it to be known to what extent they were relying on Government finance in the conduct of their operations. Total figures for areas would probably be the most which could be made public. Such totals might be misleading and open to misinterpretation without detailed explanations which the firms themselves would not wish to see disclosed.

Moreover, an annual report might show considerable variations from year to year due to the accident of one particularly large loan, for example, coming just within one year's report instead of in that for the following year. It should be remembered, also, that the Bill is an amendment to an existing Act, and there is no requirement in that Act for the publication of reports. It would, therefore, seem to be a little topsy-turvy to have a regular report on an amendment to an Act without reports on the Act as a whole.

I realise, however, how desirable it would be for hon. Members and the country generally to have some information on the subject. I think that it would be worth while to produce a report or statement on the general working of these provisions after a period of, say, two or three years. I am, therefore, glad to give an assurance that we should be prepared to make available a report on the working of the Bill after three years' experience of its operation.

The Bill is a very short one, and I have nothing further to say except that we intend to make full use of its provisions. I commend the Bill to the House as a useful means of alleviating persistent unemployment in particular localities.

3.49 p.m.

Mr. Douglas Jay (Battersea, North)

In the very short time available, we should like to wish good luck to the Bill, not because we regard it as perfect or even sufficient in itself but because we feel that it moves a little in the right direction.

I welcome and applaud, so far as they go, the assurances that the Parliamentary Secretary has given that the Government really mean to make determined use of the Bill. I hope that they will put those protestations into effect. After all, the background to all our discussions on the Bill is that unemployment in a great many areas is now higher than at any time since 1945.

The noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) had an Amendment down under the terms of which he was going to urge faint-heartedness in the use of the powers provided in the Bill. Apparently, the noble Lord has himself proved too faint-hearted even to urge his own faint-heartedness on a Friday afternoon. We hope that the Parliamentary Secretary will use the Bill in precisely the opposite fashion.

The Parliamentary Secretary said a brief word about the rendering of reports to Parliament on the use made of the Bill. I must say that I was not wholly satisfied by what he said. He did not seem to go very far to meet us. No doubt, it will be something to have a report in two or three years, but its value will really depend upon how much information about both amounts and areas that we are given in such a report.

It is true, as the Parliamentary Secretary says, that the original Distribution of Industry Act, 1945, provided for a general report after a period of, I think, three years. But, of course, this is not a parallel, because the original Act specified in its Schedules the precise areas to be Development Areas within which the powers were to be operated.

The present Bill mentions unemployment areas to be designated by the Board of Trade, but it does not tell the public or Parliament which those areas are. Therefore, it seems to me that there is a much stronger case for a report which will tell us the areas in which the Board of Trade is operating, even if it does not tell us the names of firms, which are not necessary.

Briefly, I remind the Parliamentary Secretary that we did elucidate, in Committee, that even this rather exiguous Bill in its present form gives the Government power to lend money through the D.A.T.A.C. procedure to companies whose business is providing and managing trading estates outside the development areas designated in the original Act. I hope that the Parliamentary Secretary and the Board of Trade will not forget that by this perhaps rather round-about, but, nevertheless, legal and practical procedure, they have the power to operate through trading estate companies in these special unemployment areas outside the present Development Areas.

Clause 2 (3) reads: This Act does not extend to Northern Ireland". We did attempt to raise this matter by an Amendment which, I gather, was out of order, for reasons which I can understand. But since the Bill does contain that sentence, it is in order to ask the Parliamentary Secretary why Northern Ireland is excluded. He will be well aware that unemployment in that part of the United Kingdom—after all, it is part of the United Kingdom—is now as high as 10.8 per cent. It is two-thirds higher than it was two years ago.

This is a disappointing result after all the efforts of the Northern Ireland Government and the special organisation set up with Lord Chandos at its head, which has, within its limits, been fairly active in trying to get new industry into Northern Ireland. Although the Bill specifically excludes Northern Ireland, I hope that the Government and the Board of Trade will not slacken in their efforts to help the unemployed in Northern Ireland, who are proportionately more numerous than in any other part of the United Kingdom.

Incidentally, the rise in unemployment in the last eighteen months shows that, if the Government follow a general stagnation policy in their general economic policy, individual efforts, such as those of the Northern Ireland Government and Lord Chandos' organisation, cannot produce any very pronounced effect.

Finally, I should like to take the opportunity of congratulating those responsible in the Board of Trade for the Pressed Steel project for the Swansea area which the Parliamentary Secretary announced a few days ago. This is a great success and is in the spirit and method of the original distribution of industry policy. I do not know the individual responsible in the Board of Trade for the negotiations, which no doubt were considerable, but we should like to tender our congratulations, both to those on the Government side and to Pressed Steel, who have fathered both these schemes since the war, and, incidentally, one in Paisley, in the Glasgow area.

I would ask the Parliamentary Secretary to mark the moral. He will agree—indeed, he has told us so—that this scheme is to be wholly financed, as far as capital expenditure goes, with public money through the Board of Trade. Of course, under the Bill the Government are not given the power to do this outside development areas. Therefore, it will not be possible under the Bill, except through the round-about method of trading estate companies, for the Government to do outside the old Development Areas what they are commendably doing in the Pressed Steel scheme.

I hope that the Parliamentary Secretary will mark that moral, but in other respects I again express the hope that the Bill will be operated as energetically as possible.

3.55 p.m.

Mr. W. R. Rees-Davies (Isle of Thanet)

The greatest compliment that one can pay my hon. Friend the Parliamentary Secretary is to speak for less than one minute. In that minute, I should like, first, to say how much all of us on this side commend his own speeches and those of my right hon. Friend the Minister of Labour in this matter. The Bill itself is a most important manifestation of Conservative policy and will particularly be well received in the seaside areas.

We should certainly like to see some area reports as to how the Bill progresses, not giving the details that my hon. Friend indicated might present difficulty, but reports of some nature. Secondly, we would like it to be clearly understood that where there is a substantial rate of unemployment for at least nine months in the year, that would be persistently a high rate of employment within the meaning of the Bill, so that, therefore, the areas where there have been persistent pockets of unemployment may now be dealt with in the future, whereas no part of this country or, as far as I know, of any other country has ever been able to deal with them in the past.

This is a first-class Tory Measure and I congratulate the Government very much upon it.

3.56 p.m.

Mr. Sydney Silverman (Nelson and Colne)

Whether this is a first-class Tory Measure or not, the hon. Member for the Isle of Thanet (Mr. Rees-Davies) will be a better judge than I can possibly be. With his congratulations to the Parliamentary Secretary, I should like respectfully to concur. He has conducted the business of the Bill in Committee and in the House with his usual charm. He is so disarming that he almost made some of us believe that there might possibly be something in the Bill after all. The emphasis, however, must be on the word "almost," because in the end the hon. Gentleman certainly did not convince me.

My right hon. Friend the Member for Battersea, North (Mr. Jay) referred to the fact that in view of the lateness of the hour we had not sought to move our new Clause and Amendment which appear on the Notice Paper. The noble Lord the Member for Dorset, South (Viscount Hinchingbrooke), who had put down a much more substantial Amendment, did not think it worth while to be here. My right hon. Friend said that he did not move our new Clause and Amendment because he wanted to expedite the Bill. We do not know why the noble Lord is not here, but I would say that the real reason for not moving the Amendments is that, with the best will in the world, it is impossible to take the Bill seriously.

If there is not a report, it will be mainly because it will be far longer than three years before there is anything to report. If one were to look at the benefits that some areas have derived or failed to derive from the major Act and then look at the proposals of the amending Bill and the extensions and limitations, the prohibitions, inhibitions and all the things that have to be satisfied, examined and certified, this will be very cold comfort indeed. In the end, it amounts to nothing more than a shoddy piece of window-dressing.

3.58 p.m.

Mr. Douglas Houghton (Sowerby)

I should like to add a final word. This is a good Bill, no doubt, as far as it goes. Part of my constituency, however, is under the threat of deterioration by the recession in the cotton industry and other factors. I regret that the Bill cannot give preventive treatment. It is only curative treatment and one has to be thoroughly and persistently ill before this particular doctor is called in. That is why, from my standpoint, the Bill is inadequate.

Question put and agreed to.

Bill accordingly read the Third time and passed.