HC Deb 08 December 1959 vol 615 cc457-79
Mr. Ross

I beg to move, in page 3, line 31. to leave out from "section" to the end of line 34.

This Amendment is to give the Government an opportunity of explaining once again why they feel it essential to do this. I should have thought that this would be one of the things which, as a matter of course would be part of the general directions which are to be given to the advisory committee by the Board about the conduct of its investigations leading to its recommendations to the Board. I should have thought, in keeping with what we have been told about the Bill, that it would have been unnecessary at this stage to have in the subsection the words that the Board is satisfied that there are good prospects of the undertaking ultimately being able to be carried on successfully without further assistance under this section. When discussing Clause 1 we were told about the relationship between the expenditure involved and the employment likely to be provided". and particularly, at the instance of my hon. Friend the Member for Greenock (Dr. Dickson Mabon), about the matter of calculating this in terms of man-years of employment. Of course the Board, and, I presume, the advisory committee, would look into the question of stability of employment.

Why should it be necessary to fill out the Bill with this kind of thing? It undoubtedly leads to confusion. It is as though the Government were thinking of all the stumbling blocks to agreeing to a grant. It is not a principle to which I object, but it is not a principle which can be over-stated in the Bill. The Clause has already adequately covered the matter. That is done in subsection (2): In recommending the terms and conditions on which a loan or grant under this section should be made, the advisory committee shall act in accordance with general directions given to them by the Board with the consent of the Treasury. Can anyone imagine the Treasury giving its consent to any direction which told the advisory committee to ignore any question whether or not an undertaking would ever be able to be self-supporting?

We could well do without these words. They tend to frighten people away from applying for a grant. I hope the Minister of State will be prepared to be a little more flexible than hitherto. Ministers have been very unhelpful on Amendments. Ministers who do not accept Amendments are not necessarily wise ones. Usually they are rather frightened, and it usually means they just do not know their own Bill and are terrified in case they do something wrong, and so they are too terrified to give way. I thought that the Minister of State would have been stronger and would have accepted a number of Amendments in the spirit in which they were tendered, or at least would have been prepared to have a further look at them. We all want the best Bill possible. We want a Bill which will not only do the work, but will be one which will not tend to frighten away undertakings and companies which probably may be thinking of applying for grant.

Then the first thing they read is that the Board in making a loan or grant has to specify up to the hilt that the undertaking will ultimately be able to carry on without further assistance. I like the word "ultimately". It is a good word in the provision—very good. the undertaking ultimately being able to be carried on successfully without further assistance… If we have "ultimately", we do not need "without further". What is meant is "ultimately without assistance under this section". "Further" adds confusion to the subsection. It is a bad one from the viewpoint of legal jargon. It is quite unnecessary. It could be covered adequately by the general directions, in view particularly of the fact that the Treasury will be at the elbow of the President of the Board of Trade when he is making the general directions.

Mr. Erroll

The hon. Member for Kilmarnock (Mr. Ross) reads the Bill closely. Therefore, I paid particular attention to his remarks. On this occasion, however, I do not think he has appreciated the distinction between subsection (1, b) and subsection (2). Subsection (2) refers to terms and conditions on which a loan or grant under the Clause shall be made. These are the financial terms, such as rates of interest, the period of the loan, whether, perhaps, one or two years should be allowed interest free and such like conditions. It is hardly necessary for us to say so, because this was the practice in the 1945 and 1958 Acts.

In what I am about to say in insisting on the retention of the words which the hon. Member proposes to delete, I am reinforced by pointing out that subsection (1, b) appeared in the 1945 Act in almost precisely similar terms and has been operated satisfactorily in the 1958 Act, also. It is very satisfactory from the viewpoint of the people in the employment locality. We want to get into the areas enterprises which will be ultimately successful. We do not want to induce dud concerns to go there. We want good firms to go.

Therefore, it is necessary to write into the Bill that we shall provide loans or grants only to those enterpises which will, in the words of the Bill, ultimately be able to be carried on successfully". It is in the interest of the workpeople themselves that they should get their jobs with good, and not doubtful or "dud", concerns. It is also right from the taxpayer's point of view to make sure that his money is put into enterprises which ultimately will be commercially successful.

It is, therefore, important to retain subsection (1, b). It is not redundant, as the hon. Member for Kilmarnock suggested. It could not be covered by subsection (2) in the general terms and conditions, which relate mainly to financial and other terms and conditions. I hope, therefore, that the Committee will be content to let the Amendment disappear.

Mr. Willis

I do not altogether accept the hon. Gentleman's argument. Whilst the terms of subsection (1, b) might have been in the 1945 Act, it does not follow that they should be in the Bill, unless it is a good subsection in itself. That is the real test. The hon. Gentleman said that this provision had worked well up to the present. That just is not true, because we still have unemployment in these areas. Therefore, we have to think out new ideas.

The underlying assumption is that the Government will assist only industries that become profitable. The subsection is vaguely worded. It says that there must be good prospects of the undertaking ultimately becoming profitable. Whilst that might be true in a great number of cases and it might be an excellent criterion to accept, surely there must be cases in which it is not altogether true.

3.15 a.m.

There must be cases in which it would be advantageous for the men in the district about whom the right hon. Gentleman is concerned, for the district itself, and for the nation as a whole, from the point of view of national finance, if a marginal industry were subsidised to a small extent. There is nothing revolutionary in this principle. We subsidise fishing and agriculture and all sorts of things because it is in the national interest to do so.

Suppose that we go to some remote area of Scotland and we ask ourselves whether it is desirable that we should establish an industry there to prevent the area becoming desolate. The answer might well be, "Yes, in the overwhelming national interest it is desirable that we should maintain a population in this area." It might also be true to say that we could not do that unless we subsidised an industry to a small extent. If it is a marginal proposition we cannot ever say that it will ultimately be profitable in the accepted sense of the term. It may lose and carry on losing a small amount year after year, but it is saving a district and is providing men with jobs and saving the payment of unemployment benefit and National Assistance, and the loss might be less than the amount paid out under those heads.

In these circumstances surely it would be quite in order to say that that we do not think that it need be exactly profitable. I can think of areas round the West Coast and elsewhere in Scotland where this might well apply, such as in the constituency of my hon. Friend the Member for the Western Isles (Mr. Malcolm MacMillan). In those circumstances, there should be no argument against what is virtually a small subsidy. If it is right to do this with other industries, there cannot be any objection to doing it for the important purpose of providing men with work and a wage. I can see no objection to it and I should have thought that the Board of Trade might have considered that to be an acceptable proposition.

The phrasing of the subsection is so general that it is difficult to make up one's mind about it. The right hon. Gentleman did not so interpret it, but it could be interpreted as I have suggested, because it speaks of good prospects "ultimately." Does that mean the year 2,000 or 3,000? "Ultimately" means the end. Surely that is not what this provision means—the end of time. What is the meaning of this word "ultimately"?

Mr. Manuel

We must have an answer to that.

Mr. Willis

When one says "ultimately this will happen" one means, "In the end this will happen." Of course, we ought to have an answer. I am sorry for the Minister if he has been brought up on Bradley and Caird, but we must have an answer. If the subsection must be strictly interpreted in the sense that in an appreciable time, say a year or two, the industry has to be paying its way, it is too tightly drawn. I do not want a general exception for every industry started, but I can visualise circumstances in which it might be dessirable to have greater flexibility than is now proposed.

It is for those reasons, as well as those already adduced, that we put down the Amendment. The hon. Gentleman has not replied to that. He has simply brushed our arguments aside and asked why we should assist something that has not proved to be successful. What does he mean when he says, "proved to be successful"? Was he using that expression in the context accepted by capitalism and private enterprise? An enterprise can be carried on successfully in a quite different context.

I remember Sir Stafford Cripps, many years ago, replying to a Conservative Member and saying that the test of a successful publicly-owned industry was quite different from that of the success of a privately-owned industry [Laughter.] Hon. Members opposite should not laugh so loudly. After all, there is hardly a private industry in the country which is not subsidised and no publicly-owned industry is subsidised. Industry has half of its rates paid for it, to start with.

It depends on the context within which the words are used. The arguments which we have put forward are very important for some districts, although they may not be so important in others.

Dr. Dickson Mabon

I was very sorry that my hon. Friend the Member for Edinburgh, East (Mr. Willis) spent so much time trying to teach the Philistines an appreciation of the society to come. The task was far too difficult and it would have been better if he had confined himself to the Government's arguments on this subject.

I want to make three points. First, the hon. Gentleman argued that we could not have dubious firms going into these areas and, in the last analysis, raising false hopes among the workpeople who would take jobs and then suddenly find themselves out of work on the folding up of the firm. That is a very far-fetched argument and a serious reflection on the capacity of the Government's advisory committee. It is also a reflection on our discussion on the composition of that committee, and perhaps we should have a local government representative to help the committee avoid that sort of situation. That is not a serious argument.

The appeal to Holy Writ was possibly valid and it captured the imagination of my right hon. Friend the Member for Battersea, North (Mr. Jay)—the Holy Writ of the 1945 Act. Naturally, one would immediately fall into line with that. When Conservatives quote us as the standard of good behaviour and good judgment in politics, I always think that that is one of the few of their appreciations of political conduct which I acknowledge. If I may do so without appearing to be heretical, I suggest that Holy Writ is not all that holy.

The Deputy-Chairman

Order. I can find nothing about Holy Writ in the Amendment.

Dr. Dickson Mabon

Ultimately, perhaps, you will appreciate, Sir William, that paragraph (1, b) is part of the Distribution of Industry Act, 1945, to which I was referring, possibly somewhat misleadingly, which was passed by the Coalition Government and operated by the Parliament and Government of 1945–50.

The Minister appeared to be saying that this was an argument for having it included in this Bill.

Miss Herbison

When my hon. Friend used the phrase "Holy Writ", surely he was using it as a metaphor. It does not seem to be wrong to do that.

Dr. Mabon

I am a good Presbyterian and I would never dream of referring to a "Holy Writ" except in inverted commas. I was using the phrase in a political and metaphorical sense. My minister would be rightly angry with me if I misused that phrase in any way.

If the Bill was passed and the Minister did not want to give a grant, he could use this in reverse. A good example of this is the Clyde Graving Dock. That dock was approved under the Distribution of Industry Act, 1958, by the advisory committee which will become the advisory committee under the Bill. What would happen if, later, the advisory committee was told that the Treasury did not want this passed? Would the project be counted out on the ground that the prospects for the future were not good?

The present Minister may not always be at the Board of Trade, and he may not always be able to interpret the Clause as he likes. The present Government might not be the Government of the day. We are not interested in the dramatis personae. We are interested in the Bill that is now before the Committee.

We ought to look at this in two ways. Not only in the way that the Minister has done, but in the way that we think one could turn down reasonable projects. The Minister was a party to the Clyde Graving Dock project, so no doubt he thought that that was a reasonable project, but it was possible to have turned it down on the basis that it was not certain of not needing further assistance, or that it did not have good prospects, or that it would not ultimately succeed. We know that it was in a way a tremendous industrial gamble. It is an act of confidence on the part of Scotland that such a thing has taken place but, nevertheless, the project could have been refused by a hostile Government.

That is our point. We would like the Minister to justify this. It is important to make the definition more precise and less open to a double interpretation. If the Minister would like to consider this further and raise it again on Report, we would be delighted to withdraw the Amendment.

Mr. Malcolm MacMillan

We seem to have lost sight of the word "ultimate", which, in my constituency, sometimes has a rather different meaning from what it has in some of the industrial areas where the tempo is much faster and is likely to continue that way.

The word "successful", as used by the Minister, seems to fly in the face of the meaning adopted by the Secretary of State for Scotland on Wednesday last week, and by the President of the Board of Trade in his introductory speech on the Second Reading of the Bill. The Secretary of State intervened and said that we should refer to the Government's White Paper on the Review of Highland Policy. he White Paper states:

The Government's Highland policy"— which is not reflected in the Bill— is in general terms to promote economic growth in the Highlands and to provide suitable amenities and social services so that viable communities with modern standards of living and opportunities for useful employment may be established and retained there. Then the right hon. Gentleman assured us that he had something like the same wide scope of development in mind. On 9th November, he said that the Government's main purpose was to mitigate, for social and human reasons, some of the industrial consequences of over-concentration and under-control in certain areas. Now we seem to be right down to the cash criterion. All these human and social values are thown overboard in the Government's rejection of each Amendment. The only test now is the hard cash test, with which the Tories are so familiar.

3.30 a.m.

The right hon. Gentleman should not consider it more discreditable to him, the Board of Trade and the Government to have tried and failed than not to have tried at all. That is what we are worried about. Never have many parts of Britain, not only in Scotland, but in England and Wales, felt so excluded. It seems that those areas will have the greatest difficulty in persuading the Government to allow the provisions of the Bill to operate for their benefit. Parliament would excuse the Minister for trying something and failing more than for failing to try to do something under the Bill for certain of these areas.

We have had notable and distinguished industrial failures in some of the areas which the Minister is frightened to in-clude. Lord Leverhulme once came to the Western Isles and made some mistakes in industrial development, but nobody would condemn any industrial enterprise because of one failure, even on the part of a gentleman so qualified to judge as he was. We expect a little experimentation, enterprise and risk to he undertaken, and we would not criticise the Government if they happened to fail. But why should they apply universally the same test of success to enterprises which are prepared to go into difficult areas as they do to those which go into the most favoured areas, with the best of existing basic services?

The right hon. Gentleman has already practically told us that many areas which might have got something under the l958 Act, had it been applied a little more generously, will have no prospect of getting anything under the Bill. This is not an expansive Measure. It is narrow, and it is being interpreted almost entirely on the cash criterion, even in areas where it is most important for us to apply the criterion outlined by the right hon. Gentleman when he said that the Government's main purpose was to mitigate, for social and human reasons, some of the industrial consequences of over-concentration.

We hope that this purely materialistic standard, reflected so eloquently by the Prime Minister and his colleagues—who have never had it so good—will not be the only criterion by which they judge whether they should develop industries in areas which, hitherto, have not had the good fortune to attract them. The purpose of the Bill should be to attract industry into these areas, not only for economic but for social and human reasons, and to try to develop what cannot be developed out of their own resources.

By decades of neglect and lack of industrial development we have failed to build up a rateable revenue in those areas for the purpose of development by local authorities, and self-help and the rest of it. And because of that they are to be neglected now. All the difficulties of geography and distance and the rest of it are to be used as arguments against their development. Unless the right hon. Gentleman is convinced, or the advisory committee is convinced, that an industrial undertaking is as likely to succeed in difficult areas as in easy areas, there will be no help. That is an extraordinary attitude and policy.

Never have I felt so excluded statutorily from any attempt to help my constituency as I have since listening to speeches from the Government Front Bench on this Bill. I am sure that people do not believe that the Bill will do any good whatever. What is worse, they do not believe it is intended to. Last Wednesday night, I heard the President of the Board of Trade, in response to our appeal, tell us that there is a limit to our national resources and that we cannot press industry to go into these areas because that would be forcing inefficiency upon them. I have heard hon. Members say tonight that unless the Government could see that industry was likely to succeed within a specified time—I had no doubt that that word would come, it has also been described as "ultimately," which is almost contradictory—they would not attempt to help the areas at all.

I hope that the Minister will not leave it at that. Last year, during the Committee stage debates on the Distribution of Industry Act, he was a lot more generous. I think that he intended to be and that his whole mode and approach was more elastic and generous than that as President of the Board of Trade during the last two or three days of this debate. Like ourselves, he has D.A.T.A.C. to deal with, and I do not think that that was the sort of policy annunciated by the President of the Board of Trade. When human and social values are to be considered we should not go to D.A.T.A.C. Indeed, my advice would be, "Do not go to D.A.T.A.C. at all if you can go anywhere else." What was the meaning of the declaration about the main purpose being to mitigate for social and human reasons some of the industrial consequences—and all the rest of it? What is the meaning of the White Paper which reviews Highland policy, to which we were told to refer as a test of the Government's intentions and the context in which the Bill had to be applied in the Highland areas? What is the meaning of it, if, at this stage, we come to the pure cash criterion with no allowance and no margin made for special difficulties and areas?

The Bill applies to my constituency more than anywhere else in Britain, so far as unemployment and the need for employment is concerned. There is no other area which has reached an unemployment figure of 39 per cent. It was singled out for that reason last year. Now it has been singled out not for help, but for exclusion. I hope that the right hon. Gentleman will go back to the generosity which was shown last April and forget the general application of the same criterion for success in the industrial areas and places on the fringe, and leave it for the Government to tell us that they are not going back from the 1958 Distribution of Industry Act and an effort to interpret that rather unsuccessful piece of legislation.

Mrs. Hart

I should like to raise not only the question of the words "ultimately" and "successfully", which my hon. Friends have raised, but also another question. I want to look at this matter from the point of view of hon. Members opposite and to consider their approach to it. Who is to determine which firms have good prospects and which have not? I assume that it is to be the advisory committee and the Board. How will they determine it? What will be the criteria which influence their decision? Will they look carefully at the balance sheets and the accounts of any firm which is seeking to go into an area? On what criteria will they base their judgment? That is, to me, a relevant point on which I should like an answer from the Minister.

Secondly, we have the word "ultimately", about which some of my hon. Friends have been anxious, and the word "successfully". The Minister has amplified in his speech what is meant by "successfully" as it is written in the subsection; he has said that it means "commercial success". He used the words "commercially successful". We have no doubt at all what we think of that interpretation of success in its application to areas of high unemployment, in which, above all, work is needed and in which there is very little concern, as indeed there is in the mining communities in my constituency, about the level of dividends which are paid to the shareholders of firms which may be induced to go into the areas.

I am sure that the Minister is anxious not to favour some of the bigger monopoly concerns of this country which have large capital resources, but we can imagine that a situation would arise in which there was competition between two firms to go into an area, or competition between a long-established firm in this country and a co-operative enterprise or a municipal enterprise. According to the subsection, it might well be that the firm would be chosen which had the largest capital resources behind it and which was able to convince the advisory committee and the Board that its possibilities of making high profits in the near future were greater than those of the co-operative or municipal enterprise, or even of a small private enterprise firm. It seems to me that the way is clearly left open for discrimination against the small firm or against any commercial or noncommercial organisation which is not one of the bigger concerns in the country with large resources behind it.

The test of high profits and high profitability is in itself a test of which we cannot approve. The Minister should consider carefully what he means by "commercially successful". For example, hon. Members opposite have supporters who take varying views on what constitutes commercial success. There are firms which believe that the greatest commercial success is achieved by paying the highest possible dividend to the share holders. That is one interpretation. Another interpretation is taken by firms which reserve a considerable part of their profits for capital investment and re-equipment, and which distribute a much smaller proportion of the profits in the form of dividends.

Which of these two definitions of commercial success are accepted on the opposite side of the Committee? Is a new, clear thought to be expressed to us by the Government on the definition of the commercial success of private enterprise? If so, it will be interesting to many of those firms whose share values will be quoted in the Financial Times tomorrow and to many supporters of the Conservative Party. Which of these two interpretations does the Minister take when he speaks of commercial success?

Mr. Manuel

He is not bothering.

Mrs. Hart

So it seems.

When I speak of our interpretation of the subsection I am speaking in human and social terms. I am speaking not of the level of dividends paid to the shareholders or the level of expenses paid to managing directors, but in terms of the employment provided for people who otherwise would have no work. I have in mind the very urgent need that is likely to arise to introduce enterprises into areas of high unemployment which are, by the very nature of the areas, unlikely to attract private enterprise. I hope that in my constituency we may find municipal or co-operative enterprises developing to serve the need there is for jobs there, but it is unlikely that municipal or co-operative enterprises will be commercially successful in the sense in which the Minister has interpreted the Clause. I therefore hope that he will give very careful consideration to this point.

It must be quite plain to the right hon. Gentleman that the logical criticisms of the words he has used are very strong and that, quite apart from those words, the spirit of the subsection is not giving any service to the communities whom the Bill is designed to protect, but, instead, is doing them a very great disservice.

3.45 a.m.

Mr. Erroll

I would like to comment on the very interesting points that have been put forward. It is interesting to note that all the speakers on this Amendment have been Scotsmen. Apparently, all the English Members are satisfied with the provisions of the Clause as it stands—

Mr. Peart

I do not want to prolong the discussion or be accused of fillibustering, but for the Minister to argue that this is a matter only affecting Scottish Members is going a little far. I agree wholeheartedly with my hon. Friends. I have made speeches on other Clauses, and I hope that the Minister will not tempt me to make another.

Mr. Erroll

No, a thousand times, no. As a matter of fact, when the hon. Member interrupted, I was about to say something nice. I will certainly withdraw any stricture, however unintentional it may have been.

I had intended to say that it was interesting to note that it was Scotsmen who drew attention to this matter, because Scotsmen are well known for their interest in getting value for money, and as Scottish chartered accountants, who scrutinise the activities of many private and public companies in England and Wales, and are close judges of whether or not a company is successful, find no fault with the wording, I am surprised to find hon. Members opposite querying Clause 4 (1, b).

This is the first occasion on which I have heard the hon. Lady the Member for Lanark (Mrs. Hart) speak and, even at this late hour, I found her speech most agreeable and interesting. Perhaps I may be permitted to deal with the points put forward by various hon. Members. The hon. Member for Kilmarnock (Mr. Ross) referred to the word "successfully," as did the hon. Lady. The wording in the Bill is not "commercially successful"—we say "successful"—but I am quite prepared to admit that I said "commercially successful" because that is what it obviously must mean.

When one is making money available to a person carrying on, or proposing to carry on an undertaking of the sort that we wish to attract, what is the definition of commercially successful? The hon. Lady made several suggestions. She said that it might mean high profits, or big retained dividends, or high profits retained for re-equipment, and so on. There is, however, another matter which must be looked at by the committee, and that is that the loan should be not only serviced, but repaid. It is public money that is being lent to a person or firm.

One of the criteria which must be kept in the mind of the advisory committee vetting individual applications is the prospects of the person or undertaking and their ability or chances of servicing and ultimately repaying the loan. We must have proper regard to that if we are not to find that we are disbursing public money in a loose or lax manner. That we have no intention of doing.

Quite apart from all that, I should have thought that all of us in this Committee would agree that it is successful enterprises that we want to see going to these areas, not enterprises which are likely to be unsuccessful. Surely no one wants unsuccessful ones to go there, ones which make losses instead of profits. Those which make losses can never be a success. We want enterprises which will be successful.

Mr. Willis

The fact is that, in vast areas of Scotland, private enterprise has proved conclusively—if the hon. Gentleman's arguments are correct, that that is the best way to run an industry—that one cannot conduct industry profitably in some places in the sense that the hon. Gentleman has just interpreted the word "profitably." In those circumstances, what answer do the Government offer?

Mr. Erroll

I shall not, on this Amendment, argue the respective merits of private or public enterprise. The Bill is designed, among other things, to induce private companies and persons to go to areas where they will be able to help in dealing with local unemployment.

Mr. Manuel rose—

Mr. Erroll

No, it is my turn now. I have listened a great deal, although I have been accused of not listening, and now it is my turn.

This is a Bill, and particularly Clause 4 of it, to help private enterprise. It is not designed to help other forms of enterprise. Therefore, we must properly apply those tests which are appropriate to private enterprise. That is why we retain subsection (1, b).

The hon. Member for Greenock (Dr. Dickson Mabon) suggested that, in talking about other unsuccessful enterprises, I was making a reflection on the advisory committee. Not at all. It is the duty if the advisory committee to examine each application, particularly from the standpoint of Clause 4 (1, b), and very carefully it has done its work, as I have had good reason to know from my time at the Treasury. The hon. Member for Greenock referred to the Clyde Graving Dock. That proposition passed all the tests required under the 1945–58 legislation. No exception was made in the case of the dock: it stands on the tests applied in the same way as to other propositions.

Dr. Dickson Mabon

Will the hon. Gentleman admit, in this argument, that it is quite possible for another Minister or, perhaps, another person in charge of the advisory committee, so to interpret the terms of that Clause as to treat them as a remit for actually coming down against such a scheme as the Clyde Graving Dock, because of its long-term nature and the risk involved? This could be interpreted by—to put it as high as that—a malevolent Minister against the interests of the very people whom we are trying to protect. That is our argument.

Mr. Erroll

The short answer is that it is our Bill, and we should not be trying to get it through the House of Commons if we did not intend to implement it. We are quite confident that we shall operate it successfully.

The hon. Member for Kilmarnock (Mr. Ross) asked what we meant by "ultimately." In one context, I did hope that "ultimately" meant half-past three this morning, but it looks like meaning four o'clock. For the purpose of the particular firm, "ultimately" means that, in the end, it will pay off well, and in the terms of the Clause, that will be, generally speaking, within the currency of the period of the loan, which will be determined under Clause 4 (2). The length of time will depend on the length of the loan concerned.

The hon. Member for the Western Isles (Mr. Malcolm MacMillan), whose speech was as interesting as his remarks always are, referred to particular difficulties in his constituency. The great merit of this Clause is that it particularly helps existing enterprises in the Western Isles to expand. In the 1958 Act we were able to help a number of small enterprises there which were already established, and this will enable us to continue that in the future.

Mr. Malcolm MacMillan

Would the Minister tell me exactly what enterprises in the Western Isles have had assistance, or can be assisted? Would he give me the list? He mentioned existing enterprises. Which are they? Which are being assisted and which enterprises does he intend to assist?

Mr. Erroll

If it will help the Committee to reach a conclusion. Under the summary headings of Highlands and Islands we have had 74 firm applications of which 28 have been approved. The estimated number of new jobs created is over 500—a large number in the Islands. But as the Committee will remember from the debate in which I joined on Scottish industry, it is not the practice to reveal individual applications.

Mr. Malcolm MacMillan

The Minister based his reply on the point that existing industries in the Western Isles are being assisted by provisions similar to those in the Bill. That is not correct. I want to know which they are and how many. It is no use the Minister consulting the Scottish Office It cannot tell him.

Mr. Erroll

I can tell the hon. Gentleman. In his constituency the number is eight.

Mr. Malcolm MacMillan

They have not all been agreed. In total the amount of employment given by them, I should imagine, is not more than 20 or 25.

I do not want to get into trouble with the Chair, but I challenge the accuracy of the Minister's answer. I ask him to specify the firms helped under the provisions of the Act, under D.A.T.A.C., and so on. In fact, the Highlands and Islands received a grant of £7,500 last year, but no other part had received a grant at all outside that figure. Under the Act £89,000 had been given in the form of loans. But not more than 20 extra people were employed, and the operation of the Act, which was to apply with particularly efficacy in that area, according to the Minister, has been a complete failure. What we are afraid of is that this Bill is even worse.

4.0 a.m.

Mr. Ross

I did not think, when I moved this Amendment, a long time ago, that we would have such an interesting discussion. I do not know whether hon. Members opposite realise it, but from the point of view of Scotland in general, and certain parts of Scotland in particular, this is a very important matter indeed.

I cannot express myself as entirely satisfied with the arguments of the Minister of State. I think that he was quite right in drawing my attention to my misinterpretation of subsection (2), but I did not let it pass without notice that he made no reference at all to my having put forward the fact that the provision that the Board of Trade, under Clause 1 (3), In determining whether and in what manner to exercise their powers under this Part of this Act for the benefit of any such locality…shall have regard (a) to the relationship between the expenditure involved and the employment likely to be provided exactly covers what is provided in this subsection.

I think that we ought to have time to consider the reply which was given by the Minister. He will probably want time to consider it. I do not think that he has satisfied even himself or the President of the Board of Trade that he has dealt adequately with "ultimately". If he comes to any conclusion at all it may be and ought to be that the word "ultimately" is quite unnecessary if he hopes for this success, of which there must be good prospects, to come within the period of the loan. It means he is leaving out altogether any question of any further assistance whatever. Anyone reading this paragraph, which provides that, ultimately, the company will be able to be carried on successfully without further assistance will see the implication that there may be more than one loan or grant.

The word "ultimately" is not needed. Including it is obscuring the intention of the Government. I hope that the Minister will read his own reply, and that he will read the arguments put forward. because I think that this is a matter to which we ought to return. Meanwhile. I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

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

Mr. Ross

I had an Amendment on the Notice Paper, as you will recollect, Sir Gordon, which has not been selected, and which dealt with the question—

The Chairman

As it has not been selected the hon. Member cannot deal with it.

Mr. Ross

I cannot deal with it, but I can deal with the whole Clause.

I would draw your attention, Sir Gordon, to the first three lines, which say that Where, in accordance with recommendations of the advisory committee, the Board are satisfied something happens "with the consent of the Treasury." I had the impression originally that the Bill was designed to streamline the whole proceedings of assistance to be given to Development Areas. Now we have three bodies and three people concerned. We have the President of the Board of Trade, the Board; we have the advisory committee; we have the Treasury. We shall get very speedy help under this kind of administration! Let us remember that the present advisory committee is under the Treasury. Now we have a new body pushed in. The President of the Board of Trade, the advisory committee and the Treasury are all to be consulted. Does the Minister really think that this will lead to speedy action?

If he can recollect the debate we had on the working of the procedure he will remember that it was thought sufficiently slow and that we had complicated investigation before we ever got anything. Even today he cannot give us very much additional information. Compared with July the figures do not show any great advance in consideration of requests under the D.A.T.A.C. scheme.

Does the Minister really think that it will be helped by having the Board of Trade, an advisory committee and the Treasury all involved in this before we get any action? That is quite apart from the other matters that we have been discussing. This whole procedure is clumsy. I am prepared to be persuaded, but my opinion is that we will not get the speedy action that we require in relation to the purposes of the Bill.

I wish that the Minister of State would be a little more careful when addressing himself to the Amendments, even though it is four o'clock in the morning. He said that in the Clause we were dealing with the business of helping private industry. With respect, we are not. If the hon. Gentleman knew his Bill, he would know what was covered. Subsection (1, a) states that it is expedient for the purposes of this Part of this Act", those purposes being defined in Clause 1 as providing…employment appropriate to the needs of the locality". We are providing employment for the people who need it. We have to do it in circumstances not only of high unemployment, but of imminent unemployment, in which, in many cases, we require to act quickly. How quickly does the hon. Gentleman think that this setup, with the Board of Trade, an advisory committee and the consent of the Treasury, will act, with all the obstacles and conditions to which attention must be paid?

This is a piece of Tory tinkering. It does not answer the demands and needs of Scotland. The Bill was drawn up before the President of the Board of Trade And the Minister of State saw it, but I hope that they will look at it during the coming Recess in the light of the needs and of the declared purpose of the Bill to provide employment. I do not think that the set-up of the Board of Trade, the advisory committee and the consent of the Treasury with the involvement of all these people, will give us the action we require, certainly not with the speed with which we require it.

Mr. Manuel

I want to put two points to the Minister. He was diffident about giving way earlier, so I must now try to get elucidation from him. I was concerned at his definite statement that the whole purpose of the Bill was to be secured by private enterprise industries carrying on to cure unemployment in the various difficult areas throughout the country. He was most definite that it was to be private enterprise.

I want a complete assurance from the Minister. Co-operative societies have gone into the difficult area of the Highland counties and are doing a very good job. If the Scottish Co-operative Wholesale Society wants to establish a factory there, it is not private enterprise and by the Minister's definition it would be excluded. I hope that he will make this clear.

Before we part with the Clause, I want to put again the problem which has been gallantly advocated by my hon. Friend the Member for the Western Isles (Mr. Malcolm MacMillan) without any encouragement. Hon. Members opposite should be supporting my hon. Friend in his advocacy that these Highland areas should keep their life and their employment by retaining their workers. I am quite certain that no one is now 100 per cent. for keeping the Highlands as mere sporting estates, with huge deer forests designed to keep the deer in and the people out. Hon. Members opposite know the Highlands as well as I do, and they know that large areas of the Highlands are today being held together only by hydro-electricity undertakings and afforestation. If these public enterprises were not holding the economy there would be complete depopulation. Many crofters are managing to keep their little uneconomic crofts going by means of the part-time work that they are able to do in afforestation and in connection with hydro-electric schemes.

If the Government are writing off the Highlands, they should tell us, otherwise they will raise false hopes in some quarters as a result of what has been said about the objectives of the Bill. The Government must face the fact that they simply will not be able to get industrialists to go into the Highlands under the conditions laid down in the Clause. They will not go there no matter what inducements are offered under the Bill. If the Government are sincere and intend to tackle unemployment whenever it rears its head in areas where there is a high rate of unemployment, then assessment of that rate must mean something in Highland areas very different from what it means in the South of Scotland.

The Government must direct attention to themselves deliberately sponsoring factories in these areas and securing work for them under their own control. Private enterprise will not be the solution in the Highland counties. The help presently given by public ownership in hydroelectricity and afforestation must be augmented and aid must be given to the fishing industry and other activities which my hon. Friend the Member for the Western Isles could indicate.

The Minister of State, Board of Trade, must clear up this point about private enterprise. If he does not, he will be writing off practically the whole of the Highland counties. I ask him to consider this point so that he may redeem the pledge which he and the President of the Board of Trade have given to the people of the Highlands, where depopulation is proceeding apace, that they will have some chance, under the Bill, to solve their unemployment problem and retain the population that is dwindling away year by year.

4.15 a.m.

Mr. Erroll

I should like to apologise for having unwittingly misled the Committee if, when discussing this part of the Bill, I referred to private enterprise. I did so because hon. Members referred to profits and whether they should he retained or distributed as being a possible criterion for success. I was thus thinking primarily of private enterprise firms taking advantage of Clause 4.

I was reinforced in that frame of mind by the fact that, so far as I know, almost all the applications, and certainly all the successful applications, under the 1958 Act have been from private enterprise firms. That does not mean that other forms of activity are in any way precluded. In fact, I had thought of cooperative organisations when I was speaking earlier.

By way of reinforcing my correction, I remind the Committee of Clause 16, which defines "undertaking" as meaning any trade or business, or any other activity providing employment". That will cover any public enterprise, co-operative organisation, or any other form of activity, but it is only fair to point out that the majority of applications under the 1958 Act have come from private enterprise firms. That would ensure that we were not tied when we came to a claim for the Highlands. If a scheme could pass the tests, it would qualify like any other, if that part of the Highlands were included in the list which is still to be made public

The hon. Member for Kilmarnock (Mr. Ross) spoke of delays, but I point out that the proposed arrangements represent an improvement on the present position, because the 1945 and subsequent Acts required the Treasury to operate the advisory committee, whereas the advisory committee is now to report to the Board of Trade, so that the operations will be streamlined. The words: with the consent of the Treasury refer to financial terms and conditions of the loans and grants. The proposed arrangements will thus represent an improvement on present practice.

Mr. Loughlin

Did I understand the hon. Gentleman to say that an area had been included in the list?

Mr. Erroll

I have not given any commitment about what would be in the list.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Mr. Jay

I beg to move, That the Chairman do report Progress and ask leave to sit again.

I move this Motion to ask the Government their intentions. The progress which we have made today has been rather like the progress made with unemployment in the constituencies of some of my hon. Friends—a good deal has been done on paper.

We have been partly delayed by the provocative speeches of the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke), who has now rather ignobly left us, but the delay has been mainly due to the fact that the President of the Board of Trade has refused to tell us those areas which are to be in the list. One after another, my hon. Friends have felt bound to put in a case for their areas. Nevertheless, we may now bring the discussion to a close so that we can continue it tomorrow at a more reasonable hour.

Mr. Maudling

It is a little difficult to report Progress at this sitting because not much has been made. I will not be tempted into following the right hon. Gentleman into the causes of the delay, but he will not be surprised when I say that I do not accept his analysis. However, I recognise that the hour is late and in the hope that we shall get more rapid progress tomorrow. as we should, I will advise the Committee to accept the Motion.

Question put and agreed to.

Committee report Progress; to sit again this day.