§ Motion made, and Question proposed, That this House do now adoum.—[Mr. Sharpies.]
§ 8.9 p.m.
§ Mr. Percy Browne (Torrington)
I am very pleased to have this opportunity to raise the case of Messrs. J. Leete and Company of Torrington. This is a firm which has been established for a number of years as specialists in precision-turned parts and gear hobbing. My interest in them arises from "Industry on the Move", and I should like to quote from the beginning of this pamphlet, which was issued when the Distribution of Industry Act, 1958, came into force. It says:The Treasury have been given power to make loans or grants for purposes likely to provide more work in places where a high rate of unemployment would otherwise be likely to continue.This is one of the firms which, having read the pamphlet, decided to move. It applied for a grant. It has been established since 1933, and it has been showing reasonable profits. For example, in 1955 it made £17,000 profit, and in 1956 £15,000.
Then, owing to fierce competition for labour with the motor industry in the Coventry area, its profits dropped to approximately £6,500 in 1957 and 1958. However, a comparison of its turnover figures between 1958 and 1959 shows that it was managing to compete with this difficulty. In September, 1958, it had a turnover of just over £9,000. In September, 1959, the turnover was £11,500.
However, in the autumn of 1959 the firm decided to give up the struggle of competing with the large motor industry for the available labour and move to new pastures. It approached the Board of Trade in Birmingham with a view to remaining in the Midland area, but it was persuaded that it would be advantageous, both to itself and to the place to which it went, if it moved to a D.A.T.A.C. area. So it was referred to the D.A.T.A. Committee by way of the Board of Trade in Bristol, and it decided to go to Bideford.
The officials at the Board of Trade in Bristol said that they considered that this was just the type of firm which 1184 would be eligible for help under the Distribution of Industry Act. They said that, as a general rule, the people who came to them for help were those who wished to start a new venture, rather on the lines of the competition which takes place on the television offering £5,000 for the person with the best idea. However, this was a unique occasion when an established firm wished to move lock, stock and barrel into a D.A.T.A.C. area.
The firm officially applied for a grant in October, 1959. It filled out a comprehensive D.A.T.A. Committee questionnaire at the beginning of November. I was told by the Board of Trade in that month that the project had its blessing and that a development certificate had been issued. There was a further letter to the firm in December asking for forward estimates of profit. Quite rightly, the firm put in conservative estimates as it had to train new labour in a completely new site. In December, I again saw my hon. Friend the Economic Secretary to the Treasury, who confirmed that the Treasury agreed in principle with the move, but that under the 1945 Act it was up to the D.A.T.A. Committee.
At this stage, I should like to thank both my hon. Friend the Parliamentary Secretary to the Board of Trade and my hon. Friend the Economic Secretary to the Treasury for the help which they have always given me whilst I have been pursuing this project.
From December until March, nothing was heard. Meanwhile, the firm had had to tell its workpeople that it was going to move, and gradually its business was winding down. When I went to see my hon. Friend the Parliamentary Secretary to the Board of Trade to make a plea on Bideford's behalf for inclusion in the new list just before it came out, I mentioned the firm of J. Leete and Co. and that this project was still in the pipeline. I asked that at least the firm's application should be looked at by the Committee before 31st March.
In the event, on about 9th or 10th March the application was looked at by the Committee, and turned down, but no reasons were given why it was turned down. The managing director lodged an appeal, but it was extremely difficult to lodge an appeal if he did not know upon what grounds his original application had been turned down. He also asked 1185 if he could go in person before the Committee, but he did not receive an answer to that request. The next thing he heard was that his appeal had been heard, and rejected. That is a chronological statement of what has happened so far.
I should like now to make a few observations. First, the firm moved into a D.A.T.A.C. area only because it was persuaded to do so by the Board of Trade. A firm will not be persuaded to move into a remote area unless it has some incentive to do so. No attempt was made by the D.A.T.A. Committee to value the plant and machinery belonging to the firm, which was of particular value. If one is to arrive at the true potential of any business, the first thing one should do is value its assets.
It would appear as if the firm's application was turned down because it failed to give a sufficiently happy picture for forward profits. I believe that the Committee said that it did not think that the firm would make a go of it in Bideford, in spite of the fact that it had been doing so in Coventry for a number of years, unless it had future help from the Treasury.
I want to quote a paragraph from the appeal which was made by the managing director:Surely the important question is not how much money a firm say they will make in the future but how much they have made in the past and how they have spent it. That is the only criterion that should count. Future promises come easily and we could have given you a high estimate as readily as a low one. Our past record … shows that we have never distributed profits but have ploughed it all back into the purchase of machinery. As a consequence we have one of the finest collections of precision automatic machinery in the country and we are asking for little more than the expenses consequent on moving it and re-installing it at Bideford.What the firm asked for were grants of just under £12,000. These were mainly to cover the physical expenses of moving, and the necessity for training unskilled labour in its new place of business. It would have defeated the object of the exercise if the firm had brought all its skilled labour down from Coventry, because part of the reason for it coming to Bideford was to alleviate the unemployment position there.
Here I wish to quote one more passage from the appeal. The managing director said: 1186No doubt we could borrow money elsewhere but we do not intend to ask for any loans, the time has gone for that. We ask for the Government grants that are offered to pay initial expenses to set up in business where unemployment exists.If the reason for the rejection of the application was the lowness of the firm's future profits, it was a doubtful premise, because in the last six years, with capital assets of approximately £115,000, the firm has had an annual turnover of just over £100,000 and a net annual profit of just over £10,000. I am no expert, but I am told by those who should know that these figures show a very reasonable and healthy business.
I turn to the consequences to the Bideford area of the refusal of this grant. We were a scheduled area from January, 1959, until the end of March, 1960, when we were taken off the list under the new Act. This was in spite of the fact that we had an overall decrease in unemployed of only three people between March, 1959, and March, 1960. This firm promised that, given grant aid, it would employ between 70 and 90 people in Bideford and district. It was particularly keen to take and train school leavers. I do not need to tell the House how important this aspect of employment is. In the area where I live, owing to its remoteness, there is no diversity of opportunity, and the more types of work there are available the more likely are we to keep our school leavers in their home district.
Every encouragement was given to the firm by the borough council of Bideford. It connected the main supplies and provided all the facilities, and it let the site at a low rent with an option to purchase at a later date. Now, as a result of the turning down of the application and the appeal for grant aid, this company is forced to consider selling much of its plant in Coventry and operating on a reduced scale. I believe that a golden opportunity to get rid, once and for all, of our chronic high level of unemployment, which stands now, at the last count in March, still at 4.1 per cent., has been lost.
It is a travesty of justice that an application can be turned down with no reason given. Although an appeal is allowed, the appellant has no way of knowing on what grounds he should appeal. It seems strange, also, under 1187 this scheme, that even though the Government give great encouragement to industries to move they are absolutely powerless to say whether industries should have help or not if they do move.
In this case, a project which set out to help to alleviate unemployment has foundered on the questionable accuracy of a forecast of profits. In answer to a Question fairly recently, my hon. Friend the Economic Secretary said that, of the 69 places in the South-West which had applied for help under the D.A.T.A.C. scheme, only 18 had been given aid. Yet it would appear that the large public companies can have help to go to places of high unemployment without much difficulty. The British Motor Corporation and Vauxhalls spring to mind. I have nothing against that if it helps to alleviate unemployment on Merseyside, but I hope that my hon. Friend will realise that, in proportion, a small firm coming to Bideford will alleviate as much unemployment as will a big firm going to Merseyside.
I am quite sure that my hon. Friend will say that every case must be judged on its merits, but I hope that I have been able to show that there is merit in this particular case. I ask him to look at it once again.
§ 8.23 p.m.
§ Mr. Cyril Bence (Dunbartonshire, East)
I was astounded to hear the hon. Member for Torrington (Mr. P. Browne) say in his opening remarks that he was grateful to his hon. Friends the Parliamentary Secretary to the Board of Trade and the Economic Secretary to the Treasury. I cannot understand what he is grateful for.
§ Mr. P. Browne
If the hon. Gentleman had listened, he would have heard me say that under the 1945 Act my hon. Friend has no power to make grants or loans. It is written into the Act that D.A.T.A.C. is the only body which can sanction those grants or loans. I was thanking my hon. Friend because he has, all the time, done his best to help me and to press that Committee to look at this case before the deadline. He has no statutory powers from Parliament to act on his own.
§ Mr. Bence
The hon. Member's point is that his hon. and right hon. Friends 1188 could not influence D.A.T.A.C. in getting a grant for Messrs. J. Leete & Co. of Coventry to move to Bideford. D.A.T.A.C. decided against the company. I understood from the hon. Gentleman that the firm made a gross profit —I presume it was a gross profit—of £10,000, and he rather suggested that D.A.T.A.C. had thought that that was rather small.
§ Mr. Browne
I was talking about the profit which it had been making in the past. I was suggesting that D.A.T.A.C. had made its decision on the estimated forward profit. On no occasion since 1945, whichever Government have been in power, has the Treasury overridden a decision made by D.A.T.A.C.
I have tried to suggest that the principle is wrong, that it should be possible for the Government to take into account the social problems involved in a move of this description and that decisions should not be based purely on business financial considerations. That is why I thought that, if I could bring this point up tonight, it might be possible, in the arrangements of the present Board of Trade Advisory Committee, as distinct from D.A.T.A.C, to alter the rules, as it were, in order to achieve that desirable end.
§ Mr. Bence
I quite agree with the hon. Gentleman. He has almost come to the point that I was about to make when I spoke about profits. If an undertaking, particularly one with small profits, is prepared to go to an area of unemployment where, in absorbing some of the unemployment, particularly among young people leaving school, it could do social good, I should think that it would be more to its credit that it was prepared to undertake such a move. The fact that its profits were small would add greatly to the merits of its case. I should have thought that D.A.T.A.C., in the interests of the country as a whole and in the interests of our young people, would have been more ready to make a grant on the basis of small profits rather than on the basis of, perhaps, some fabulous level of profits.
§ Mr. Thomas Fraser (Hamilton)
Does my hon. Friend appreciate that, of course, the final responsibility under the Act of Parliament lies with the Treasury? That is why D.A.T.A.C. is named as it 1189 is—the Development Area Treasury Advisory Committee. B.O.T.A.C. is the Board of Trade Advisory Committee. It is the Committee that advises the Minister, but the decision whether to give a grant or to make a loan is the decision of the Minister. There is no statutory bar to the Minister doing what he considers to be right.
§ Mr. Deputy-Speaker (Major Sir William Anstruther-Gray)
I think we had better go one at a time. Am I to understand that the hon. Member for Dunbartonshire, East (Mr. Bence) gives way to the Minister?
§ Mr. Barber
I am grateful to you, Mr. Deputy-Speaker, and to the hon. Gentleman. I wish only to make it quite clear —there is no point in beating about the bush—that what the hon. Member for Hamilton (Mr. T. Fraser) said a moment ago is quite wrong. The Treasury has no power whatever to make a grant unless advice is given to that effect by the Committee.
§ Mr. Edward Short (Newcastle-upon-Tyne, Central)
This matter may well have been in the hands of D.A.T.A.C. in the past, but surely it is now in the hands of the Government. By leaving Bideford off the list of areas under the new Act, the Government are saying that this firm cannot have any assistance. That is precisely what they have done on Tyneside with regard to the motor car industry. By leaving us off the list, they have prevented us getting the motor car industry on Tyneside.
§ Mr. Bence
I should like to try to develop the theme that I was trying to develop about grants to companies which are prepared to move from the Midlands to areas of heavy unemployment. Here we have a small company, with comparatively small capital for an engineering firm, which is turned down, although it is prepared to go to an area of heavy unemployment.
It seems that it is much less difficult for very large concerns to get money. Through my industrial training, I am used to the large integrated engineering plant. I am used to the big company. 1190 I have never been the supporter of the little man in the past, but I am shocked, after eight years of Conservative Government, that it is becoming increasingly the case that the little man does not get the deal that the big man gets. This is a shock to me. I have always thought that, basically, the Tory Party thinks first of the little man.
We are indebted to the hon. Member for Torrington for raising this matter. We are here concerned with a small firm. We have heard much propaganda over the years to the effect that the great power and prestige of this country has been built by small independent companies and small family businesses. This is not the first case of its kind that we have had. There have been many cases in which small firms have not had the support of the Treasury or of D.A.T.A.C. I wonder whether they will get the support of B.O.T.A.C. Will small engineering enterprises be able to get the support that some of the big companies receive?
We in Scotland will be concerned with this problem. What happens between the Midlands and Bideford may well happen between the Midlands and Scotland and the Midlands and the North-East Coast. One of the things that we in Scotland need is a larger number of small production units with diversified products for the future.
§ Mr. Bence
With a future, and for the future. We need small engineering companies which produce consumer durables of all kinds, so that we do not have to be dependent on the huge heavy industrial plants that dominate the industrial scene in Scotland.
When we in Scotland see small firms turned down and when we know that millions of £s are being poured into some of the large-scale enterprises, in the knowledge that we want some of these small feeder or small engineering units in Scotland, we naturally fear that we may be treated in the same way as the people of Bideford.
§ Mr. Bence
I do not want to be dogmatic in the matter. We shall see what happens in future, but the Scottish intuition of my hon. Friend the Member 1191 for Coatbridge and Airdrie (Mr. Dempsey) tells him emphatically that there is no hope for Scotland if this is the treatment that the great Conservative Party is to give to places like Bideford.
Bideford is symbolic of everything that is adventurous and courageous in English spirit. This is a company which wants to go to Bideford from Coventry, but it has been turned down flat.
§ Mr. P. Browne
Can the hon. Member put his hand on his heart and say that he had ever heard of Bideford before tonight?
§ Mr. Bence
Really! I come from South Wales. Anyone who has spent his life in industrial South Wales and who has to work 50 weeks of the year in the frightful mess that the industrialists have made of South Wales would walk to Bideford to get out of that mess. We would go on the steamers across the Channel to Minehead from Cardiff. It is a treat to go to Clovelly, Bideford, Ilfracombe and Watersmeet.
§ Mr. Browne
I should like to apologise to the hon. Member. I am delighted by what he has said. I hope that he will go on to mention some other names because summer is coming and the holiday trade would welcome it.
§ Mr. Bence
I hope to go to Bideford this summer. I do not want to tender advice to the hon. Gentleman, but if he wants to attract industry to Bideford I beg him to keep a sharp look-out and to ensure that the industrialists do not make the mess of Bideford that they made of some of our lovely valleys in South Wales. The trend must be watched, because places will be ruined if those people have their own way, as they did in the past. I now live in Scotland and they have made an awful mess of some of the places there.
I hope that we can have assurances tonight that the new Committee advising the Board of Trade and the Minister will appreciate that in the problems, not only in Bideford but in Scotland, something much more is involved than the profitability of the people engaged in the enterprises. This is a big social problem.
When I look at the papers down South and see the advertisements for skilled labour of all kinds, I know very well that few of the young men who are 1192 leaving school in Scotland, and, I dare say, in Bideford as well, and in Barn-staple and Ilfracombe, will have that type of industrial and engineering training that will fit them for some of the jobs that are advertised in the papers in the Midlands and the South.
Last week I had the pleasure of visiting what I should describe as one of the most up-to-date engineering factories in the Midlands. It is only nine years ago that I left industry. That is not a long time. I saw in the factory, however, mechanical processes that were completely revolutionary in comparison with what I was doing nine years ago—and I was in exactly the same type of plant. The changes are so great that is something is not done, and done quickly, in areas like Bideford, in Scotland and on the North-East Coast, we shall turn out young people in these areas who get no training to fit them for the new techniques that are being developed in British industry.
In a shipyard, a boy can be apprenticed as a shipwright or a marine engineer. He may be able to move a little bit beyond that, but he will not be able to move out into the new fields which are being opened up by new technology in the light engineering industry.
With the growth of mass production and mass assembly, there is no hope whatever of dispersing or creating new mass production or mass assembly plants unless there are established in the locality those units which are diversified within themselves or unless there are small units of a diverse character that can sub-contract and produce what we call the "hardware" of the assembled product. This is particularly true concerning the motor car.
Another important point in the redistribution of industry is that extraordinary things have happened in many of the industrial plants that have been developed in the last forty years in the Midlands. I remember the time when, in our factory, we produced only one product. That was thirty-one years ago. That one product was marketed all over the British Commonwealth. That same unit today is engaged in producing parts for typewriters, components for the International Harvester at Kilmarnock, moulds for the Marley Tile Company 1193 between Glasgow and Kirkintilloch, motor car body panels, washing machines, refrigerators and moulds for making nylon stockings. All this diversified production is being done at a motor car plant.
That tendency will increase. It will not become less. If it increases, it will be more and more difficult to establish and diversify over the country the various institutions for the production of consumer durables. Time, therefore, is not on our side. The longer we wait, the more hesitant we are in deciding to redistribute our industrial capacity over the country and, at the same time, to redistribute our population, thinning it out down South and increasing it up North, the more difficult will it be— indeed, it will become almost impossible —to do these things.
This is a social problem; it is not an economic one. These companies, like J. Leete & Co. of Coventry, are not associated together to solve social problems. They are associated to produce goods and services for sale on the market. This Government, and all modern Governments, say that they want to solve this social problem, and quite rightly. It is a social problem which has to be solved because we are creating two nations, one group prosperous and the other living on the edge of poverty. All Governments say that they want to solve this problem. If they want to solve it, they must finance private enterprise to solve it, because it is not the problem of private enterprise. It is the Government's job to solve it and the Government must find the finance to solve it. If Governments will not finance private enterprise to solve this social problem, they must step in and create the means of production and training. That is what it means in the ultimate.
We cannot just stand aside. We have 1,500 boys leaving school in Glasgow and no jobs for them. We have the phenomenon in Scotland that when five boys leave school and look for a job— no doubt there is the same sort of picture in Bideford—there is only one job. One boy gets a decent job that has a future in it and the other four—goodness knows what they will do—are unemployed. There is nothing worse in an affluent society than to have boys and girls of 15 years of age unemployed.
§ Mr. Bence
When we were unemployed in the 'thirties we were all unemployed together, so it was not so bad. To pitch young people out into an affluent society with no income and no job is a most dangerous thing in this society in which we live. Therefore, I believe that it is the Government's entire duty.
I think that the hon. Member has shown tonight that the Government have no interest in the small man. They are only interested in the big man. The hon. Member has done a service to the small industrialists in raising this matter. On every occasion when there is an opportunity to create training facilities for young men we should do everything in our power to see that those facilities are provided. I dread to think what the future may be if there is an inadequate number of institutions in any part of the country where some of our young people can be trained, because it will be increasingly difficult for them to earn a living.
My hon. Friends have no illusions about how difficult it is for Britain to earn a living in the modern world. We know very well that to earn a living for our people we must be careful to see that some people do not take too much out of that living. That is why we are on this side of the House, and that is why some day we shall be on the benches opposite.
People in this country are beginning to realise that we will be losing out unless more of our young people are trained in the skill and technology of modern production processes. I feel very grateful to the hon. Member for bringing up this case tonight because I feel sure that so long as this Government, or any other Government, are determined to measure what they will do only on the basis of profitability to the shareholders, whoever they may be, and not to consider the value of an enterprise as a means of exporting goods and services and of getting foreign currency with which to buy imports, as a means of employing young people and training them to use their skill, this problem, in my view, will be insoluble. Unless a new attitude is adopted on this subject we in Scotland will suffer very badly.
1195 There is a glaring case of this before us now. We have a shipbuilding industry in Scotland, and I do not want anybody to remind me that there is one in England. The industry in Scotland seems likely to enter very dark days in the near future. We have a Government which in the last twelve months have brought together the aircraft industry of the country in the Midlands and the South. I do not know whether there is any aircraft industry in Bideford.
§ Mr. Bence
Bideford is out of it, just as we are in Scotland. Rolls Royce, the Bristol Aeroplane Company, Handley Page and the rest have been told by the Government, "Now, boys, get together to develop supersonic aircraft and we will see that you get all the money you want." The chairman of Cunard sees this and immediately Cunard gets in and obtains a controlling interest in Eagle Airways, because if it controls that company it will get aeroplanes developed, evolved and constructed on Government money—and aeroplanes compete with the passenger liners.
We have no aircraft industry in Scotland, but we build ships, and now John Brown in my constituency will not merely be building ships but building them to compete with aircraft transport when the aircraft are subsidised, and there is no subsidy for ships. What effect will this have on Scotland?
The Government will find plenty of money to support the big fellows down South—this new monopoly. Hon. Members should not tell me that the two consortia would be competing elements. Not a bit. The only competition between them will be in getting the Government's ear first to secure the most money. People used to build boats in Bideford.
§ Mr. Bence
But the industry in Bideford declined because the State got control of the buccaneers, and when the buccaneers went out of business so did Bideford. The buccaneers of today are not going to sponsor that kind of buccaneering. The aircraft manufacturers are far better at the game than the Bideford buccaneers ever were.
§ Mr. Bence
The hon. Member should have supported me in saying that the Bideford boat building industry was in low water, and that most of the boats were being careened because the buccaneers were gone and were now in the Midlands. I hope that the hon. Member will not be too proud about the high level of boat building in Bideford, because that will not help him in dealing with his hon. and right hon. Friends who so far have not given him anything. That is the only cue they are waiting for.
I could speak much longer, but some of my hon. Friends feel as deeply about this question as I do. They will want to support the hon. Gentleman wholeheartedly because they have industries in their constituencies which are suffering far more than shipbuilding in Scotland or boat building in Bideford. They may have a far stronger case than mine, and I see no reason why they should not take this opportunity to make their case for their towns, where young people become dead end kids in a so-called civilised society. I hope that as a result of this Adjournment debate the Treasury will at least ensure that something is done for places like Bideford and also for Scotland.
§ 8.51 p.m.
§ Mr. James Scott-Hopkins (Cornwall, North)
I was interested to hear what was said by the hon. Gentleman the Member for Dunbartonshire, East (Mr. Bence) when he was talking about the problems of the small industrialist. I am delighted that he has been converted to the support of the smaller man in wanting to see private enterprise supported by the Government. That is a very good thing. I have always been in favour of the small man getting as many opportunities as possible.
There is perhaps one misconception in the mind of the hon. Gentleman about the training of young people in the West Country when they leave school. 1197 Undoubtedly they do not find opportunities locally, but it is not true to say that they cannot get work. Unfortunately, what happens to a great extent is that since there are many vacancies and opportunities elsewhere in the southern part of England, young men go there. One of our difficulties in the West Country is not the unemployment of our young people but the fact that they leave the West Country and, therefore, the true unemployment picture is concealed.
It is not up to me to try to follow the hon. Gentleman in his peregrinations around England. The case my hon. Friend the Member for Torrington (Mr. P. Browne) has brought forward tonight underlines two principles about which I am very worried. I, too, have had applications for D.A.T.A.C. help turned down. I, too, have firms in my constituency which have not been told why their applications have been turned down I support my hon. Friend when he says it is monstrous that when a Treasury committee turns down an application for public money there is no case stated to show why it has been turned down. I thought that one of the principles of British justice was that a man should be given a chance to reply to his critics.
One must assume that the reason the Treasury Committee turned down this application was that it thought the firm in question was not a viable prospect for the West Country. If that is so, surely that firm has the right to reply to the accusation of non-viability? That is only right and just. Presumably, this must apply as well to those cases in my constituency which have been turned down.
This brings me to the second point where I go a certain way along the road with the hon. Gentleman the Member for Dumbartonshire, East, namely, that this is also a social problem. The D.A.T.A.C. scheme was introduced for the social purpose of relieving unemployment by the use of public moneys. However, the hon. Gentleman must be careful not to let his imagination run away with him. I can imagine the difficulty that would arise if the Treasury recommended an outpouring of a great deal of public money to non-viable firms.
§ Mr. E. G. Willis (Edinburgh, East)
What about the tens of millions of pounds 1198 which have been poured away on Blue Streak, which is now to be stopped?
§ Mr. Scott-Hopkins
The hon. Gentleman knows that at the moment when Blue Streak was conceived its possibilities were vital to our national defence.
§ Mr. Willis
Does the hon. Gentleman know that when Blue Streak was conceived and proceeded with we also knew about Polaris, which seems to be replacing it?
§ Mr. Scott-Hopkins
The hon. Gentleman seems to think that Blue Streak might have been conceived and manufactured in the West Country, but it was not. I do not concede that when Blue Streak was on the drawing board it was out of date. It was vital for our national defence, and the millions of pounds devoted to it have been used well. As things have progressed and changed Blue Streak has faded slightly into the background and its future is not as bright as it might have been.
That does not get away from the principle that when public money is being used upon the recommendations of D.A.T.A.C. to the Treasury there must be a certain standard whereby it is known that the firms to which the money is to go are not likely to fold up within four or five years' time. Unless the Committee states its reasons for having turned down applications for help, it is impossible for the firms to argue why they think they are capable of becoming viable and, in a five-year period, of making a profit and not folding up.
I ask the Economic Secretary not only to look at the case I have mentioned, which is a glaring example of what has happened elsewhere in the country, but at the same time to instruct the new Committee, if he has that power—I am not sure whether he has or has not— that when it is considering applications it should have very much in mind the social problems, the need for new industries and firms to be established, and the need even for existing firms in unemployment areas to be expanded. The Committee should bear in mind what the social consequences are likely to be if the firms do not receive help. It must realise that although the unemployment figures in such areas may not rise startlingly there is a constant drain of young people away from the countryside 1199 into the urban areas, and no matter in what way one looks at that, it cannot be a good thing.
Consequently, I ask the Economic Secretary, when he looks into this matter, to be as sympathetic as he can and, if he finds it possible, to instruct the new D.A.T.A.C. not only to make known the reasons why it turns down applications but to remember the social reasons for providing employment in the areas concerned, reasons which will in the end surely tip the balance in areas like that represented by my hon. Friend the Member for Torrington and, in fact, the whole West Country, and also in Scotland
§ 8.59 p.m.
§ Mr. F. H. Hayman (Falmouth and Camborne)
I support what has been said by the hon. Members for Cornwall, North (Mr. Scott-Hopkins) and Torrington (Mr. P. Browne) about the need for small industries in places like their constituencies, which are adjacent along the Bristol Channel coast.
I feel that when we are considering the needs of places like Bideford and others in my constituency of Fahnouth and Camborne we have to consider what are the businesses, trades or industries of optimum size. They must be of a size related to the population, both men and women, of the district.
In considering Bideford one has to remember that Bideford and Barnstaple have been, as it were, small industrial units of North Devon for centuries. Ever since I have been in this House I have known and heard of unemployment difficulties, particularly in Bideford. We have had unemployment in North Cornwall in the recent past. I was particularly struck by the case of Bideford because I had not quite realised the amount of industry it had.
I appeal to the Economic Secretary to say that help will be given to industries that are prepared to go to places like Bideford and other towns in the West Country. I recall the closing last year, or the year before, of the Delabole slate quarries. It seems that one half of their employees—
§ Mr. Scott-Hopkins
When the Delabole slate quarries dismissed these people it 1200 was the only case in my constituency in which D.A.T.A.C. agreed to a new industry being established. One was established in 1958 in Delabole to take up the slack of unemployment. That is the sole case, as far as I know.
§ Mr. Hayman
I am glad to hear that, because I can recall the case of one man in Delabole who was 65. He had worked in the quarries since he was 14, and his father and grandfather had worked there before him. So many of the industries which arose in North Cornwall as a result of the war closed down one after the other. There is a duty on the part of any Government to see, whether or not the area is covered by some wider unit containing 4½ per cent. unemployment or more, that in places like Delabole and Bideford some kind of replacement work is provided when there is unemployment.
The hon. Member for Cornwall, North spoke of training facilities for young people. Something came to my knowledge a short time ago and I ought to speak out about it. The Cornwall Education Committee very adequately provides for the training of youngsters at the Cornwall Technical College. Girls in particular who pass the examination are admitted there to the commercial course. They then qualify, but when they come out there are no jobs for them. I have heard of cases where employers in offices have been offering 15s. to 25s. a week for young girls who have studied perhaps for a couple of years at the college, and are fully qualified. That sort of thing should not continue.
I suggest to the Economic Secretary that tomorrow his Department should place before him the Western Morning News, a Plymouth newspaper, of today. In it he will find a report of an emigrant ship registered in Genoa but engaged in the traffic of emigrants for Australia, which disembarked some passengers at Plymouth and then came to Falmouth for repairs. People intending to go on the return trip to Australia were unable to embark at Falmouth and had to go to Plymouth, because the Customs were unable to provide the necessary facilities at Falmouth, although those facilities had been provided in a somewhat similar case a short time before.
We have high unemployment in Falmouth and in the ship-repairing yard 1201 it is sometimes very high, indeed. If it is possible for passenger ships to be brought to Falmouth for repair, that should be done. The Economic Secretary may not be aware that there is a dry dock at Falmouth capable of dealing with ships of up to 80,000 tons. There would be some hope for Falmouth's future prosperity if vessels of that kind could be sent to Falmouth for repair and if the necessary Customs facilities could be provided when required.
I feel very strongly about this issue of unemployment, because West Cornwall suffered severely from unemployment during the inter-war years. Even now, the whole of my constituency is a D.A.T.A.C. or B.O.T.A.C. area, or whatever is the current term. I beg the hon. Gentleman seriously to consider the type of firm which can provide work anywhere. We do not want the big units. We want small units which are viable and which can provide employment for adults, including women, and enable youngsters to have proper training.
About three years ago, I visited an electric power station between Bideford and Barnstaple and I found that it was impossible to provide proper technical training for apprentices and other young people in the power station because there was almost no other industry in the area to keep up the numbers in the classes. For all those reasons, I hope that the Economic Secretary will study this issue sympathetically.
§ 9.7 p.m.
Mr. Charles Longhlin (Gloucestershire, West)
The debate is a little unreal, but even so it has served a useful purpose. I know that the hon. Member for Torrington (Mr. P. Browne) will feel that some of the points which he made in initiating the debate will have been stolen. However, no firm or area can be assisted with the transfer or expansion of factories or industries unless the area to which the factory is to be transferred, or in which it is to be expanded, is included in the scheduled list of development districts under the Local Employment Act.
No matter what the desire of the Economic Secretary and no matter how far we can convince him that additional consideration should be given in a certain case, it is not possible for him to give that consideration or assistance 1202 other than by persuading his right hon. Friend the President of the Board of Trade to put Bideford—in this case-on the list of development districts.
In initiating this debate, the hon. Gentleman has spotlighted one of the problems that face many areas which are similar to Bideford, and which, as far as I can see, have little chance of solving their employment problems, or the problem of the eventual emigration of their younger people.
In my area, in the Forest of Dean, I have a very serious pending unemployment problem. The closure of the three remaining pits in the area will produce an unemployment figure of 12 to 14 per cent. It will produce a figure at least 12.8 per cent. unemployment without taking into consideration the natural growth of our labour force.
At present, we have in the area one or two very small factories on the trading estates. They are in the early stages of their development. If they are to expand as they ought to and thus have some social value, they must receive from the Government the type of assistance which the hon. Gentleman has asked should be given to Bideford. But the factories in my area cannot get that assistance.
One firm—and it is the only firm in the country doing this—has introduced the moulding of what we now know to be chipboard, a combination of sawdust and resin which hitherto was pressed into long lengths. At present, it employs about thirty people. If it received assistance under the Local Employment Act, it would be able to expand within two years to employ 130 people and expand still further in the years ahead.
The expansion of that factory would be of enormous benefit to my constituency, but I know that it is no good going to the Economic Secretary or to the President of the Board of Trade and saying, "Here is a situation in which we feel that the social value is such that assistance ought to be given to this company". We just cannot get the President of the Board of Trade to include the Forest of Dean on the list.
§ Mr. Loughlin
The President of the Board of Trade will not include the Forest of Dean on the list of Development Areas. One of the reasons why we have been turned down is that there is still this concept that not only must unemployment be at a high level, or imminent, but that it must be persistent. Having listened to many of the debates, and taken part in the proceedings in Committee, on the Local Employment Bill, I thought that we had got away from the concept that unemployment had to be persistent if one had a situation in which it was reasonable to assume that within a reasonable period of time unemployment was inevitable.
I understand that even though one of the pits in my constituency is closing in September, which will produce a situation of 5½4 per cent. unemployment in the area, no assistance will be given to the Forest of Dean until such time as the President of the Board of Trade determines that unemployment is persistent there. I made further inquiries about this and asked the Parliamentary Secretary what constituted persistence in the context in which he had used the term. He said that ten months would be persistent unemployment. Not only can a small firm not be assisted even though there is social value in that firm receiving help, but when there is unemployment in an area, even if it is more than 4½6 per cent. and expected to be 5½4 per cent., there has to be persistency after that.
All the blandishments in the world— and it is alleged that I kissed the Blarney Stone years ago—would not move the Parliamentary Secretary from his attitude even though it is accepted that once the first pit closes the water situation in the Forest of Dean will make it necessary for other pits to close. In one pit we pump 111 tons of water for every ton of coal mined. The closure of the second pit would mean that two other pits would almost overnight produce the situation of 12½8 per cent. unemployment. Even then there is no attempt by the President of the Board of Trade to include the Forest of Dean in the development area list.
§ Mr. Hayman
Exactly the same happened a generation ago in Camborne. When one tin mine closed, it caused the flooding of the remainder of the tin mines.
§ Mr. Loughlin
I thank my hon. Friend for that information. What is the reason for the adamant attitude of the President of the Board of Trade? What is the reason for his refusal to give assistance to this firm? It is possible that the reason was the same as was given to me about the Forest of Dean. That was a reason which had been worked out before our deputation went to the Board of Trade. A map had been looked at and train schedules worked out to show that from Lydney to Llanwern, where the new strip mill is to be, was perhaps thirty-eight miles. It took forty-five minutes on the train and the Board of Trade said that was not too long a time for people to be travelling. In London people travelled forty or forty-five miles and thought nothing of it. In the city of Birmingham, they travel from one side of the city to another every day, and again they think nothing of it. There is validity up to a point in the argument about cities like London and Birmingham.
I would argue that in an age when the whole emphasis is towards decreasing the working week, when the normal technological development in industry is such as to ensure that there can be a shorter working week, there is no justification for adding travelling time to a working person's daily stint. The task of the Government is to bring the work to the people, but let us forget that argument for a moment. Perhaps the Economic Secretary to the Treasury will convey these remarks to the Minister, because if it applies to my constituency it may well apply equally to other constituencies which have been spot-lighted in this debate. If all the people lived in Lydney who were travelling to South Wales it would not be too bad, but when we have a multiplicity of small townships and villages stretching from three to eight, or nine or ten miles away from Lydney, where there is no modern bus service and where the buses do not begin until seven o'clock in the morning, and are perhaps hourly, because on circular routes it means that those men who are to be confronted with travelling forty-five minutes in the train to get to work will have to get up at five o'clock in the morning to walk from their homes to Lydney to enable them to catch the train.
§ Mr. A. C. Manuel (Central Ayrshire)
I am sure my hon. Friend would appreciate that the man who drove the train would have to get up two hours before that.
§ Mr. Loughlin
I am sure that my hon. Friend will also accept and appreciate that the train driver will come home after a shorter working day than those people who were travelling forty-five minutes in the morning and again in the evening, in addition to an ordinary working day.
In addition to spot-lighting the problem of my own constituency, what, above all, I have sought to do, and I hope that the Economic Secretary to the Treasury will be seized of this point, is to point out the dilemma which faces him in connection with this particular firm and its proposed transfer. It is that he has no power to assist in such a transfer at the present time. Irrespective of the circumstances, he has no power at all, nor has the President of the Board of Trade any power, under the terms of the Local Employment Act. This is the weakness of that Act, and it means that there are many areas and small communities which have one of two choices before them. Because their situation is not such that the persons representing them are able to persuade the President of the Board of Trade to include them in a list of development districts, they have one of two choices.
It means either that they cease to exist or that there is emigration from one part of the country to another. If the provisions of the Act allowed the President of the Board of Trade or the Government to say that, in addition to its existing provisions—perhaps it could be amended—it would be possible for an advisory committee to recommend assistance to be given in specific cases, either for areas or for firms, there would be a possibility of assisting the firm to which the hon. Member for Torrington referred and firms in areas to which other hon. Members have referred.
I do not want to convey the impression to the House that I have given up the ghost as regards the Forest of Dean being included in the list of development areas. I should tell the President of the Board of Trade that I have not started yet.
§ Mr. Loughlin
His hon. Friend might convey such an impression to him. I have not started yet. Unless he gives me some assurance the next time I see him, as I will shortly—I shall at any rate see his Parliamentary Secretary—I shall pester the House, at Question Time and every conceivable opportunity, to see that the Forest of Dean is given the justice it deserves.
§ 9.27 p.m.
§ Mr. William Ross (Kilmarnock)
The hon. Member for Torrington (Mr. P. Browne) must be very surprised indeed that what he thought would be a nice quiet probing little Adjournment debate has aroused such a considerable amount of interest among Opposition Members, even though it has not aroused any great interest amongst his own hon. Friends. There is a simple explanation for that. What has happened in the hon. Gentleman's constituency has happened in practically every other constituency which knows unemployment. Indeed, it is what we fear will happen, certainly in Scotland—
§ Mr. Ross
And the North of England, but I am sure that my hon. Friend the Member for Newcastle-upon-Tyne, Central (Mr. Short) will allow me to cite Scotland for a moment. In Scotland we have over 90,000 unemployed, and nearly 30,000 of them are not in listed localities.
Has it struck any of my hon. Friends, as it has struck me, that it is very strange that the person who is to answer this debate is the Economic Secretary? That is important from this point of view. It was agreed by the hon. Member for Torrington, and supported by every other speaker, that Bideford is not on the list published under the new Act. Not being on the list, it is not eligible for any help. What we are dealing with tonight is a piece of history. The Economic Secretary will correct me if I am wrong, but the administrative decision in this case was taken in March before the Local Employment Bill became an Act.
§ The Economic Secretary to the Treasury (Mr. Anthony Barber)
That is precisely the reason why I am here and 1207 not somebody from the Board of Trade. My hon. Friend the Member for Torrington (Mr. P. Browne) was kind enough to tell me, before he raised this subject on the Adjournment tonight, that it concerned the application of J. Leete and Co., through D.A.T.A.C. to the Treasury, which application was under the 1958 Act, for which the Treasury was responsible.
§ Mr. Barber
The hon. Gentleman is under a slight misunderstanding. It is obviously for my hon. Friend the Member for Torrington, having been granted the opportunity to raise a subject on the Adjournment, to decide what subject he wants to raise. He has raised a subject which I quite follow that the hon. Member for Kilmarnock (Mr. Ross) considers from his point of view to be merely a little piece of history, but it is a matter of importance to my hon. Friend.
§ Mr. Ross
It is very much more important even than the hon. Gentleman thinks. We have been arguing tonight that we cannot have any help unless we are on the list, but what we are really dealing with is that, even when we are on the list, we do not receive any help.
I do not underestimate the importance of the matter. Here was an area which was put on the D.A.T.A.C. list, I think the hon. Member for Torrington said, in October. Who was the Member for Torrington then? It was a member of the Liberal Party, I think. Where is the Liberal Party tonight? Has it lost its interest in Torrington? If we talk long enough, it might even put in an appearance.
We can understand the feelings of the hon. Member. No doubt, when he was fighting the General Election, he felt happy for his party because it was doing something and he could say to himself, "We are coming on the D.A.T.A.C. list and we shall get some help". Then, as soon as the election is over, he is faced with the awful business of coming here to support a Bill when he does not even 1208 know whether Torrington or any other part of the country will be on the list and, moreover, as soon as the Bill leaves the House, Bideford is taken off the list. We see the warning here. It may well be that, before one can have something, one must go on the list; but, once one is on the list, that is no guarantee of anything at all.
We have seen some ploys on the other side of the House related to some mystic thing called Government expenditure. The hon. Member for Kidderminster (Mr. Nabarro) and the noble Lord the Member for Dorset, South (Viscount Hinch-ingbrooke) and a few others of their grisly gang have been concerned about Government expenditure, not on the Army, the Navy or the Air Force—that is the sacred £1,600 million—but only on things related to what they call the spending Departments, the social services.
There was a leading article in The Times recently on this very subject. If I remember it aright, the final paragraph said that it was not only in the supply Departments but on steel and on unemployment and development areas that ruthless intervention was required to cut expenditure. I wonder whether this decision taken in the month of March was taken because the Chancellor has seen the red light and he thought that expenditure must be cut to satisfy the demands of Kidderminster or Dorset. It is a possibility.
We are concerned about this in Scotland, in the areas which are not listed as well as in the areas which are listed. The hon. Member for Torrington has told us about a company which was prepared to move into an area where the Government themselves had said that unemployment was so bad that the special benefits of D.A.T.A.C. cover under the 1958 Act should be applied. It is not right to suggest that this is all a matter for the discretion of the Committee. We understand from the hon. Member that it was only under the Distribution of Industry (Industrial Finance) Act, 1958, that Bideford came on the list.
The Act says quite clearly that it extends the powers of the Treasury to make grants or loans in respect of undertakings outwith the old development areas, and then it provides—this is the condition for grant or loan—if the Board "—1209 that is to say, the Board of Trade—are satisfied that the purpose for which the grant or loan is required is a purpose likely to reduce or contribute to the reduction of the rate of unemployment ".This Committee is nothing more than an advisory committee.
§ Mr. P. Browne
I have taken the trouble to discover the facts. On no occasion since 1945 has the Treasury gone against a decision made by this Committee. Section 4 of the Distribution of Industry Act, 1945, reads:The Treasury may, in accordance with recommendations of an advisory committee appointed by them, agree with any person carrying on, or proposing to carry on, in a development area an industrial undertaking …
§ Mr. Ross
That Committee is appointed by the Government. It works under terms of reference laid down by the Government. From that administrative point of view, the Treasury has power over it. If the Treasury is tough in its terms of reference, the Committee is tough.
Since 1945 up to last year, we have seen changes in emphasis and we have certainly seen changes from 1951 in the way that this Act has been administered. The whole matter depends entirely on the nature of the control that the Government are prepared to wield in the granting of industrial development certificates.
§ Mr. Douglas Marshall (Bodmin)
The hon. Member came into the House, I think, at the same time as I did, in 1945.
§ Mr. Marshall
Can the hon. Member give one instance since 1945 in which the Committee has turned down an application? There are many questions of this kind to which I should like to refer if I catch Mr. Speaker's eye. In no case has the Committee turned down 1210 a proposition and then later has the Treasury reversed the decision when appeal has been made to it.
§ Mr. Ross
The hon. Member must know that Ministers refuse to give information on individual cases. He knows that he is asking a question to which no one can give the answer. There are many cases in which we have managed to make the Committee change its mind through our intervention with Ministers, not on the Floor of the House but often in discussion with them.
The Government have established, more or less, an arbitrary Committee against which it is useless to appeal. Not only is the Committee's decision final but it is not prepared to give reasons why it has turned down any application. This is the matter on which we argued during the passage of the Local Employment Bill. First, we in the House of Commons handed over powers to the Board of Trade and then the Board of Trade handed them over to a Committee behind which it is prepared to shelter in relation to what it does and does not do.
There is considerable concern in this matter. I can appreciate the feelings of the hon. Member for Torrington. He has our sympathy. He was not here when I spoke about what his feelings must have been when he was fighting the last election in an area which was previously on the list and then, as soon as he comes here, an Act is put on the Statute Book to deny his constituency any possibility of assistance. This power behind the Treasury is terrifying, particularly in view of what the Chancellor said the other day. Already we see warning signs. The squeeze will come. How do we know that the terms of reference of the Committee have not been tightened so that what has happened in this instance may well be part of a new credit squeeze? It is happening not only at Torrington. My hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey) tells me it has happened also at Coatbridge.
That underlines the fact that this so-called new flexible instrument is not an instrument of any great flexibility in being able properly to help. According to the hon. Member for Torrington, from the time that the area was made a D.A.T.A.C. area—a special help area— 1211 until the time it was taken off the list, there was a reduction in unemployment of exactly three. Either the area should never have been put on the list or, having been put on, it should never have been taken off.
I represent an area where, last month, the unemployment figure was 7 per cent. with over 1,200 people unemployed. This month, the figure certainly has gone down to about 5.4 per cent., but there are still 1,000 people unemployed. Many of them have been unemployed, not for a week or for a month, but for over six months. We are faced with the same position for our school-leavers. They cannot sit waiting until they are put on the list and so they find work in the Midlands and down here in London.
I hope that the hon. Member for Torrington will continue to join us in these protestations about the administrative folly of the Government in the use of their powers for the areas for which they have them, and to demonstrate that the powers are inadequate in respect of areas which are left out but which certainly need help.
§ 9.42 p.m.
§ Mr. Douglas Marshall (Bodmin)
The hon. Member for Kilmarnock (Mr. Ross) will find, strangely enough, that I agree with the principle underlying his speech, although I do not agree with the details to which he has referred. The point I wish to put to my hon. Friend the Economic Secretary is one of substance. If the House will bear with me for a few moments, I should like to develop my reasons for making it.
One must remember that when D.A.T.A.C. first started the country's greatest difficulty was acute inflation. The Chancellor of the Exchequer of that time understood that, and although I as an hon. Member on the Opposition side did not agree with all the different things he did to try to combat it, there was no doubt that he understood the position which was developing. Consequently, tonight I make no charge against that former Chancellor of the Exchequer, who has now left this House, about the particular arrangement he made within what I call the pattern of D.A.T.A.C.
The pattern at that time was a quite simple one. It was to help different 1212 industries in different parts of the United Kingdom where there might well be difficulties and unemployment. But so that hon. Members and others could not continually go back to argue individual cases with the Committee that was set up, whatever the Committe decided— although an appeal could go back to the Committee—was the decision that was to be accepted.
When one is in the position that the country as a whole is suffering from acute inflation, which generally develops immediately after the cessation of a great war, it is understandable that that pattern should develop. What worries me, however, is what has developed more latterly. I do not have the knowledge to know whether what I am saying is correct, but it may well be that there are certain people who have given excellent service during that period who are still serving upon the same Committee, although it has now changed its name.
I suggest to the House and to the Economic Secretary, in particular, that it may well be possible that the approach and calibre of the men concerned to deal with the problem of need and necessity in certain places in the United Kingdom and relating it to an expansionist policy which is coupled with acute inflation may not be exactly the right pattern to develop when the country is in a quite different position, when inflation has been stopped, where the standard of living is far higher and yet at the same time there are certain parts within the United Kingdom where there is still suffering and pockets of unemployment.
Consequently we are left in this dilemma. We know that if certain cases arise—and I have had several cases of this description during the past few years —we can get quite an incredible position. We can get a position where one feels that one has put up a case, indeed a first-class case, and then come to the position that quite a small percentage of aid will enable that thing to develop and get through. I have seen such a case turned down. I had taken it to a Minister as a further approach. He could not influence the Committee. In the end, private enterprise was found and came in to help and made the enterprise a success.
I mention that one case to show that D.A.T.A.C. can be wrong, because 1213 D.A.T.A.C. did not turn it down with the idea or view that the money could be made available elsewhere. Therefore, I suggest to the Economic Secretary that I trust that the Chancellor of the Exchequer, together with the President of the Board of Trade, will have a look at this again, and at the composition of the actual committee to see whether or not a slight pattern of change should come about now when the position and pattern of economic life in the United Kingdom is quite divorced from the economic position of the country in 1945, due to the skill and ability of Conservative Chancellors of the Exchequer.
§ 9.48 p.m.
§ Mr. Edward Short (Newcastle-upon-Tyne, Central)
I am very grateful to have the opportunity to support the hon. Member for Torrington (Mr. P. Browne). I am sorry that the specific point he raised has been obscured a little in the debate, but it is a mixed blessing to get the Adjournment at 8.15, especially on a subject like this.
I intervene for the one reason only that the Leete case illustrates a point which I have made frequently in recent months in this House. It is that no real study has been made by anyone of the causes and solution of regional unemployment. For fifteen years we have had the D.A.T.A.C. procedure and in recent years, at any rate, it has, I believe, proved a clumsy and ineffective weapon because the position in the regions is worse now than it has been in twenty years, in spite of D.A.T.A.C. We are now going over to the B.O.T.A.C. procedure and, as far as I can see, the position will be a good deal worse.
The Government gave as one of their major election promises that if they were returned they would make the first Measure in the new Parliament a Bill to deal with regional unemployment, and we have this miserable, piddling Act which the hon. Lady the Member for Tynemouth (Dame Irene Ward) has described as a patchy Act. It is a spotted dog of an Act. The Government think they can cure regional unemployment as if it were a case of blots of ink and a blotting paper.
Fifteen years of D.A.T.A.C. have shown that this approach to regional unemployment is a fallacy. The development areas get a double kick in the 1214 pants in that they not only suffer from regional unemployment but every two or three years the Government stick on a credit squeeze procedure because of inflation in the Midlands and the South East, and the development areas then get it doubly in the neck. The Government's approach and economic policy are fundamentally wrong.
North-East England depends on three or four major industries and two of them, coal mining and shipbuilding and ship-repairing, are contracting industries. The coalmining industry is contracting very rapidly and none of us expects the shipbuilding and ship-repairing industry to get back to the immediate post-war level. We in the North East press for any industry on the horizon—the car industry, Cunard, and anything else that is going, but nobody has a clue about what is the best industry to bring into the North East, because no one has got down to the problem and studied it. No intelligent research is being done by the Government, or, as far as I know, by anybody, on this problem.
It is little wonder that cases like the Leete case come up and that D.A.T.A.C. slipped up. How can the new procedure under the Local Employment Act succeed? What criteria will B.O.T.A.C. use? The hon. Member for Bodmin (Mr. Marshall) mentioned this point. We hear a great deal today about viable industry. How does B.O.T.A.C. decide what will be a viable industry in Bideford, Newcastle or Weirside or wherever it may be?
I know quite well from experience in the North East that existing industrialists in an area very often do not want expansion. Leading industrialists in the North of England opposed the coming there of the car industry. Trade unionists, on the other hand, look at a new project from the point of view of the number of men who will be employed in it, and I am sorry to say look no further than that. The Government have no clue at all.
The chief characteristic of an area like the North-East of England is its economic interdependence, the dependence of one industry in the area on another in the area. There is the question of purchases and sales within the 1215 area and the effect that expanding industry A will have on industries B, C and D. That is the kind of thing which nobody investigates. I am quite sure that it was not investigated by D.A.T.A.C. and certainly it is not being investigated by B.O.T.A.C. The question of Government purchases has also not been investigated. I believe that a planned policy of Government purchases in regions would do a great deal, but that has never been tackled at all.
The word "viability" has been used in connection with the Leete company. What is meant by "viability"? What did D.A.T.A.C. mean by it? While this shilly-shallying approach to regional unemployment continues, the basic situation in regions of low employment and high unemployment is getting steadily worse. We hear about the migration of young people from the South West, but that is not peculiar to the South West. My hon. Friend the Member for Durham (Mr. Grey) obtained figures for the North-East of England which showed that no fewer than 60,000 people were lost to that region in the last eight years. It makes nonsense of all the social work carried out in housing, the building of schools and so on since the war if there is to be migration of that kind from one area to another. As far as I can see, until the Government get down to the problem of regional unemployment, and tackle it more intelligently, this will continue.
The only reason why I have intervened is to make a plea for a more intelligent approach to the problem of regional unemployment. Otherwise, we shall continue to have the phenomenon of depressed areas throughout the country in the midst of an otherwise prosperous community. That is a reproach to Britain, and I hope that the Government will ensure that it does not continue much longer.
§ 9.56 p.m.
§ Mr. Harry Randall (Gateshead, West)
The hon. Member for Torrington (Mr. P. Browne) has done a considerable service to the House in introducing this Adjournment debate. I am not sure that the Economic Secretary to the Treasury would agree; but it has afforded hon. Members on this side of the House an opportunity to direct attention to a number of areas which are 1216 getting very little assistance from the Local Employment Act.
I am interested to intervene because the Leete case is not an isolated one. There are a number in the country and I shall tell the House of a similar case in my own constituency of Gateshead. We were a development area. We have a Team Valley Trading Estate which made a considerable contribution to the solution of the unemployment problem between the wars and has developed considerably. One firm there started from nothing and developed to such an extent that it is going into the American market and earning dollars. The firm of Smith's Electric Vehicles was anxious to expand. It wanted 20,000 sq. ft. and asked for D.A.T.A.C. assistance. None was given.
§ Mr. Randall
Yes, and this firm pays above trade union rates. It is an excellent employer and encourages young men to go into the business. On the other hand, since Christmas there have been twenty-four boys in Gateshead who have not yet found work. There would have been an opportunity for them, and yet no D.A.T.A.C. assistance could be given to that firm. Now we are not included in the Schedule.
Taking into consideration all vacancies, the situation in Gateshead is that there are ten men chasing one job. Yet we cannot be considered under the Local Employment Act and this firm cannot be considered for D.A.T.A.C. assistance. The percentage of unemployment among men in my constituency is 4.3, and it is getting close to 4.5. In the last twelve months there has been an additional expenditure of £50,000 on unemployment pay in Gateshead but no objective assistance has been given to enable men to be employed. The Scottish and the Northern regions have more boys unemployed than any other region of the United Kingdom, and in ours there are three boys chasing one job. Those boys have listened to stories told by their fathers of the old days in that part of the country. Their fathers told them that this would never happen again, but it has happened. Yet no assistance is given by the Treasury under the D.A.T.A.C. scheme.
1217 The Leete case is not an isolated one. Dozens of them will be found throughout the country. This brings to light the wretchedness and hypocrisy of the Local Employment Act, and the sooner we get rid of it the better.
§ 9.59 p.m.
§ The Economic Secretary to the Treasury (Mr. Anthony Barber)
This has been a fascinating—
§ Mr. Malcolm MacMillan (Western Isles)
On a point of order, Mr. Speaker. Might I ask the hon. Gentleman whether he will want half-an-hour to reply to the debate. Does he want to cut out some discussion on a subject of the highest importance?
§ It being Ten o'clock, the Motion for the Adjournment of the House lapsed, without Question put.
§ Motion made, and Question proposed, That this House do now adjourn.— [Mr. Bryan.]
§ Mr. MacMillan
As a matter of courtesy to me, will the hon. Gentleman answer my question about whether he needs to take half-an-hour to reply to the debate?
§ Mr. Barber
I want to answer in the main the points put to me by my hon. Friend the Member for Torrington (Mr. P. Browne) about the case of which he gave me notice. I shall certainly speak at no great length, and if there is time when I have dealt with the points which my hon. Friend has put to me I shall be pleased to resume my seat before half-past ten and give the hon. Member for the Western Isles (Mr. Malcolm MacMillan) an opportunity to speak.
§ Mr. Malcolm MacMillan
Does the Economic Secretary propose to make a second speech replying to the further speeches which may be made?
§ Mr. Barber
I was about to say that to me this has been a fascinating and, to my hon. Friend also, I should imagine, a somewhat unexpected debate. Certainly, the speeches which we have heard from both sides of the House have ranged over a very wide area. I know that the hon. Members who have referred to specific cases, as in the case of J. Leete and Co., Ltd., will not expect me, as they have not given me notice of the cases—I realise that they could not have done so in the circumstances— to reply to them. As to the wider question, I will certainly draw the attention of my right hon. Friends the Chancellor of the Exchequer and the President of the Board of Trade to what has been said. I was particularly interested in this regard in what was said by my hon. Friend the Member for Bodmin (Mr. Marshall).
I must say that I was extremely surprised, to put it mildly, at the intervention of the hon. Member for Hamilton (Mr. T. Fraser). He intervened for only a few moments in the debate and made one statement which was 100 per cent. wrong.
§ Mr. Barber
Perhaps I may explain. What surprised me was that he seemed to say that, even if D.A.T.A.C. advised against making a grant or a loan, the Treasury had power, nevertheless, to make a grant or loan. I see the hon. Gentleman nodding his head in assent. What astonishes me is that this falls to be considered under the Distribution of Industry (Industrial Finance) Act, 1958, which extends Section 4 of the Distribution of Industry Act, 1945. The 1945 Act was in operation and applied to parts of Scotland at the time when the hon. Gentleman was a Minister, and I should have thought that he would have known the most important words of all in Section 4 (1):The Treasury may, in accordance with the recommendations of an advisory committee appointed by them, agree with any personand so on. In other words, the Treasury has power only to agree to a proposal if a recommendation to that effect is made by the Committee—
§ Mr. Fraser
This is where the hon. Gentleman has got the thing so much upside down. D.A.T.A.C. is something which has been invented, something which has been brought into popular use for convenience. Section 4 of the 1945 Act talks about the advice of "an advisory committee" appointed by the Treasury, and so does the 1958 Act. The Treasury can appoint half a dozen advisory committees if it likes in order to get the recommendations that it wants. Ministers of both parties have from time to time stood at the Dispatch Box and referred to the different economic con-conditions which existed at the time when they were deciding whether or not they could give grants at that time. These decisions have to be taken by the Minister of the day at the time, and I should have thought that the one Minister here tonight who should know that would be the Economic Secretary.
§ Mr. Barber
I would merely say that I took careful advice on this matter. I have also, as far as it is proper for me to do so, inquired into what happened in the time of the Labour Government. I can say unreservedly and without any qualification whatsoever to the hon. Gentleman, with great respect, that I have considered the matter on previous occasions and again this evening and I can assure him that unless the Committee which was set up under the Labour Government and re-established under the Conservative Government makes favourable recommendations there simply is no power to make a grant or loan.
Several hon. Members have touched upon the Local Employment Act. I realise that in the way things have developed tonight it was proper for them to do so, and it has been most interesting for me, but they will not expect me, as Economic Secretary, to reply to the points they have made, which are for my right hon. Friend the President of the Board of Trade who has taken over in this matter. As I have already undertaken to do, I will bring what has been said to his notice.
Before I come to deal with the case of the particular company to which my 1220 hon. Friend the Member for Torrington has drawn the attention of the House, I must pay some tribute to his pertinacity. I am very much aware of his concern about the problems created in Bideford by the wide variation from season to season of the prospects of employment there. Indeed, he has left me in no doubt whatever about this on the various occasions on which he has raised it with me.
I realise also that with these problems in mind he pressed strongly in February that Bideford should be classified as a development district and so have the benefit of the incentives which the new Local Employment Act provides in attracting new industry. My right hon. Friend the President of the Board of Trade was not able to agree to this.
I recognise that, because of this fact, greater importance was attached to the possibility of the then outstanding application by this company succeeding before the power of the Treasury to grant assistance lapsed with the coming into force of the new Act. My hon. Friend has been to see me at the Treasury about this company, and has spoken to me about it on a number of occasions. Certainly he could not have done more. I want to explain now exactly what happened to this application, and the extent to which the Treasury had power to grant assistance in cases of this kind.
The Act under which the application was made was the Distribution of Industry (Industrial Finance) Act, 1958. As the House knows, this Act was repealed when the Local Employment Act came into force on 1st April. It is for this reason that in much of what I have to say I must use the past tense, because that 1958 Act is no longer operative.
It provided that in certain circumstances the Treasury might give assistance for purposes likely to reduce local unemployment. These circumstances have been explained to the House previously on a number of occasions. Moreover, in order to ensure that all those potentially eligible to benefit from the Act were fully aware of the circumstances in which assistance might be given, extensive publicity was given to the provisions of the Act in the pamphlet "Industry on the Move" to which my hon. Friend referred. It was widely distributed by the Board of Trade at the beginning of last year.
1221 I do not want to take up the time of the House by rehearsing in detail the conditions on which assistance might be given, but it is necessary to recall certain basic facts in order to understand why the application by this company proved unsuccessful. In the first place, the Act was not mandatory. It is important to realise that the Treasury had no power to make loans or annual grants except on the recommendation of an Advisory Committee appointed by the Treasury for this purpose.
In the case of J. Leete and Co., the Advisory Committee did not make a favourable recommendation and it follows that the Treasury had no legal power to provide financial assistance. In each case that came before the Committee it was required, before recommending assistance, to be satisfied, among other things, that in spite of temporary inability to obtain capital elsewhere on reasonable terms, the undertaking concerned had good prospects of being ultimately successful.
Those conditions applied equally to recommendations in favour of the loans or annual grants. Each application was submitted to both detailed technical and financial investigations which were specifically designed to enable the Committee to decide before making its recommendation to the Treasury that the statutory requirements, about the ultimate viability in spite of temporary inability to obtain capital, were satisfied. The purpose of all this was to ensure that the expenditure of public money involved was in accordance with Parliament's intentions in passing the Act.
My hon. Friend referred to the time which was taken between the application made by the company and the date when the decision was notified to the company. The initial approach was made on 24th October last year and the Committee's decision against making a favourable recommendation was notified to the company on 9th March.
I have made inquiries about this and about other cases and I can assure my hon. Friend that this period for consideration does not compare unfavourably with the length of time taken in dealing with the other 526 firm and eligible applications which were handled by the Advisory Committee during the life of the Act.
§ Mr. Barber
The hon. Member says "shame" but, perhaps, because he has not had the advantage which I have had of making detailed inquiries about it, the hon. Member does not always appreciate the considerable amount of work which is involved in ensuring that an application is the sort of application which should be given favourable consideration.
§ Mr. Manuel
I appreciate that, but does not the hon. Gentleman think that the success which we expected and about which we are now being disillusioned was bound to be denied to us if we were to take five months to explore whether we could keep out a firm on evidence brought before us?
§ Mr. Barber
The hon. Member for Kilmarnock (Mr. Ross) says "A small case like this", but small cases sometimes involve points which have to be considered with great care, just as much as cases involving greater sums. Anyhow, the important thing is to ensure that any outlay of public money is justified, and I do not think that the time taken was unreasonable. Certainly it did not prejudice the company's application.
As I have tried to make clear, in every case, one of the most important parts which accounts for a somewhat lengthy consideration is taken up by detailed technical and financial investigations. My hon. Friend said that the company had heard nothing from the end of December until March. In fact, in that period there were a number of telephone conversations following the letter of 31st December. It is important to note—I hope that the House will be fair about this in fairness to the Committee who tried to do a good job of work—that there were visits by technical and financial officers during that period.
As the House knows, the Advisory Committee was completely independent. I do not want to weary the House with the details of the men who constituted the Committee, but it was composed of men with great experience in finance, industry and commerce. I am satisfied that the Committee exercised its functions with complete impartiality and 1223 without regard to the relative size of the individual undertakings.
Indeed, I am sorry that one hon. Member opposite made some play about the Conservatives always helping big industry and not small firms. I wish that he had been hare to hear me say that it was a feature of the working of the Act that, with few exceptions, the undertakings receiving assistance were the medium and smaller sized firms.
My hon. Friend referred in passing to the motor companies. I should like to touch on that again a little later in connection with a few words I want to say about the new Act as it affects the application.
The reference of applications to an independent Committee of this kind has obvious merits which were appreciated by the Labour Government in 1945 just as much as by ourselves. It has merits both from the point of view of those applying for assistance and for the Department which is the source of assistance.
From our experience of the part played by the Committee under the Act we were convinced that similar arrangements should be incorporated in the new Local Employment Act. My right hon. Friend the President of the Board of Trade was very glad that the chairman and members of the Treasury Advisory Committee were able to accept his invitation to serve on the new Board of Trade Committee. My right hon. Friend the Chancellor of the Exchequer for his part would, I know, pay his tribute to the ungrudging way in which the members of the Committee have made their services available. It is no light task for men who themselves are actively engaged in business, and they certainly have been extremely conscientious in the way they haev fulfilled their responsibilities under this Act, both during the Conservative Government since 1951, and from 1945 to 1951 when this Committee operated under a Labour Chancellor of the Exchequer.
Against this background of the reference of each application to the independent Advisory Committee and the need to meet certain statutory conditions, it will be seen that no individual applicant could be given an assurance at the outset of his application that assistance would be forthcoming. I want to make it clear that no such assurance 1224 was given to J. Leete & Co. when it consulted the Board of Trade about the possibility of a move to Bideford. Indeed, no more could have been said at that stage than to explain the circumstances in which such assistance might be available to an undertaking prepared to move to a place of high unemployment, and to indicate which places were classed as such.
I think that these circumstances are also pretty clearly brought out in the pamphlet "Industry on the Move" to which my hon. Friend referred, and which, so far as I know, was made available to this company. The company has no grounds for claiming that in going ahead with its plans for the move to Bideford it was merely acting in anticipation of receiving assistance already promised to it. To suppose that would be to assume that the Advisory Committee was no more than a rubber stamp.
As my hon. Friend knows—and it has been mentioned by hon. Gentlemen also in more general connections—there was no obligation on the Advisory Committee to make known its grounds for refusing to recommend assistance in any particular case. It follows that I cannot state specifically the reason why the application of this company failed to obtain a favourable recommendation.
It may be that the Committee did not consider that it could recommend to the Treasury that the requirements of the Act were met. Or it may be that, even if the statutory requirements of the Act were met, the company was not able to obtain the Committee's recommendation of a grant, and it is important to what I have to say in a moment to realise that the application was for a grant and not for a loan.
I thought that my hon. Friend said that no doubt the company could borrow the money elsewhere. I do not want to take him too literally on that, but if it were the fact that the company could obtain money elsewhere, it would not have fulfilled one of the conditions which was, and always had been since 1945, that capital could not be raised on reasonable terms elsewhere. In view of the careful examination which was made by the Committee of the company's affairs, I would have thought that this would have been brought out. Consequently, I do not take that too literally.
1225 The reasons why the Committee declined to give a favourable recommendation are matters of speculation. But, as explained, in "Industry on the Move" the normal form of assistance given by the Treasury was a loan, and annual grants were made only in rather special circumstances.
This morning I obtained some figures which are of significance in this regard, bearing in mind that this company asked for a grant. Of the amount of £9,102,595, which was the total of assistance offered under the 1958 Act, only £78,150 was in the form of annual grants. That is less than 1 per cent.
The fact that an undertaking was to be moved from one place to another of course did not automatically qualify it for annual grants. This point is very important in relation to this company. It was necessary to show that the expenses in respect of annual grants which were claimed were abnormal in the sense that they were the direct consequence of locating the undertaking in one particular place: that is to say, they were higher there than they would have been in setting up the undertaking elsewhere, and, moreover, they were such as to make the undertaking temporarily uneconomic. In the circumstances in which the move was undertaken by this company from Coventry to Bideford, I should doubt whether it could have made a case to the satisfaction of the Committee.
I have listened to what my hon. Friend had to say about the grievance which the company seemed to have that in its appeal against the decision of the Committee it was not given an opportunity of appealing personally in order to put its case. My hon. Friend the Member for Cornwall, North (Mr. Scott-Hopkins) made a similar point in relation to another case. I must say, quite frankly, that it has certainly not been the practice since 1958—I have had no reason to check the point, but I do not think it was before—for the Advisory Committee to hear representations from those applying for assistance. I can assure my hon. Friend, however, that where the Committee felt it would help to have a discussion with the applicant this was always arranged. It is important that that should be known. Certainly if the Committee felt that any fresh light could be thrown on the 1226 application by discussion with a representative of the company, it would not have hesitated to suggest this.
In order to avoid any misunderstanding about the scope of the new Local Employment Act and the effect of its operation in relation to this company, I must emphasise again that in discussing this particular application I have been speaking about things past—what an hon. Member opposite called a little bit of history—and about an Act which was repealed when the Local Employment Act came into force. The fundamental reason for the introduction by the Government of new legislation superseding the Distribution of Industry Acts was to secure wider powers in the hope of finding a permanent solution to problems of local unemployment. The new Act gives the Board of Trade power to build factories in the development districts for renting by a company setting up an undertaking there.
§ Mr. Barber
It also gives the Board of Trade power to make capital grants towards the difference between the current market value and the actual cost to a company which chooses to build its own factory. In addition, it enables the Board of Trade on the recommendation of an Advisory Committee—in this case the Board of Trade Advisory Committee—to give assistance in the form of loans or grants to undertakings which fulfil the purposes of the Act.
§ Mr. Barber
The hon. Member for Kilmarnock keeps saying this is not new, but I must inform him that some of the provisions are new—
§ Mr. Barber
—and conditions on which such assistance may be available are in some respects less stringent than they were under the 1958 Distribution of Industry Act, because it is not necessary for the company to show that it is unable for the time being to raise capital from commercial sources. It is under these powers that assistance may be made available in one form or another to some of the motor-car manufacturers to which my hon. Friend referred. They themselves have made public the fact 1227 that they are seeking assistance in connection with the location of the next stage of their expansion in production in certain development districts. As my hon. Friend the Parliamentary Secretary to the Board of Trade made clear the other day, there is at present no commitment on the part of the Board of Trade to give any assistance other than in strict accordance with the terms of the Local Employment Act, including, where necessary, a favourable recommendation by the Board of Trade Advisory Committee.
I have already explained that Bideford does not qualify as a development district under the new Act. The average percentage of unemployment in the early months of this year was in fact lower than that twelve months previously, when Bideford was added to the list of places for which assistance might be available under the 1958 Distribution of Industry Act.
§ Mr. P. Browne
May I make three points for the record? First, the unemployment percentage was exactly similar in January, 1959, as in January, 1960. Secondly, I did not say that the firm of J. Leete considered that the Board of Trade had given it a promise that it would get assistance, but that it had reason to believe that it probably would, because it was the sort of firm which would get assistance. Finally, on the question of appeal, I still cannot understand how any firm can appeal against the decision if it does not know upon what grounds the original application was refused.
§ Mr. Barber
Perhaps I may say to my hon. Friend that I have noted what he has said about the company, which I am sure the Board of Trade officials will also note. I am sure that I misunderstood what he said about the company. So far as unemployment is concerned, the figures I have here for the twelve months to January, 1959, show 4.3 per cent., and for the twelve months up to January, 1960, 3.4 per cent., and it is these periods which had to be considered in connection with the new Act.
However, there were certain other points which I wanted to make, particularly in connection with Bideford, but I have not got the time to do so. In regard to the points made by two of my 1228 hon. Friends on whether or not the reasons for the decisions of the Committee should be disclosed, I mention only one factor which I know is relevant, although it is only one. It is that there have been occasions—I am not suggesting that this applies to this company; I do not believe it to be that sort of company—when it is undoubtedly the fact that the Committee took a pretty poor view of the management, and, obviously, if this were made known it might cause certain embarrassment. I can assure my hon. Friend that the application of this company received the fullest consideration. I hope that, however disappointed hon. Members are that it did not qualify for a Government grant, it will prosper, and perhaps in due course be able to undertake the further expansion at Bideford which it originally planned.
My hon. Friend asked me at the beginning of his speech if I could reconsider the case. I hope that at any rate I have satisfied the House that neither the Treasury nor the Committee has power to do that, because in fact the Act is no longer in force. Some of the considerations which my hon. Friends and hon. Gentlemen opposite raised may well be relevant to the working of the new Act, and I therefore propose to draw the attention of my right hon. Friend the President of the Board of Trade to What has taken place during this debate. I said at the outset of this debate, which so far as I and I think most of us are concerned, was somewhat unexpected in view of the fact that it has ranged considerably wider than the case which was raised by my hon. Friend—
§ Mr. Hayman
I wish to correct something I said earlier in speaking in the debate, when I made a slip about Falmouth. The passengers were to land at Falmouth, where facilities were provided, but on this occasion they could not land at Falmouth and had to go to Plymouth.
§ Mr. Malcolm MacMillan
It would be discourteous of me if I did not rise to 1229 thank the hon. Gentleman for allowing me to get in, if only to say "Good night".
§ Mr. T. Fraser
It is absolutely disgraceful. I have sat here through the whole of this debate. The Minister knew that I had points I wished to make, and he has made sure that I was not able to make them.
§ The Question having been proposed at Ten o'clock and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
§ Adjourned at half-past Ten o'clock.