HC Deb 02 February 1960 vol 616 cc942-56

(1) Subject to the provisions of this section, the principal enactment and this part of this Act shall apply to offices as they apply to industrial buildings of the prescribed classes.

(2) In relation to offices references in the principal enactment and in section eighteen of this Act to the proper distribution of industry shall have effect as references to the proper distribution of undertakings.

(3) In relation to offices references in section twenty of this Act to industrial floor space shall have the effect as references to office floor space and for the reference to five thousand square feet there shall be substituted a reference to one thousand square feet.

(4) In this section "office" means a building used as an office for any purpose other than as a bank or post office and "office floor space" shall be construed accordingly.—[Mr. Jay.]

Brought up, and read the First time.

Mr. Jay

I beg to move, That the Clause be read a Second time.

Though the hour is moderately late, we are raising in this new Clause another very substantial point. The purpose of it is to ensure that the Government in future have as much control over office development in the congested areas which are already fully employed as they have already, through the industrial development certificates, over factory development. Anyone looking at the facts must agree that the office development now going on in London in particular is in danger of defeating some of the main objectives of distribution of industry policy. London, with certain parts of the Midlands, is the main target for the natural drift of industry and additional population today. This very week we have, indeed, witnessed the spectacle of London almost completely choked by traffic in the evening rush hour. This is, perhaps, another warning of what will happen to many of the public services, not merely transport in London, if this gross congestion is allowed to continue.

On Second Reading, I gave some figures, which the Government have not, I think, contested, to show the extent to which increased office employment in London is offsetting the attempts of the Government to restrain increased factory employment. For instance, the London County Council's figures show that, in the three years 1954–57, when factory employment was actually falling in Central London, total employment rose at the rate of 15,000 a year, that is to say, 45,000 in those three years. There can be little doubt that, if office employment continues at that rate in London, the principal congested area, the Government's efforts, such as they are, to restrain total growth of employment in London and the south-eastern region will be very largely defeated.

I think it probable that no Government since the war really foresaw the importance of office employment as compared with industrial employment in our national distribution of industry policy. The industrial development certificates were not applied by the original Acts in the same sense to office employment, and we are, therefore, now facing a situation in which factory development is entirely under the control of the Board of Trade because no new factory or factory extension of more than 5,000 square feet can be built without permission, while, at the same time, office development is not under the control of the Board of Trade at all but is under the control of local authorities through the town planning machinery.

Quite apart from the policy which the Government are or are not pursuing, and, indeed, quite apart from all party argument on this, I should have thought that there was a major issue here to be examined. Have we really our machinery right, and is it possible to maintain control of distribution of industry policy? The Government are able to refuse permission, quite rightly, to the Ford Motor Company to extend its factory employment in the London area, but they have not the same power or machinery to prevent someone putting up an office block to employ another 5,000 people, which, of course, has exactly the same effect on employment and congestion in the area.

The situation is quite anomalous. I do not think that any Government can claim fully to have understood or foreseen this situation, and I am not making a party point. The anomaly is even greater than at first sight appears because, unless I have misunderstood, there is this further curious situation.

If the Parliamentary Secretary refuses one of the motor companies an industrial development certificate to build a large new factory in the London or Midlands regions, no question arises of the Board of Trade or any other authority having to pay compensation because permission is refused, yet if the L.C.C., the relevant authority for this development, refuses permission for one of these property companies to erect an office to employ the same number of people, a large financial liability falls on the local authority for compensation as a result of that refusal. This is the situation as a result of various amendments of the Town and Country Planning Act, 1947, which the present Government and their predecessor introduced.

It is surely exceedingly anomalous that there should be no direct coordination of the policy decisions of public authorities as between industrial and office employment and that, on top of that, when a local authority tries to act in the matter of office employment as the Board of Trade would act for factory development it may be restrained by the very heavy compensation which it is expected to pay. I understand that this is quite a pertinent factor.

I ask the Parliamentary Secretary not merely to criticise the precise terms of the Amendment but to tell us—what is the substance of this matter—the Government's policy at present for restraining the growth of office employment, particularly in the London area, how they are using this machinery and what they propose to do. Is it their firm policy to try to apply the same restraint here as at the moment they appear to apply—though not very convincingly according to figures given to me at Question Time last week—in the matter of factory employment?

What is the Government's policy on office employment? Are their views co-ordinated, through the Ministry of Housing and Local Government, with those of the local authorities, and do they think that the present machinery is sufficient to get this matter properly into focus? I hope that the Parliamentary Secretary will tell us what the Government seek to do.

I should have thought that there was a possibility here of ensuring that some of these big new offices, perhaps in the case of the larger insurance companies, could be induced to develop not in London or the immediate outskirts but elsewhere. lf, as may be the case, many of them cannot be set up in the remoter areas, might not some of them be suitable for the coastal areas in the South and East where there is no heavy unemployment as in Scotland and Wales but where there is undoubtedly an unemployment problem?

The Labour Government successfully established a large part of the National Insurance Department in Newcastle. The Inland Revenue is largely in Cardiff and, judging by letters that reach me, the Surtax offices are now in Worthing or some such place on the South coast. This suggests that it is not impossible to disperse office employment as well as factory employment. I hope that the Parliamentary Secretary will tell us what Government policy is, what they mean to do, and whether they think that the present machinery is adequate.

11.15 p.m.

Mr. J. Rodgers

In essence, the right hon. Member for Battersea, North (Mr. Jay), in his new Clause, is asking us to extend the policy of industrial development certificates for industrial buildings of 5,000 square feet and upwards to offices of over 1,000 square feet. Part 1 of the Bill gives us power to assist industrial and non-industrial development in listed places. It is true that, complementary to the inducements to get people to move, we have I.D.C. powers to control industrial building, but we have not parallel powers in connection with offices. I have used the phrase before, and I apologise for using it again, but in the industrial sphere we have both a carrot and a stick. In the sphere of offices we have only a carrot; we have no stick for them at the Board of Trade.

I should, however, point out that the analogy between office and factory building cannot be pressed too far; and I will try to explain as we go along why that is so. First, offices are seldom "purpose built", whereas factories usually are. Secondly, there is a more rapid turnover in office accommodation than in factory buildings.

Mr. Jay

What does the hon. Gentleman mean by "purpose built"? Blocks of offices are surely built purposely as offices.

Mr. Rodgers

That may be, but most office blocks are not for one occupant. Because there is a fairly rapid turnover in the occupation of office buildings the situation arises where—and I know this from my own experience in business—from there being one user there come to be a number of users; the occupation can be split from, say, one into 20 users. Or there may be one office building with lots of small firms in it; and those firms are then bought by one large firm. It follows that if a firm is granted permission to erect an office building there is no assurance at present that it will not be for assignment to some other firm or firms. There is no control over the acquisition of existing premises, whether office or otherwise, and the section dealing with the change of use would have no relevance in this context. If a firm tied to London were forbidden to build its own office, it might not have to wait long before existing suitable premises became available in the London area.

But let us consider some other relevant matters. This is a difficult problem which worries us very much at the Board of Trade. The vast majority of firms are tied, for one reason or another, to the Metropolis; solicitors and accountants and financiers must be near the centre of London, as producers must be near their market. Sometimes an insurance company, for example, might be able to move further out, to, say, Dorking or Tunbridge Wells. Yet the usual places are within a travelling distance of 30 or 40 miles out so that a van can make the journey there and back in a day.

That is the pattern, usually, when we talk of dispersing these buildings. If we had the power which is suggested in the proposed new Clause we might be able to decant some buildings to the periphery of London, or even further afield; but that would not help to solve local unemployment in Scotland or North-East England, or Wales. The unlikelihood of steering many of these offices to those places must be borne in mind.

Mr. Jay

Yes, but there are the coastal areas in the South and East, and some of these office units could go there. If the Minister could meet their unemployment problems he would not have to steer them there.

Mr. Rodgers

We should be pleased if some of them would move to the East and South Coast resorts, but I do not think that that would be any justification for assuming the power to issue I.D.C.s for office buildings.

Mr. Mitchison

This is only a Clause giving powers. Would not the transfer of some offices to the new towns go a long way to solve their juvenile employment problems? Is not that exactly what Harlow, for instance, is trying to achieve?

Mr. Rodgers

I agree that this is desirable. I am trying to argue that it is difficult to achieve by the methods suggested in the proposed new Clause.

It should always be remembered that most office building is speculative, as I said earlier, and that the eventual occupants are not known when the building is erected. Should all office building be banned until the potential tenants are lined up, there could be chaos in the commercial life of the country. In any case, if we adopted that method we should have to get all the potential occupants lined up and then grant 20 or more I.D.C.s to the individual occupants before new offices could be constructed. The chances are that the eventual occupants would be people who were tied to London anyway, and occupying office space already in London which was not so convenient.

The offices which would be vacated in this way would be taken over by firms occupying even less suitable accommodation. If office building were prohibited and equivalent building permitted on the periphery some firms whose desire for better accommodation outweighed other considerations would go there. That would not help to solve the unemployment problems in Scotland and Wales and parts of England. The chance of moving such firms as far away as that would be remote.

Mr. J. Griffiths

Does the Board of Trade keep a watch on Government Departments in these days? Is the policy the same as was adopted in 1945, and Government offices and staffs moved out of London wherever possible? Many people said that it would be impossible to work the National Insurance office at Newcastle, but we did.

Mr. Rodgers

I congratulate the right hon. Gentleman on being one of the people behind that move. I was proposing to refer to Government offices as I develop my argument.

I know that there has been criticism in the Press and in Parliament about firms being allowed to build prestige offices in the centre of London, like the Shell building, and the premises of the Egg Marketing Board and A.E.I. But Shell, for example, already occupied offices scattered over London and its employees have merely been collected together under one roof. It makes for the more efficient operation of the company.

Mr. Jay

Surely the hon. Gentleman realises that, though that may be true of Shell, it increases the total amount of office employment in London, because someone else is occupying the vacated buildings.

Mr. Rodgers

I agree, and it may be argued that certain offices have been built in London which should not have been erected there. Speaking personally, I regret that the Egg Marketing Board felt it necessary to build a large office block in London. That could well have been situated somewhere else, in my opinion. But for the Board of Trade to control office building down to 1,000 square feet with the chance of picking up one or two steerable cases, such as the Egg Marketing Board, would be to create a heavy administrative burden for a hypothetical return, and such a move would be likely to damage the efficiency of British business with few compensating advantages.

Although offices do not require I.D.C.s, office building is not unrestricted. Planning permission is required and there are zones where office building is prescribed. Office building in Central London and other large cities has helped to create traffic congestion and to overload the transport system. It is true that more office buildings would add to this. But, essentially, it is a planning matter. To move offices from the centre of London to Kew, or further afield, may be good planning, but it is no good as a solution for local unemployment problems

Action has been and is being taken to restrain excessive office building in London. First, in areas allocated to office use in the development plans are restricted. Secondly, a policy of withholding consent to proposals to use residential buildings as offices even in areas allocated for office buildings is included in the development plans. Thirdly, as the right hon. Member said, nearly 40,000 of the headquarters staff of Government Departments are now located outside London and arrangements are being made for any further moves to be considered from the viewpoint of local employment before a decision is reached.

I can assure the right hon. Member and his hon. Friends that we are well aware of and worried about this problem. I assure him that ever since I have occupied my present post we have looked from time to time at the possibility of extending industrial development certificates to offices, but we have rejected that for two reasons. First, there were no grounds for thinking that such a system could be sensibly administered, and, secondly, to do so would be to risk harming the efficiency of the country's economic life. We must rely on persuasion and we believe that in the long run that will be the best way of getting offices to move into areas where they are needed. We have added inducements to try to persuade firms that it would be in their interests to go to areas of high unemployment.

For these reasons, I ask the right hon. Member to withdraw the proposed new Clause, or the Committee to reject it.

Mr. T. Fraser

Some of the things the Parliamentary Secretary has said have surprised me greatly. As he neared the end of his speech he made it abundantly clear that he regarded offices as making a bigger contribution to the economic life of the country than our production units in industry, yet he sought to infer that to interfere with the location of offices would be to interfere unnecessarily with our economic life. I should have thought that one interfered more with economic life if one took decisions not to allow great industrial development in certain areas and required industrialists who are producing the things by which the country lives to be squeezed into other parts. He said that cannot be done with offices because of the effect on our economic life.

The hon. Gentleman was very concerned that at that part of his speech he should not be thought of as speaking as the Parliamentary Secretary. but speaking personally. That was when he said that it was a bad thing that the Egg Marketing Board had put up a vast office block in London. What did he think as Parliamentary Secretary of the Board of Trade? Did he think it an equally bad thing? If so, why does he not take this new Clause and refuse permission to put up unnecessary and objectionable office blocks in London?

The Parliamentary Secretary will be aware that in a great many debates in recent years, when he and his hon. Friends have been quoting to me and my hon. and right hon. Friends the amount of factory building in London in relation to the rest of the country, we have replied by calling attention to the fact that, in addition to the jobs provided in factory buildings and industrial buildings he was permitting by I.D.C.s, we had a great increase in employment in shops and offices, particularly in offices, which seemed to be going on in London unchecked by the Government. We said that that employment had to be added to the employment provided in industrial buildings in order to get a fair comparison with the rest of the country. If we did that we found that London continued to be a great magnet for population from all over the country.

A lot has been said about the perimeter and fringe areas, but the further ones gets from London the more difficult it is to find employment. It seems that the Parliamentary Secretary accepts that in this great Metropolis we must have all, or virtually all, the office building. The Parliamentary Secretary congratulated my right hon. Friend the Member for Llanelly (Mr. J. Griffiths) on the part he played in moving the administrative headquarters of the Ministry of National Insurance up to Newcastle. He knows full well that twenty years ago hon. and right hon. Members who think as he does would not have believed it possible to take a great administrative machine away from the centre of London. In 1940, it was not believed possible to take a great administrative machine like the Ministry of National Insurance away from London and establish it elsewhere in the country.

11.30 p.m.

If a Government Department can do that—I wish that more of them would do it—I do not see why other people who must have big administrative offices cannot equally do it. The Parliamentary Secretary said that we could not push them further than 30 or 40 miles from the centre of London—a convenient run for a van. What has a van got to do with the matter? The aeroplane has been in existence for quite a long time now and we also have trains. It is just as quick to travel from Scotland by train. If goods are put on a train in Scotland at night they can be taken off in London the next morning. It does not take very much longer than if they have to be brought 40 miles to London by road transport and then are held up for a considerable time through traffic congestion before reaching their destination in the centre of London.

We are not concerned in the Bill just with planning considerations. The Parliamentary Secretary said that this was a planning consideration. We have not approached the subject as a planning matter at all. In putting forward this new Clause we are concerned with the better distribution of employment about the country. By accepting the Clause the Parliamentary Secretary would not be placing any obligation upon his right hon. Friend to refuse every application for permission to erect offices in Central London. Of course, there would be cases where it would be quite wrong to refuse such permission. But, on the other hand, there would also be cases—the hon. Gentleman himself mentioned one—where it would be right to refuse permission.

Once the Minister had this power his attention would be called to very many office blocks in London which ought never to have been put up in London at all. A great deal of the work that is being sucked into London from other parts of the country ought not to be here at all. The hon. Gentleman's Parliamentary Private Secretary probably represents more office blocks than any other hon. Member at present, built since he and his right hon. Friends took office in 1951. We take the view that this is unnecessary.

There are far too many unemployed in different parts of the country who only get a job when they take the advice of the local officer of the Ministry of Labour and buy a single ticket on the railway which enables them to be deposited at Euston, St. Pancras or King's Cross and to get a job in an office very nearby. It is not good for the country's economic life, and it is disastrous for its social life, that this kind of thing should go on.

It is for these reasons that we plead with the Minister and his colleagues to have another look at the matter. We all know that there is a diminishing proportion of the working population engaged in industrial processes and an increasing proportion engaged in office work, in administration. With all our improvements in industrial technique, this process will continue.

In rejecting the new Clause the Parliamentary Secretary is saying that he and his right hon. Friends will take no power to prevent this great Metropolis from growing bigger and bigger and from taking an ever-increasing share of the nation's population. In other parts of the Bill he is taking power, by repeating provisions in the Distribution of Industry Act, 1945, and other Acts, to spread the industrial population, but that is a diminishing share of the total population, and he is taking no power to distribute the increased proportion of the nation's working population. If he has set out to achieve a better distribution of employment in this country, then he is making a mistake in rejecting the new Clause. His right hon. Friend has given the impression in earlier discussions that he is setting out to bring about a better distribution of employment over the whole of Great Britain.

We all know that there are many office jobs which do not need to be in London but which could equally well be in other parts of the country, where there is a good deal of unemployment. A lot of employment is provided in the big insurance offices and other offices which might equally well be provided elsewhere. I could say that it might equally well be provided in Glasgow, but in the presence of some of my hon. Friends representing Glasgow I will say that it might preferably be provided not in Glasgow, but in East Kilbride, or the new town of Cumbernauld, for example. They are not far from airports. People could get to London in a short time, if need be.

In any case, the telephone has been in existence for a long time, and it is frequently used. The Joint Under-Secretary of State can get in touch with his Departments in Edinburgh at any hour of any day, and he does so regularly. His office does it every day of the week, for his staff are in regular contact with St. Andrew's House, Edinburgh. In the same way, the other offices which I have mentioned could keep in touch with headquarters in London with the greatest ease, and headquarters could keep in touch with the administrative offices in various parts of the country, such as the North-East of England, Wales, Cornwall, East Kilbride, Cumbernauld or Dundee.

I beg the Parliamentary Secretary to say that he will look at this matter again. If he is not willing to take this negative power in relation to employment provided in offices in London, he will cause many of us to believe that he is not in earnest when he says that the purpose of the Bill is to achieve a better distribution of employment.

Mr. J. Rodgers

I should very much like to see a great many offices steered out of London into unemployment areas, but I believe that the number of offices so steerable is relatively few. To set up an administrative scheme which gave the Board of Trade power to look into every single application to build an office of more than 1,000 square feet would be to involve a cost not commensurate with the results obtained. That is why I cannot hold out the hope, for which the hon. Member for Hamilton (Mr. Fraser) asked, that I would look into the matter again.

Mr. Jay

Is it not the case that under the planning powers, which are what validate the industrial planning certificates, it is already necessary to obtain permission to build offices? After his incredibly negative speech, will not the Parliamentary Secretary at least give us an assurance that it is the Government's policy and intention to restrain excessive office development in the London area? Is he going back even on that policy?

Mr. Rodgers

It is a matter for my right hon. Friend the Minister of Housing and Local Government, but we will do all we can to persuade large office users such as insurance companies to take as many of their staff out of London as possible. Beyond that I cannot go.

Mr. T. Fraser

How will the hon. Gentleman know that insurance companies propose to expand in London? I wish that his hon. Friends would show a little concern for the better employment of our people. The Parliamentary Secretary said that he would use his good offices with insurance companies and the like to persuade them not to build in London. He will never know that they propose to build in London unless he takes power to require them to ask him for permission to erect offices. Then if there is a case for the building of an office in London which he cannot resist he will concede the application.

The hon. Gentleman seems to think that there will be cases where he would be serving the interests of all concerned by seeking to persuade them to go elsewhere. If he believes that he is fully justified in that, he must think it socially undesirable that they should build in London. If it is socially undesirable in London, he should take power to enable him to act to ensure that they go to where he and his right hon. Friend think they should go in the interests of all concerned. [Interruption.] There is much muttering on the bench below the Gangway. I hope that I am not keeping hon. Gentlemen out of bed. This happens to be a matter of very great importance to very many of our people in different parts of the country.

All we seek is to persuade right hon. and hon. Gentlemen opposite, and especially the Ministers responsible for the Bill, that employment is important, whether it is employment in offices or in factories. As an increasing number of our people are employed in offices and a diminishing proportion in factories, it is important at this time that there should be some control. If it is accepted that there should be control over the distribution of factory employment, it is desirable that there should be some measure of control over the distribution of office employment.

The Parliamentary Secretary conceded that he would be willing to use his good offices with insurance companies and other large employers of office workers, but he knows full well that under the present law and in the absence of a provision such as contained in the new Clause he will not know when such bodies are proceeding to build additional office accommodation. In any case, if he thinks it right that he should use his ministerial powers to persuade them to go elsewhere, why should he not take the power, if he cannot direct them to go elsewhere, at least to tell them where they shall not go. Let him take the power. We cannot say how often he will exercise it. If the figure of 1,000 square feet is wrong, let him specify an area which he thinks would not impose too heavy an administrative burden on his office. If the administrative burden will be as great as he said, it emphasises even more clearly the extent of office building taking place in the already congested parts of the country.

I hope that the Parliamentary Secretary will see that he has trapped himself. If the handling of this creates an administrative problem of such magnitude that he could not justifiably recruit the staff to do it, it is an indication of the extent to which this kind of additional new employment is being provided in a part of the country which is least in need of new employment. Let him take this power so that he may with a little talk and persuasion steer some of this employment to areas where it is much more needed.

Question put and negatived.

Bill reported, with Amendments; as amended (in Committee and on recommittal), to be considered Tomorrow.