HC Deb 11 February 1960 vol 617 cc807-16

Motion made, and Question proposed, That this House do now adjourn.—[Colonel J. H. Harrison.]

10.25 p.m.

Mr. Cyril Osborne (Louth)

I am grateful for the opportunity of raising the question of industrial development certificates on behalf of my friends in the City of Leicester, where I live. I apologise to the hon. Members who represent Leicester and in whose constituencies this problem may fall. It is divided between properties in two different constituencies. I have been asked to bring this matter to the Ministry merely because, for over thirty years, I have been a member of the Leicester Chamber of Commerce Council and I am its representative here in London.

As my hon. Friend the Parliamentary Secretary to the Board of Trade well knows, the people of Leicester are not at all opposed to the Government's policy of directing industry to the black spots where unemployment is high. They have no quarrels with the policy as such. The question that is troubling them and which I wish to put before my hon. Friend tonight is whether the power which has been delegated is being properly used. Are the powers vested by Parliament in the Minister and delegated by him to the regional offices being reasonably exercised? It is on that ground that I want to ask my hon. Friend some questions.

My hon. Friend is well informed of the circumstances, but there are one or two points that I should make. First, he would, I think, agree that the City of Leicester is a progressive and farsighted local authority. It is well ahead with its slum clearance schemes and is doing well with its road development plans. In those two respects, there is no quarrel with the Ministeries concerned. Because, however, of the progressive nature of the local authority in dealing with the slums and in building the new ring roads, the plans have caused 272 firms to fear that their works will have to be demolished either for slum clearance purposes or for the purpose of new ring roads.

The owners of these businesses understand that they must fit in with the national plan and are willing to "play ball." They also recognise that Leicester has been a fortunate city for over thirty years. It has probably had the lowest rate of unemployment since the 1920s. To that extent, both the trade union leaders and the businessmen of the city recognise that it would be unwise to let a lot of new companies come and develop and so attract the labour that is already scarce.

What the local business men say—and this is the nub of the complaint—is that where they are compelled to move because of the action of the local authorities, they should have the right to reestablish themselves within their own city and not, through the Government's general policy, be driven to a place like South Wales or Scotland, where neither the workers nor the management want to go. What they say to me, quite simply, is that they are Leicester people, they were born there and they want to live and work there.

The test case has come concerning a company called Fox's Glacier Mints. This is the first of the 272 cases about which people feel nervous. This company has "played ball" with the Board of Trade in that it has already established a substantial factory in Northern Ireland and has helped the problem there. The difficulty is that the new ring road which is proposed to be built will go through the existing factory or destroy so much of it that there will be nothing left.

Like wise men, the company purchased a site on the opposite side of the road which had belonged to the city corporation and was a slum clearance site. Months ago it asked the Board of Trade for an I.D.C., but it was refused. I have to admit straight away that when the architect first put in his plans he asked for permission to employ one-third more workpeople. That was disovered by the director, who said, "Nonsense. Strike it out." The Board of Trade has been advised that it was a mistake. That is admitted. Time after time the firm has said to the regional controller in Birmingham, "We give you our word that we will not try to attract more labour to ourselves, but we want a bigger and better factory."

The old factory had a floor space of about 27,000 sq. ft. The new site has a ground area of 18,000 sq ft. I am sure that my hon. Friend would agree that it would be absurd for the Board of Trade to say to any firm, "You have to build an exact replica of the place that we are pulling down." We are all hoping to build more modern places, better places for business purposes and for our people to work in. We want more light, space and air.

The corporation has suggested that on one side of the new factory, anyhow, the firm will have to build three storeys. Three storeys of 18,000 sq. ft. will give 54,000 sq. ft. as compared with the previous area of 27,000 sq. ft. I readily admit that. However, a letter dated 8th September was sent by the president of the local chamber of commerce to the regional controller in Birmingham in which he said: On the site the local authority prefers"— the word is "prefers": they do not demand"— that a three-storey building shall be erected, and this would provide some 54,000 sq. ft. of which 40,875 sq. ft. would be used for installing the most modern plant for sweet manufacture using no additional labour. The whole point of the direction of industry surely is to protect labour and ensure that employment is provided where it is required. My hon. Friend may say, "Why should the firm want a bigger and better factory? From 27,000 sq. ft. to 54,000 sq. ft. is a great jump." That is true. I will give my hon. Friend four of the reasons given to me by the director of the company for wanting a bigger factory.

The first reason that he gives is: To exchange foot by foot, as suggested by the Board of Trade"— that is where I think the regional controller is wrong— would be to deny the right to increase efficiency and improve labour conditions. That would be stupid, surely.

Secondly, he says: Both offices and factory are overcrowded on modern-day standards because of their age. The newest production building is over 40 years old. The office block is of the same size as when the company was only doing one-fifth of its present turnover. Surely we are regularly told that the recommendations of the Gowers Committee should be implemented and that office workers should have better accommodation. Surely it would be unreasonable to put the office people back into the same cramped conditions which they have put up with over the 40 years.

The third reason is: The welfare facilities for the employees are totally inadequate, e.g. canteens, cloakrooms, etc., by today's standards. Lastly, the director says: The traffic problem is now acute, when parking facilities will have to be provided on the site, not only required by town planning but because of the proposed traffic order by the City Council. So a good deal of the extra space, especially on the ground floor, will be required for parking purposes.

All these facts have been sent to my right hon. Friend's controller in Birmingham. Those facts have been supported not only by the firm itself, but by a number of hon. Members from that district, by the local authorities and by the trade unions. I am making a very reasonable case, yet, despite all that, and after six months' correspondence, interviews and negotiations, even as late as this week, the Birmingham office has refused to issue a certificate. I ask my hon. Friend to be good enough to reconsider the matter, I hope, favourably.

What is more important is that the 271 other firms which are affected by this slum clearance and general town planning are mostly small family businesses and what they say is that if a firm the size of Fox's is refused a certificate, they have no hope. They are little men and they are frightened that the person who is administering the power will ride roughshod over them.

I think that they have good reason for that fear. One of them went so far as to say that it looked as though it was the old story, one law for the big man and one for the little fellow, the big combine being able to get away with things for which the small man could not hope. They have some grounds for that complaint because, as my hon. Friend knows, a letter was sent to his regional officer in Birmingham on 27th January containing a paragraph showing the real grounds for the fears of the little men that they would not get their certificates and not be able to rehouse themselves. This is what the secretary of the local chamber of commerce wrote to the Birmingham office: I might say, in conclusion, that my Council"— that is, the chamber of commerce council— finds your expressed policy completely at variance with known fact. You have allowed two very large employers of labour to come into Leicester within recent times. The Metal Box Co. Ltd., and Associated Electrical Industries Ltd. In this connection, I have learned with interest of the proposal of the A.E.I. Ltd. to increase its existing floor area in the next few years up to 600,000 sq. feet, necessitating the acquisition of a further 10 acres in addition to its existing site of 20 acres. This makes nonsense of your letter under reply. It does make nonsense of the refusal to give certificates to the smaller people.

Will my hon. Friend give an unqualified guarantee tonight that, provided they do not want to increase the number of people they employ, if they are disturbed by local authorities rebuilding and re-planning, the small firms will have certificates? Secondly, can I have an assurance on behalf of chambers of commerce throughout the country, about 30 of which have written to Leicester to say that they have similar fears in greater or lesser degree? Thirdly, will my hon. Friend see that his regional controllers in various parts of the country exercise their powers uniformly?

Lastly, will he answer the letter which was sent to him personally by the President of the Association of British Chambers of Commerce on 29th January asking for the setting up of a … tribunal of appeal against a Departmental decision, even if it is only in the nature of taking a second opinion on a decision"— this is the crux of the matter— which may in the last resort be only a question of personal opinion of the official who is dealing with the question"? That is a reasonable request to make.

A letter was written from Leicester to my hon. Friend's regional controller in Birmingham, setting out all these facts, on 8th September. He replied on 9th January, after having been reminded that he had not replied. It is not good enough for these officials to keep business men waiting for four months for a reply.

I should like my hon. Friend to look into the matters which I have raised. I hope that he will give an assurance that he will help the small businessmen, especially in the big cities.

10.41 p.m.

The Parliamentary Secretary to the Board of Trade (Mr. John Rodgers)

I am glad that my hon. Friend the Member for Louth (Mr. Osborne) has provided us with an opportunity of discussing the way in which the issue of industrial development certificates is carried out by the Board of Trade.

These I.D.Cs. are, of course, required for any new industrial premises, including extensions, for all buildings of over 5,000 square feet. I think that it will be of interest to hon. Members to know what are the administrative arrangements which we have at the Board of Trade. The Board of Trade has seven regional offices in England and also an office for Wales and one for Scotland. It is the controllers of these offices who are given the duty of issuing I.D.Cs. We take a great deal of care, however, to see that the standards by which applications are judged are the same throughout the country.

The Board of Trade receives about 4,000 I.D.C. applications a year, of which only a small percentage is refused. I must point out, however, that it is not possible to draw any conclusions about our policy from the percentage refused. Many applications are withdrawn before we reach the stage of actual refusal, and we receive very few requests for I.D.Cs. for completely new enterprises in the London and Birmingham areas, as it is well known by now that these will not be granted, not even extensions, save in the most exceptional circumstances.

Of the 4,000 to which I referred, about 1,000 are decided in the headquarters of the Board of Trade, the remainder being left to the discretion of the regional controllers, and of this 1,000 a considerable number are decided by me personally.

I think that it will be helpful if I explain just what sort of cases come to the Board of Trade headquarters. In areas where there is little unemployment, all cases in which the regional office recommends the granting of a certificate for a significant industrial expansion have to be submitted to headquarters. In addition, all cases involving an area over 100,000 square feet and any which present special difficulty are likewise considered centrally. I myself decide all the cases over 100,000 square feet and many more which have aspects of particular importance.

As I have tried to make clear to the House in the past, it is very difficult to determine whether an application should be granted. In places where there is little unemployment a firm has to show an overriding necessity for being allowed to build its factory before I will agree to the issue of a certificate.

But these ties may be of many different sorts, perhaps a tie to sources of raw materials or a centre of population which a service industry needs to be near. In case of some extensions, too, it is quite clear that they could not conceivably be separated from the main production line. Many factors, therefore, have to be taken into account where a firm is being "planned out", as the expression is, of its existing premises.

I can assure my hon. Friend that the Board of Trade would certainly be willing to permit roughly a foot-for-foot replacement of the premises which are being demolished, and, of course, we will always look into the problem of increased premises for increased efficiency. None the less, it may be that the firm could, and might even prefer, to move to an area of high unemployment, and we must always reserve the right to draw firms' attention to other possibilities and, indeed, in some cases to try to persuade them to go to these places.

It may also be that within a prosperous area like London it is necessary for the firm to move a considerable distance from its old site. As I have said, however, if a firm wishes to develop in the same town on a foot-for-foot basis as a replacement of buildings which are "planned out", and cannot move elsewhere, we would not deny it the right. That is the answer to my hon. Friend's first question. It would certainly he contrary to common sense—and in administering the I.D.Cs. we must be guided by common sense all the time—if the Government were, on the one hand, to encourage the local authorities to redevelop their towns and, on the other, to prevent this redevelopment from taking place by the refusal to grant I.D.Cs.

My hon. Friend the Member for Louth has also suggested that there should be some sort of court of appeal for the refusal of I.D.Cs. I hope that what I have said has allayed his fears that there is anything arbitrary and capricious about the refusal of I.D.Cs. I can assure him that there is no variation of the practice between the regions, depending on which bureaucrat is in charge.

I have explained that the decision in cases of difficulty is taken by me personally, and in some cases where an appeal is made I review the cases, and previous decisions have been reversed. I have to decide, to quote the Act, whether … the development in question can be carried out consistently with the proper distribution of industry. This can perhaps be best described as the policy which at any time Ministers feel best combines the economic wellbeing of the country and the need to assist those areas which are suffering from high unemployment. On such a policy matter only Ministers can bear the ultimate responsibility, and only Ministers can, I believe, be the ultimate court of appeal. In that sense I can, therefore, give my hon. Friend the assurance that there is in a sense a court of appeal since firms can come to me if they have been refused I.D.Cs. by the regional controllers.

Now I would like to say a word about the particular case of Fox's Glacier Mints. This case has been brought to my attention on many occasions in the past by my hon. Friend the Member for Leicester, South East (Mr. Peel). This firm, as my hon. Friend the Member for Louth said, applied in October, 1958, for an I.D.C. for 54,300 square feet in Leicester, giving as its reason the faot that 7,000 square feet of its existing premises were to be pulled down under a road widening scheme. Its labour force was to increase from 188 to 250 and production was also to go up. This was considered to be a large expansion which could well take place elsewhere.

The Northern Ireland authorities were worried by the fact that the extension at Leicester might tip the balance in favour of this city from Fox's other factory in Belfast, which supplies a large part of Great Britain as well as Northern Ireland. I am grateful to Fox's Glacier Mints for establishing a factory in Belfast, but for the reasons I have given the I.D.C. at Leicester was refused.

The firm has subsequently maintained that because of reorganisation there will be no increase in labour, but has said that it must have 54,300 square feet because the local authority insists on full development of the site. The local authority, however, says that it has made only three requirements. First, that a car park should be provided. Secondly, that the frontage on the road should be of three storeys, and, thirdly, that there must be a loading bay.

It says that it regarded Fox's application for 54,300 square feet as reasonble because its existing premises were of 40,000 square feet. However, I should point out that this includes a grocery business of 13,000 square feet which is not affected by the move.

Despite these facts, I am in touch with the firm and some days ago I invited it to discuss its application with me. I shall look into the factors my hon. Friend has raised tonight when I discuss this matter with the directors of Fox's Glacier Mints.

We have, as my hon. Friend has said, issued I.D.Cs. in Leicester for other firms that had to be tied to that area. Metal Box, which is a service industry making cans for firms in that area is an example, and I think that the issue of I.D.Cs. in Leicester shows that we are not heedless of the need for a certain amount of industrial growth there and that wild statements by the Leicester Chamber of Commerce that Board of Trade policy will soon turn Leicester into a distressed area are ridiculous.

I hope that the description of the way in which I.D.Cs. are administered will allay my hon. Friend's doubts that there are differences between one region and another, other than those which arise from the obvious fact that the employment situation is different in different regions. Each application is considered objectively and impartially on its merits.

I hope that I have disabused my hon. Friend's mind of any possible feeling that I.D.Cs. are refused by a capricious bureaucracy. The task of administering this part of the Town and Country Planning Act is not easy, but I am convinced that it has been operated on the whole in the interest not only of the localities concerned but more importantly with regard to the national well-being and the paramount duty to try to provide employment in those areas which have persistently suffered or are threatened with the scourge of unemployment.

In conclusion, I would say to my hon. Friend that we are concerned with the overall efficiency of industry. Therefore, we look sympathetically on any application for increased premises that would lead to increased efficiency without increasing the labour force. But we do not wish to see increased labour forces in certain towns. If a firm is planned out by the action of the local authority, whether because of slum clearance or road widening or similar causes they can have, roughly, a foot-for-foot replacement. Anything above that they would have to justify. Thirdly, there is a court of appeal, which is myself.

Question put and agreed to.

Adjourned accordingly at ten minutes to Eleven o'clock.