§ 37 and 38. Mr. Shortasked the President of the Board of Trade (1) whether he will increase the assistance offered to industries expanding in the north-east of England, under the Local Employment Act, to compensate for the restriction of credit by the banks;
(2) what effect the recently announced credit restrictions will have on assistance given under the Local Employment Act in the north-east of England.
§ Mr. J. RodgersWithin the powers conferred on the Government by the Local Employment Act my purpose is to assist industry to expand in development districts in the North-East and elsewhere, I certainly do not intend to operate those powers more restrictively as a result of the measures recently announced.
§ Mr. ShortI am asking the Minister to be a little less restrictive—a little more expansive. Is he aware that the policy which the Government are pursuing is fantastic? Is he aware that the banks in the North-East are becoming very reluctant to give any worth-while assistance to industry expanding in the area? I am sure that he will be aware of the recent case which I drew to the notice of the Board of Trade. Is it not a ridiculous and unintelligent policy to offer credit with one hand under the Local Employment Act and to take it away with the other by restricting credit from the banks?
§ Mr. RodgersUnder the old Act we were lenders of last resort. Now we are lenders of equal status with the banks. The procedure does not operate in the way the hon. Gentleman has suggested.
§ Mr. JayIs it sensible to have a credit squeeze which hits equally areas of unemployment like the North-East and congested areas like London?
§ Mr. RodgersThat is another question.
§ Mr. GowerDealing with the problem of these areas generally, is it not fair to say that the restriction on general credit in some ways increases the value of the special assistance given under the Act?
§ Mr. RodgersIt could well work that way.
§ Mr. SpeakerMr. Grey.
§ Mr. SpeakerI have called the next Question.