HC Deb 17 December 1962 vol 669 cc901-1032

3.57 p.m.

Mr. Ray Gunter (Southwark)

I beg to move, That this House expresses its grave concern at the high and rising level of unemployment which is the result of the policies of Her Majesty's Government and calls upon the Government forthwith to adopt measures that will increase industrial production and ensure full employment throughout the United Kingdom. I have never been told whether the Chancellor of the Exchequer is a very keen student of homiletics, which, to the uninitiated, is the art of preaching, but I thought that he delivered a very good sermon to the nation on 1st December, at Stoke Newington. He spoke in considered and very thoughtful terms. Obviously, it was a moment of truth and of candour. Plainly, he had escaped, or had slipped, from the shackles of the Tory Central Office for just a few moments when he said, of the British people: There is today a restlessness, a cynicism and a feeling of unease. … We have lost to some extent our sense of purpose. I believe that the right hon. Gentleman was quite right. It was a moment of candour and of truth, and I know from personal experience that moments of candour can be dangerous but yet refreshing.

Much is said and written these days about obtaining a new sense of purpose for the nation, about how we are to find our new rôle in this world, which is so different from the world which we knew in the days of our imperial grandeur. Much is said and written about how we may come to a new sense of our destiny, but I remind the Chancellor of the Exchequer and other Members on the Front Bench opposite that the mere call to the nation to find this sense of purpose is no substitute for its achievement.

I am persuaded by the history books that the purpose and dynamic of our industrial life depend so much, in whatever period of history it may be, on the vision, courage and integrity of those who claim to lead the nation; and the response to those assets and virtues has, I submit, been the hallmark of the British character during the difficult years of our history.

I am at one with the Chancellor in believing that millions of the most thoughtful of our people today are uneasy and know deep within themselves that there is something wrong somewhere with the nation. We have recently been touching upon the raw wound of our pride. But it is not altogether a matter of pride, though our pride is hurt. After all, it is not very easy, within two decades of the Battles of Britain and of Alamein, to adjust ourselves to a situation where our friends and allies tend to write us off.

It is not alone a matter of pride, however. Many people in this country today believe that human values are being debased, and the Prime Minister brings us no balm at all when he rests his cold feet upon the history books in the belief that warmth and comfort can come from the record of our exploits, deeds and achievements in a world which, in every material sense, bears no relationship to the present world, and when the problems of the 1960s and 1970s have no relationship to those problems which our fathers faced.

I submit at the outset of this debate, upon what, to me, is the indication of the running sore of deeper problems, that it is the harnessing of the courage and the skills of our people to meet today's problems that will equip us to play what I still believe will be a formidable part upon the world scene in the future.

I hope that I shall always have reverence for the history of our people. It is a great history. I hope that I shall always respect the traditions and the rituals of our people. But I say that no amount of reverence or respect for tradition will avail us unless we can get our people to understand the nature of the problems with which we are now confronted in a world that is undergoing frightening changes. If we cannot arouse them from that disquiet, unease and cynicism of which the Chancellor spoke, and bring to them a sense of vigour and adventure in the pattern of their daily lives, then I do not see any great hope for the future of this country.

Therefore, I say to the party opposite that the first requirement to relieve this nation of its present state is that the people should be told the truth and that we should all understand that promises given for the sole purpose of maintaining political power, and remaining unfulfilled, will inevitably create the atmosphere which the Chancellor has described. They will inevitably bring a sense of distrust and unease.

My mother knew very little about many things—she was a collier's wife—but there is one thing that she always taught her children, that one of the worst forms of lying is to make a promise and not to fulfil it, for then there arise distrust, unease and cynicism.

Let us start with the promises that were made in 1959. In 1959, the Conservative election manifesto, which was headed "The Next Five Years" said this: Conservatism is more than successful administration. It is a way of life. It stands for integrity. They might have interpolated a word about directorships for the boys. The manifesto went on to say: It stands for efficiency, for moral values as well as for material advancement. By raising living standards and by social reform we are succeeding in creating one nation. … It continued: So long as Conservative policies of sound currency and expanding trade are continued and unity at home maintained, full employment is safe. I remember that the then President of the Board of Trade, now Lord Eccles, had a whale of a time going up and down the country and telling people at every meeting that if the Conservatives were re-elected the Conservative Party would approach the problem of local unemployment in a revolutionary manner. Indeed, on 14th September, 1959, he is quoted as having said that if re-elected the Conservative Party intend to tackle unemployment with the methods of mobile warfare. I am not sure whether the President of the Board of Trade knew very much of what he was claiming, but the past three years' record of the Government has about as much relationship to mobile warfare as one jeep stuck in the Libyan Desert.

We have the promises and now we are in a position to judge the three years' record. From mid-October to mid-November the number of people unemployed has increased by 42,000, which, I imagine, is probably twice as much as could have been expected at that time of the year. Those figures give cause for deep anxiety, but the greatest anxiety that arises from that analysis is the pattern of those figures. It is this pattern that is frightening many workers in many parts of the country today. It is throwing their minds back—and we did not want them thrown back at this time—to the 1930s.

We are seeing emerging a predominantly prosperous Southern half of the nation and a basically declining North. We find 1.3 per cent. unemployment in Greater London; less than 1 per cent. in Oxford, Cambridge, Slough and Northampton; 2 per cent. or thereabouts in Birmingham; over 5 per cent. in Middlesbrough and Stockton; 8 per cent. in Hartlepools and Workington; and nearly 9 per cent. in Girvan and Greenock.

Commander J. S. Kerans (The Hartlepools) rose

Mr. Gunter

I should like to finish this point before I give way.

We see this emerging pattern. We have moved into the most serious unemployment situation since before the war, and the Government have failed miserably to understand the true nature of the problem. I have no doubt that the Chancellor of the Exchequer will this afternoon claim that he has done something recently, by reflation, Purchase Tax cuts, higher investment allowances, and so on. I have no doubt that the Board of Trade will claim that it, too, has done something to channel industry into the worst areas. But the indictment of the Government today is the usual one, the ever-justifiable one—too late and too little.

If these measures had been introduced early in the year there might well not have been the tragic situation that has emerged in Merseyside, Wales, Scotland, West Cumberland and the North-East Coast. We would like the people in those areas to understand that their present plight is entirely the responsibility of the present Government because of their lack of vigour and planning. I hope those who live and suffer there will protest in the not-too-distant future.

Mr. Paul Williams (Sunderland, South)

If the hon. Gentleman's thesis is right, what he is saying is that the Chancellor's remedies will in due course solve the problems of the North-East. This is just what some of us are not saying.

Mr. Gunter

Neither am I saying it. All I say is that the Government will claim it. I do not propose this afternoon to survey the whole of the areas. There are many hon. Members on both sides who will, no doubt, give the most detailed attention to the areas from which they come. I should, however, like to pick just one or two examples.

Over the months, it has been an experience to witness hon. Members on this side of the House from Scotland trying desperately to get attention from Ministers. This problem has been before us for years. The heart of the problem in Scotland is the lack of balanced industrial development. Since 1948, the rate of unemployment in Scotland has been double that of Great Britain as a whole and sometimes four or five times as much as in the Midland region.

This tragedy in Scotland, and, indeed, now in parts of the north-east of England, is deepened because of the long duration of unemployment. These facts might have been much worse. They must be seen against the migration of large numbers from Scotland to the South and abroad. It is, perhaps, of interest that the Registrar-General for Scotland estimates that for ten years the annual rate of migration has been about 25,000 each year. Week after week, month after month and year after year, hon. Members on this side have been pleading for action. All we have had is the reply, "Well, things are not as bad as you try to paint them. There are plenty of jobs in the pipeline. If you hold your heads up and wait a bit, the jobs will come." They have never come. We have the same kind of aspect on the North-East Coast and on Merseyside.

In quoting the Sunday Times, I know that I am in good company. I was interested to read what it says of Merseyside: When Merseyside, then a fully-recognised development area, ceased to qualify for Treasury financial grants in 1960 it was believed"— these are the beliefs that Ministers hold from time to time— that some 34,000 new jobs would be available by 1965 (against an unemployment register then standing at 19,000). This was made up largely by the … Ford offshoot at Halewood, a rather smaller Vauxhall expansion (going ahead smoothly and without publicity), a considerably smaller Standard-Triumph factory, of which the first brick has yet to be laid, and the rest accounted for by the component firms which were expected to spring up in the district. This is the important part of it: In fact, since then, not only has the number of likely new jobs been trimmed to a much more glumly realist 14,000, but no fewer than sixteen of the brand-new post-war factories on the trading estates at Kirkby and Speke, then operating full blast, are now standing empty 'Takeover' is a fairly dirty word in Liverpool, where the Plessey merger with Automatic Telephone put nearly 700 men out of work, and the recent Courtaulds deal closed a substantial part of the British Enka fibre plant. A clothing works and a tyre factory closed. Dunlop stopped making rubber footwear. And as Lieut.-Col. Burford, Secretary of the Liverpool Chamber of Commerce, acidly says: 'There's not much point in the Government taking powers to direct industry to come, if they don't take powers to prevent them being stripped out again at a moment's notice'.

Mr. Gerald Nabarro (Kidderminster)

The Government do not direct, in any case.

Mr. Kenneth Thompson (Liverpool, Walton)

May I say, on a matter of fact, that Dunlop's largest rubber shoe factory is still operating at full blast in my constituency?

Mr. Gunter

I will write to the Sunday Times.

It could well be that this afternoon the Chancellor will advance some further ideas for dealing with the situation. We hope so. We do not know, but rumour has it that there may be reliefs by way of tax inducement for firms to go north. It has been said—I think, in The Times—that possibly a Minister will be appointed to co-ordinate all the efforts of the various Ministers. I have learnt a lot about co-ordination on railways. I sometimes wonder whether there is not a theory abroad that when one is in a mess, one co-ordinates a lot of smaller areas of incompetence and simply creates a bigger area.

We should have few illusions this afternoon. We are entering a general election year. We have had three years of stagnation and, possibly, we may now have a year of expansion in time for an election. I do not know. We are, however, bound to ask, if the Government are in earnest, why it is that only now they are doing things which they know should have been done long ago.

The Chancellor has expressed great confidence that his measures will work out. If that be so, why, were they not introduced before this distress rose to its present proportions? Perhaps the Chancellor will tell us why, despite all the election promises and all the warnings that have been given over the past few years, the position has reached the state that it has today.

Unfortunately, there is a general belief that unemployment will grow in size and misery over the next couple of months. It could be that in the spring there will be a wonderful consumers' pre-election Budget. Possibly, there could be a withering away of a measure of unemployment; the spectre will withdraw for a bit and will then reappear. What a way that is to run a country! What a way to trade upon men's livelihoods and careers! If the Government really wanted to tackle this problem, there are many things that could have been done. There is so much that is obvious.

A former President of the Board of Trade, to whom I have already referred—Lord Eccles, who, following the falling of the guillotine in July, has joined the revolutionaries in his after and purer life in another place—now sees things differently. He speaks of the need for real action. He speaks of £200 million a year, for ten years, being devoted to deal with this tremendous problem in these areas. He advocates great spending on public works, roads, slums and schools. This is what ought to be done. Now is the time to do it.

It is some of the areas which contributed so much to our industrial prosperity that bear the most wicked scars of the first Industrial Revolution. Now is the time to clean them, to prepare and to equip them for the unfolding second industrial revolution. We cannot allow areas like Scotland and the North-East Coast to wither away.

I do not deny that industrial development certificates are valuable. I wish that the Government had shown a little more zeal to capitalise their value. In certain ways, these certificates have a negative value; they are a negative instrument. They tend in some ways to discourage successful firms from expanding when those firms could, and should, expand. When they are driven northwards by necessity, they tend sometimes to withdraw quickly when the cold winds blow.

Surely, what is required in these areas is a bold, imaginative approach to make these places attractive to the industrialists of the South. Not only must they be given priority, but they must be made attractive. They have a long history of craft and skill. If we really wanted to, we could develop imaginative schemes to this end, remodelling their transport and their services, bring the new technical colleges to them and fully equipping them to take part in the changes which are going on around us.

I submit that this should be part of a great and imaginative national plan. We must not carry on tinkering about with "ambulance" services for this or that locality, trying this or that trifling method to ease a problem as it arises in some locality or other, hastily devising ill-defined measures to deal with it. If we are to regain our place in the world, we must plan our economic growth. We must define the targets for our industries in these areas, and this means that, where the distress is greatest, there should be, as Lord Eccles suggested, great schemes of public works to provide immediate relief of unemployment and, at the same time, lay the foundations of future development in terms of transport, housing, power, water and the rest. The task demands great powers of planning, of co-ordination and of vision.

I have already said that the areas which now reveal their great distress are, as it were, sores which indicate, perhaps, a deeper trouble. There are other aspects of our situation which demand immediate attention. No matter on which side of the House we sit, we all know that dramatic changes are now unfolding in British industry. One of the priorities is to realise that, during this most difficult period, when the processes of manufacture are being altered, and when, inevitably, there will be redundancies in this industry or that, industrial relations are of paramount importance.

We can equip our people for change, but, if the economy is not alive and responsive to change, there will be little hope. There are several things which require immediate attention. I have said in the House before that perhaps my greatest love is industry, not politics. Looking at these things as an industrialist, I feel that one of the most damaging features in our industrial life today is the exaggeration of every minor industrial row. Every minor row, every unofficial strike, is blown up to exaggerated proportions by the Press and, so it appears from the Order Paper, by hon. Members opposite who, apparently, want Parliament to legislate.

I say clearly and seriously that all unofficial strikes are bad, but the men are not always to blame. An analysis of unofficial strikes reveals some startling facts. Men can sometimes be driven too far. After all, they are British.

Mr. Nabarro

Some of them come from Moscow.

Mr. Gunter

That is the very outlook I am referring to. That is what is damaging the whole fabric of industrial relations in this country. It is the attitude which is bringing spleen and bitterness where we want decency and understanding.

I put this to hon. Members opposite, to those who accept their responsibility in industry. What is the good of my blasting bad mangement every day, and their blasting unofficial strikers every day, when the aim should be to develop in the changing pattern of our industrial life the best relations in order to discover the art of living together in harmony for the welfare of us all? I submit that the Government have not been strong enough in making their protest against what is said and done by some of their own supporters and, indeed, by some organs of propaganda in this country. We must try to diminish the bitterness which is abroad.

I have purposely raised this subject this afternoon because I am convinced that the Government must accept much of the blame. Hon. Members opposite so often fail to understand—the hon. Member for Kidderminster (Mr. Nabarro) has not got a clue about it—that disputes about who is to bore the holes, disputes which arise on matters of demarcation, and so forth, disputes which appear sometimes to be so trivial, are really about the fear of unemployment.

Mr. Nabarro


Mr. Gunter

Men want to retain their jobs, perhaps irrationally, and they are afraid of unemployment. The Government promised that we should have full employment. If we can instil into the minds and hearts of those engaged in industry a real sense of security about full employment, many of our troubles will diminish.

Now, a word about mobility of labour. It must be appreciated—some of my colleagues in the trade unions are appreciating it more and more—that to insist on anything like complete rigidity of labour would be foolish. Retraining in new skills, in apprenticeships, sometimes to new industries, presupposes a measure of movement in labour. There must inevitably, in the changing pattern of industry, be a certain amount of movement.

Redundancies are bound to occur. Men fear redundancy, too. The Government have failed to show any imagination in this matter. Their attitude at times is pathetic. Last week, the bugles blew and we had the "Workers' Charter". What does it mean to a man who has spent forty years with the same firm? He might have joined that firm when he was 15 years of age. At 55, he is declared redundant, and the "Workers' Charter" means that he gets four weeks' pay. That is not the way to deal with these changes. The Government's great lack of imagination and vision is further revealed.

Is it not time that we thought in wider terms? In this matter of redundancy, why should we shrink from wider national legislation? It is significant that when, in 1961, the International Labour Office, at Geneva, conducted an inquiry and questioned 65 nations, the United Kingdom was the only one to declare that severance rights for a worker should be left to voluntary negotiation for settlement. In this changing world, it must be a national responsibility to deal with what happens as a consequence of change.

There are many people to whom the word "unemployment" does not mean a great deal today. It would be a great pity if those charged with the responsibility of government at this time failed, in an atmosphere of cynicism, unrest or lack of purpose, to realise that unemployment may become of more than academic interest to many more people during the next decade or so. The Americans have coined a new word for a modern phenomenon, cybernation. It is the science of linking the electronic computer with the automatic machine. A study recently conducted in America revealed that not only unskilled, semiskilled and even skilled workers have no part in many sections of industry, but that even middle-level management could find itself declared redundant as a result of the development of this new system.

There is no longer any strong reason to suppose that in twenty or twenty-five years man can always be in effective control of machine operations. Computers have already been designed which can store facts in the memory, and virtually learn from their own "experience" or even from their own mistakes. Their capacity and speed of operation mean that they quickly outstrip the human capacity for performing the same functions. This is not a bogy. More and more of these systems are now being introduced into industry in America. More and more they will increase over the years ahead.

Therefore, I want to say that if ever there was a time when we required leadership in this country, leadership in tune with these problems of employment or unemployment, not only the immediate problems but those which we see, looking into the future, it is now. There are grave problems. We in this country, I repeat, with our skills and experience, should be on the eve of great things, so long as we understand, in all these changes, that to withhold from anyone the right to work is to hurt him badly.

I believe that if this nation can be brought back to a sense of purpose, brought back to understand that human values will always surmount and ought to surmount everything else, we can win through. People are uneasy; they are without a sense of purpose. Maybe, ere long, they will hurl from office those who have brought them to this state, and bring to power, I hope, those—to be found in my own party—with vision about the future rôle of Britain.

I believe that within the next few months we may possibly have a General Election, when, I believe, my own party will be returned to power, because this is the party which is relevant to these problems, which understands the nature of the present problems of unemployment, and is geared to and in tune with future developments. The party opposite has proved that it is incompetent to deal with the immediate problem. I see no hope that it will grasp the difficulties or realise the hopes which lie before the nation.

4.33 p.m.

The Chancellor of the Exchequer (Mr. Reginald Maudling)

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: shares the concern of the Government at the recent rise in the level of unemployment and supports the actions of Her Majesty's Government to deal with the problems of certain areas particularly affected and to promote general industrial expansion on a sound basis". The hon. Member for Southwark (Mr. Gunter) has moved the Motion in terms of great sincerity and seriousness. There is a good deal in what he said with which I would entirely agree—the need for change, the need to recognise the necessity for change and to grasp the opportunities which it contains, the need for good industrial relations, the danger of allowing these disputes, difficult as they are and dangerous as they are, to give the impression of a general climate of labour relations which can be distorted, and the need to give to areas with relatively high unemployment attractions to industry which will bring industry there.

With most of what the hon. Member said I must say I find myself in agreement. In particular, I agree with him that the duty of anyone speaking on this subject at the moment, or, indeed, at any other time, is to tell the country the truth and not to hold out promises which cannot be fulfilled, and I shall endeavour during the course of what I have to say this afternoon, to follow strictly that precept, to set out the problems as I see them, and to say what the Government are endeavouring to do about them.

Perhaps I may permit myself just one party crack in a sense. Although the hon. Member made criticisms of the way in which the Government have acted, and said much about what they ought to do, I did not notice in his speech many very positive suggestions which we might follow—

Mr. Nabarro

None at all.

Hon. Members

That is the Government's job.

Mr. Maudling

It may be argued that it is not the function of the Opposition. We have, in fact, done quite a lot, and we shall be doing more.

There are two problems facing the Government and the country at the moment. One is the problem of unemployment; the other, the problem of achieving and obtaining a high level of expansion, a higher growth rate. The first, problem, unemployment, is certainly, in human terms, the more urgent. With that we entirely agree. The second, in economic terms, may be perhaps more fundamental in the long run. We must keep both in view at all times, and they are, of course, interrelated.

Prospects of employment, like prospects for OUT living standards in this country, depend upon getting a higher rate of growth and a more stable rate of growth in our expansion. Short-term expansion by methods which may soon bring a return to inflation and balance of payments problems would, in the long run, be self-defeating. A more rapid and a more sustained rate of growth, I accept entirely, must be the first objective of our policy at present.

Mr. Archie Manuel (Central Ayrshire)

Do I take it from what the right hon. Gentleman is saying now that he does not mean to do anything in the short term about unemployment? He is saying that growth is the only way, taking a Long-term view. In other words, he does not mean a crash programme of public works to ease the present unemployment problem and difficulties, but he is thinking of a long-term programme and would 'starve immediate needs. [HON. MEMBERS: "No."] What are hon. Members grumbling about?

Mr. Maudling

I hope that the hon. Member will be patient, for I intend to deal with this problem. I have a lot to say on these various problems, and I hope that he will bear with me if I do not answer him immediately. I hope that he and his colleagues will allow me to develop my points and to answer the hon. Member in the course of what I have to say.

In looking at the problem of unemployment we must be clear what the nature of the problem is. It is a twofold problem. There is the general problem of the level of unemployment in the country as a whole and there are special problems in particular areas, the North-East, Scotland, and Ulster, where there is a level of unemployment well above the national average.

Mr. Frederick Peart (Workington)

And West Cumberland.

Mr. Maudling

I hope that I shall be allowed to deal with this problem as a national problem and not as an essay in competitive constituency propaganda.

Mr. Peart rose

Mr. Maudling

I hope that the hon. Member will forgive me for not giving way, but I want to develop my argument.

There are two problems, the general and the local, and they overlap to a considerable extent. For instance, weaknesses in heavy industry, steel and shipbuilding affect local difficulties, particularly in some areas, and the general difficulty already overlaps. As the Leader of the Opposition pointed out the other day, general expansion, not only in the context of particular areas, affects both the local and the general problem. General measures to expand the economy, which may be quicker and simpler, may get us more quickly into positive balance of payments difficulties. On the other hand, where there are particular problems, they may be more persistent, and may be more deep-seated and more difficult, but they could be tackled, and are being tackled, by methods which have less effect on the balance of payments.

Taking these two problems, the general and the local, I shall try to develop my argument, first, by analysing the situation we are facing in both cases, and, secondly, by outlining the way in Which the Government are tackling, and intend to tackle, this problem.

First, on the general employment situation. Let us, above all, get this into perspective. The present figure, 2.4 per cent., is too high—I would accept that—but really, to argue, as some people do, a comparison between that and the 1930s is absolute nonsense. There is no possible relation between the figures at present and the figures, or the conditions, of the 1930s, and to suggest that there is, is doing positive harm to the prospects of solving the difficulties. What is more, the present figure of 2.4 per cent. is below the definition of "employment" given in the classic case put in 1951 by the Labour Party-3 per cent. at the peak of the seasonal unemployment. That is true; I looked it up.

Because of the present general unemployment we must, as I say, look at this matter carefully. First, there is the seasonal position. There is no point in disregarding it. With the winter weather, employment in the construction trades, agriculture, and so on, falls off. Every year we get rising unemployment during this period till January or February, and then it falls off again. This is a seasonal movement that no one can ignore and no one can deny. Another point that I would make is that this year there has been a substantially higher number of school-leavers to be absorbed than in previous years. [HON. MEMBERS: "We told you that."] They have been absorbed encouragingly well. But this has added to the general problem.

Throughout recent months there has been a decline in demand for labour against a background of rising production. This is the exceptional feature. Throughout the first nine months of this year, while production has been rising, unemployment has also been rising. The clear deduction from this is twofold. First, we are seeing the fruits of the high level of investment in recent years—greater economy in man-power, greater productivity per man, and so on. Secondly, there has been, quite clearly, under the pressure of more competitive conditions and lower profit margins, a desire for employers to reduce their establishments and their manpower requirements because they have found that they can produce more with fewer men, with modern methods and better organisation.

This is, on the one hand, a good thing because it means that we are more competitive and costs are lower, and the future of everyone in this country depends on lower costs and greater competitiveness. On the other hand, there is the fear in people's minds that the effect of higher productivity with modern machinery must mean higher unemployment. I am sure that this is absolutely wrong, and we must assume that it is wrong and work for the purpose of proving that it is wrong. Throughout mankind's history we have been looking for means of getting machines to do the work for us. Now that we are more and more finding ways of getting machines to do the work, we must regard it as a blessing and not a disaster.

The deduction from this is that there is more slack in the economy than one would have thought six months ago, and that productivity is potentially greater, and we must make use of that higher productive potential.

Mr. Dan Jones (Burnley)

Since the right hon. Gentleman is putting forward the argument that a level of unemployment now is inevitable, does he not agree that benefit reforms must be inevitable, too?

Mr. Maudling

In the first case, what I said was the opposite of that. The second matter I will deal with later.

Demand has been rising fairly steadily throughout the year. Public expenditure particularly has been rising rapidly, and so have exports. Production has been rising in the first three-quarters of the year. The main slack has been in private investment, for a number of reasons—lower profitability, doubts about the Common Market and doubts about the possible trend of the American economy. Investment in private manufacturing industry has, for various reasons, been slackening off. That is why as long ago as the summer we decided upon substantial increases in public investment at a time when private investment was likely to slacken.

Recent signs have been that after the third quarter the increase in exports has been flattening out, and possibly the same thing has been happening to production. It was against this background and against the background of consumer demand, which has not been rising as fast as we expected largely because savings, as recent figures have shown, have been growing very rapidly, that the Government introduced in October and November the very substantial measures to put further purchasing power, further stimulus, into the economy as a whole, to which I will refer again a little later.

That seems to me to be the best analysis I can give of the general level of unemployment and the reasons for it.

I turn for a short time to the special problems. Great progress has been made under the Local Employment Act, 1960. [HON. MEMBERS: "Rubbish."] HON. Members may say "Rubbish", but let them consider the facts before they make those noises. The amounts involved have been quoted previously—already more than £75 million, involving about 80,000 jobs.

As to the methods, undoubtedly our tough I.D.C. policy and inducements are right. If anyone doubts whether our I.D.C. policy has been tough, let him look at the much publicised case of the Slough Estates Company, which would have liked to develop in the North but could not do so, stating that it could not compete with what the Government were doing in the North. Let hon. Members look at that. That is as good a proof of our policy as I have seen.

The problem has changed. What is so interesting is the change which has taken place since the Act was introduced. In 1960, people were talking about "development districts" now they are talking about "the North" and "the South". That shows how the problem has changed. Take, for example, the problem of Wales, about which we heard so much in 1960. It has been transformed. I was responsible for the Act and its early administration. We must look at the practical effects. What happens when industry is expanding rapidly, as it did in 1960 and 1961, is that it is much easier to get industries to go a short distance, to Wales or to Merseyside, as we succeeded in doing, than it is to get them to go further afield to the North-East and Scotland.

It was our policy—I think it was right, and I think that the House accepted the policy when we were passing legislation—that we should not discriminate between development districts. I think it is clear that when one is getting industry to move out of the crowded Midlands and the South it will go, first, to Wales and Merseyside before it will go further afield to the North-East and Scotland.

By the end of last year we could justifiably claim as a result of all that we had done and with the development in prospect that the problem had been largely confined to Ulster and Scotland and the then threatening position in the North-East.

Mr. Charles Loughlin (Gloucestershire, West) rose

Mr. Maudling

I cannot give way. I want to continue with my argument.

Mr. Peart

What about West Cumberland?

Mr. Maudling

It was for very good reasons that we moved West Cumberland from the development districts list. It is an example of the very good development that we have had.

That was the position at the end of 1961. Since then there have been the following experiences. In Ulster, a great deal of excellent work has been done recently, despite the great difficulty of the pay-off in the shipyards. But we must remember, whatever the relative position of Ulster, that the absolute position there is worse than anywhere else.

Secondly, in Scotland difficulties have persisted, and on the North-East Coast there has been a sharp deterioration, which shows itself in the figures. On Merseyside, there has been a disappointment. I remember so well the business of the motor car firms going to Merseyside. I remember very well myself persuading the Ford Motor Company to go to Merseyside and operate there with other motor car firms. Such development on Merseyside can, and will, make an enormous difference to the whole picture there. After getting the Ford Motor Company to go there, it is heartbreaking to me to see what has happened in the last few months.

I would sum up that the Local Employment Act system has created many jobs and will create many more. The pace at which we can move will depend on the general expansion of the economy. Investment, as I have said, is overhung by the uncertainties of the Common Market, and so on. Distance between the main producing and consuming areas has proved to be a very great handicap to outlying districts. It has proved, in practice, especially difficult to persuade firms to go to the North-East. This is a fair summary of the position that we have to face.

Mr. Sydney Silverman (Nelson and Colne)

Does not the right hon. Gentleman agree that the operation of the Local Employment Act is arbitrary in the extreme and that the decisions taken under it are very hard to justify to the people concerned? The north-east Lancashire belt stretches from my constituency to Burnley and down to the constituency of my hon. Friend the Member for Clitheroe (Mr. F. Pearson). This is a district where unemployment is as high and as persistent as anywhere, but not merely is it not scheduled under the Act but the President of the Board of Trade has refused to discuss it at all with hon. Members representing constituencies in the area.

Mr. Maudling

I was trying to deal with these problems on the basis of a national problem and not on the basis of competitive constituency considerations. Certainly, the method used under the Act is arbitrary in the sense that it involves decisions by Ministers, but it is nothing like so arbitrary as what is proposed by right hon. and hon. Members opposite. Anything so arbitrary as their system of planning I cannot imagine.

I want now to turn from the analysis of the situation to the policies which the Government have been pursuing. First, there is the general level of unemployment. We have been tackling that problem with a series of measures to expand demand. Obviously, that is the right way to tackle it. These measures must not be indiscriminate. We have been upbraided in the past by the right hon. Member for Huyton (Mr. H. Wilson), for example, for what he called a "frothy" consumer goods boom. We must not fall into the error of inviting that criticism again. Nevertheless, I must say that some of the suggestions coming from the Labour Party seem rather to fall into that error.

We must be discerning in the impetus we put behind the economy, first, because a steady and more rapid rate of growth means more investment above all, and because it is investment, particularly, in manufacturing industry which is showing slack or lagging behind at present, and, secondly, because we must keep a constant watch on the balance of payments. We must not overlook or neglect this factor.

We should not go too much on one month's figures, but the November export figures, for example, were disappointing, and this underlines the importance of watching the balance of payments always. Expansion of home demand that does not lead at some time, though not immediately, also to an increase of exports will obviously cause difficulties in our balance of payments, because expansion of home demand must always of itself lead to an increase of imports.

This is the reason for the nature of the measures we have taken to date, aimed as they are at encouraging investment, helping exports and, in the case of post-war credits, at a temporary boost to consumption. I would like to run quickly through these measures because, in sum, they are quite formidable.

Our measures were the release of special deposits and the ending of special restrictions on bank lending, an increase of £70 million in public investment, the release of over £40 million of post-war credits, the reduction of Purchase Tax on motor cars, and very large improvements indeed in investment and capital allowances generally. The sum of money involved in all this should not be underestimated. These measures will have their effect, progressively, and in the long run the effect will be large. We must not underestimate, especially, the growth in public expenditure. I will say something about this.

The estimates of public expenditure this year compared with last year were up no less than 8 per cent. and there are substantial Supplementary Estimates still to come. So far as I can judge from the information I have at the moment from various Departments, the Estimates for this year will show an even bigger increase than last year and this will be especially marked in the social services—education, housing, etc.—and in assistance to local authorities. This is a measure of what we are doing in this field. We are pressed, indeed driven—quite rightly—by hon. Members on both sides of the House to expand these activities.

The hon. Member for Southwark referred to the need for more public investment. I said in my Mansion House speech that investment next year would be up by about £175 million. Additions, however, to the electricity programme are being worked out, and so the final figure is more likely to be £200 million of additional public investment.

All this is calculated before allowance is made for possible increases in social benefits which, as the House is aware, the Government have under review at the present time.

I want to make this clear and not burk the issue: public expenditure, both capital and current together, is the most expansive force in the economy today, by deliberate decision of the Government. This entails the fact that, for the time being, public expenditure will take a rising proportion of the national product. I recognise the difficulties of this. It is not a tendency I like to see, but I think that it is right at the present time.

If the House wishes to prove the seriousness with which we are tackling the problem of unemployment, both central and local, no better proof can be found than the degree to which we are expanding public activity, both current and capital, in the nationalised industries, housing, schools, roads and all the things for which hon. Members are asking. All I say, in addition, is, "Let us look at what is being done." Anyone who presses us to go further and faster must calculate the cost that is likely to arise at the time when it makes itself fully felt, some time next year.

I turn now to our policy for local unemployment. We shall certainly continue the system of the Local Employment Act, which is basically sound. [HON. MEMBERS: "No."] If it is not, then I do not know why the Labour party did not vote against it. Hon. Members opposite seemed to like it at the time.

Mr. James Callaghan (Cardiff, South-East)

I have read the debate on that Act. The criticism of the Opposition was focussed at the time by the late Aneurin Bevan and by my right hon. Friend the Member for Llanelly (Mr. J. Griffiths) on the point that the Act would take far too narrow a view of the picture and that development areas were the proper basis on which to plan.

Mr. Maudling

I was responsible for the passage of the Act and I cannot remember either Mr. Bevan or the right hon. Member for Llanelly (Mr. J. Griffiths) taking a large part in our debate. I think that the hon. Member has the wrong Bill.

Mr. Callaghan

If the right hon. Gentleman will look up his Second Reading speech on the Act, he will see that this was precisely the point made by Mr. Bevan when he interrupted the right hon. Gentleman during his speech.

Mr. Maudling

I cannot recall precisely what was dealt with during the many and long debates during the passage of the Act, and I suggest that the hon. Member reads those debates as a whole.

Certainly, our system of I.D.C.s, which we are administering vigorously, is accepted by the Labour Party. I do not think that right hon. and hon. Members opposite would put forward the proposal that industry should be directed into particular areas. I remember reading the powerful argument by the hon. Member for Cardiff, South-East (Mr. Callaghan) himself at the recent party conference, when he pointed out the difficulties of direction, and no doubt he will also have the opportunity to enlighten us later. The Opposition's policy is not to direct firms to these areas, and in that they are right. [HON. MEMBERS: "Oh."] There may be some hon. Members opposite who disagree and no doubt they will make themselves clear. I am speaking of official party policy.

The inducements being offered to industry are very large. I have already quoted the figure of over £75 million. We must not, however, get on the basis of assuming that developing industries in these areas should be based on a permanent subsidy. We want to help industries to establish themselves in these areas but industries which, once established, will be capable of working on a profitable and viable basis.

In addition to these industries brought in under the Act, we have, as my right hon. Friend the President of the Board of Trade has already announced, been producing plans for a substantial number of additional advance factories—an important development—in Scotland and the North-East, where they are most needed.

We must not let our efforts to bring in new industries to these areas obscure the fact that it is fundamentally upon the initiative of the areas themselves that development will depend, particularly for new products and new ideas. It is the ingenuity of the people and firms there which must be encouraged. They must not look entirely, as sometimes people do, to the importation of new ideas and products from other areas. Of course, that is desirable and will help, but it must not obscure the basic problem of encouraging all that is best in the enterprise and skill of these areas.

There must be a seizing of the particular opportunities. Perhaps I can give one example—the motor car industry in Scotland. I think we all hoped, and still hope, that the arrival of the big motor car assemblers in Scotland could be followed by the arrival of component manufacturers there. But it is not only a question of bringing component manufacturers to Scotland. What about the Scottish engineering industry developing its own component manufacturing? Surely the arrival of the assemblers should be regarded as a real opportunity for Scottish manufacturers to develop production in this way.

The two things must go together—the import of new firms and the development of local enterprise. It is because of the importance of developing local enterprise that we are backing up the Local Employment Act by measures of expenditure designed to improve the amenities and facilities of the areas themselves. The hon. Member for Southwark rightly referred to the importance of doing this.

The £70 million of additional public investment expenditure, to which I referred earlier, is being particularly concentrated, as far as possible, in areas such as Scotland, the North-East and Merseyside where there are idle resources and more people looking for work. There is a definite bias in favour of these areas in allocating this expenditure.

Mr. Thomas Fraser (Hamilton)

Is the right hon. Gentleman not aware that according to his White Paper on Public Investment the amount of money to be spent on classified roads in Scotland is next year going down by £1½ million? Is he further aware that the amount of money spent on factory building is also to be reduced from £11 million this year to £9 million next year?

Mr. Maudling

What I was saying was that the £70 million of additional expenditure—[HON. MEMBERS: "Answer."]—I do not carry those figures in my head. What I do carry in my head is the fact that in this additional expenditure of £70 million special bias has been given and is being given—

Mr. Ernest Popplewell (Newcastle-upon-Tyne, West) rose

Mr. Maudling

No, I will not give way. I am responsible for these things and I know precisely what is being done, and this is what is being done. If we take, for example, road expenditure, to which reference was made, and take the North-East—this is a very good example—I would have thought that road expenditure in Scotland was pretty high. As I have said, I do not carry the figures in my head, but my guess is that public capital expenditure per head in Scotland, out of the total Exchequer expenditure for Great Britain as a whole, is very high. If we look at roads in the North-East we see that we are, taking this year and next year, doubling the expenditure and, in addition, we are allowing another £¾4 million on top to be spent on further road development on the North-East Coast.

Together, I think, all this additional investment expenditure will fairly fully absorb the skills of the building and construction industries in these districts, but as they are taking time to develop fully I am looking for ways of encouraging further quick schemes in Merseyside, Scotland and the North-East. We have decided to allow local authorities in those areas to start capital works of a small nature of up to £15,000 or so by the end of the financial year if they can be finished by the summer. It is a useful and sensible contribution, but if hon. Members opposite do not want it that is another matter.

I am sure that there is a lot in the argument put forward that apart from the financial inducements designed to attract firms to these areas, much can be done, as is being done, by the very high level of public investment that is now planned for these areas to increase the facilities and to improve them and to improve the amenities of the areas. Anyone who listened to the figures which I gave of the rate of increase in public expenditure, both current and capital, and anyone who knows the facts of the potential of the construction industries will recognise that what we are doing is very large indeed and will produce large results.

There are other ways in which we can use Government expenditure to assist local employment. I spoke about giving overseas aid from the products of our industries going through a period of recession and I have been looking into this possibility. But one can only give aid to people in the form in which they want to receive it. We can, however, link the two together. We are looking for possibilities of linking the two together where aid can be granted for a form of product for which there is a spare capacity in this country. I think that a sum of £10 million is possible as additional aid from industries which have spare capacity. I think that this could make a big contribution and is another way in which we could assist.

My right hon. Friend the Minister of Labour will later be referring to the providing of retraining facilities, which are of immense importance to the long-term employment prospects in these areas. These are the main ways in which we are tackling the problems of local unemployment difficulties. We have been looking at the special problems of the North-East, in the light of a number of representations and, in particular, of representations made to my right hon. Friend the Prime Minister by a recent deputation composed of hon. Members on this side of the House, and in the light of this—

Mr. Edward Short (Newcastle-upon-Tyne, Central)

On a point of order. Is not the right hon. Gentleman aware that I was a member of that delegation?

Mr. Deputy-Speaker (Sir William Anstruther-Gray)

Am I right in thinking that the hon. Member rises to a point of order?

Mr. Short

The Chancellor made a statement which is incorrect. I also saw the Prime Minister last week. Why does not the right hon. Gentleman mention my representation to the Prime Minister?

Mr. Deputy-Speaker

That is not a point of order for the Chair to deal with.

Mr. Maudling

I said "in the light of a number of representations". I think that the representation of the hon. Member for Newcastle-upon-Tyne, Central (Mr. Short) was well publicised in the local Press and I did not think it necessary to refer to it again.

On the question of the North-East Coast—

Mr. Short

Cheap jargon. That is all the right hon. Gentleman is capable of.

Mr. Maudling

I want to say something useful about the North-East Coast. We believe that a long-term effort is needed to strengthen the economic structure of the whole of that area. We must look at communications and public services and consider the efforts which are being made by the local authorities and others in the area and present them to the Government as a co-ordinated whole. This is an approach at which we are urgently looking at the present time. Clearly, something needs to be done here and clearly something will be done here, and I believe that it will be of great value.

Mr. Douglas Jay (Battersea, North)

Will the right hon. Gentleman at least consider going back to the system which existed in the North-East before he introduced the Local Employment Act and treating the whole North-East Coast as a development district?

Mr. Maudling

I do not think that that would be the right thing to do. What I want to do is to find a system whereby the needs of the area can be looked at as a whole. I think that what I have suggested is the right thing to do and is accepted on both sides of the House as desirable. We shall go ahead with it.

Mr. P. Williams

In view of the fact that my right hon. Friend the Chancellor has announced something of importance and of help to the North-East, will he accept appreciation of that immediately and say whether any body is to be set up to co-ordinate the gathering of information and the dissemination of Government policy in the North-East itself?

Mr. Maudling

That is the sort of thing we have in mind.

Mr. Popplewell

In this new look which the Chancellor is going to give to the North-East, will he give an assurance to the House that he will restore to the old North-Eastern trading development area the right to promote schemes? The Chancellor said earlier that he wanted the North-East to do something for itself. Under the old arrangement the North-East promoted schemes far itself and this power was taken away from it, as the right hon. Gentleman will remember. Will he now seek to restore that power to the area?

Mr. Maudling

I am aware of the arguments about that, but I do not myself believe that that decision has prevented the development of the area. What I have been saying—and I hope that with this I may finish what I have been saying about the North-East—is that there is an area problem which should be looked at as an area problem.

Several Hon. Members rose

Mr. Maudling

I have given often enough.

Dame Irene Ward (Tynemouth)

I have a go?

Mr. Maudling

I have given often enough.

Dame Irene Ward

Can I ask—

Hon. Members


Dame Irene Ward

Will my right hon. Friend now deal in detail with some of the many points which were put forward by the deputation which the Prime Minister received, many more than my right hon. Friend has mentioned this afternoon?

Mr. Peart rose

Mr. Maudling

I thought that my hon. Friend the Member for Tynemouth (Dame Irene Ward) was rising to a point of order. I did not intend to give way. As I have said, I think that I have given way enough. I wanted to come to the summary of what I want to say on this general point.

Mr. Peart

On a point of order. Would it be in order for me to ask the Chancellor of the Exchequer whether West Cumberland is to be mentioned in his speech?

Mr. Deputy-Speaker

That would not be a point of order.

Mr. Pearl

Why not?

Mr. Maudling

I think that that is the most irrelevant question of the debate. If I may summarise what I have been saying, the position which we have reached in this country—

Mr. Peart

On a point of order. The Chancellor said that mine was an irrelevant question. Is he aware that we have more than 8 per cent. unemployed in the area? That is not irrelevant.

Mr. Deputy-Speaker

The hon. Member for Workington (Mr. Peart) is getting out of order if he puts a point of view under the guise of a point of order when it is not.

Mr. Maudling

I thought that the hon. Member for Workington (Mr. Peart) was asking why it was out of order. That is why I said that it was irrelevant. The level of unemployment in any part of the country is certainly not irrelevant.

The point is to try to achieve a higher level of employment and to maintain it, to achieve a higher and steady rate of growth. This means that we must have more elbow room than we have at the moment. As all parties know perfectly well when they think seriously about the problem, a level of unemployment of 550,000 or 600,000 is too high. On the other hand, a level of unemployment half that would lead us back into the difficulties of inflation and balance of payments which we have seen in the past.

Hon. Members


Mr. Maudling

I do not say that those problems are insoluble, but it is unreal to try to pretend that we can bring the unemployment rate down to half what it is at the moment without running into problems. We must, therefore, have more elbow room and a higher rate of exports and, as we are seeking, greater co-operation internationally on mutual problems of industrial expansion. The work in O.E.C.D. and our proposals for a mutual currency account are all part of an intensely important pattern to try to get concerted action in the Western world towards expansion at the highest and most sustainable rate which can be achieved.

At home, if we are to get the lower rate of unemployment which we all want and sustain that level of activity without running into the problems of balance of payments, we have to do several things. The first is to press ahead with the problems of local unemployment, as I have explained we are doing. Secondly, with all the help we can get from every source, we have to have retraining, which is of immense importance. Thirdly—and I stress this again—the prospects of a steady and substantial rate of expansion depend also on the prospects of a successful incomes policy.

It cannot be stressed too often that if we are not only to have full employment but to maintain full employment, we must have competitive costs in this country. There is no sense in the interests of anyone, including the unemployed, in producing policies which might produce temporary alleviation, but which soon land us back again in problems which we wish to avoid—balance of payments and exports and so on. There is no doubt in my mind that we can succeed in this objective with a more stable rate of expansion. Our products are very competitive and must remain so. Government action is sustaining and stimulating the demand in the economy and we need and I am sure that we will get co-operation from the whole country, management, workers and the country as a whole. All that needs to be done to ensure that the expansion on which we are now embarking will be one which we can and will sustain.

5.16 p.m.

Mr. Neil Carmichael (Glasgow, Woodside)

Having been elected to the House in the recent series of by-elections, I rise to take part in this debate on unemployment with more diffidence than is normal, even for a first effort. I am well aware of my own limitations, and I trust that the House will show its usual courtesy and indulgence towards a first speech.

Part of my diffidence is because I am from Clydeside and the people from Clydeside are well aware—perhaps those from other areas are not so aware—of our long record of people who have come to the House from that area, starting with one whom most hon. Members would agree to have been a very distinguished Member and whom, I am sure, my hon. Friends would regard as the most distinguished Member who, although he came from the Clyde Valley, was first elected for the West Ham Constituency of London seventy years ago this month. In the 1920s, there came a very vigorous, individualistic and energetic band of Members. They made a strong impression on the House and, through the House, on the country. Most of them have now passed on, but it is nice to see that one of the original band is still in the House and is still very vigorous and forceful.

All of those Members spoke of unemployment, because the problem was then as great as, or much greater than, it is today. I am well aware that Scottish Members tend to be Chauvinistic and cause a certain irritation and annoyance among the less fortunate Members of all parties. I have no desire to increase this irritation—

Mr. William Ross (Kilmarnock)

Why not?

Mr. Carmichael

—but I hope that I may be permitted to refer to the area which I know best. Glasgow is a big, vigorous, kind-hearted city, passionately loved by her citizens and quickly seductive of those who come to live within her borders, or even to visit hex. It is a city of great contrasts. The merchants and the coal-owners and the ironmasters and the shipbuilders of the last century built wonderful houses and beautiful terraces, and about the dock areas and the factories row upon row of slums for those who worked in the shipyards and smelted the iron and worked in the factories.

In the constituency of Woodside, which I represent, we have this contrast to a very great degree. We have the fine terraces and we have the slums. The slums are such a problem to the local authority, so densely are people packed—we have densities higher than most areas in Western Europe—that the local authority will be very fortunate if it is able to put one-third of the people back into the area in which they have lived for so long, once the present houses have have either fallen down or been pulled down.

In that area of Woodside we have also a university. It is an old university—500 years old. It is as large, I think, as most of the members of its staff would like it ever to become. This does not mean that we do not feel that there should be more opportunities for university education in Scotland. I hope that I am not being controversial when I say that all the candidates at the last election, speaking in the university, were unanimous in the demand for the fifth university.

Maiden speeches are by long tradition non-controversial. Here I come to another cause for diffidence. How can one speak of the terrible problems involved in unemployment without being controversial? I think that the heat of this debate earlier was not artificial. It is what people feel about this problem. A very material problem is caused when a man is suddenly brought from a wage packet to rather inadequate unemployment benefit. There is the terrible human problem of the man, as an individual, feeling that he is no longer wanted and the feeling of insecurity that goes with that, not merely to the unemployed man but to all the people who think that they may be next. It is the problem of lost hope.

The spring soon goes out of a man's step when he has been unemployed for three or four months, when he feels that when he comes downstairs in the morning it does not matter whether he goes right or left or back upstairs again because he has already walked the yards of the Clyde. He has already gone to all the industrial estates, followed every rumour of a job and there just does not seem to be any place for him. Many men I know have been through this. Here I should like to make a mild plea. During the 1930s and, I understand, the 1920s, the idea was abroad that people did not work because they did not really want to work. This story is beginning to be spread in certain ill-informed and irresponsible circles even today. The experience of every personnel officer lin whatever industry, large or small, particularly in the north, but I believe, even in the Midlands is that there is a constant procession of people looking for work.

I know, in my own area, of one job advertised which received over a hundred applicants, and of one firm which advertised a few apprenticeships receiving 270 applications. There are just not enough jobs in the country and far, far too few in my part of the country. The position in Scotland is quite desperate. We have an unemployed figure of 93,000. I do not wish to bore the House with figures, but a survey was made by Glasgow Trades Council recently in which it received a great deal of cooperation from employers on the Clyde, large and small. The social and economic barometer of the health of Scotland is the shipyards, the heavy and medium engineering. In four years those employed in shipbuilding have dropped from 27,500 to 19,500—there just are not the jobs any more. In heavy engineering, in one of the best known firms, the figure has dropped from 1,300 to 800 employed in three years and in medium engineering, in a firm which is a 'household word, employment dropped from 15,000 to 10,000. The position is very desperate. These jobs no longer exist for the people.

The thing that is most damning is how fast is this rate of decline. The Scottish Council of Development in Industry reckon that it will take 25,000 new jobs every year in Scotland for the next eight years even to maintain the very unsatisfactory figures that we have at present. If we want to get the figures down to the national average, we must have about 40,000 jobs a year.

Reference was made earlier to the North and the South and the difference between the two. One of our more responsible Glasgow newspapers quoted recently that instead of Disraeli's two nations we are quickly becoming three nations—the employers, the workers of the North, and the workers of the South. This is a terrible thing to happen in any country. What do we think can be done?

I feel nervous at having the temerity to suggest it, but when we look at a constituency such as mine and see the unemployment and the houses which we have in the constituency, and realise that civil engineering and the building industry is under-working just now—is there anything more obvious? We need new roads in Scotland for the sake of industry. We cannot keep it going without roads, and we need also another bridge over the Clyde which should be started immediately.

In a short time, I should like to see Government contracts coming to Scotland—the Post Office and the nationalised industries—and the Government directing as much of the industry to Scotland as is feasible. We do not need advance factories. We have over 1 million sq. ft. of unemployed factory space art present. It is work that we need, not factories. I should like to see the Government establishing some industries of their own in Scotland, using the expansion of the university as a nucleus around Which to build scientifically based industry in Scotland, and giving us a break from this occasionally prosperous but too often skimpy traditional industry of heavy engineering. Scotland has a highly skilled labour force, with a long tradition and a pride in its craftsmanship. As my hon. Friend the Member for Southwark (Mr. Gunter) said, this is where the real wealth of Britain lies, and where much of the greatness of Britain comes from.

It would be a tragedy to allow these communities to break up even further than they have. No less than 250,000 people have left Scotland in the last ten years because of lack of opportunity. I ask the Government whether it he possible to increase unemployment benefit. This would do three things. It would help the economy; it would greatly help the people in very severe need, and it would provide an assurance that the Government are really making a serious attempt to deal with the unemployment problem—because they would not wish to go on paying a higher rate of benefit indefinitely. It would show that the Government meant to increase not merely individual productivity but the national product.

I hope that the debate continues on the same lines as those on which it has been proceeding up to now. In my area the problem is so immense and depressing to so many people that I am quite sure that, no matter how much heat may be generated in this House, the people would rather have this than think that this House cared little about what was happening.

5.32 p.m.

Sir Herbert Butcher (Holland with Boston)

Every hon. Member who has heard the speech of the hon. Member for Glasgow, Woodside (Mr. Carmichael) will wish that he had the good fortune that has fallen to me, namely, of sincerely congratulating the hon. Member on a valuable contribution to our debate.

He started his speech in a properly diffident and modest manner, reminding the House of the distinguished Clydesiders who had preceded him. I thought his modesty went a little too far, because those of us who have served in this House for some years remember with pleasure and affection his own father. It is nice to know that Clydeside is again represented by a Carmichael—and I hope that I shall not get out of order in saying that. When a former colleague of this House reads tomorrow's HANSARD I am sure that he will feel that great as are the accomplishments of his family there is every chance that they will be surpassed in the future. The hon. Member's was a model maiden speech, and I commend it to all hon. Members, in every way.

I now want to deal with the points that he made. First, there was his advocacy of his native city, which he loves so much. I cannot help feeling that other depressed areas would do well to emulate his policy, namely, to catalogue many of the advantages which they are able to offer. He pointed out, quite truthfully and properly, the advantages of education and scenery, and the corporate unity of Glasgow. He could also have referred to the charm of the countryside and, passing to more material matters, to the fact that the cost of living is probably slightly cheaper than it is in England. Certainly the cost of housing is very much cheaper. The same things could probably be said of the North-East and other areas.

Another point on which I agree with him wholeheartedly was that which he made relating to the man who, having been employed for many years, suddenly finds himself unemployed. I cannot help feeling that the present concept of unemployment insurance is due for a change, and that the benefit which a man receives on becoming unemployed—through no fault of his own—should be related to the period for which he has been in steady and regular employment. It is surely not beyond the wit of man to devise a scheme which would prevent the terrible effect of the great drop in the family income which occurs when a man falls out of work through no fault of his own. My right hon. Friend the Chancellor of the Exchequer was right to summarise the various steps which have already been taken to deal with the problem of unemployment and to put the matter in proper proportion. He pointed out that the national figure was only 2.4 per cent. On the other hand, he was right to show his awareness of the fact that large and substantial pockets of unemployment require special attention and action.

He said that the enlargement of the already large public expenditure will be the most expansive feature in our economy in the next year or so. That may be very right and proper. It may be the right thing to do for unemploy- ment. I enter only two cautionary words. First, I should like to know to what extent this increased expenditure is going to be inflationary, and, secondly, to point out that to the extent that public expenditure is a charge on industry it will in no way assist the development of our export trade. But the linking of aid to the production of goods is an imaginative approach, which should be carried forward with the greatest impetus that can be mustered by the Government.

The peroration of the speech of the hon. Member for Southwark (Mr. Gunter) was in much of a party character, but in all his proposals he seemed to draw his inspiration from a former Cabinet Minister on this side of the House, now elevated to another place. But I agree with him—and I took a note of the phrase he used—that "there is something wrong somewhere, and human values are being debased."

As I go round the streets of this city and many of the small towns in my constituency, I ask myself whether, at a time when we are dealing with problems of unemployment, we can afford to allow so great a diversion of the resources of our people, by betting shops and other such facilities. The money that goes over the counters of those places could be much better used, either in the purchase of household goods or in savings, which would help capital expenditure. I was glad that my right hon. Friend hinted that some remedial steps might be taken in that direction. If those steps were taken the bookmakers and owners of the gambling shops would have nothing to complain about. Gambling is their trade; they would merely have backed a loser.

There are one or two other steps which the Chancellor could take which would help to solve the unemployment problem. Two are somewhat technical, but they both have a certain amount of force. My right hon. Friend reduoed the Purchase Tax on motor cars with a view to stimulating employment in the industry, and it did so. On the other hand, it certainly increased unemployment in the motor-cycle industry.

The Chancellor's decision is having one other effect: the fact that this change in Purchase Tax in a downward direction was announced in the early winter is making many retailers and wholesalers anticipate that future movements of Purchase Tax will also be downwards. As a result, orders are being kept to the very minimum, and there is some likelihood of their being unemployment in manufacturing industries which produce goods which are subject to Purchase Tax. I therefore hope that my right hon. Friend, having to a large extent anticipated his Budget by his announcement last month, will go a little further and will, perhaps as soon as the House resumes, announce the whole of his proposals in connection with Purchase Tax for this year.

I believe that to some minor extent it would be of advantage to the country if the Government reintroduced the facilities under the House Purchase and Housing Act by which money was made available to building societies for lending on older houses. I declare my interest as a director of a building society. One of the results of making it easy for pre-1919 houses to pass out of the hands of the landlord and into the hands of the owner-occupier is that there has been an outward and visible brightening up—and quite a number of the industrial parts of this country could do with that. Secondly, expenditure has been undertaken on putting inside those houses such standard amenities as baths, sinks and boilers—and this has meant expenditure and employment in providing all the incidental work, on transport and materials, which are also required.

The hon. Member for Southwark said that it would be an admirable idea if the Government made places of heavy unemployment more attractive. He described the places where unemployment is heavy and said that the Government must make these places attractive. I agree with him, but I wonder what he had in mind when he used the word "attractive". Attractive to whom? Surely he means that we should make areas of unemployment profitable to industry. That, I think, is the main test which should and must be applied nowadays to the movement of industry from one part of the country to another. Whether we like it or not, and whether we enter the Common Market or not, we have to live in a highly competitive world in which we have to sell our exports in competition with all other nations. It is not the slightest good curing unemployment for a few years now if we then discover that we have sited our factories in the wrong place and have handicapped them so that their products cannot compete in world markets.

I was interested to hear what my right hon. Friend said about proposals for the north-eastern region. An hon. Member who used to sit opposite and spoke with great authority on matters of air and industry is taking an interest, and an important part, in the development of the north-eastern region, I believe that it would be well worth while as a shock tactic taking the north-eastern region and examining first how we can make it more attractive to industry. I repeat that when I say attractive to industry I mean more profitable to industry.

Secondly, we might pick up some suggestions at least among those contained in the recent article in the Economist and move a large section of Government employment into such areas. I am not suggesting that for the moment this House should be moved. Perhaps we should send an advance party to see how they get on. But I think that it would be a very good idea if we moved a substantial number of civil servants into that district.

We must always bear in mind that in this country, if we are to maintain our freedom and our liberty, we have to coax, persuade and encourage people to move. One of the things which the older districts of this country need is a bit of a face-lift and a bit of a new spirit, and perhaps, let us face it, a certain amount of enterprise by the firms and the people who are living there at the moment. I should like to see the north-eastern region used as an experimental area, and I believe that, with the plans which have been put forward in all parts of the House, we may move forward.

The hon. Member for Woodside has shown a spirit of humanity and of looking forward—the kind of approach which all of us wish to bring to the subject of today's debate.

5.46 p.m.

Mr. Shinwell (Easington)

Few speeches in the House in my experience have given me as much pleasure as did the maiden speech of my hon. Friend the Member for Glasgow, Woodside (Mr. Carmichael). In his human approach to a possible solution of these unemployment problems he has proved most truly a representative of that part of the country.

Much could be said about the history of unemployment in the west of Scotland, going back almost to the beginning of the century. I recall that in 1908 I led a procession to Cathedral Square in Glasgow. After some propaganda, but no particular inducement on my part, the mob decided to enter Glasgow Cathedral to make a protest. This was on a Sunday. The police had other ideas about the intentions of the mob, however, and we were soon batoned down the High Street—and that was the end of that agitation.

In the following years we were confronted, as were other parts of the country, by the serious malady of unemployment. In 1919 we initiated what was then described at the 40-hour strike. I was that chairman and the leader of that strike. Following demobilisation, which was perhaps carried out too speedily, we had probably 150,000 unemployed persons in the west of Scotland. But all that resulted from the agitation was that I found myself in Calton Goal in Edinburgh serving a rather longer sentence than I cared to serve. I was, of course, quite innocent—but that was not the view of the judge who tried me.

I will not take up much time of the House. I want to be brief, because I know that many hon. Members wish to take part in the debate. [HON. MEMBERS: "Hear, hear."] I must, however, make this observation: almost every hon. Member in the House wants every other hon. Member to be brief in his observations but forgets about it when he himself is on his feet. I do not want to waste the time of the House by discussing the local situation in the part of the country which I represent. The hon. Member for Holland with Boston (Sir H. Butcher) spoke about trying an experiment in the North-East. We do not mind what experiment is tried as long as we can provide idle men with work. I offer best wishes to the Chancellor of the Exchequer in the process of this experiment. We shall wait and see.

My concern is to ask the question: What is the cause of unemployment? I observe that in recent debates and so far in the course of this debate nobody has asked that question. But unless we can discover what is the fundamental cause of unemployment there is no hope of reaching a solution. I have no doubt that during the debate on both sides of the House there will be agreement with the Chancellor's statement that we must expand our exports. We have been asked to do it during the whole of this century. Exports have gone up and then they have receded. But unemployment has remained all through those years. We must at the same time remember that if we boost our exports by adopting incentives and other devices we may often do so at the expense of our neighbours.

It may be worth our trying another experiment, and perhaps the Minister of Labour will convey this to the Chancellor of the Exchequer. Why not initiate a world economic conference and bring the countries of the world together—particularly the more powerful and industrial ones—to consider the prospects of analysing the situation and of promoting a possible solution to the vexed and complex problem of unemployment? I throw this out as a suggestion, because when we talk about boosting our exports on the assumption, which I believe to be false, that that itself can help to solve the unemployment problem, we must consider the fundamental question of why we must boost our export trade in order to survive. I realise that we must import and that, because we must import, we must export.

I was disappointed with the Minister's speech, for it was full of bits and pieces. It contained the suggestion that if we expand our industries and productivity all would be well, but I noticed that the Minister said, in effect—and I urge hon. Members to note this—"We cannot solve our present unemployment problem because we must have regard to the balance of payments difficulties." It seems that if our balance of payments difficulties are an obstacle to the solution of the unemployment problem we must accept the consequences. My hon. Friend the Member for Woodside was right when he directed attention to a matter which I heard the Chancellor say in the North-East in the course of a television programme.

The Chancellor declared his intention to survey the possibilities of increasing unemployment benefits. If we cannot solve the unemployment problem then clearly there is a humane duty—indeed, a high responsibility—on the Government either to increase the unemployment benefits speedily by legislation. Something else could be done. I have previously advocated the creation of a supplementary unemployment fund, to a large extent contributed to by employers, with a contribution from the State. This should increase the amount of benefit received by a person while unemployed on the condition, rigidly applied, that that person, if offered a job, must accept it provided the conditions are regarded as satisfactory from the trade union point of view.

The propositions I have suggested are remedial and might have a certain ameliorative effect, but I would be the first to agree that they would not solve the problem. What, then, can be done? It is surprising that the Chancellor did not mention the possibilities inherent in East-West trade. There are enormous populations throughout the world; 700 million in China, 400 million in India, 150 million in the African territories and more in other backward and underdeveloped countries where much could be done. There is a possibility of increasing trade in these directions and this would certainly enable us to boost our exports. It would enable us to increase our production and provide people with work and, at the same time, it would help to solve the unemployment problem which exists throughout what is known as the civilised world.

Why cannot we trade more with China? Why cannot we forget the antagonisms and hostilities of an idealogical character and tell the United States administration not to interfere in matters of trade which affect this country, as they are proposing to do about Cuba? Why should they interfere with our shipping, ordering us about, pushing us around, giving us instructions? Is it not about time we told them to mind their own business? China is one place. India is another. What about the countries behind the Iron Curtain? Only the other week some of my hon. Friends and I directed attention to the question of Rumanian trade. I understand that the negotiations have been resumed so I content myself with asking the Government to do something to boost East-West trade, irrespective of what the United States Administration believe to be correct. If the Government do that they will discover a vast reservoir of opportunities of which we can take advantage.

I return to the question I posed at the beginning; what is the cause of unemployment? The cause, after all, is simple enough; that it is impossible to reconcile consumption with production; productive capacity. While that is so internally, it is also true throughout the world. I have directed attention to only one possibility of correcting this position; the possibility of boosting trade throughout the world and helping the backward countries. We must also realise that there are vast numbers of people in Britain who would like to buy and consume more—clothing, food and other things—if they had the money to do so. But they do not have it.

I am told that retail drapers in Oxford Street and neighbourhood say that Christmas trade is not as good as it was last year or the year before. This is not due to bad weather or the lack of transport but simply because people do not have as much money to spend.

Mr. A. E. Cooper (Ilford, South)

The facts are that over the last seven or eight weeks there has been a surplus on small savings.

Mr. Shinwell

Then the obvious thing is for the Government to say to the people, "Do not save your money but spend it."

Mr. Nabarro


Mr. Shinwell

Let me explain.

Several Hon. Members rose

Mr. Shinwell

I know that hon. Members opposite have so much money that they can afford to spend it.

Mr. Nabarro

Sit down.

Mr. Shinwell

Is that the kind of argument we are to get from hon. Members opposite?

Mr. E. Fernyhough (Jarrow)

is it not obvious from what my right hon. Friend the Member for Easington (Mr. Shinwell) is saying that he believes that the unemployed have no consumer requirement because those requirements are all being fulfilled? Does that not apply to those on National Assistance, the old and the sick; that they are all getting what they want?

Mr. Shinwell

My hon. Friend is actually reinforcing my point. And had the hon. Member for Ilford, South (Mr. Cooper) not interrupted me I should not have dealt with this matter. The hon. Member mentioned savings, but, to the extent that people save—unless the money is used for investment purposes —that must reduce consumption.

Mr. R. W. Elliott (Newcastle-upon-Tyne, North)

Regarding sales in the Christmas period, the right hon. Member for Easington (Mr. Shinwell) may be correct in what he was saying, but the fact is that in the third quarter of this year departmental store sales have been greater, according to a national index, and considerably higher than in the second quarter of this year.

Mr. Shinwell

The hon. Gentleman first says that I may be accurate and then tries to confute what I say. All I can say is that I read the newspapers and I also read certain documents sent to hon. Members, and I came to the conclusion that the retail trade was not quite as good. The obvious reason is that people have not as much money to spend—perhaps for the reason given by the hon. Member for Ilford, South, that they are saving the money, or it may just be that they have not got it. The fact is that unless in this country or in any other there is money to enable people to buy goods, and if production increases out of proportion to consumption, there must sooner or later be unemployment.

Who will deny that? Where are the hon. Members opposite now who said "Sit down"? Let them answer that question. I am stating facts, and if after I have concluded any hon. Member can refute what I have said about the primary cause of unemployment, not only in this country but throughout the world, I will be very glad to hear what he has to say—

Mr. Nabarro

Perhaps the right hon. Gentleman will hear what I have to say about it. I was one of the hon. Members on this side who said "Sit down" after the right hon. Gentleman had said that people should not save. I want to tell him that it is far better that people should save than that they should spend their money on bingo.

Mr. Shinwell

I think that a quite unnecessary intervention, except that the hon. Member for Kidderminster (Mr. Nabarro) said that he had asked me to sit down. Everybody in this House and in the country knows that the hon. Member is famous for his courtesy—

Mr. Dan Jones (Burnley)

And for his bingo mentality.

Mr. Shinwell

—and for his remarkable manners, but if he thinks that he can stop me saying what I have to say he will have to get up much earlier in the morning than he is accustomed to do —because he can afford to stay in bed, being one of the affluent class. However, I will say no more about that. We are not dealing with the hon. Member but with a human problem. I leave hon. Members to draw their own conclusion.

I turn now to the short-term problem. My hon. Friend the Member for Southwark (Mr. Gunter) referred to public works, and that subject was mentioned in a debate some time ago on unemployment in the North-East and also in a debate on unemployment in Scotland. Of course we have to boost up public works. Much work has to be done, and my hon. Friend the Member for Woodside indicated what should be done in his area. The hon. Member for Holland with Boston spoke of the need to make some parts of the North more attractive. How can we make them more attractive? We can get rid of the slums and the squalor, we can get rid of the unsightly pit heaps and slag heaps, we can improve roads and provide amenities.

That is the way to make those places more attractive even if it does mean more profitability. That, however, is a matter for the Government and the local authorities in combination. We have heard of co-ordination this afternoon, but how can we effect that except by the Government taking the initiative and calling on the local authorities to combine with them to provide the necessary improvements and amenities, so that those and various other parts of the country can be made more attractive?

Government contracts should be given immediate attention. They have been referred to over and over again. I cannot understand why the majority of the contracts for the Post Office—engineering equipment, clothes, electronic equipment, and the like—or for the nationalised industries—the Electricity Authority, even the National Coal Board—or for the Service Departments who, between them, must spend on stores and various equipment something like £600 million or £700 million a year, go to the South and the Midlands.

I do not want to deprive the South and the Midlands of a living—

Mr. D. Jones

Fair shares.

Mr. Shinwell

Exactly—fair shares. There should be fair shares in this country, but at this time the people in the North are suffering more intensely than the people in the South.

I have reached the conclusion that it is not the intention of this Government to solve the unemployment problem. That is riot their intention—it never was. It never was the intention of a Tory Government to solve the unemployment problem. Indeed, there are hon. Members opposite who have said time and again that there must be a reservoir of unemployment, which is very satisfactory from their point of view—

Dame Irene Ward


Mr. Shinwell

The Chancellor said again today that we can only solve the unemployment problem by upsetting the balance-of-payments position. I hope that every unemployed person will note what the right hon. Gentleman said—

The Minister of Labour (Mr. John Hare)

I think that the right hon. Gentleman had better read HANSARD very carefully tomorrow. What my right hon. Friend described was the problem of how one reconciles the need for sound balance-of-payments position and a sound employment policy.

Mr. Shinwell

I heard what the Chancellor said. At the right hon. Gentleman's request, I will read the OFFICIAL REPORT tomorrow, but I am sure that I am right. The Chancellor referred to the proposals to provide more investment, more expansion, to inject more Government money into the public works programme, and the like, and then he added that we must be mighty careful because all this means inflation and might upset our balance of payments. I therefore repeat my hope that every unemployed person will understand just what was meant by the Chancellor; that if it is a choice between attempting to solve the unemployment problem by adopting a measure of inflation and affecting our balance-of-payments position, the unemployed must put up with it.

The Chancellor referred to the effect on productivity of automation, rationalisation, modernisation, and so on. What are the facts? Here I will deal with a local matter. In the administrative County of Durham—not the boroughs—according to the figures given to me by the Minister of Labour last week in reply to a Question, more than 1,500 miners are registered as unemployed—and that despite all the talk about absorbing unemployed miners who have been displaced as the result of the closing of pits. Those men have no hope of getting work. They have no opportunities for employment in the Midlands, the South or in Wales—none at all. What is to be done about them?

The fact is, and we must be ready for it, that the trend is towards automation, mechanisation, rationalisation and the modernisation of industry. It is happening now, not only in industry but in clerical work in office clerical work, and the like. What is the Government's intention about that? We are able today to produce far more goods with fewer men. What will happen in the future?

How will the Government tackle this job? By talking about the balance of payments? By providing a few advance factories with no certainty that they will be occupied? By telling us about a little road improvement in the North-East and talking about something in the nature of public works, and by talking all the balderdash that comes from hon. and right hon. Members opposite? [Laughter.] Yes, including the hon. Lady the Member for Tynemouth (Dame Irene Ward) who talks more balderdash than anybody in the House. She has been doing it for years and she gets away with it, and I can never understand why.

The hon. Lady has been criticising the Government without the courage to go into the Lobby against them. She pretends that she is interested in shipbuilding and shipping and the like, but she has never raised a finger to help those industries and has done nothing except talk about them. The hon. Lady is an excellent talker, though when it comes to action there is no courage behind it at all. [HON. MEMBERS: "Oh."] I am not going to take something from the other side of the House without returning it, and I am returning it now.

Dame Irene Ward

Thanks for a lot of votes. I am delighted.

Mr. Shinwell

The hon. Lady will not be delighted at the next election. We will soap the stairs for her.

All these bits and pieces will not do. The Government must tackle the question in a fundamental fashion. If they do not, they will go out at the next General Election, and no Government will deserve that more. The Chancellor of the Exchequer made the kind of speech that pretends that the Government are doing something, but the test is whether idle men are to be employed. The Government admit that it will be worse in the next month or two. They talk about seasonal and weather difficulties.

Mr. Rupert Speir (Hexham)

What about the fuel crisis?

Mr. Shinwell

The hon. Member should ask the Prime Minister some day about that fuel crisis. He should ask him to disclose all the facts. I have never done so, but let the Prime Minister, with Cabinet documents, disclose the facts and hon. Members opposite may not be laughing any longer. [Laughter.]

Mr. D. Jones

Why do hon. Members opposite not deal with this debate? If they were unemployed they would not laugh.

Mr. Shinwell

I have been unemployed, before we had the dole, and I feel bitter because of that experience. I recall also that in the 1930s we had 21 million unemployed and that in Scotland the figure was 26 per cent. We, on this side of the House are not going back to that period, but if this Government last much longer and if by some misfortune they come back after the General Election we may suffer the same again. That is what we are determined to prevent.

6.12 p.m.

Sir Fitzroy Maclean (Bute and North Ayrshire)

The right hon. Gentleman the Member for Easington (Mr. Shinwell) had, first, a knock-about turn with the hon. Member for Kidderminster (Mr. Nabarro) and then a knock-about turn with my hon. Friend the Member for Tynemouth (Dame Irene Ward), in both of which he got as good as he gave.

Mr. Nabarro

Much worse from me.

Dame Irene Ward

The right hon. Member for Easington (Mr. Shinwell) is jealous of me.

Sir F. Maclean

In between these two encounters, the right hon. Gentleman asked a question of the Government which I also wish to ask them. I noticed incidentally, that he made no attempt to answer it himself, but why should he? He asked what the Government would do to counter the effects of automation. This is something which is taking place on a very large scale in my constituency. I am very familiar with the effects of it. They are deplorable in North Ayrshire, in the matter of unemployment, and so I, too, want to know what the Government are going to do about it.

Of late, a good many of the Government's utterances on unemployment have been far from reassuring. They may have been meant to be reassuring, but they certainly did not have that effect in Scotland. It is all very well for the Minister for Science to tell us that we must keep our heads about Scottish unemployment. We have been keeping our heads under successive Administrations, of both complexions, for a very long time without anything very effective being done. It is also not reassuring for the Government to ask us to keep calm or to give them time. They have been given time, but things have only got worse. One is led to suppose that the Government make the mistake, as the Scotsman put it, of … regarding as temporary and transient what is deep-seated and enduring. The problem in Scotland is quite different from that in areas in England and elsewhere which are adversely affected. The Scottish problem is a problem of its own and should be treated as such.

One of the things which must be remembered, and which I think the Government sometimes do not always remember, is that the rapid decline of the old industries makes even more urgent than it otherwise would be the need to establish new industries. We axe always being told, and quite rightly, about the jobs that are in the pipeline. Quite a lot of jobs are in the pipeline, but the trouble is that while jobs are flowing into one pipeline they are flowing out of the other, and while we are taking one step forward we are very often taking two steps back.

The assertion that we sometimes hear that unless industry as a whole expands it cannot expand in Scotland ignores the enormous leeway that must be made up and also ignores the fact that Scotland is a distinct country. It is all very well for the Minister for Science to go to Glasgow and talk about people preferring Surbiton to the Highlands. Many people may go to Surbiton from the Highlands, but not necessarily because they prefer it, but rather because they have to go there to earn their living. Depopulation is something which no Government should accept as calmly as that.

I am glad to see the Joint Under-Secretary of State for Scotland in the Chamber. I wish that we had had a Scottish Minister either opening or winding up the debate. He might have told us rather more about Scotland and what will be done to help Scotland than has his right hon. Friend the Chancellor of the Exchequer. I sometimes wonder whether the Secretary of State for Scotland has sufficient power and whether he might not be able to do much more for Scotland if he had more power in economics and finance. I have not so far noticed any great signs of activity from the new development department at St. Andrew's House. I wonder whether that also could not have its power expanded and whether it might not be better if it were remodelled and made into a real development department for Scotland.

Any reference to planning in these debates always produces a derisive reaction from the other side of the House, but I remind hon. Members that a is some time now since the late Sir James Henderson Stewart, after he left office as Joint Under-Secretary of State, called for a five-year or a ten-year plan. [An HON. MEMBER: "After he left office."] Better to do it after leaving office than not at all, otherwise one would never say anything after leaving office.

My main conclusion is that what is being done by the Government is not unsatisfactory in itself. The Local Employment Act is all right as far as it goes, and it is satisfactory to know that more has been spent on Scotland than on England and Wales.

Dame Irene Ward

Satisfactory to my hon. Friend.

Sir F. Maclean

Satisfactory to Scotland—well, we deserve it more. But when I say "spent" it has to be remembered that most of the money spent is spent in loans at a relatively high rate of interest.

My own view is that the Local Employment Act is necessary, that it has done good work and that it will do more good work, but that it needs supplementing, and the question is how to supplement it. It has been said before, from both sides of the House, that what is needed is to provide a bigger deterrent and also a bigger carrot. Personally, I feel that there is something in that. But if a bigger stick is used to stop expansion where firms want to expand, there is always a danger that it will have the effect of stopping them expanding altogether, and nobody wants to do that.

That is also the answer to hon. Members opposite, some of whom, though not all, talk about the direction of industry. Until we have a Socialist State, which we are, I hope, a very long way from having, there can be no effective direction of industry. All that would happen if we tried to direct industry would be that it would shrivel away. If ever another Labour Government come in, and they try to direct industry, just wait and see what happens.

But I do not think that the same argument applies to the provision of a bigger carrot. If we offer sufficient inducements, human beings, including industrialists, will do almost anything. If the prospects for establishing new industries in Scotland are made sufficiently attractive, people will establish them there, and that is a factor which the Government, in this desperate state of affairs, ought to bear in mind.

What should be offered must be supplementary to the Local Employment Act. I am sure that to get things going we have to give inducements from the outset, but we also have to make up our minds fairly quickly what inducements we are to give and to whom, otherwise those concerned will lose interest, and that is one of the great complaints made against the operation of the B.O.T.A.C. machinery—that it works much too slowly. I hope that my right hon. Friend the President of the Board of Trade will do something about that. It is not the first time that he has been told about it.

In addition to what can be done under the Local Employment Act, I think that the Government should consider—I have said this before—fiscal inducements of one kind or another. They should consider the possibility of the remission of rates and of making good the losses to the local authorities by means of grants of one kind or another. They should also consider granting remission of taxation and increased taxation allowances of different kinds. There seems to me to be no reason why, if the Government want to promote increased investment in any given area, one of the ways in which to do it should not be to offer increased investment allowances in the area while the need exists.

To get them going I do not see why they should not grant industrialists moving into a development area remission of a certain amount of taxation for a certain number of years. I am sure that there are difficulties—there always are—but, in the desperate situation in which we are at present, that is something which needs looking at. It is something which has been done with success in other countries, and which could be done with success in Scotland.

Dr. J. Dickson Mabon (Greenock)

Is it not a fact that during the debate on the last Finance Bill we on this side of the House moved Amendments to do precisely this, but the hon. Gentleman, with one exception, either voted with his party or abstained?

Sir F. Maclean

I have changed my mind since then. Further, I would not accept that the proposals of the hon. Gentleman and his hon. Friends were necessarily the right way of doing it. What I am asking the Chancellor to do is to consider this scheme and see whether he cannot work out one which would produce the desired results.

Mr. Ross

May I remind the hon. Gentleman that on the occasion mentioned by my hon. Friend the Member for Greenock (Dr. Dickson Mabon) he did not even vote for his own new Clause?

Sir F. Maclean

No, the hon. Gentleman has got that wrong. I think that I did.

Mr. Ross

No, the hon. Gentleman did not.

Sir F. Maclean

If the hon. Gentleman is talking about the same new Clause as I am, I went into the Lobby with the Opposition and with my hon. Friend the Member for Tynemouth (Dame Irene Ward).

Dr. Dickson Mabon

In fairness to the hon. Gentleman, it is a fact that he did vote for his own new Clause, but was not present to move it.

Sir F. Maclean

I may not have been present to move it, but I seconded it, I thought, very successfully, and, certainly, as I have just told the hon. Member I voted for it. The hon. Gentleman generally has a very good memory in these things, but it has failed him this time.

Another thing which I think can and should be done to help—and I am glad to say that it is being done, although not always in the right places—is the provision of advance factories. Personally, I believe that, whereas most firms would prefer to have factories built to their own specifications, there are certain firms which would rather take a ready-made factory at once than wait for the machinery of the Board of Trade to produce whatever it is they want.

This brings me back to the urgency of the matter. I was in my own constituency this weekend, and there the local figures show unemployment running at a rate of 7.6 per cent. What is more, I am reliably informed that there are more men to be paid off at Hunterston, and there is still a steady run-down at the I.C.I. factory at Ardeer, past the bottom figure of 4,500 originally given. And that is largely the result of automation. That is why again I say, like the right hon. Member for Easington, that I want to know what the Government are proposing to do about that.

Mr. Shinwell

The hon. Gentleman has asked me why I did not provide a possible remedy for the effect of automation. He is quite correct; I did not do so. The obvious trend must be towards automation and towards remedying its effects in the reduction of the working week.

Sir F. Maclean

That is the point which I am making, too.

What makes the situation in this area of North Ayrshire worse—and I make no apology for referring to it, because it is representative of a great part of Scotland—is the need to absorb the available labour as quickly as possible, because otherwise, there is a danger that all the skilled labour will be drawn off relatively quickly, and that a residue of the less easily employed labour will be left.

That will not only be very bad for the unfortunate skilled workers who have 'to leave their homes, or for the less skilled workers who stay there but who have no work to do, but also very bad for Scotland, because it will mean that our labour force will be thrown out of balance, and that we shall lose a lot of very valuable workers.

That is why I urge the Government once again to reconsider their decision not to site an advance factory in Central Ayrshire, as the hon. Member for Central Ayrshire (Mr. Manuel) and I have so often urged them to do. I do not begrudge the hon. Member for South Ayrshire (Mr. Emrys Hughes) his advance factory at Cumnock. I am sure that it is needed there, but we in North Ayrshire have a much higher rate of unemployment at the moment.

I urge this on the Government all the more because of an incident which occurred earlier this year, when an American firm, with which I have been in touch, was told that it need not come to inspect the area, for two reasons, first, because there were no existing premises, and, secondly, because one could not be sure of getting labour in the area. That reply was given to me by the then Parliamentary Secretary to the Board of Trade, and all I can say is that, while there may still be no existing premises, there is certainly no shortage of available labour in that area at the present time.

Mention has been made of public works. There are arguments for and against a large programme of public works, but in this one small area of which I am speaking there are plans for roads, sewerage, a new post office and a new employment exchange. These plans were made a long time ago and have been held up for one reason or another, and this, in turn, is holding up other things such as housing development. The Government should consider seriously whether it is not better to spend money on employing men on projects of this kind than to spend a comparable amount of money on unemployment benefit and relief and leaving the men unemployed.

One of the great necessities today is to catch people's imagination in Scotland. An idea which has certainly caught my imagination, and which might catch the imagination of many other people has been put forward by the Ayr County Council, namely, a duty-free industrial estate at Prestwick. Something of the kind already exists at Shannon and it has been enormously successful. There are many things that we can learn from the Irish in this respect. Prestwick lacks none of the advantages of Shannon, and has many more of its own.

We hear many references to the need for research, particularly for Government research in Scotland. I certainly prefer the remarks of the Minister for Science on this subject and his reference to keeping our heads and preferring Surbiton. What is needed is something that will catch the imagination of the local population and of prospective industrialists. Once that is done, I think that the outlook will be much better.

It is sometimes said that in Scotland we do not do enough to help ourselves. In North Ayrshire, the people are certainly doing a lot to help themselves at the moment. In my constituency and in Central Ayrshire a joint industrial committee, formed by the trades councils and the local authorities, is doing much valuable work to this end, and, above all, it is giving plenty of publicity to the various amenities of the area, such as the good roads, railways, port facilities, and so on.

The Ardrossan Harbour Company has extended its facilities so that a much wider range of cargoes can now be handled. The Ardrossan Shipyard, which for so long lay practically derelict, has now been taken over by an enterprising local man—almost local, anyway—and, what is more, it is now proposing to expand. It has already had a great many contracts, Government and otherwise.

All that is extremely encouraging. Nobody can say that in this area the people, the industrialists and the local authorities have not played their part. That being so, let the Government now play their part. I know that their powers in these matters are limited, but there is a certain amount that they can do. I was disappointed that the Chancellor did not announce something new in his speech. I would have liked to hear him say some-think new and imaginative. Above all, I would like him to produce something quickly, because speed is of the essence.

6.36 p.m.

Mr. J. Grimond (Orkney and Shetland)

With a great deal of what the hon. Member for Bute and North Ayrshire (Sir F. Maclean) said I agree. Of course, there should be far more protest against the complacency, the conservatism and, indeed, the incompetence of the Government in dealing with this problem. As the hon. Gentleman rightly said, this has been endemic in Scotland for many years. The hon. Gentleman has been taken to task for not always following his voice with his vote on previous occasions. He will have a chance tonight to follow up the protest he has made verbally by voting against the Government. The more he and other hon. Members do this the quicker we shall get some action.

The hon. Gentleman also mentioned some of the speeches which have been made by former Ministers after they have resigned office. It is becoming a habit of Tory Ministers to have, not so much a death bed repentance but a repentance after political death. We have had Lord Eccles beating his breast in the Upper Chamber. We had the late Sir James Henderson Stewart doing it before. It is no good. What we require from the Government is action white they have the power to take it.

The Chancellor of the Exchequer opened the debate by saying that he would deal with the problem under two headings. One was the question of local unemployment, and the other was the question of expanding the economy in general. The indictment against the Government is that they have been in office for 11 years but have done nothing under either heading. They have not for stalled the obvious danger of regional unemployment, and they have not until lately taken the decision that growth in the economy shall be given a high priority. It has taken the Tories over half a million unemployed to awaken to the fact that we have no effective industrial policy. It is going to be much more difficult to introduce these policies now, at a time of difficulty, than it would have been three or four years ago in a time of comparative prosperity.

I represent a constituency—I do not intend to say much about it—which has suffered from unemployment and depopulation for many years. We are well aware of what a social disease this is and of how it feeds upon itself. It is no fluke that industry concentrates in the south-east of England. It has been a deliberate decision to concentrate our financial, industrial and political power. We are one of the most centralised countries in the world, and we are centralised by deliberate policy on London.

The Chancellor of the Exchequer chose some enlightening phrases. He talked about the Government being driven to do something by this House. That is extremely enlightening about the Government's attitude. They wait till they are driven to do something. He talked of the difficulty of getting industry to go far afield. That also is typical of the Government's attitude, that the Tyne, the Tees, the Mersey and Scotland, to say nothing of Shetland, are far afield in a sort of backwoods where it is difficult to get people to go.

This centralisation has had two consequences. First, talented population has been drawn down to the South and to the Midlands. Secondly, this country has taken a London view. We are inclined to think that what is good or normal for Middlesex suits the rest of the country automatically. Since the nineteenth century, Manchester and Wales have been steadily drained of the capability of making a distinctive life of their own. This is not at all insignificant in the context of unemployment. Once an area begins to lose its talent, skill and ability as they drift away, once it ceases to have an organic local life and expression of its own, the population soon drifts away, too.

If the Government are sincere, therefore, about developing the depressed areas far from London, they must deliberately bring back power into those areas and encourage them to develop their own centres of political, industrial and social growth. I do not suggest that the capital of England should be moved to the Fells, but I do suggest that the Government should develop Edinburgh and regional capitals and a Welsh capital.

Mr. Cyril Bence (Dunbartonshire, East)

Have the Bank of England in Edinburgh. We would look after the money better.

Mr. Grimond

To complete the process would take time, but the Government can start right away by moving some of their own offices. It would not be comfortable for everybody. Anything that is done in this way would be uncomfortable, but it is no good pretending that we can solve regional unemployment and that everybody will remain as comfortable as before.

Mr. James Griffiths (Llanelly)

I have had a lot of the argument about moves being uncomfortable. As Minister of National Insurance, it fell to me to establish the central office at Newcastle-upon-Tyne. Many people said that it could not work because it was too far away. It has been a wonderful success.

Mr. Grimond

I am obliged to the right hon. Gentleman. Of course, it would only be uncomfortable for the people who have a Middlesex outlook.

Secondly, the Government must restrain the growth of more offices in London. One reads in the papers that offices are still pouring into London. The Government could stop this, but they will not. They should put the main development in housing, transport and services where it will benefit the North-East.

If we consider housing, only 46 per cent, of the houses are in the North of England, Scotland, Wales and the South-West, yet these areas contain 64 per cent. of the unfit houses. While 30 per cent. of the unfit houses which were replaced in the years from 1956 to 1959 were in the South-East, only 19.3 per cent. were replaced in the North, Scotland and the South-West. Of 50 slum back spots, 45 are in the North. Seventy-four out of 82 local authorities whose pupil-teacher ratio will exceed the national average in 1963 are in the North. Sixteen out of 22 authorities with fewer than 100 13-year-olds at grammar schools are in the North. The first motorway was built between London and Birmingham, and the great bulk of new towns are to be found in a ring round London.

It is, of course, possible to make a case for that kind of development. It is possible to make a case for carrying out these main developments and making life more comfortable and agreeable in the South. It is not, however, possible to argue at one and the same time that we want industry to go to the North but that we will maintain all the advantages in the South. The industrial development certificate scheme does not touch the basic attraction of power, building, housing, roads and everything else in the South.

Let us face the problem frankly. If we are to get people in industry to go back to the North, it means making the North, the West and Wales relatively more attractive or, to put it another way, making the South-East relatively less attractive. To put it bluntly, it means allowing some of the results of overcrowding in the South-East to operate. It means allowing the differences in land values to take effect. By all means, let us take the product for the nation.

Such a method would mean giving priorities of transport to the North. It means giving really fast services and good roads to the northern ports. It means carrying out the Rochdale Commission's recommendations first in the northern ports and not channelling everything down to the South, as is still being done. It means taking a look at the Victoria tube and asking whether, if it is built—as, I dare say, it should be —Londoners should pay for it, perhaps, by other forms of taxation on other types of vehicles in the London area. It is not sufficient merely to stem the flow from the North. We have got to reverse the flow, especially as it affects skilled people and management.

Next, we must undertake in the North developments which would be preeminent of their kind. I should like to see a new town created in Scotland on one of the marvellous sites which we could provide, and in that new town I should like to see our fifth university. This would obviate much of the quarrelling about where the university should be situated. I should like that new town to be pre-eminent in architectural beauty. I should like to see some first-class research and post-graduate institutions in Scotland. There is a possibility of this. There is a chance that the Russian studies in Glasgow and the electronics and European studies in Edinburgh will form the basis for this. Will the Government put money and energy behind this kind of development?

The next place where the Government should look if they are serious about this problem is their own machinery. We have not yet begun to grasp the implications within the Government machine of development as against mere administration. I share the view of the hon. Member for Bute and North Ayrshire about the Scottish Office, but the Scottish Office does not have the economists, the sociologists or the people with commercial experience, and its so-called development department is not a development department at all. Furthermore, the Scottish Office is under the control of the Treasury. It is all very well to demand that Scottish Ministers should be present on the Government Front Bench, but the man we want there is the Chancellor of the Exchequer, because it is he who ultimately calls the tune in Scotland, as everywhere else. Again and again, I am struck by the lack of professional outlook and the lack of development outlook in agencies which are supposed to be introducing new industries or supporting old ones.

Next, I come to some particular proposals for immediately helping these areas. The first is the possibility of a tax advantage. Surely, the Chancellor of the Exchequer missed a great opportunity when he increased the investment allowances. Why did he not discriminate and give a higher rate of investment allowances for these areas than for the South-East?

Dame Irene Ward

Hear, hear.

Mr. Grimond

If the right hon. Gentleman does not like that method of doing it, what about altering the National Insurance contributions or the rate contributions, as an earlier speaker has suggested?

In his speech, the Chancellor said two things. The first was that when aid was given to foreign countries, a condition as part of the granting of the aid might be that it should be expended in industries which had slack capacity to be taken up. The Chancellor said that the figure he had in mind was £10 million. That is not a great deal. Looked at against the problems of the shipbuilding industry alone, it is not a substantial sum.

I hope that the Minister of Labour will tell us more about that, because I fully agree that it is a good idea. Is it, however, intended that this should be additional to our normal aid programmes? If so, does the right hon. Gentleman have any idea what countries might accept it? Has a scheme been drawn up and offered to any country, or is it merely an idea?

Secondly, how far have we got with retraining in the depressed areas, of which the Chancellor spoke?

Mr. Loughlin

Will the right hon. Gentleman deal with this point about attracting industry to the less prosperous areas? There is danger of believing that we are dealing solely with the less prosperous areas, whereas we are dealing with an overall position. If the right hon. Gentleman looks at the figures for 1960, 1961 and 1962, he will find that there has been a gradual deterioration in London and the South-East, so much so that today there are seven unemployed for every four vacancies in what is generally regarded as a prosperous area.

Mr. Grimond

I note the hon. Member's comments and hope that he will have an opportunity of expanding them. It is generally agreed that the problem is worse, however, in the more remote areas than in London.

Mr. Loughlin

It is now a national problem.

Mr. Grimond

Have the Government given any consideration with a view to action to the proposition of having a duty-free area at, say, Prestwick or other similar places? This suggestion was made many months ago. Presumably, it has been considered by the development unit of the Scottish Office and, presumably, a conclusion about it has been reached.

It is noteworthy also that in this country unemployment pay is only 19 per cent. of earnings. In West Germany, it is 90 per cent. Even in Greece it is 40 per cent. We talk about a Welfare State. I should have thought that there was good deal to be said for increasing, unemployment pay. If my figures are right—it is rather difficult to work these things out because one does not know haw many are drawing National Assistance—it seems that one could take a sum of £1 million a week, £52 million a year, for this purpose. This would not be an addition to spending power which would be totally unacceptable to the Chancellor, and it would, I suggest, make a great difference to the unemployed and provide some additional demand for industry.

There is also the question of automation and [leisure. We really must consider stepping up the payments to people who are not employed so that they may share in the general prosperity brought about by automation.

I come now to the general heading with which the Chancellor dealt. He said that no measures for particular areas of unemployment can be effective unless the economy can be expanded. We cannot battle with regional unemployment against a tide of industrial stagnation. Here, of course, the Government are in a difficulty. Having wasted the easier years, they are now faced with a disastrous loss of confidence and, indeed, a general lack of direction throughout the country.

I take one instance which, I suggest, typifies the reason why confidence is lacking. It is agreed that it is essential that, if we are to have expansion, we must not at the saint time have gross inflation. What is the Government's policy about this? Very belatedly, they have, as I understand it, got round to talking about an incomes policy. They spent most of last year urging wage restraint. They set up the National Incomes Commission. But what else do we see? No sooner do Ministers leave office than they take jobs at large salaries and, what is more, at increasing salaries. Are these stories true? Are the figures one reads showing a steady increase in directors' salaries correct?

If so, the state of mind of the Government and of the industrial leaderships generally is incredible. These are the very men who, last year, were going about the country telling nurses, teachers and ordinary working people that they must not take more out of the national "kitty" than they put in. They declared themselves against increases in salaries about one-tenth of those which they are now taking. They are not refusing increases in their own present salaries.

The Government cannot have it both ways. It is perfectly reasonable to say that one does not accept restraint, that one thinks that those who are leading industry are entitled to as big a salary as they can get. That is a point of view. But how can it be reconciled with appeals for wage restraint, with talk of an incomes policy, with telling people like nurses and all wage earners that they, of course, must not have any more? One must either make it a genuine policy or drop the cant. Unless one does that, one simply will not get co-operation.

I put this question to the Government. Are directors' salaries to be referred to the National Incomes Commission? The claim of the Scottish builders and plumbers has already been referred. One of the grounds upon which it has been referred is that it may have repercussions upon other employment and that it sets a bad example. In all seriousness, I say that directors are much more capable of setting an example than are the plumbers and builders. This is an important matter. It is an illustration of the way in which the Government's words and their deeds just do not match. Unless they do something about it, they will not get the country behind them, they will not get the economy moving, and they will not have the basic tide into which they can absorb unemployment.

My party has long argued that we must have a decision from the Government to give expansion a high priority, but we have argued also that we shall be able to attain our target of expansion only if we have a good industrial relations policy. It is not only the "two nations" barrier between North and South which must go. The barrier between the other two nations, those who own the wealth and those who work to create the wealth, also must be broken down.

I am all for running a system with high returns, but the results must be shared. I am all for running profits systems, bat, again, let us share the profits and share the ownership of the means of production which gives rise to those profits. Until we have a revolutionary proposal from the Government about giving back the power to these areas which have been drained of their skill and ability, until we have a real sense of purpose which is not mere words but is reflected in the actions of the Government, and until we have a firm and continuing determination to go for expansion, we shall face the threat of unemployment, and no temporary measures will cure it.

6.55 p.m.

Mr. G. B. H. Currie (Down, North)

The right hon. Member for Orkney and Shetland (Mr. Grimond) was the Member who followed me after I made my maiden speech in the House. On this occasion, as I follow him, I say at the outset that I entirely agree with his concluding observations about the importance of improving labour relations in industry.

The right hon. Member for Easington (Mr. Shinwell) said, a little unfairly, I thought, that the Chancellor did not really deal with the long-term problems of unemployment. I may be wrong, but I think that, when my right hon. Friend was speaking, he dealt with the problems facing the Government in trying to expand the economy, with the problems of the balance of payments, the pressure of production and of preventing such inflation as would harm the economy. I thought that all those matters were dealt with quite adequately by my right hon. Friend.

I think that most of us here realise that, ever since 1945, our experience has been either that our economy has been expanding, or that, having successfully expanded it to a state almost of boom, we have had to put the brakes on and slow down the rate of expansion because we were running into difficulties of inflation. When right hon. and hon. Members opposite were in power, they found that the problem for them was very similar to that which faces us now.

Mr. D. Jones

We tackled it very much better.

Mr. Currie

That is a matter of opinion. I do not want to spend time now going over the figures for those years.

Mr. Jones

I invite the hon. Gentleman to do so.

Mr. Currie

I think it important tonight to look to the future and consider whether some way can be found of avoiding this repeated cycle in the nation's economy.

What do the problems seem to be? I think that we have had to cut back because of the dangerous pressures of inflation for a number of reasons when we have been in a booming economy. Our economy, I think, has been too much subject to pressures from the American economy. We have been much too subject to the effects of recessions in trade in the United States of America.

I think that we ought to look for some way of being a little bit more divorced from the immediate effects of recessions in the United States. I think that many of our manufacturers have not been sufficiently enterprising in going out to explore new markets, and that they are very largely to blame in this way. The Government, as I see it, lay down the type of economy in which industry can thrive; it is for the manufacturers and producers in these conditions to make the most out of the opportunities which are provided for them by the economy at home.

Another way in which we have fallen down—and all these matters give rise to unemployment, in my view—is this, that we have not been providing the after sales service in foreign countries to which we sell goods; we have not been competitive with manufacturers in foreign countries. This is particularly obvious, I think, in some branches of the motor trade. In industry our productivity has dragged behind our rising standard of wages and—let us face it—behind the increasing standard of living and behind the increase of social benefits. They have increased, but our productivity has dragged behind.

Then there are industrial disputes. I do not lay the blame for these disputes on one side or the other of industry, but we have got to face it that there have been industrial disputes. Sometimes the management is to blame; sometimes the people on the shop floor strike for reasons which, to the vast majority of the people of this country, appear to be totally inadequate. It does not matter whether managements are to blame, or whether the shop floor is to blame, the result is a loss of our exports, a failure on the part of manufacturers, in many cases, to he able to keep contract delivery dates, and loss of production on the shop floor.

These all add to the problems of industry in difficult export markets. All this possibly did not matter quite so much in those days when we had a sellers' market all over the world, but today, in France, Germany and other manufacturing countries, there are manufacturers who are ready and only too anxious to step in to replace the sales which we were hoping to make in those countries.

I hope that the Government will look at this problem very seriously and consider whether a method can be devised of bringing about a better relationship in industry between management and the shop floor. I myself believe that if they would have some sort of working party, representative of the unions on the one side, representatives of management, of owners, on the other, and representatives of the Government helping wherever possible, it might be possible to devise a way in which we could improve industrial relationships.

I think myself—I may be blamed, perhaps, for thinking in a way which is slightly Socialist—that that sort of investigation should go further and should look to the rewards which come from industry and should see whether some way could be devised—I know there are difficulties, in fixing levels, and so on—whereby proper proportions of the profits of industry might be spread out between shareholders, management and the shop floor. This is something which requires to be looked at in this modern, highly competitive commercial world in which we find ourselves today.

I do not want to take up too much time, because there are other right hon. and hon. Gentlemen who desire to speak in the debate, but I should just like to refer to the question of East-West trade. I think that it was the right hon. Gentleman the Member for Easington who raised it. He said there were limitless opportunities for the expansion of trade between East and West. Well, of course, that is true, but one thing which he forgets is that when we are dealing with the countries of the so-called planned economy group we have to be able to purchase from them a virtually equal bulk or value of goods in order to make it possible for them to purchase from us. That places a great limitation on what otherwise appears to be a wide-open market, and they are certainly extremely deficient in consumer goods.

Another matter which is not helping us in our trade at present is the stringent shipping policy of the United States of America. In these days, when we are finding certain difficulties in the balance of payments, and while these sorts of restrictions are being imposed on our shipping, we should perhaps look more closely at the value and nature of goods, often unnecessary goods, which are being imported from the dollar area into this country. While we are in this sort of situation there may possibly be sound arguments for some method of quota, tied possibly to the value of our exports to the dollar area; but I think that this may be one of the necessary measures if we are to get our economy on to a sound basis in the long term.

I would make another suggestion, for everything towards expansion of industry is, of course, helpful to the provision of new employment. I should like to see the Export Credits Guarantee Department making its advances more easily than has been experienced in the past. Many underdeveloped countries require credit. Many of our goods could be sold to those countries if credit could be given, and I think that the Export Credits Guarantee Department has probably a very large part to play in that. Moreover, I am firmly convinced that we ought to do more than we are doing to help the development of the underdeveloped countries.

After all, if we succeed in getting them developed they will eventually acquire wealth and become good customers of ours; so there is a certain amount of self-interest in helping the development of the underdeveloped countries. The Government have done quite a lot in helping towards the development of the rather backward countries of the Commonwealth. I believe that they can usefully do very much more in this direction.

I do not want to be too parochial, but I would refer very briefly to the situation as it exists today in Northern Ireland. At the middle of November, our unemployment figure was 34,299, or 7.1 per cent. of the employable population—7.6 per cent. for men and 6.2 per cent. for women. I shall not canvass the reasons for our difficulties in this speech. First, it would take too long, and, secondly, I do not believe that it helps to attract new industry if one canvasses the reasons which have led to a degree of unemployment in any part of the country.

Unemployment is a scourge. We are all agreed on this. I am sure there is not the slightest divergence from that view on the part of any hon. Member. Idle hands are costly hands to a country if one looks at it purely from the economic point of view. As the hon. Member for Glasgow, Woodside (Mr. Carmichael) so effectively said in his maiden speech, the unemployed man is miserable because of the lack of opportunity of work.

The position in Northern Ireland, I am glad to say, is not wholly black. There is relevance in what I am about to say, because we want to co-operate as far as possible by giving our experience to other areas now suffering from unemployment. There are today 51,000 at work in Northern Ireland as a result of the development of shadow factories with Government assistance who in all probability would not otherwise be in employment. Although I know that one can be critical of figures of this sort, there are now 18,500 jobs in the pipeline, waiting for new factories to be built.

We have had a great diversification of industry. It used to be that our jobs were in too few kinds of work. We had shipbuilding, aircraft manufacture, linen textiles, agriculture, and very little else. I am glad to say that today we are much more diversified, and the effect of a slump in one industry will be much less felt. This diversification is very important. Where new industries are being attracted now, I believe that the one thing to concentrate on above all others is as much diversification as possible.

Mr. F. H. Hayman (Falmouth and Camborne)

Perhaps the hon. Gentleman will take account of the fact that the Board of Trade actually invited a firm in my constituency, where there is 20 per cent. unemployment, to go to Northern Ireland.

Mr. Currie

That shows the apparent effect of some of our propaganda.

There is another thing which is now being done, and not before time. We are having our youth trained in new skills and techniques which will be required in industry from now on. I agree that in many cases this training has come much later than it could usefully have come, but it is very much better that it should have come even late than that we should have failed to appreciate the situation at all.

Many of our unemployed are unskilled. One might then ask what is suggested to bring those people into employment. [An HON. MEMBER: "A change of Government."] I believe that much earn be done by the development in Northern Ireland of the dead meat trade, which art present is practically non-existent. As another hon. Member said, much can be done to improve road communications, which would give work immediately and would help eventually to reduce costs. I believe that much can be done if we can find some way to reduce our greatest bugbear—crosschannel freights and internal freights. Like the right hon. Member for Orkney and Shetland, we find ourselves at the end of a sea communication, which makes life much more difficult.

I believe that much can be done by the development of a freighter aircraft for the transport of agricultural produce and other goods. Furthermore, we have an aircraft factory in which we can build such aircraft, with Government assistance. I believe sincerely that the Government have a very special responsibility for Short and Harlands, as they are the major shareholders. Whereas another firm can go to the market for money for development, Short and Harlands depends entirely on the Government for this. In view of their special responsibility, the Government should devote special attention to the firm.

It was a shocking mistake that the development of the SCI was not carried out by means of a large programme in Short and Harlands. Now that the Government are looking for a successor to the trooping type of aircraft and freightage aircraft for the Royal Air Force—the Beverleys—I believe they have a responsibility to give Short and Harlands an opportunity of at least providing a design for the replacement. The Government could help our industry in that way and make very much more secure the future of those in employment at Short and Harlands.

Our design team is the main part of the industry about which we are immediately worried. If the team breaks up or the members of it feel insecure and go to other jobs, we shall never be able to get them together again, and that will mean that the future of this vital industry to Northern Ireland will be very much in jeopardy.

Our shipyards, like many others throughout the United Kingdom, badly need orders. I cannot understand why so many orders appear to go to one or two yards when there would be enough to keep all our yards going to some extent if the work were Spread out.

As to the building industry, I agree with what has already been said, that immediate relief could be given to many areas if the Government would press ahead with an imaginative scheme to build dwelling-houses and flats and to replace slums so that our people could be housed in the way they ought to be.

I would like to see an extension of the Small Dwellings Acquisition Act, and new funds of money available at cheaper rates of interest. The building societies have had it all their own way too long and it is time that young married couples were able to get a house of their own at a reasonable rate of repayment, so that we could have the property-owning democracy which this party has talked about for so long.

I should like to see the development of our tourist industry, the expansion of our schools, and the raising of the school-leaving age, which would create a great deal of employment in itself. About 8,000 school-leavers come into our industry each year. I should also like to see a drive by the Government to deal not only with the long-term aspects of unemployment, but also with the first-aid repairs which are immediately necessary in order to cut out the scourge of unemployment.

7.21 p.m.

Mr. Alan Fitch (Wigan)

It is a sad reflection on the Government that only 17 years after the war and 11 years after they came into office we should be discussing such a subject as this. The Chancellor of the Exchequer said it was an exaggeration to say that we were back in the 'thirties. I agree that it is an exaggeration. But to any one of the 600,000 unemployed men it is cold comfort to say to him, "You are only one of 600,000 and not one of 1½ million."

Those of us who unfortunately suffered unemployment before the war are apprehensive of the future, I make no apology for speaking very largely about the North-West. It is an area which we have not heard a great deal about in the debate. I believe that the right hon. Gentleman the Chancellor of the Exchequer did not mention it, although he referred to Merseyside. It is an area of considerable unemployment.

We know that the national average is only 2.4 per cent., which I agree is not an alarming figure. But what is at least giving rise to concern is that practically all the areas of high unemployment are above the line Mersey to Humber. In the North-West itself, the rate of unemployment is 2.9 per cent., representing a total of 88,493. If one breaks this down into some of the areas within the North-West one finds very revealing figures, and I hope that the Minister of Labour will take note of them.

According to the latest figures, issued on 12th November, Merseyside has an unemployment rate of 5.6 per cent., North-East Lancashire has 4 per cent, South Lancashire, in which my constituency lies, has 3.7 per cent., and the Furness area 3.3 per cent. The only part below the national level is the Manchester district with 1.9 per cent.

Mr. S. Silverman

Will my hon. Friend clarify the limit of the area north-east Lancashire, where he says that the rate of unemployment is 4 per cent.? In the area that was for a short time under the old Act a special area, stretching from just north of my constituency through Burnley and down to Padiham, the rate is very much higher. In Colne it is 9.8 per cent. and in Nelson 6.8 per cent. The average over the whole area is between 8 and 9 per cent.

Mr. Fitch

I thank my hon. Friend for his remarks. I am not sure of the geographical outline of the area northeast Lancashire. I take my information from the Lancashire and Merseyside Industrial Association Report. It includes Burnley, Nelson, Padiham, Clitheroe and other adjacent places.

The alarming thing is that the Government seem to be looking at the situation from a cold mathematical point of view. I know that a figure of 2.4 per cent. or even of 2.9 per cent. does not seem so bad. But we want to look a little deeper than this to try to discover whether the situation is temporary, whether it is a passing phase, and whether the future outlook is good. As far as I can see, the outlook is far from good.

For example, the number of wholly unemployed in relation to the number of temporarily stopped has gone up considerably. In my constituency the figures on 10th December were 1,440 wholly unemployed and 123 temporarily stopped. That is one of the most alarming aspects. I believe that this is the case in many Lancashire towns, and no doubt some of my hon. Friends will he able to confirm this finding.

The figures of 2.4 per cent, or 2.9 per cent. do not reveal concealed unemployment. By that, I mean uninsured married women who do not bother to register at the labour exchange because, in any case, they would not draw benefit, and school leavers who have not registered. The rate of unemployment among school leavers in the North-West is higher than normal, and we have the Christmas school leavers to come. Again, the figures of unemployment do not reveal that there are in south Lancashire only 457 vacancies for 5,000 unemployed, and in this I include Wigan and St. Helen's and the area bordering on them.

Figures quoted by the Chancellor, which will no doubt be repeated by the Minister of Labour, do not tell the whole story. I was interested to read a report in the Guardian on an American survey. The Americans have what they call "a direct survey of unemployment," and a report just issued suggests, according to the Guardian, that … compared with the American figures, British statistics of registered unemployed under-estimate the numbers actually looking for jobs. The report, by a committee of experts appointed by President Kennedy, gives comparative tables of unemployment for several countries adjusted to the American basis of measurement. On this basis the rate of unemployment in Britain in 1960 was 2.4 per cent. compared with 1.6 per cent. by the Ministry of Labour's reckoning. If the gap between the two systems of measurement can be assumed to have remained roughly the same, this could mean that there are in this country up to 200,000 people over and above the 544,000 registered as unemployed in mid-November who would be listed in America as out of work and seeking jobs. That means that the real unemployment figure is nearly 750,000.

All areas of high unemployment have something in common—contracting industries. Lancashire is no exception. Lancashire has an industry unique to Lancashire—the cotton industry—and that is contracting. We have coal, railway workshops and shipbuilding, all of which industries are contracting. I do not want to be parochial, but it is interesting to note that the unemployment figures in the Wigan employment exchange are mainly of cotton workers, engineers and building workers and that only a very few miners are unemployed, mostly only those who are disabled. That shows that the policies of the nationalised coal industry towards redundancy and towards trying to channel out-of-work men into other pits is paying off. The figures at the Wigan exchange suggests that private enterprise industries have not yet been able to deal with redundancy in the same way.

One can sum up the position in Lancashire by saying that unemployment has been rising steadily throughout the year. Among those unemployed are many more wholly out of work. Many others are school leavers. One of the disturbing factors is that mills which have become empty through closures have not been taken over by other industries. In other words, there is contraction in Lancashire which is not offset by any form of expansion.

Those are the things which the figures do not show. They are problems involving human beings. The figures are a pointer to the future and they suggest that Lancashire's future is very bleak. That fact has created a lack of confidence in the future and that has lead to migration or, as we call it, the drift to the South.

The 1961 Census revealed that while there was a slight growth in population in Lancashire, it was only 3 per cent., compared with the national figure of 5.7 per cent. It would be wrong to suggest that this drift to the South has only just started, for it has been going on for some time, but the Government should do something about it and should have some sort of plan to halt it. We are not Luddites in the sense that we want things to remain exactly as they are. Obviously, mobility and flexibility of labour and of capital are necessary but in the North-West we are concerned with the fact that movement is now in only one direction—north to south and not south to north.

I was interested in the suggestion of the Economist that the seat of Government should be moved from London to the North. This suggestion should be carefully considered. I should also like the views of the Minister of Labour on the suggestion that our entry into the Common Market will accelerate this drift. Do the Government accept that view, and, if so, what are their plans for dealing with it? There has been much talk about the "Golden Triangle" formed by Hamm, Paris and Birmingham, a sort of supermarket within the Common Market. It is said that the people outside will gradually drift into this triangle.

I think that that is an over-simplified explanation. It may be argued that if one is nearer to the coast, one's communications with the Continent are better, but inside Europe a potential customer in Hamburg or Milan will not be unduly influenced by possible differences in transport costs from Birmingham, Manchester or Newcastle.

Mr. Fernyhough

But that is exactly what the Chancellor of the Exchequer said this afternoon—that industry was not going to the North because of transport costs.

Mr. Fitch

That was within the country itself, but I do not think that the Chancellor suggested that differences in transport costs would matter much if the customer was 1,000 or 2,000 miles away. The further away the customer is, the less do the differences in transport costs between Milan and Birmingham or Milan and Manchester, for instance, matter. I am interested to know what plans the Minister of Labour has for dealing with the suggested acceleration of the drift from north to south if we enter the Common Market.

What can we do about this problem? We in the North can do certain things. Local authorities have their powers, but they are limited. As has been said, we suffer from the aftermath of the Industrial Revolution. One has only to go to some Lancashire towns to see how badly planned they are, to see how houses have been built around the pits and mills without any planning.

The philosophy of the financiers and industrialists of the days of the Industrial Revolution was, "Where there's muck, there's money". Unfortunately, some of that philosophy has stuck and although it is an exaggeration to think the north of England, in the words of William Blake's Jerusalem, is "those dark satanic mills", there is some truth in that.

However, there are some things which local authorities can do with Government help, and some local authorities in the north of Lancashire are tackling the problem progressively. My own county borough council has a big scheme of redevelopment and is hoping to redevelop the whole of the town centre and get rid of many unsightly buildings. Other communities are doing the same. Then there is the necessity for the full implementation of the Clean Air Act, not only to make the atmosphere cleaner, but to make it healthier by dealing with the emission of sulphur dioxide. These are limited things which the local authority can do, but the main responsibility for this problem and the solving of it rest on the Government and their policy. What can they do?

We have heard a lot about the Local Employment Act. In my opinion the Act is far too rigid; there is not enough flexibility. On the one hand, there are the black areas of high unemployment and, on the other, the white areas, but there is nothing in between. I appeal to the Minister, while he may not agree that Lancashire, by and large, is a black area, to treat it as a grey area or an intermediate area. That is one of the things that the Act does not do. It is far too rigid in its application. It is quite ridiculous to treat a constituency like mine, where unemployment has been recently over 4 per cent. and is now 3.7 per cent., as though it were a prosperous area. Under the Act a place like Wigan which is not scheduled for development is treated in the same way as a prosperous area. That, in my opinion, is where the Act falls short. It should cater for these areas which are neither black nor white but in fact grey.

Another thing that the Government can do is to inject into the North-West and particularly into Lancashire capital for social purposes. There is, for instance, the question of slum clearance. One-third of the 2 million families in the North-West are living in old houses, and one house in every five in Lancashire is a slum house. This is a matter which the Government could tackle. In doing so they would not only be giving work to the people who are out of work but they would be removing the black marks of the Industrial Revolution.

Then, of course, we need roads. If we are to attract new industries to Lancashire we must have the best possible roads—not only new roads but improvement of the old roads. The Trans-Pennine Road should be extended to the Mersey so that there is a direct link between the West Riding and Lancashire. Manchester Airport could do with even more redevelopment. These are things that the Government should be considering. Education is another matter for consideration. We have many old schools in Lancashire, some, in my opinion, unfit for children to be taught in. This, again, ought to be tackled as something which would attract the potential industrialist and his family to Lancashire.

Added to these things which I suggest that the Government should undertake are the natural assets of Lancashire itself, the ability and industry of its people. About three years ago Heinz built their biggest factory in Europe, just outside Wigan. I asked one or two of the directors why they had chosen Wigan. They told me that they regarded the Lancashire people as hard-working and—this may seem rather funny, but it very interesting—very clean. This is an important point for people engaged in food production. They chose this part of Lancashire—no doubt there are several other parts which they could have chosen—because of the characteristics of the people.

This injection of capital for social purposes plus the character and ability of the people, plus the fact that we have in Lancashire property which is not necessarily old but which is out of use—the cotton mills, which are very cheap in comparison with property in the South—are all considerations which the Government should take into consideration.

I urge the Government to regard Lancashire as a grey area, as an area where the people are beginning slowly to lose confidence, and I suggest that it is the Government's duty to restore the confidence of the Lancashire people in the future. They can do this by introducing really radical policies, and they should do it now before the people of Lancashire have lost all patience.

7.45 p.m.

Commander J. S. Kerans (The Hartle-pools)

It gives me great pleasure to speak about the North-East at last, because it is rather apt to be forgotten. In following the hon. Member for Wigan (Mr. Fitch), I would say that I understand his problems in the North-West, and that I shall probably be repeating many of the points myself that he made. We have, in fact, a certain amount in common.

On 9th May, I raised the matter of unemployment in my constituency of The Hartlepools. It then stood at 6.5 per cent. In the intervening months, it has risen to 9.6 per cent., with 12 per cent. male unemployed. I think that the House will agree that this a very disturbing figure indeed. Furthermore, I am faced with further redundancy in the new year in heavy engineering, plus nearly 300 school leavers before Christmas. From my point of view, there are no grounds for complacency whatsoever.

I think that the Press and television have done the North-East a great disservice. They have painted one side of the picture only and shown nothing good about it. There are two sides to every picture. In fairness, this should be put right in the months ahead. It has made a very bad impression in the South from the point of view of attracting industry into the area. It has not helped by any means at all. I know from my contacts in London that it has done a great deal of harm.

In my constituency, unfortunately a shipyard has closed down after a hundred years and it is now in the hands of the liquidators. This has been the fulcrum of industry in my constituency for nearly 100,000 people for a very long time, right back into the past. That includes heavy engineering. We must face the fact that there are 80 shipbuilding yards in this country, and they are not all going to do very well in the years ahead, when the demand for ships is not that great and with the difficulties that there have been over labour and so on. The recession in the shipyards did not occur overnight, and I think that it must have been obvious to the President of the Board of Trade and his officers.

For a long time I have put Questions about the rise in unemployment in my constituency. I have been fobbed off by being told that there were many jobs in the pipeline. These pipe dreams never materialised, because they do not catch up with the problem of the school leavers. They have been based on a false hypothesis in the Board of Trade. I cannot absolve the Board of Trade from some blame for not forecasting and seeing ahead. Furthermore, we have these long delays in B.O.T.A.C. Cannot we shorten the time in which a decision is arrived at, for the benefit of the industrialist who wants financial assistance? If the committee is all that busy, why not appoint another? Let us get some more people in.

The problem in my constituency does not stop at the loss of a shipyard. The small traders—the butchers, the bakers and the candlestick makers—are all affected in some degree. People cannot leave the area, because they are paying off mortgages on their houses. It comes as a very great shock to a man over 50 when he is made redundant for the first time in his life, and is thrown back on a few pounds a week. These are heartrending problems, of which the country should be made aware. Skilled labour cannot always leave an area, for the reasons that I have enunciated.

The Chancellor talked about retraining those who are made redundant. That is a problem for the over-fifties. But let us not forget that the apprentice of today is the workman of the future. He will provide the skilled labour in the technical age in which we now live, and he should have a high priority in the Chancellor's reappraisal of the situation, and his reassessment of the steps to be taken.

There is a countrywide recession in the steel industry and the heavy engineering industry. In my constituency there is a £57 million steelworks which has never worked to full capacity since it was completed not long ago. When I left the Service I worked there, to learn a job. It is an appalling fact that these large industries are now facing a recession.

What remedies can be taken? First, we must advertise the North-East a good deal more than we have in the past. I was recently told of a proposal to have a merchant ship built as an exhibition ship for the North-East. That proposal has potentialities, because the further afield we can sell the potential worth of the North-East the greater will be our hopes in the long term.

I should like to know who coordinates what is going on in the North-East. We have not had a clear-cut answer to this question. I hope that my right hon. Friend the Minister of Labour will be able to give us some ideas tonight. We cannot continue to go to Department after Department in order to have one or another aspect of the matter dealt with. I can name at least half a dozen that we have to go to —the Ministry of Labour, the Ministry of Transport, the Ministry of Education, the Ministry of Housing and Local Government, the Admiralty, and the Board of Trade—and by the time we have gone round all those Departments we have very little idea of what is going on in Whitehall. It is that lethargy which is stultifying effort in the North-East. We must have somebody in charge before whom we can put all these problems, so that we can ensure that remedial action is taken.

Mr. Fernyhough

The Prime Minister.

Commander Kerans

Yes, I have been to the Prime Minister—and so have my colleagues—on that very point. We must improve our natural communications in the North-East by road, by air and, where necessary, by improved harbour facilities. My constituency has the harbour facilities, but better road and air communications are of vital interest, as the main arteries between the north and south of England, and Scotland. Much money must be spent on this. The nearest airport to my constituency is seven miles north-east of Newcastle. That is nonsense in this modern age, if we really want to get industrialists to come into the area.

Some fiscal incentive must be given to industry if we are to attract it to the North-East. If a firm is within 30 miles of London it has easy access to the South Coast by road. Could it not be arranged that firms in the North-East be given fiscal relief amounting to the difference between the transport charges which they have to pay and those which are paid by firms in the South? It should not be impossible to work out a satisfactory solution on these lines, for the benefit of industrialists who might then be willing to go to the North-East, Scotland, Northern Ireland and the North-West.

The Local Employment Act was reasonable in its concept, but it is illogical to have peripheral areas, as in the North-East. It is not generally realised that in this area people commute for long distances in order to go to their jobs. No less than 6,500 of my constituents work in shifts for I.C.I., and a good many others go by bus to work in Haverton every day. They are no different from the persons who commute to London. The whole of Durham and Northumberland should be treated as one area under the Local Employment Act, certainly for an experimental period.

I also stress the necessity for siting a power station in the North-East. This has been in the pipeline for some time, out no decision has yet been reached. I ask the Chancellor of the Exchequer and his colleagues to announce a decision on the matter tonight, or, if that is impossible, at least to let us have a forecast showing the way that the Government are thinking.

Many Government Departments could go to the North-East. Several hon. Members opposite have talked about overcrowding in London. We must get these Departments out of the London area. What we need is some dynamic project to catch the eye—something that can be produced in the area. People in the North-East must realise that they cannot rely upon the Government to do everything. Local businessmen must inject a certain amount of verve into their planning, and collaborate in order to produce something on their own initiative. Many people in the North-East have a large amount of private investment locked up in the area, which they cannot retract to the South or to anywhere else.

We want more hotels, or motels. Newcastle certainly has not enough hotels to attract large businesses to the area. We must increase the social amenities; we cannot exist entirely on bingo halls and greyhound tracks. We want a few more theatres, amateur dramatics and all those things. There are some people whose wives will say, "I am not going to the North on any condition whatever. I want to be within 30 miles of London. The North is a mass of slag heaps. I cannot go there. There is nothing for me to do." This is a wrong concept. From my long experience of Newcastle and my constituency I know that the country is within a very short distance, and that there are masses of emenities. It is not right that that bad impression should be given to industrialists—English or foreign.

The North-East has another asset. It has been virtually strike-free for many years. It also has a very friendly population, which is more than some people say about the South. There is room for a great deal of expansion in industry in the North-East. I deplore the two-nation concept which is creeping into our debates and into the Press. We must an work together, with the same object. Not all men can leave the North-East. There was a story of a young man of 16 who went 200 miles to get a job as a grocer's assistant, and this was given great publicity in the Press. I admire him for his courage, but this is the wrong concept to put across to the people; a young man should not have to go that far to get a job. Once the skilled labour leaves the area it does not always come back.

Unfortunately, at the moment we are passing through a period in which industry is waiting to see whether we shall enter the Common Market. There is uncertainty. The Chancellor has taken various measures to inject capital into the economy, but this is a long-term process. It is a step in the right direction but it is too long-term to have an effect now on men without a job. World events wait for no man, and undoubtedly there is hesitation at the moment. The country needs confidence in what the Government intend to do. We need a co-ordinated policy, because many of my constituents will have a very poor Christmas. The constituents judge their Members of Parliament by results, and the Government are blamed for the present situation through me—and I cannot blame my constituents for that. Words may count for a certain amount, but we are judged by results.

I ask the Government for a major planning policy to inject new life into the North-East. We need dynamic projects, greater financial assistance and greater injections of capital to ameliorate the present situation and to allay anxieties. There is a great will to work in the North-East and a genuine desire to contribute to the national economy. Many of them have life-long investments in the area and cannot leave it. We cannot blame some people if they have a grave disbelief in the future and dissatisfaction with the present. They do not understand all the factors. They understand a pay packet on Thursday, Friday or Saturday. There is also a social problem.

Help may be on the way, but my constituents want reassurance and concrete proposals for the future. I ask the Government to give a lead. There is no room for complacency when unemployment reaches 10 per cent. I consider that some of my constituents have been sold down the river—and I have been down one myself. I hope that it will not happen again. I intend to abstain in the Division unless I receive some firm assurances from the Government. I want action now and action quickly.

8.3 p.m.

Mr. A. G. Bottomley (Middlesbrough, East)

The hon. and gallant Member for The Hartlepools (Commander Kerans) is rightly concerned about unemployment. In his division the unemployment figure at the moment is 12 per cent. of the insured population. When I heard him say that he intended to deliver a broadside at the Government I expected something exciting, but I am afraid that they will treat his speech as a damp squib and will be delighted to know that all he intends to do in the Division is to abstain. If he had courage he would come into the Lobby with us and vote against the Government.

We heard this afternoon from the Chancellor of the Exchequer a repetition of speeches delivered by his predecessors. There was nothing new. I say to the Chancellor, if there were a war we should have full employment We should have to use all our resources in getting a victorious peace. If we can have full employment in war why do we tolerate unemployment in peace? We ought to have full employment, and we can get it if we pursue the policies which will make it possible.

The Government ought to control investment and to see that our raw materials are used to the best possible advantage. They should see that there is a proper distribution of industry. They should introduce building controls. Things of this kind should be done now. The situation birks no delay. Instead of doing this, the Government permit an extravagant consumption of our wealth on less essential industries.

Why do they do it? They do it because they pander to their friends, whose sole aim is to make the biggest profit in the quickest possible time.

Mr. K. Thompson

Will the right hon. Gentleman also tell the House that in time of war we should have direction of labour? Is he willing to have that now?

Mr. Bottomley

We did not have direction of labour initially; war conditions forced it upon us. And I do not think that we should necessarily have to have it now. But I will not develop the point. Let me make my own speech as I intend to make it, as other hon. Members are wanting to speak.

The Government put the blame on the workers. In fact they cannot be blamed. The workers of this country are some of the best in the world. Let me give one or two examples which will show that in recent years the workers have been playing their part. In my constituency recently, although there is unemployment —which is not a great encouragement to working hard—we have had the record output ever from the blast furnaces. This was done by men who belong to the union whose general secretary led the workers recently in the Ford's dispute.

Over the last ten years there have been fewer strikes in this country than in the Common Market countries and five times fewer than in the United States. British workers today work longer hours than do workers in France and Germany and have had fewer wage increases.

In consideration of this, the Government talk about an incomes policy but, as the Leader of the Liberal Party said, that policy is directed against one section of the community and not against those who ought to be covered. It is very difficult for me to talk to the unemployed in my constituency about an incomes policy. All they have is a miserable allowance—the dale, which, as hon. Members have said, ought to be increased to help them and also to enable them to buy more and thereby assist in the recovery of the economy.

This year we are laying stress, quite rightly, on productivity, and in his speech the Chancellor said that we must make sure that we had a higher rate of growth. It is all very well saying that, but if we have a higher rate of growth in producing the wrong kind of goods this could hasten our economic ruin. We have to produce goods which we need and which the world wants from us. If we are to play OUT part in developing our industry, we must note that we are living in a new age—the age of silicates, oxides, carbides and nitrites. Last week, in their budget, the Russians put more money aside for this kind of development than they have ever done before. We ought to be considering that. It is not that our technicians and scientists are lagging behind; they are in front. The reason we are not making the advance in this field which we ought to make is that we are not giving the kind of assistance which is necessary and creating the economic conditions which will make it possible to make progress in this development.

Why do not the Government consider bringing back the Ministry of Materials? This Ministry, created by the Labour Government, was only beginning to tackle the problem, and it is a pity that it was pushed aside. We must find substitute materials for imported raw materials. Its reconstitution ought to be considered, because unless we face the fact that we must try to trade as little as we must, rather than as much as we can, we shall find ourselves in continued economic difficulties and balance of payment problems. If we are to succeed in overcoming our economic ills we must have a national plan. We must tell industry, both public and private, what is required of them.

I am sure that the Chancellor has had the same experience as myself. Industrialists are saying, "We are 'fed up' with this policy of stop-go-stop. Why does not somebody tell us what is required?" We cannot do that unless we have a plan and produce the kind of goods which are necessary. I would lay down a number of conditions for this. We must ensure that the kind of goods which must be produced are those essential for the well-being of the economy, that the workers are treated as equal partners and that the consumers are given a square deal.

I admit that what I have been saying is in the long term and I appreciate that the immediate unemployment problems of the North, Scotland and elsewhere must be tackled at once. I have been told, as have hon. Members generally, that we must be patient. We know that certain Ministers have been on sight-seeing tours. That is not good enough and it must come to an end. Something more positive must be done—and it can be done—but it certainly will not be done without proper co-ordination.

Some time ago I asked to see the President of the Board of Trade, but he was too busy to see me. I sent a letter to him in which I started that as a means of helping the unemployment position in Tees-side the Government should stress publicly that steel should be used as much as possible, particularly in constructional building. What was the result? After a week the right hon. Gentleman wrote to me saying that he was passing the letter on to the Minister of Housing and Local Government. Two weeks later that Minister said that it was being passed to the Minister of Works.

I have received a reply from the Minister of Works and, while it is in some ways rather useful, because it makes some suggestions, I wrote the letter in the first place merely to urge the Government to say—as was said in another context in 1952 to the industry and the community as a whole, when there was a shortage of steel and the public was told to use steel sparingly—that now that there is a surplus, the country should use as much steel as it could. However, for just that one suggestion, there was this delay of a month and still no pronouncement.

The steel industry has an important part to play in the country's economy. Steel can be used in all kinds of capital development; for housing, railways, docks, roads, hospitals, schools, and so on, but it is at this very time that the Minister of Housing has sent a circular to local authorities telling them, in effect, to keep their rates down. How will that encourage local authorities to undertake the sort of building that I have mentioned? In any case, they cannot do it in my area, because the unemployed do not want to pay higher rates.

Why cannot the Government accept the responsibility for a national programme to cover these building services? Why cannot they pay for the houses, roads and schools—and they might even pay for the police and Civil Defence—so that the ratepayers' money can be spent usefully on those things which local authorities must do to help employment. In this connection—and this has been mentioned by other hon. Members—it might be better if Government Departments were decentralised. In Tees-side there is a large number of unemployed clerks and office workers who have little hope of getting jobs. I want to see opportunities provided so that they may be employed and in these days of modern communications there might be a lot to be said for having offices in the provinces and outside London. After all, with close-circuit television and other modern aids people can not only speak to each other, but actually see each other, and documents, so that the movement of people as we have known it over the years is unnecessary. Telex is another means of communication in offices which enables work to be dealt with in parts other than London.

Indicative of the Government's attitude towards this urgent problem of unemployment is this. The owner of a firm near my constituency got in touch with me recently about the production of prestressed concrete sleepers. Last year a great deal of this work was transferred to another area and I am told that there is a threat of a further upheaval and that even more sleepers may be made elsewhere. The manufacturers have appealed to the Government not to allow this to happen and I have written to the British Transport Commission in similar terms.

Another factory near my constituency has informed me that it has forward-looking projects which are designed to keep men in employment for many years to come. However, the immediate problem is rather short term, with fears concerning the next twelve months. One Government contract has been promised, but has not been forthcoming. These instances show that positive action could be taken by the Government to ease the immediate problem.

I agree that the Government are now doing a good many things to help Teesside and I hope that industrialists and others will read what has been said in today's debate. If an industrialist comes to this area he will find it a good place and will wish to stay. This applies particularly to manufacturers of consumer goods. There is a population of 650,000 people. There is a supply of workers who are not only highly skilled, but who seldom engage in industrial disputes, as has been pointed out today.

There are excellent public utilty services, facilities for education, technical training, sports and recreational activities, all enhanced by a delightful countryside. There are good communications—and we hope that the Government's road programme will improve these even further—and there is a £24 million project which local authorities will be putting to the Government. There are excellent communications from the ports to Europe and other parts of the world and I hope that those who are contemplating coming to this area as a result of Government encouragement will find their choice worth while.

If unemployment develops in Teesside, Scotland and elsewhere, what will happen? It must be remembered that unemployment breeds unemployment and that already, in the Midlands and some parts of London, it is beginning to show itself. We must face the fact that our society is lopsided. It is altogether wrong that a stockbroker can receive commission on a single sale of shares which is in excess of a steelworker's wage for a week's work. It is altogether wrong that a property speculator can make hundreds of thousands of pounds overnight while the men who design and build get hundreds of pounds less, and then must pay tax on it.

The policy of the Government encourages an excessive concentration of money in the hands of a few people who get progressively richer without any great effort. All these things provide a threat to our economy and political democracy. The keynote of what I have said is that we have two main tasks: first, the people must understand the truth about our economic position and the Government must convince them that everything depends upon having the right type of production; and, secondly, the Government must make it clear to them that, beyond a shadow of a doubt, the total product of the country's labour will be devoted fairly and in the national interest.

With this leadership I am sure that there will be a response. It is because I do not think that this Government will give that leadership that I hope a great number of hon. Members will go into the Lobby tonight and say that they, also, do not think that this leadership will be forthcoming from the Government.

8.18 p.m.

Mr. Graham Page (Crosby)

The right hon. Member for Middlesbrough, East (Mr. Bottomley) made some powerful proposals, but the background to his argument, which was that the Government were doing nothing about the problem of localised unemployment, is quite untenable on the facts. Under the Local Employment Act, 1960, £75 million has been offered in 340 projects, creating about 84,000 jobs. My right hon. Friend mentioned, among other things, the advance factories, the selective public works and the preferences in placing Government contracts, which can be of great value in the quick relief of localised unemployment.

There are also such things as the great increases in freight transport facilities that have been developed over the last two years, and the allowances given on changing jobs. Things like that have helped immensely to prevent really serious unemployment problems arising in some areas, and the recent measures for encouraging expansion—the reduction of interest rates, the release of the special deposits, the reduction in Purchase Tax on cars and the increases in allowances for capital investments—have all been very satisfactory in initiating schemes that will provide many new jobs.

The average basic unemployment figure throughout the country is 2.4 per cent. In talking of national averages, I do not wish in any way to hide the suffering and hardship caused to nearly 600,000 individuals now without work, and their families, but it is fair to pay tribute to the Government for tackling the problem better than almost any other country. We have had a lower average unemployment since 1951 than any country in Europe, than Canada, than the United States.

But, against this general picture, there are certain local areas where the unemployment problem stands out in tragic relief. One of those tragedies is Merseyside—

Mr. Manuel

And Scotland.

Mr. Page

I wish to deal with the one particular area of Merseyside, and I call it a tragedy because in that area, whatever one may think of the unofficial strikes that may have occurred—and they are unwise at times—there is no harder worker than the Merseysider, and none who will work longer hours when the jobs are there at which to work. But frighteningly sudden has been the increase in unemployment there. In 15 or 16 months the figure has doubled, and, we now have 34,321 people unemployed.

Merseyside has its special problems and, because it has special problems, it is entitled to the exercise of special Government powers to solve them. That was recognised in 1949, when Merseyside was made a development area. For ten years, despite the running-down of the Royal Ordnance factories there, which removed about 30,000 jobs, the new firms coming in have kept down the unemployment figure. That is something of an achievement, because, to keep pace with its increasing population, Merseyside needs 3,500 additional new jobs a year.

In 1960, the Government were successful in persuading Fords, Vauxhalls, Standard-Triumphs and other firms to start development in the Merseyside area. That development will create 33,000 new jobs. The hon. Member for Southwark (Mr. Gunter) read from the Sunday Times to the effect that those 33,000 new jobs had been reduced to an estimated, figure of 14,000. That is wrong. The number of jobs may have been reduced by a small amount—down, perhaps, to 30,000 or 29,000, as an estimate—but certainly not down to 14,000.

When these new developments were introduced into Merseyside in 1960, to produce 33,000 new jobs, that figure was against only 20,000 unemployed at that time. As a result, Merseyside was partially demoted from being a development district; that is to say, I.D.C.s were not excluded from the area, but the help by, grant to those wanting to set up business there was no longer available.

On Merseyside, therefore, we have now no chance of attracting industry in competition with full development districts. True, there have been new constructional jobs in the building of the Ford factory at Halewood, but against the total of unemployed the number has been insignificant.

Over the past two years on Merseyside it has been a case of jam tomorrow. The bread today has been disappearing, because many of the factories in Kirkby and in Speke have packed up, with the result that a number of jobs have been lost in the area. Take-overs have caused considerable resentment. The Plessey and Automatic Telephones take-over and the Courtaulds and British Anchor amalgamation caused a reduction in the number of jobs available in the area. So we now have about 34,000 unemployed.

But that does not tell the whole story. About 3,000 to 4,000 dockers are reporting every day and receiving attendance money because there are no jobs on the docks for them. Furthermore, the pension scheme has retired a number of dockers who would normally be working at this stage, for the strength and stamina of the older docker is absolutely lengendary.

I repeat that 34,000 unemployed is not the full story. For that reason, I think that we have a right to demand that Merseyside be given back its development district status in full. There would then be a positive encouragement to industry, by grants, to come to that area. We should be able to reduce the unemployment figure if that status were restored.

But I give the warning that that it is no good if it merely provides new factory buildings. That would take too long to provide the jobs for those who are now unemployed, and it is really unnecessary, because we have a great deal of vacant factory space there already. What is needed is assistance to restart those factories. If we could provide that assistance it would give quick relief and we should not have the troubles on Merseyside which we have at the moment on the big building sites. Lt would give quick relief if vacant factory space could be used and if some assistance could be given to that end. I believe that the Local Employment Act enables the Government to give that assistance.

There are also many factories which have not been abandoned and which, although not vacant, do not have full order books. The Government can help here by placing Government contracts in the area. This is a recognised form of preference for a development district. I hope that my hon. Friend the Parliamentary Secretary will put to his right hon. Friend this very important point, namely, that unless some Government orders are placed in the district many of these factories which are still operating will join those which have been abandoned and which are now just vacant factory space.

In addition to Government orders for factory work, there are, of course, the Government orders which can be given in ship repairing and, indirectly, in house building. Where are the naval vessels which we used to have for repair on Merseyside? Some of the Jeremiahs shake their heads and say that areas like Merseyside rely on a declining industry and they couple ship repairing with coal and cotton. I deny that ship repairing and shipbuilding is a contracting or declining industry, at any rate permanently. It is a very live industry and can go on being a live industry. I claim that Merseyside is entitled to its share of Government ship repairing and building.

This leads me to the subject of docks in general. Last Friday, Her Majesty the Queen opened the Langton River entrance dock in Liverpool Docks. It was a great act of solid confidence by the Merseyside dock authorities to build that magnificent new dock, but there is still a great lack of deep-water berths. We shall go on losing shipping and shipbuilding and ship repairing to the Continent unless we have more of them.

I should like to see another dock put alongside the Gladstone Dock in an area which has been reserved for a dock in my own constituency. I believe that an act of that sort would be a great act of faith in regard to the dock facilities of this country. Liverpool is not in any way a declining port, but it has very heavy maintenance expenditure, particularly on dredging, and, as a result, it is at a disadvantage in competing with other ports in that its dock dues are very high. In this respect it is entitled to a national contribution, because it certainly would be a national disaster if Liverpool ever ceased to be the great transport and distribution centre which it has been in the past.

I do not go all the way with those who ask for the return of the development district status to Merseyside because they would like to introduce innumerable manufacturing industries there and would like to turn it into something like Birmingham. I should prefer to see an effort made to restore and rehabilitate Merseyside as the great distribution and transport area which it has been in the past; that means the rehabilitation of the docks and the modernising of the marshalling and storage facilities on the docks so that the area can retain its position as a great transport nerve centre. That involves the improvement of the road and rail access to the docks, and there one would hope that the Government would invest public money in improving that road and rail access.

To pass from shipping and the docks, I want to mention housing and house building as being one direction in which unemployment could be relieved in the district. The tremendous slum clearance and rebuilding programme that is necessary in Liverpool and in the area north of Merseyside is well-known. We have about 80,000 new houses to be built to replace the slums. If orders could be given by the local authorities for mass production of the quick construction types of flats and houses, there are several big contractors who would be prepared to place factories in the Merseyside area to build the components for that quick construction of flats or houses. This would provide employment for the factory workers and for the building workers, and the unemployment amongst the latter is very high on Merseyside at present.

I ask my right hon. Friend to look at this possibility. If the local authorities cannot give the big orders for the quick construction of houses and blocks of flats, the Government should take on the job and appoint a development corporation to do it. I believe that this is the only way to make rapid progress with house building and to provide a great amount of employment in one area and that it can be done well on Merseyside. There is no overall shortage of land there. The land can be found. For example, if the company called Railway Sites Limited would get on to the job of finding where vacant railway sites are and where development could take place, it would find that there would be a great amount of land for housing development. It would be valuable if there could be co-ordination between factory development and housing development. There, the £25 million for housing associations might well be put to good use.

I think that in these remarks I have shown that so many Ministries are concerned, as my hon. and gallant Friend the Member for The Hartlepools (Commander Kerans) has mentioned, that there might be some advantage in coordination. The Minister of Housing and Local Government, the Minister of Public Building and Works, the Minister of Labour, the President of the Board of Trade and the Minister of Transport are all deeply concerned in this problem, and without co-operation between all of them it cannot successfully be tackled. I wonder sometimes whether a co-ordinating Minister of State might be the appropriate answer.

However that may be, I am quite sure that if Merseyside were put on an equal basis of competition with others who have a like unemployment problem, the unemployment difficulties of the area could be solved. I ask again that Merseyside be put back into the development district status and that my right hon. Friend looks at the problem from the point of view of restoring that area to its great position as a transport and distribution area.

8.36 p.m.

Mr. Bruce Millan (Glasgow, Craigton)

The hon. Member for Crosby (Mr. Graham Page) has just been speaking about Merseyside. I want to speak principally about Scotland. But I think it is worth commenting that such a large number of hon. Members opposite have been contributing to this debate and saying in effect what we on this side of the House have been saying for so long—that, however well-intentioned the Government may have been and however good the intentions of the Local Employment Act, that Act has in fact failed to solve this problem of regional unemployment.

The speech of the Chancellor of the Exchequer this afternoon was profoundly disappointing, and it had in particular absolutely nothing in it from the Scottish point of view. We had been expecting the Chancellor to bring forward some new ideas. He has received quite a number of suggestions today, and in the Press recently. What the Chancellor said was, "I have taken some steps up to the present to stimulate the economy and I do not believe that anything more is necessary" A particularly disheartening feature of his speech was the point at which he said that there would be great difficulties if the unemployment rate was lower than it is at present, particularly from the point of view of the balance of payments and inflation. If this is the attitude of what is reputed to be an expansionist Chancellor, it makes one very doubtful whether the Government as a whole have any real apprehension of what the difficulties and problems are.

The Chancellor has taken a certain number of steps, particularly in the improvement of the investment allowances and in the reduction of Purchase Tax on motor cars, in order to give some stimulus to the economy. Of course, as far as these have gone they are perfectly acceptable to us, but from the point of view of cash payments, putting cash into people's hands, and giving a stimulus to the economy in that way, the Chancellor has done very little. Certainly post-war credits are being paid out, but a number of other things could have been done. One of them, which has been mentioned in a number of speeches today, is the raising of unemployment benefit and, indeed, of social security benefits as a whole. The Chancellor said that he did not want to stimulate a frothy consumers' boom. I hardly think that an increase in unemployment benefit would stimulate a consumers' boom.

There are other things which can be done. For example, there is the 10 per cent. Purchase Tax rate on essential goods. Could not the Chancellor give relief in that direction without waiting for the next Budget? This is the kind of stimulation of consumer demand which is not susceptible to the criticism of what happened before, when a large demand was created for consumers' durables and we had inflation, balance of payments difficulties, and so on, in consequence.

When we come from the national to the regional problem, one sees that there is very little either in what the Chancellor has said today or in what he did about a month ago which is of any relevance to the regional difficulties that are experienced in Scotland and in other parts of the country. Today, I was glad to see that so many hon. Members opposite, as well as on this side of the House, have now accepted that there is not simply a problem of local black spots of unemployment and that what we are dealing with are organic regional differences between different parts of the country. That is at least a step forward, although one sees absolutely nothing coming from the Government in solution of the problems that this brings.

We are familiar with what the problems are. Particularly in Scotland, the run-down of old industries is far more rapid than the build-up of the new. A certain temporary relief has been given to Scottish unemployment from migration, but it is a particularly undesirable way of getting relief. It is a point worth making that any relief from migration for Scotland or elsewhere can be only temporary and that, in the long term, nothing is mare enervating to any kind of economy than to lose the young, able-bodied men. That is precisely what is happening to Scotland. Temporary relief though it may be, it is a disastrous way to get it. From the longterm point of view, we shall never get a prosperous Scottish economy until we have the kind of conditions in which this continued migration of some of our best young people can be stopped.

What we need is not merely a temporary policy, but a sustained effort. One of the essential criticisms of the Government when dealing with this problem is that they last so much opportunity to deal with it in the years between, say, 1955 and 1959, when virtually nothing was done about the redistribution of industry policy. It was because the Government at that time failed to appreciate that a sustained effort—not a temporary effort spread over a few months —was required that in the last few years, when there have been general economic difficulties, the Government's policies have so miserably failed to match up to the problems.

In his speech today the Chancellor of the Exchequer said that hon. Members on this side of the House kept complain- ing about the Local Employment Act, but that in principle there was nothing wrong with that Act. Certainly, so far as it goes, we do not abject to the Local Employment Act in principle. It is a mistake to keep looking far new ideas and methods continually as if the old methods were necessarily completely unavailing. Certainly, however, new ideas are required.

There is a certain amount of substance in what the Chancellor has said about the Local Employment Act. The basic difficulty about its operation, apart from difficulties in its detailed application, has been that it cannot operate unless the economy as a whole is prosperous. We could tinker about with the Local Employment Act as much as we like, we could make improvements to it, we could improve the B.O.T.A.C. procedure, we could increase the inducements for the construction of new buildings, for example, and we could do a number of things about the Act, but these things by themselves will not solve the problem unless the economy as a whole is prosperous. That is the basic difficulty facing the Government today.

One aspect of the Local Employment Act which interests me is the extent to which assistance under it is going not to new firms coming in from outside but to existing firms in the area already. I have in mind particularly what is happening in Scotland, and the Chancellor of the Exchequer said today that, of course, we must encourage firms in Scotland and elsewhere to help themselves. It may interest the right hon. Gentleman to know that only last week, at an interview, I asked the President of the Board of Trade whether he could give me the breakdown of the total assistance which has gone to Scotland divided between assistance to firms coming in from outside, assistance to firms within Scotland itself which are developing and expanding employment, and assistance to firms in Scotland which may be eligible because, if they did not get the assistance, the numbers of employed would fall. Surprisingly, the President of the Board of Trade did not have the information. The Board of Trade has not done this exercise.

The more I think about it, the more it seems to me that the Board of Trade is not fully aware of the basic problems with which it is supposed to be dealing under the Local Employment Act. This is a simple point. It is implicit in the kind of thing which the Chancellor of the Exchequer was recommending today. But the Board of Trade has not done the exercise and does not know in analytical detail exactly how the Local Employment Act is working and, in particular, how it is helping existing industry as well as industry coming in from outside.

This brings me to a point which has been put in several speeches today. One suspects that the Local Employment Act has been helping far more new industry coming in from outside rather than existing industry. It has been said that there ought to be discriminatory investment allowances on a regional basis for areas of high unemployment. There may be practical difficulties in discriminatory taxation in a general sense, but there are no practical difficulties in discriminatory investment allowances which could not be overcome with a little ingenuity.

This is definitely one aspect of the matter which should be considered. In fact, the Government turned down a proposal to this effect made in the debate on the last Finance Bill. It is interesting to hear people such as the hon. Member for Bute and North Ayrshire (Sir F. Maclean) trotting out the proposal today as though there were something original in it and it had not been put forward before from this side of the House.

There are several other ways open to the Government to help an area like Scotland. A great part of our difficulty, for instance, comes from the rundown of the railway and mining industries. These are nationalised industries. The Government cannot completely wash their hands of policy in regard to them and say that it all has to be done on a purely commercial basis and that they cannot intervene. What about the new electricity station in the South of Scotland which all authorities agree will be required within the very near future? This is a big project. Shall it be an oil-fired station or a coal-fired station? Even on this the Secretary of State for Scotland will not commit himself. He says that we must look at the commercial considerations, that we must not put the South of Scotland Electricity Board at a financial disadvantage.

When it comes to the operation of Government policy for the self-financing of our nationalised industries, it is all right to put the South of Scotland Electricity Board at a financial disadvantage in having to raise its tariffs by 11 per cent. to meet the Government's financial policy. If it is all right to intervene then and if it is all right to put the South of Scotland Electricity Board at a financial disadvantage in that way, why not put it at a financial disadvantage in building a coal-fired as distinct from an oil-fired generating station, particularly having regard to all the arguments on the other side in terms of employment in the mines and so on which are so great? In any case, it is by no means certain that the Board would be put at a financial disadvantage on this particular project by such a decision.

There is a complete lack of initiative on the part of the Government and a complete inability to match their approach to this particular problem of a coal-fired electricity generating station with the general problem of unemployment which we have in Scotland. If the Government cannot act in something in which they have the final and ultimate responsibility, how can we expect them to act vigorously towards private enterprise?

There is another thing which I want to mention. There were reports in the Press last week about opportunities for Scottish shipyards to tender for Russian cargo ships, but on this condition which one may very well regret—and I do regret it —that the Russians want to sell us a certain percentage of their oil. I want to know what the Government are going to do about this. Are they going to take the purist attitude that they cannot possibly have anything to do with this because it is an undesirable trade practice? Perhaps it is. Perhaps it is an undesirable trade practice, but it is a trade practice which, for example, has been acceptable to Italian industry. I understand that the Italians are importing Russian oil in quite considerable quantities.

I want to know whether this economic purism can be carried too far. If it is all right for Italy why should it be not all right for Britain and not all right for Scotland if there are opportunities for work which would be a relief for our shipbuilding industry? But again, we can only go by recent signs, and they are that the Government have no proposals for resolving the general background of unemployment which we have in Scotland at the present time.

There are a number of other things which could be done. My hon. Friend the Member for Hamilton (Mr. T. Fraser) was scoffed at by the Financial Secretary to the Treasury the other day when he said that if private enterprise were not willing to do the job, nationalised industry would do the job instead, and that further measures of nationalisation for the specific purpose of bringing employment to areas of high unemployment would be a very desirable thing. He was scoffed at by the Financial Secretary to the Treasury, and yet we had the Chancellor of the Exchequer this afternoon telling us that the only real source of expansion in the British economy at the present time is in public expenditure and in the nationalised industries.

I do not care what people's politics are. If we say to an unemployed man in Scotland or in the North-East or on Merseyside, "Are you in favour of nationalisation as a move to bring you employment?" I know very well What the answer will be, regardless of his political prejudices, but again the Government have not taken a wide view on this or on any other of the things which I have mentioned.

As for public works, as they are being called—I must say that I do not like the term very much: it sounds a bit like public relief-in so far as the expenditure of public money, of public capital expenditure is concerned, there are a number of obvious candidates in Scotland, for example, roads, the education services, the question of the fifth university; but the one which sticks out like a sore thumb is the question of housing, and in particular the question of slum clearance. It does not seem to have penetrated to the Government yet that the slum clearance programme in Scotland has been stagnating for about five years. As a matter of fact, the number of slums demolished in Scotland has been going down—certainly, only slightly; but it has been going down. The figure has hovered round about the 10,000 level.

Anyone who knows Scottish housing conditions knows that theme must be a wholesale clearance, a wholesale demolition of slums in Scotland if we are to get anything like decent housing conditions in the country, but again the Government are absolutely indifferent and they dilly-dallied about the fourth new town let alone a fifth or sixth new town, despite the great difficulties for Glasgow and Glasgow's overspill.

The Government introduced the Rent Act which is itself a factor inhibiting Glasgow's actions. The Government, again, have completely failed to take action about this; so houses become vacant, as people move out from Glasgow into the overspill areas, private landlords are selling them off, and the stock of rented accommodation in Glasgow is not going up despite 'the overspill programme. This is completely frustrating Glasgow's overspill programme and has prevented drastic action. From the short-term point of view as well as from that of the social consequences, this is something which ought to be tackled more vigorously than it has been up to the present time.

These are only a number of the things which the Government can do. They are all matters for which the Government have the responsibility and about which they can take action. The Government say "We have done our best, but private industry will not do what we want it to do." But these are all matters for which the Government have responsibility and, therefore, they do not have the excuse that someone is not willing to do what the Government would like them to do.

The point is that there is not a real will in the Government to do things of this kind. It was this will, impetus, and willingness to act vigorously about the problem that we wanted demonstrated by the Chancellor of the Exchequer today. Instead, we had absolutely nothing. We had no solution at all offered to the national and regional unemployment problems. This must rank as one of the most unsatisfactory debates that we have had for a very long time. I hope that the people are aware—I am confident that they are—of the complete bankruptcy of the Government about unemployment and other problems, and will draw the correct conclusions, particularly at a General Election.

8.56 p.m.

Mr. Stanley R. McMaster (Belfast, East)

We have listened to a number of interesting speeches. There is very little time left, and I hope that the House will forgive me if I show that an Ulsterman can speak at least as quickly as the hon. Member for Glasgow, Craigton (Mr. Millan).

The picture in my constituency is as bad as any in the United Kingdom. We now have an unemployment rate of more than 7 per cent., which has persisted for the past ten to fifteen years. I have seen more than 10,000 men discharged from the shipyards in East Belfast during the last twelve months and another 1,000.2,000 discharged as the result of the shutdown of the large linen mills there. This gives East Belfast an unemployment figure which is three or four times higher than the national average.

I was very glad to note from his speech my right hon. Friend's reference to Northern Ireland and his acceptance of the fact that our unemployment problem is one of peculiar difficulty, perhaps one of the most difficult in the Kingdom. I say "Kingdom", but I am speaking of the United Kingdom. Much play has been made during the debate on the question whether the country is one nation or divided into two nations. I stress that we are one nation, and, therefore, I urge my right hon. Friends to make sure that Northern Ireland does not suffer in relation to the large sum of money—£70 million—which is being devoted to public works in the United Kingdom. Northern Ireland should be able to share in this expenditure. It should be able to spend similar sums on housing in particular, but also on hospitals, schools and roads.

Turning to defence, we need to rebuild our Navy, and much of this work could be placed in our shipbuilding areas in Northern Ireland. The aircraft industry is also represented in my constituency. A proportion of defence expenditure could be diverted there deliberately to ease the unemployment situation in that seriously affected area.

My main suggestion is addressed to my right hon. Friend the Chancellor of the Exchequer—that he should once again consider the proposal for a tax holiday for new industries going to Northern Ireland and seeking to export manufactured goods. It is suggested that such industries should have tax relief for a number of years—perhaps a limited number of years; say, five or seven—after a factory is established.

It is hard to address the House, Mr. Speaker, over the burble from the benches opposite. I know that hon. Members opposite are not particularly interested in Northern Ireland. I noticed that in the speech of the hon. Member for Southwark (Mr. Gunter) not one mention was made of Northern Ireland, but my right hon. Friend the Chancellor of the Exchequer referred to it. I am not surprised that the Opposition are paying little attention to my remarks.

I should like to see the administrative difficulties which my right hon. Friend mentioned overcome. Our function is to overcome administrative difficulties. Our neighbours in Southern Ireland are able to offer such a tax holiday, and we have to attract industry in competition with other countries such as the Irish Free State. This will be even more serious if Eire and Britain enter the Common Market, because we must be able to attract industry to Northern Ireland.

I should like to see this problem considered by the National Economic Development Council as a matter of priority. I should like to be assured by my right hon. Friend the Minister of Labour that the differentials, which have existed over the past ten years and which have helped us to attract industry to Northern Ireland, will be maintained. This is a matter of great urgency, in view of the Common Market negotiations. We have excellent labour relations in Northern Ireland, and I would like a firm statement of intention by the Government to match the appreciation by my right hon. Friend the Chancellor of the Exchequer of the seriousness of our problem.

9.1 p.m.

Mr. James Callaghan (Cardiff, South-East)

We were all very interested to hear about the problems of Northern Ireland, and certainly most interested in illusion of the hon. Member for Belfast, East (Mr. McMaster) that he represents one nation. I do not know that that will go down equally well in every part of Ireland. But the hon. Member's usual courtesy deserted him. He said that hon. Members on this side of the House were not interested in the problems of Northern Ireland. He would not have made this speech today if it had not been for the Opposition's Motion.

Mr. McMaster rose

Mr. Callaghan

The hon. Member has made a charge and I am replying to it. I can recall only one occasion since 1955 when the Government have found time to debate the problems of Northern Ireland. On every other occasion time has been found by the Opposition. I sometimes wonder why hon. Members from Northern Ireland call themselves Ulster Unionists and continue to support the Conservative Party, because that party has done very little for Northern Ireland over the years.

Mr. McMaster

Perhaps the hon. Gentleman will explain why, in a rather long speech, his hon. Friend the Member for Southwark (Mr. Gunter) did not say one word about our serious problems in Northern Ireland.

Mr. Callaghan

Nor did my hon. Friend speak about Wales, but that does not mean that no one on this side of the House is interested in Wales. In the debate on the Address in reply to the Queen's Speech, the Opposition put down an Amendment and reference was made in that Amendment to Northern Ireland. I spoke about the problems of Northern Ireland then. The hon. Member, however, voted with the Government, as he always does. There will be a future for Northern Ireland when it breaks away from the thraldom of the Ulster Unionist Movement.

I congratulate my hon. Friend the Member for Glasgow, Woodside (Mr. Carmichael) on the compassion and humanity with which he spoke in his maiden speech. It was a speech of which his father will be very proud, and I can say no more than that to him, except that I believe that we have a most notable recruit to our benches from Clydeside and that we heard the authentic voice of Scotland ringing out again this afternoon.

We must time the beginning of the debate. It really started in July, 1961, and not this afternoon. It started when the former Chancellor of the Exchequer, the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) announced his measures to strengthen—strengthen —the economy. I am sorry that he does not speak in these debates. Three times have I sat here and watched his pencil poised over his notes in debates of this kind. Never does he rise to give us the benefit of his advice. I hope that we can tempt him to do so before long, because he has a lot of explaining to do. It was he who set off to strengthen the economy at a time when unemployment was 258,000. As a result of strengthening the economy, unemployment is now 544,000. It was he who set off to strengthen the economy—

Sir Alexander Spearman (Scarborough and Whitby) rose

Mr. Callaghan

I have already given way once and I was late starting. I must push on.

It was the right hon. and learned Gentleman who set off to strengthen the economy at a time when the price level was much lower than it now is. It was he who set off to strengthen the economy at a time when exports were moving ahead quite fast. As a result of his strengthening, the increase in exports has slowed down quite noticeably and they are now increasing at the rate of only 3 per cent. per annum, whereas if we are to get the expansion in industry of which the present Chancellor is so fond of talking, we need, I understand, an increase in exports of 6 per cent. per year. We are getting half that figure now.

Right hon. Gentlemen opposite have also strengthened the economy in the sense that industry is running well below capacity, whereas in July, 1961, when this debate started, industry was running all out. Since the middle of this year, production has been stationary—the Chancellor told us so this afternoon. It has gone up by only 2 per cent. since July, 1960. It has increased by 2 per cent. in eighteen months. The Chancellor did not repeat that this afternoon, but he has twice said that production is increasing at an annual rate of 7 per cent.

Sir A. Spearman

It is true.

Mr. Callaghan

The hon. Gentleman says that it is true. Heaven help us if our finances are ever committed to his care. He knows as well as I do that when the former Chancellor put his measures into operation, production sagged until January of this year and that only from the January level has it increased by 7 per cent. However, compared with the moment when the then Chancellor intervened, it has gone up by 2 per cent. Is it fair to describe that as increasing at an annual rate of 7 per cent. per annum? If that is strengthening the economy—higher prices, unemployment up, industry running below capacity, exports slowing down—the unemployed can be forgiven for saying, "Heaven help us if they start to weaken the economy".

What are the portents for the future? The Chancellor told us quite clearly this afternoon, and the facts are already known, that industry is spending less on new plant today, and has been doing so for some time, than it did in 1961 or 1960. This is an ill omen and everyone must thank goodness that we have a public sector. If we did not have a public sector in which the Chancellor could put another £70 million of spending, the future for Scotland and the North and for parts of Wales would be very bleak. I am delighted that the Chancellor has put another £70 million of public money into this sector, and I hope that we shall not have any complaints from hon. Members opposite when the Estimates are presented later this year, because this is one way of preventing a further decline in employment. I am certain that the Chancellor is right to do it.

Another ill omen is that the number of vacancies for workers is decreasing still. As unemployment goes up, so the number of vacancies goes down. I fear that we have to look forward to a substantial increase in unemployment during the next few months.

On the other hand, as the Chancellor pointed out, productivity is increasing while unemployment is going up. The conventional explanation of this seems to be that firms are getting more efficient work out of their machinery, but, because of their lack of confidence in the future, they are discharging workers whom they might otherwise have held in the hope of a return to better times. I do not know whether that is the true explanation, but it is one which is advanced and the Chancellor was saying something like it this afternoon. He said that workers were being discharged while productivity was going up. But I cannot think of any industrialist who would want to discharge workers at the same time as he was getting more benefit out of the machinery he had installed if he had any confidence in the future employment of those workers. As the Chancellor knows, it is confidence in the Government which is entirely lacking among the business and industrial community of this country.

Sir A. Spearman

Does the hon. Gentleman appreciate that it is the industries which are expanding most, the oil refineries, plastics and basic chemicals, which are dis-hoarding more men than anyone else?

Mr. Callaghan

I am interested to hear that the new name for unemployment is dis-hoarding. I prefer the simple word. Unemployment is unemployment. As regards the type of industries which are dis-hoarding, it is true that a number which are technically advanced are doing this, but it is also true that if these industries could see a future in front of them they would not be creating unemployment themselves. I take a practical example from the Welsh valleys. There is an advertisement in the Press today of a large factory for sale by I.C.I. in Merthyr, a 59-acre site. It is dis-hoarding its employees, because it cannot see any future for that factory in South Wales.

I turn to the wider aspect of the portents for the future. One on which I think the Chancellor should have spent more time is the decrease in the prices of primary products of the underdeveloped nations. World prices have turned against them steadily over the last five to seven years, and, according to all the forecasts, the prices of primary products are likely to decline still further during the next two or three years, which will have a most lamentable effect both on their standards of life and also on out exporting industry. It would be the height of good morality and political and economic wisdom to ensure that the prices of primary products were increased, and I wish that the Chancellor would turn his attention to this subject to see if we cannot get some long-term agreements in order that the effect will be felt on our own industry.

There is a job to be done in these countries which could be of tremendous benefit to our industries. I was glad to hear the Chancellor say that he was thinking of increasing aid to the extent of about £10 million and, perhaps, tying it. I am not very happy about tying it because that prevents the poorest countries from buying in the cheapest market and from their point of view that is an important consideration, too. But it is not aid that matters; it is the price that they get for their commodities that matters, and it is upon this aspect that the Government should be concentrating to a greater extent than at present.

With regard to the economies of the rest of the world, it seems that, like our own economy, the world is in a state of balance and no one seems very confident whether there will be a world recession or Whether production and an expansion of the wealth of the world will go on. It is in a state of balance. In the absence of any definite indication one way or the other there can be no doubt that, in this country at any rate, the Chancellor has been much too cautious in his approach and that he should have speeded up the measures that he has taken. If he holds back too long, he will find himself in the middle of "stop-go" once again, and that he has to plunge suddenly in order to enable the economy to recover much faster than if he were to take it more steadily than he seems to be doing at present.

I ask the Chancellor this question. We did not hear anything this afternoon about the Government's economic target of 4 per cent. expansion per annum. If, 18 months ago, the former Chancellor took these measures to strengthen the economy, and if, as a result, we are still crawling along in bottom gear, growing at 2 per cent. per annum or thereabouts, when does the Chancellor propose to aim at his expansion of 4 per cent. per annum? When shall we get the increase in wealth we all wish to see? I expected to hear something from him about this. Will he aim at a 4 per cent. growth next year, or in 1964, Or is it just one of those mythical targets to which 'he set his hand and to which the Government have put their signatures but which mean nothing in reality?

In a debate like this we might have expected the Chancellor to tell us the Government's views about the growth of the economy in this way. If he is serious in his view that the problem in these areas that we have been discussing —and I am inclined to agree with him—can be solved only in the context of a general expansion of industry, he should have told us when he expects to aim at such a target of growth as will enable tim to solve these problems. We did not hear a word about it.

Unemployment has grown and is likely to grow still more before it improves next spring or in the early part of the summer. Debate about unemployment started in July, 1961, but I would remind the right hon. Gentleman that the debate on the second problem—the problem of the distribution of industry—started in 1955. When we look over the Government's record it is astonishing to see how often the 1955 General Election marks the turning point in the Tory Party's approach to social policies. It was after that election that the Government decided to reverse the taxation tide in favour of the wealthy. It was after that election that they decided to allow the distribution of industry policy to go by default. Seven years later we are now trying to pick up the broken threads of that policy.

I can sum up the position by saying that in the last few years 75 per cent. of the new jobs have been created in the South, around the new conurbations. But there is widespread rural depopulation, and the combination of both factors has created two nations, with a continuing drift to the South.

The first indictment against the Government is that they have failed to use their powers under the Distribution of Industry Act. Perhaps, rather than say that they have failed to use them, I should say that they deliberately did not use them. It was not their philosophy to use them. In 1959 the Chancellor, then President of the Board of Trade, said: We believe we should start from the assumption that the economic and industrial expansion of the country should proceed freely in response to growing and changing consumer demand and that it should proceed on the principle of the most effective use of our national resources, especially in competitive conditions."—[OFFICIAL REPORT, 9th November, 1959; Vol. 613, c. 32.]

Mr. Maudling

What is wrong with that?

Mr. Callaghan

What is wrong with that? We have the continuing drift to the South, resulting in congestion in London and unemployment in the North. If the Chancellor does not understand that he is not fit to occupy his job.

Because he failed to use his powers under this Act he put in its place the Local Employment Act, which Lord Eccles told us was a lavish, ambitious and revolutionary Act. Three years later he has changed his mind. He has told the House of Lords that he was wrong. It is very rare that in the history of one Parliament the Minister who introduced a Bill should say that he was entirely wrong about its consequences, and that he thinks that we should do something entirely different. That, in effect, is what Lord Eccles told the House of Lords the other day.

The Local Employment Act has done some good work in specific areas, but as a means of distributing industry and ensuring an even balance throughout Scotland. Northern Ireland, Wales and the North of England it is a complete and utter failure. It is quite inadequate. It selects small industrial pockets of unemployment and tries to deal with them as they arise. There is no broad conception of planning on a regional basis. The Government do not attempt to deal with a whole area, taking in all the social and industrial complexes that go to make it up. They do not say, "How shall we try to get industry as a whole into a balance throughout the area?" They say, "A pit will close down in this village. Let us try to get a factory there." It is a good idea for the village, but does not the President of the Board of Trade understand that it does not solve the problem of the distribution of industry, which is the problem that we are now discussing?

The Act does not try to solve the problem of the growing congestion in London and the South, with the 75 per cent. of new jobs created there. This used to be part of the job of the President of the Board of Trade; it is not now. This is the problem that we are discussing. Let me say a word about the effect which it has had. This afternoon my right hon. and learned Friend the Member for Newport (Sir F. Soskice) raised the question of the Whitehead Iron & Steel Co. Ltd., and the Minister of Power gave a most inadequate reply. We are there faced with a situation in which a firm employing some 1,500 men in Newport is in danger of being taken over by a Scottish firm with large interests in Corby. I am not attacking it on that account, but the probability is that the re-rolling which is done at Whiteheads will finish at Newport and will be sent to Corby.

The Local Employment Act will not help in this situation. We shall create more difficulties in Corby and we shall create difficulties in South Wales. The question which I want to ask the Government is, what responsibility do they take for the planning of industry as a whole? Do they take any? Is the future of the steel industry of any real concern to them, or do they assume that we are already in the Common Market —because that will certainly throw up some substantial difficulties for Ministers to solve?

I have here an extract from The Times about the iron and steel industry; Britain has accepted that there are incompatibilities as regards certain powers of price fixing and the control of investment projects where they concern Community products". What does that mean? Does it mean that when we go into the Common Market there will be no power at all to plan the location of the steel industry? Will there never be another Llanwern or Raverscraig? Are we to have our steel industry in future on the banks of the Thames, where we know much of the steel industry would like to be today?

I should like to ask the Minister of Labour whether this has been taken up in the discussions which we have had with the Brussels Treaty Powers and the Coal and Steel Community. Can he give us an assurance that as far as the steel industry is concerned we shall be able to ensure that the distribution of industry policy goes on?

There is one other point which I wish to make about the distribution of industry. On 13th December my right hon. Friend the Member for Battersea, North (Mr. Jay) asked the Prime Minister which Minister is responsible for co-ordinating Government policy …? The Prime Minister replied: Co-ordination of the many aspects of national policy involved is best secured by consultation between the Ministers concerned in different aspects of the problem."—[OFFICIAL REPORT, 13th December, 1962; Vol. 1669, c. 578.] This is a complete reversal of the policy which was followed by the Labour Government between 1945 and 1951 and which was followed at any rate at the beginning of their life by the first Conservative Government in Employment Policy, the White Paper on which postwar Governments acted. Paragraph 30 of that document reads: The Government therefore propose that the channel for the expression of Government policy in this matter shall be the Board of Trade, which will be the Department responsible for all general questions of industrial policy and will be suitably strengthened.… The President of the Board of Trade will be responsible to Parliament for all the general aspects of the policy It may be a question for argument whether it ought to be the President of the Board of Trade. Do the social questions which are involved in the distribution of industry and in replanning industry in the way in which we on this side of the House want it re-planned raise the question whether the President of the Board of Trade is the right man? Or should there not be some new Ministry created for this purpose which will amalgamate certain functions? That is a matter for argument, but what is quite clear is that this policy works successfully only when there is one Minister responsible for the whole of it and not a hurry-scurrying between a group of Ministers none of whom has the final responsibility for carrying out the policy. That is the one major reason why the distribution of industries policy has broken down.

We have been asked to say what remedies we propose in the present situation. We have stated them all before. Indeed, we have stated them so often that we are getting tired of repeating them, because they fall on deaf ears. I have here a list of 12 proposals which we have made at various times for dealing with this subject. I do not propose to go through them all now. The Chancellor could, within the limits of his philosophy, repay the post-war credits at a faster rate, because that would be a non-recurring expenditure and he would not be taking on any recurring liability. Apart from that, a whole series of proposals have been put forward from this side of the House time and again and they have been repeated again today, including that of increasing unemployment benefits.

The Chancellor did not attempt to answer the terms of the Motion. The high and rising level of unemployment is indeed the result of Government policy; the result of policies which began in July, 1961. Hon. Members opposite may not like to hear it, but unemployment is a part of this Government's policy. They want unemployment. Unemployment is their way of solving the problem and the Chancellor told us that this afternoon. "It would be an embarrassment," he said in effect, "if unemployment were to go down because we would run into balance of payment difficulties once again".

Mr. Maudling

We should get this clear. I said, and I think experience shows, that unless we have more elbow room it is difficult to halve the present rate of unemployment without running once again into inflationary dangers. This, I think, is perfectly true.

Mr. Callaghan

In that case I do not understand why the Chancellor should expect us to share the Government's views on the recent rise in the level of unemployment. They are crocodile tears. The Chancellor could lessen the amount of unemployment today if he chose to do so and every man on the dole today looks to the Chancellor and says, "You are responsible for my being there".

The Chancellor is not increasing output as fast as he could because he fears that if he does he will get into balance of payment difficulties. Is that not right? Is that not what he said? If that is true —and if, in fact, he is so concerned about balance of payments problems—and if he is keeping a high level of unemployment for the time being, what comes of all those stories about the £ never having been stronger in our lifetime? Must we, after 11 years of Tory rule, keep half a million people out of work because of the risk of our balance of payments difficulties should we put them back into employment?

It is equally true that under this Government the Chancellor must keep a high level of unemployment or risk a balance of payments crisis. That is why we shall have e unemployment until just before the next General Election, when the figure will go down in order to tide them over the election—and then it will grow again afterwards. The reason is that they have no long-term solution to these problems.

I feel bitterly angered when I hear the Chancellor and other Ministers denying that it is possible to put up unemployment benefits now. After all, 97s. 6d. is what a married man has on which to enjoy Christmas. That, of course, does not apply to everyone, for 1st January will be gift Tuesday for a lot of people. The Surtax concessions come into force on gift Tuesday. The Chancellor will not be able to offer to put up unemployment benefits, but he will see to it that a director getting £15,000 a year wild get £1,638 in tax remissions.

The Leader of the Liberal Party suggested that the incomes of some of the new directors might be referred to the National Incomes Commission. That would be an excellent idea if the Government really wanted to set an example to the nation. They send the painters' hours there. What about sending the fees to be drawn by some of these directors who have recently been appointed? It is astonishing that we should pay someone £6,000 a year or less to run our defences, or mess them up, and that he should then get £30,000 a year for selling soda water—about £1 a bubble.

We cannot accept the Government's Amendment. It is hypocritical of them to say that they share concern for the unemployed. This is the old story. They stand aside. These problems have nothing to do with them. They say they are very worried about them. It is just like Skybolt; if things go all right—well and good; but if they go wrong, blame the Americans. If the Central African Federation goes wrong, then blame the Labour Party. If the Tory Party is unpopular, blame the Press. So unemployment is not their responsibility. But they are very concerned about it. This is hypocrisy. They created the unemployment; they are responsible for it. We do not believe that their measures will be effective to overcome it, and we do not believe that, even though they should try to overcome it, they intend to try to overcome it for some months yet. For that reason, we reject the Government's Amendment, and hope that the House will support us in our Motion.

9.31 p.m.

The Minister of Labour (Mr. John Hare)

In the first two parts of his speech the hon. Member for Cardiff, South-East (Mr. Callaghan) tried to address himself seriously to the argument, but I think that he enjoyed himself very much during the last ten minutes. It was a good knockabout turn, but it did not contribute very much to solving the problem of unemployment.

I should like to join the hon. Gentleman in congratulating the hon. Member for Glasgow, Woodside (Mr. Carmichael) on a really first-class maiden speech. Those of us who heard it were much impressed both with its sincerity and with the great skill with which it revealed some controversial matters in a way that was absolutely a model in a maiden speech. We hope very much to hear from the hon. Gentleman in future.

The hon. Member for Cardiff, South-East said that the debate about unemployment really began in July, 1961, when my right hon. and learned Friend the Member for the Wirral (Mr. Selwyn Lloyd) was Chancellor of the Exchequer. By implication, of course, the hon. Gentleman has criticised my right hon. and learned Friend for the present unemployment position. He does not acknowledge, or has not acknowledged in the House today, that unless my right hon. and learned Friend had acted as he did today's unemployment position might have been infinitely worse—[Interruption.] This is the trouble with hon. Members opposite—they will not face up to facts.

They know perfectly well that we were in a balance-of-payments crisis and that the £ was in danger. They also know that the position is reversed today; that the £ is strong, that our reserves are good, that our exports are growing, and that, even on the hon. Gentleman's figures, our production has been increasing.

They also know in their heart of hearts that we are more competitive in prices than we have been for many years past, and they also realise the importance of that to our export trade. We are, therefore, at this moment well poised for further expansion, and this is precisely what my right hon. Friend the Chancellor has in hand.

This has been a good debate. Debates on unemployment are debates in which it is difficult to keep a sense of proportion. Percentage rates, statistics, and so on, are familiar to economists, but we in this House represent human beings—and it is not the monopoly of hon. Members opposite to be concerned when unemployment is being discussed.

I think also, considering the speeches, that we did not run into what some people might have imagined would have been a real danger. We did not on both sides talk ourselves into a crisis. We did not try to create greater dismay than is justified. We did not try to destroy morale or to undermine confidence. [Laughter.] Hon. Members opposite laugh, but confidence is very much the key to this whole problem.

The hon. Member for Cardiff, South-East asked why there was not confidence, and said that, after all, the Government are in power and that they should have engendered confidence after eleven years. One of the troubles about confidence—and there are two—is that many industrialists are hesitating about proceeding with their plans for expansion because of doubts about the Common Market negotiations. The second—and I know that hon. Members opposite will not like it—is that many businessmen are badly advised in thinking that there might possibly be a change of Government. Hence their lack of confidence.

Hon. Members opposite were saying, "This is a sad story after eleven years of Tory rule". I wonder whether they would like to look at a figure or two? Today, there are 1¾ million more in employment in Britain than there were eleven years ago. This represents an increase of 160,000 new jobs each year. [HON. MEMBERS: "Where?"] The fall of a little more than 50,000 during the past year is small compared with the gains which I have just mentioned. Again, if people are interested in looking at What has happened in this country—the growth and expansion which we have seen in the last eleven years—it is right to point out that much of that growth has taken place in the newer industries and in those which are particularly important to the export trade. In the engineering and electrical goods industries there has been a rise in employment, in the last eleven years, of 24 per cent. In chemicals the labour force has risen by 13 per cent., and in vehicle production by 21 per cent.

Another significant factor is that during these eleven years distribution and the professional and scientific services have each increased by over 500,000. This therefore represents—and I hope that my hon. Friend will agree—a picture of very considerable expansion and one is only sorry that hon. Members opposite do not seem able to realise it. Having said this—[HON. MEMBERS: "What?"] —having pointed out that during the last eleven years we have gone through one of the greatest periods of expansion in the country, we are now dealing with the problem of 544,000 people who are out of jobs.

Mr. T. Fraser

The right hon. Gentleman talked about great expansion over the past eleven years. Is he aware that only last week he told the House that in that period the number of males employed in Scotland had been reduced by no less than 16,000?

Mr. Hare

I should like to say something later about Scotland.

I should like to turn now to the problem we are discussing—the 540,000 people who are without jobs. It would be quite wrong not to tell the House that, owing to the usual seasonal influences, this figure will get worse before it gets better, but it will, in fact, improve. I have no doubt about that. My right hon. Friend the Chanchellor of the Exchequer told us this afternoon about the massive measures that he is taking to reflate the economy. The Government are confident that they will have the effect which my right hon. Friend said they will. This does not mean, however, that in generally refiating the economy, we shall be able to overcome the problems that we find in the areas of high unemployment, particularly the North of Ireland, Scotland and the North-East of England.

I recognise that the Northern Ireland unemployment situation is an entirely different type of problem, requiring exceptional treatment, which I think the House accepted when it passed a Motion on 30th March which stated that it believes that Her Majesty's Government, together with the Government of Northern Ireland, would be fully justified in adopting further exceptional measures to achieve these ends."—[OFICIAL REPORT, 30th March, 1962; Vol. 656, c. 1711.] As it is, the inducements which Northern Ireland can offer to industrialists, as my hon. Friends who represent Ulster constituencies know, are in advance of those held out by other areas, because we realise that there are many factors, particularly geography, which place Ulster in a particularly difficult and special position.

Coming now to Scotland and the North-East, here we have the problem of the older heavier industries contracting more quickly in terms of jobs than the influx of new and growing industries is making good. In looking at Scotland and the North-East, I believe that we should deplore the talk of two nations. I believe that the hon. Member for Wigan (Mr. Fitch), whose speech I very much enjoyed, was perfectly right in saying that he also resented the implication that if we went into Europe there would be this so-called "golden triangle". I think that the talk of two nations is not only dangerous—and by dangerous I mean that we could talk ourselves into a depression by auto-suggestion—but that it is also completely untrue.

Taking the November figures, in Huddersfield we had the same unemployment position as we have had in London, while Leeds and Bury were very little higher, Edinburgh and Manchester had less unemployment than Birmingham, Dundee less than Coventry, and Aberdeen less than Southend-on-Sea. My own view is that the southern part of the country is already getting far too congested, and it would be intolerable to accentuate these conditions at the expense of bleeding Scotland and the North-East of their skilled manpower—leaving communities without hope and with no capacity to attract new industries to them.

There are people—and I am glad that my hon. Friend the Member for Holland with Boston (Sir H. Butcher) drew attention to Glasgow in this connection— who suggest that the South is a far pleasanter place to live in. I think that many of us would dispute that. The areas to which we must persuade new industry to go have great assets. They have good ports and communications. The communications have been, and are being, greatly improved by the progressive policy that has been carried out by my right hon. Friend the Minister of Transport. There is good countryside, and many of these assets are much more accessible than in the case of many of the towns in the South.

The hon. Member for Hamilton (Mr. T. Fraser) said that we were not doing as much for Scotland in the way of public investment as we should. I have ascertained the figures and I can assure the hon. Gentleman that Scotland, quite rightly, is certainly getting her fair share. Taking investment per head in England and Wales as 100, Scotland is getting 123 in education, hospitals 124, roads 130 and housing 168. It is no use the hon. Member trying to juggle with figures in the way that he did, because these are the facts.

Mr. T. Fraser

Expenditure is going down.

Mr. Hare

Also, in the North-East, as my right hon. Friend the Chancellor of the Exchequer said, £6 million is being spent on roads this year and that amount is being doubled next year. Generally, it is the policy of my right hon. Friend to see that priority in all public expenditure should go to areas of higher unemployment.

Apart from the amenities and assets of these places to which I have referred, as many hon. Members have said, the quality of the people who dwell in these parts is perhaps the greatest asset. They may be tough in bargaining, but once they agree they stick to their bargain and, with possibly some exceptions, their labour relations are first-class. Let those who doubt this go to Scotland or to Durham, and lot them talk to the managements of new industries which have gone to these areas since the war. If they do this, as many of us have done—I have done so myself—they will find that these people, who, after all, are the pioneers who have gone up from the South, have nothing but praise for the adaptability, skill and hard-working qualities of the labour force there. These firms are, in fact, the best advertisers for these areas. I wish that more industrialists would talk to their colleagues and find out these things for themselves.

A great deal has been done to make known these facts by local authorities and by Members of Parliament on both sides of the House who represent the North-East. Also, I have not found Scottish Members in any way shy of extolling the virtues of Scotland. The Scottish Council, under the chairmanship of Lord Polwarth, is engaged in a real job in pointing out the many advantages that Scotland has for new and growing industries.

One of the troubles that we find, even when unemployment is high, is that industrialists are having great difficulties in getting the skilled manpower they need to meet their requirements. I know that during the expansionist period during 1951 and 1961 employers who would have been perfectly willing to go north were not able to do so because they could not find the skilled men available.

Hon. Members

Speak up.

Mr. Speaker

Order. When I hear hon. Members shouting "Speak up", I feel impelled to draw the attention of the House to the fact that it is making rather a noise and had better keep order.

Mr. Hare

I was talking of the need for increasing the pool of skilled labour so that areas of high unemployment can get the benefit of expansion as it comes.

As the House knows, we have recently published proposals for modernising our industrial training arrangements and I do not propose to go into them at length tonight. In many respects, they represent a complete break from the past. They have been well received and I shall press forward and seek the cooperation of employers and trade unions in setting up training boards industry by industry.

But, meanwhile, I shall continue to do all I can to get employers and trade unions to look far more urgently than they have done in the past at the length of apprenticeship, the age of entry and the quality and content of training. I do not want the time that must elapse before the setting up of these boards to be used as an excuse for doing nothing. That relates to the long term.

In the short term, as my right hon. Friend the Leader of the House made clear in replying to the debate on the Queen's Speech, we propose to provide more retraining for adults. I have been discussing with trade unions and employers means to get started on plans for this. As the House knows, some training of adults goes on at my Department's centres, but a substantial part of that is for disabled men. I hope to start two new centres in Scotland and one in Durham and to enlarge the existing Government training centre at Glasgow.

Mr. William Ainsley (Durham, North-West)

How many people will be trained at the training centre in the North-East?

Mr. Hare

I am hoping to find jobs for—[HON. MEMBERS: "Answer."] I hope to start a class of 20 straight away. [Laughter.] The House may laugh, but I have been discussing the matter with trade union leaders, trying to obtain their support in retraining in both the building construction and the engineering industries. Although, in principle, they say that they agree that something should be done, when it gets down to the detail of setting up these training centres, either in Scotland or in Durham, I encounter considerable difficulties. Nevertheless, I intend to go ahead.

Dr. Jeremy Bray (Middlesbrough, West) rose

Mr. Hare

There are a number of other points with which I want to deal. The question of Government offices was raised both by the right hon. Member for Orkney and Shetland (Mr. Grimond) and by the right hon. Member for Middlesbrough, East (Mr. Bottomley). In Newcastle-upon-Tyne, we have the Ministry of Pensions and National Insurance, we have the Post Office Saving Certificate Division at Durham and in Cardiff we have the Inland Revenue. We intend to do what we can to continue to move staff away from London wherever necessary.

I repeat what my right hon. Friend the Chancellor of the Exchequer said when he opened the debate, that the Government are keeping under close review the position of those receiving National Insurance benefits. This was referred to specifically in the Queen's Speech.

The hon. Member for Southwark (Mr. Gunter). who opened the debate with a very sincere and clear speech, laid great stress on the need for the improvement of labour relations if we were to make our way forward in the world and make the best use of the great assets which reside in this country. I agree with practically everything he said, but I think that he was rather unfair about the new Bill which has been published, dealing with contracts of service. He spoke of a man who might have been in employment for forty years and then, at the end, would have only four weeks' notice or four weeks' compensation if notice was not given. The point is that nothing of the sort has ever been put on the Statute Book before. Here is a formidable start —a start which, I think, can well lead to further developments.

As the hon. Gentleman knows, in the matter of redundancy, severance payments, retirement pensions and sick pay schemes, I am pressing forward as fast as I can with both sides of industry to see that better measures are brought about by agreement with the two sides of industry.

In all these things, we cannot, I think, expect to change overnight attitudes of mind which have existed for many years. We look to employers to be more enterprising in new departures, to seek new technological developments and to show a greater willingness to expand in new areas. We look to trade unionists to be

less dog-in-the-manger about the training in expanding industries of men displaced from the contracting industries, and we look to them to be more forthcoming in their attitude to new and developing techniques.

For the Government's part we shall concentrate all our efforts not only to bring new expanding industries to the areas, especially in Scotland and the North-East, which have suffered particularly from the decline in the old industries, but we shall concentrate also on having such measures as our economic resources allow to make these areas more attractive as centres of economic growth. I believe that it is only in these ways that the long-term problem can be solved.

The effect of the Motion would be to land us right back in the difficulties of last year. I therefore ask the House to reject it and to vote for the Amendment, which is positive, constructive, and which emphasises the Government's determination to secure expansion on a sound and lasting basis.

Dr. Dickson Mahon rose

The Parliamentary Secretary to the Treasury (Mr. Martin Redmayne) rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the words proposed to be left out stand part of the Question:—

The House divided: Ayes 235, Noes 315.

Division No. 19.] AYES [10.0 p.m.
Abse, Leo Boyden, James Dalyell, Tam
Ainsley, William Braddock, Mrs. E. M. Darling, George
Albu, Austen Bradley, Tom Davies, G. Elfed (Rhondda, E.)
Allaun, Frank (Salford, E.) Bray, Dr. Jeremy Davies, Ifor (Cower)
Allen, Scholefield (Crewe) Brockway, A. Fenner Davies, S. O. (Merthyr)
Awbery, Stan (Bristol, Central) Broughton, Dr. A. D. D. Deer, George
Bacon, Miss Alice Brown, Rt. Hon. George (Belper) Delargy, Hugh
Baird, John Butler, Herbert (Hackney, C.) Dempsey, James
Barnett, Guy Butler, Mrs. Joyce (Wood Green) Diamond, John
Baxter, William (Stirlingshire, W.) Callaghan, James Dodds, Norman
Beaney, Alan Carmichael, Neil Driberg, Tom
Bellenger, Rh. Hon. F. J. Castle, Mrs. Barbara Dugdale, Rt. Hon. John
Bence, Cyril Chapman, Donald Ede, Rt. Hon. C.
Bennett, J. (Glasgow, Bridgeton) Cliffe, Michael Edelman, Maurice
Benson, Sir George Collick, Percy Edwards, Rt. Hon. Ness (Caerphilly)
Blackburn, F. Corbet, Mrs. Freda Edwards, Walter (Stepney)
Blyton, William Craddock, George (Bradford, S.) Evans, Albert
Boardman, H. Cronin, John Fernyhough, E.
Bottomley, Rt. Hon. A. G. Crosland, Anthony Finch, Harold
Bowden, Rt. Hon. H.W.(Leics.,S.W.) Crossman, R. H. S. Fitch, Alan
Bowles, Frank Cullen, Mrs. Alice Fletcher, Eric
Foot, Dingle (Ipswich) Loughlln, Charles Robinson, Kenneth (St. Pancras, N.)
Foot, Michael (Ebbw vale) Lubbock, Eric Rodgers, W. T. (Stockton)
Forman), J. C. Mabon, Dr. J. Dickson Ross, William
Fraser, Thomas (Hamilton) McCann, John Royle, Charles (Salford, West)
Galpern, Sir Myer MacColl, James Shinwell, Rt. Hon. E.
George, LadyMeganLloyd(Crmrthn) MacDermot, Niall Silverman, Julius (Aston)
Ginsburg, David Mclnnes, James Silverman, Sydney (Nelson)
Greenwood, Anthony McKay, John (Wallsend) Skeffington, Arthur
Grey, Charles Mackie, John (Enfield, East) Slater, Mrs- Harriet (Stoke, N.)
Griffiths, David (Rother Valley) McLeavy, Frank Slater, Joseph (Sedgefield)
Griffiths, Rt. Hon. James (Llanelly) MacMillan, Malcolm (Western Isles) Small, William
Griffiths, w. (Exchange) MacPherson, Malcolm (Stirling) Smith, Ellis (Stoke, S.)
Grimond, Rt. Hon. J. Mallalieu, E. L. (Brigg) Snow, Julian
Gunter, Ray Mallalieu, J.P.W. (Huddersfield, E.) Sorensen, R. W.
Hale, Leslie (Oldham, w.) Manuel, Archie Soskice, Rt. Hon. Sir Frank
Hannan, William Mapp, Charles Spriggs, Leslie
Harper, Joseph Marsh, Richard Steele, Thomas
Hart, Mrs. Judith Mason, Roy Stewart, Michael (Fulham)
Hayman, F. H. Mellish, R. J. Stonehouse, John
Healey, Denis Mendelson, J. J, Stones, William
Henderson, Rt.Hn.Arthur(Rwly Regis) Millan, Bruce Strauss, Rt. Hn. G. R. (Vauxhall)
Herbison, Miss Margaret Milne, Edward Stross,Dr.Barnett(Stoke-on-Trent,C.)
Hewitson, Capt. M. Mitchison, G. R. Swain, Thomas
Hill, J. (Midlothian) Monslow, Walter Swingler, Stephen
Hilton, A. V. Moody, A, S. Taverne, D.
Holman, Percy Morris, John Taylor, Bernard (Mansfield)
Holt, Arthur Moyle, Arthur Thomas, George (Cardiff, W.)
Houghton, Douglas Mulley, Frederick Thomas, Iorwerth (Rhondda, W.)
Howell, Charles A. (Perry Barr) Neal, Harold Thomson, G. M. (Dundee, E.)
Howell, Denis (Small Heath) Noel-Baker, Francis (Swindon) Thornton, Ernest
Hoy, James H. Oliver, G. H. Thorpe, Jeremy
Hughes Cledwyn (Anglesey) Oram, A. E. Timmons, John
Hughes, Emrys (S. Ayrshire) Oswald, Thomas Tomney, Frank
Hughes, Hector (Aberdeen, N.) Owen, Will Wade, Donald
Hunter, A. E. Padley, W. E. Wainwright, Edwin
Hynd, H. (Accrington) Paget, R. T. Warbey, William
Hynd, John (Attercliffe) Panneil, Charles (Leeds, W.) Watkins, Tudor
Irvine, A. J. (Edge Hill) Pargiter, G A. Weitzman, David
Irving, Sydney (Dartford) Parker, John Wells, Percy (Faversham)
Janner, Sir Barnett Parkin, B. T. Wells, William (Walsall, N.)
Jay, Rt. Hon. Douglas Pavitt, Laurence White, Mrs. Eirene
Jeger, George Pearson, Arthur (Pontypridd) Whitlock, William
Jones, Rt. Hn. A. Creech (Wakefield) Peart, Frederick Wigg, George
Jones, Dan (Burnley) Pentland, Norman Wilkins, W. A.
Jones J. Idwal (Wrexham) Plummer, Sir Leslie Willey, Frederick
Jones T. W. (Merioneth) Popplewell, Ernest Williams, D. J. (Neath)
Kelley, Richard Prentice, RE. Williams, L. (Abertillery)
Kenyon, Clifford Price, J. T. (westhoughton) Williams, W. R. (Openshaw)
Key, Rt. Hon. C. W. Probert, Arthur Williams, W. T. (Warrington)
King, Dr. Horace Proctor, W. T. Wilson, Rt. Hon. Harold (Huyton)
Lawson, George Pursey, Cmdr. Harry Winterbottom, R. E.
Ledger, Ron Rankin, John Woodburn, Rt. Hon. A.
Lee, Frederick (Newton) Reid, William Wyatt, Woodrow
Lee, Miss Jennie (Cannock) Reynolds, G. w Yates, Victor (Ladywood)
Lever, Harold (Cheetham) Rhodes, H. Zilliacus, K.
Lever, L. M. (Ardwick) Roberts, Albert (Normanton)
Lewis, Arthur (West Ham, N.) Roberts, Goronwy (Caernarvon) TELLERS FOR THE AYES:
Upton, Marcus Robertson, John (Paisley) Mr. Short and Mr. Redhead.
Agnew, Sir Peter Bingham, R. M. Channon, H. P. G.
Aitken, W. T. Birch, Rt. Hon. Nigel Chataway, Christopher
Allan, Robert (Paddington, S.) Bishop, F. P. Clark, Henry (Antrim, N.)
Allason, James Black, Sir Cyril Clark, William (Nottingham, S.)
Amery, Rt Hon. Julian Bossom, Clive Clarke, Brig. Terence(Portsmth,W.)
Arbuthnot, John Bourne-Arton, A. Cleaver, Leonard
Ashton, Sir Hubert Box, Donald Cole, Norman
Atkins, Humphrey Boyd-Carpenter, Rt. Hon. John Cooke, Robert
Awdry, Daniel (Chippenham) Boyle, Rt. Hon. Sir Edward Cooper, A. E.
Balniel, Lord Braine, Bernard Cooper-Key, Sir Neill
Barber, Anthony Brooke, Rt. Hon. Henry Cordeaux, Lt.-Col. J. K.
Barlow, Sir John Brooman-White, R. Cordle, John
Barter, John Brown, Alan (Tottenham) Corfield, F. V.
Batsford, Brian Browne, Percy (Torrington) Costain, A. P.
Baxter, Sir Beverley (Southgate) Bryan, Paul Coulson, Michael
Beamish, Col. Sir Tufton Buck, Antony Courtney, Cdr. Anthony
Bell, Ronald Buliard, Denys Craddock, Sir Beresford
Bennett, F. M. (Torquay) Bullus, Wing Commander Eric Crawley, Aidan
Bennett, Dr. Reginald (Gos & Fhm) Burden, F. A. Crosthwaite-Eyre, Col. Sir Oliver
Berkeley, Humphrey Butcher, Sir Herbert Crowder, F. P.
Bevins, Rt. Hon. Reginald Butler, Rt.Hn.R. A. (Saffron Walden) Cunningham, Knox
Bidgood, John C. Campbell, Gordon (Moray & Nairn) Curran, Charles
Biffen, John Carr, Robert (Mitcham) Currie, G. B. H.
Biggs-Davison, John Cary, Sir Robert Dalkeith, Earl of
Dance, James Joseph, Rt. Hon. Sir Keith Profumo, Rt. Hon. John
d'Avigdor-Goldsmid, sir Henry Kaberry, Sir Donald Proudfoot, Wilfred
Deedes, Rt. Hon. W. F. Kerby, Capt. Henry Pym, Francis
Digby, Simon Wingfield Kerr, Sir Hamilton Quennell, Miss J. M.
Donaldson, Cmdr. C. E. M. Kimball, Marcus Ramsden, James
Doughty, Charles Kirk, Peter Rawlinson, Sir Peter
Drayson, G. B. Lagden, Godfrey Redmayne, Rt. Hon. Martin
du Cann, Edward Lambton, Viscount Rees, Hugh
Duncan, Sir James Lancaster, col. C. G. Rees-Davies, W. R.
Eden, John Langford-Holt, Sir John Renton, Rt. Hon. David
Elliot, Capt. Walter (Carshalton) Leavey, J. A. Ridley, Hon. Nicholas
Elliott,R.W.(Nwcastle-upon-Tyne,N.) Leburn, Gilmour Ridsdale, Julian
Emery, Peter Legge-Bourke, Sir Harry Rippon, Rt. Hon. Geoffrey
Errington, Sir Eric Lewis Kenneth (Rutland) Roberts, Sir Peter (Heeley)
Erroll, Rt. Hon. F. J. Lilley, F. J. P. Robson Brown, Sir William
Farey-Jones, F. W. Lindsay, Sir Martin Rodgers, John (Sevenoaks)
Farr, John Linstead, Sir Hugh Roots, William
Fell, Anthony Litchfield, Capt. John Ropner, Col. Sir Leonard
Fisher, Nigel Lloyd, Rt.Hn. Geoffrey (Sut'nC'dfield) Royle, Anthony (Richmond, Surrey)
Fletcher-Cooke, Charles Lloyd, Rt. Hon. Selwyn (Wirral) St. Clair, M.
Forrest, George Longbottom, Charles Scott-Hopkins, James
Fraser,Rt.Hn.Hugh(Stafford&Stone) Longden, Gilbert Seymour, Leslie
Fraser, Ian (Plymouth, Sutton) Loveys, Walter H. Sharpies, Richard
Freeth, Denzil Lucas, Sir Jocelyn Shepherd, William
Galbraith, Hon. T. G. D. Lucas-Tooth, Sir Hugh Skeet, T. H. H.
Gammans, Lady McAdden, Sir Stephen Smith, Dudley (Br'ntf'd & Chiswick)
Gardner, Edward McArthur, Ian Smithers, Peter
Gibson-Watt, David McLaren, Martin Smyth, Rt. Hon. Brig. Sir John
Gilmour, Ian (Norfolk Central) McLaughlin, Mrs. Patricia Soames, Rt. Hon. Christopher
Gilmour, Sir John (East Fife) Maciay, Rt. Hon. John Spearman, Sir Alexander
Glyn, Dr. Alan (Clapham) McLean, Neil (Inverness) Stanley, Hon. Richard
Goodhew, Victor Macieod, Rt. Hn. Ian (Enfield, W.) Stevens, Geoffrey
Gough, Frederick MacLeod, John (Ross & Cromarty) Steward, Harold (Stockport, S.)
Grant-Ferris, H. McMaster, Stanley R. Stodart, J. A.
Green, Alan Macmillan, Maurice (Halifax) Stoddart-Scott, Col. Sir Malcolm
Gresham Cooke, R. Macpherson,Rt.Hn.Niall(Dumfrles) Storey, Sir Samuel
Grosvenor, Lt.-Col. R, G. Maginnis, John E. Studholme, Sir Henry
Gurden, Harold Maitland, Sir John Summers, Sir Spencer
Hall, John (Wycombe) Marlowe, Anthony Tapsell, Peter
Hamilton, Michael (Wellingborough) Marples, Rt. Hon. Ernest Taylor, Sir Charles (Eastbourne)
Hare, Rt. Hon. John Marshall, Douglas Taylor, Edwin (Bolton, E.)
Harris, Reader (Heston) Marten, Nell Taylor, Frank (M'ch'st'r, Moss Side)
Harrison, Brian (Maldon) Mathew, Robert (Honiton) Taylor, W. J. (Bradford, N.)
Harrison, Col. Sir Harwood (Eye) Matthews, Gordon (Meriden) Teeling, Sir William
Harvey, Sir Arthur Vere (Macclesf'd) Maudling, Rt. Hon. Reginald Temple, John M.
Harvey, John (Walthamstow, E.) Mawby, Ray Thatcher, Mrs. Margaret
Harvie Anderson, Miss Maxwell-Hyslop, R. J. Thomas, Peter (Conway)
Hastings, Stephen Maydon, Lt.-Cmdr. S. L. C. Thompson, Kenneth (Walton)
Hay, John Mills, Stratton Thompson, Richard (Croydon, S.)
Heald, Rt. Hon. Sir Lionel Mlscampbell, Norman Thornton-Kemsiey, Sir Colin
Heath, Rt. Hon. Edward Moore, Sir Thomas (Ayr) Tiley, Arthur (Bradford, W.)
Henderson John (Cathcart) Morgan, William Tilney, John (Wavertree)
Hendry, Forbes Morrison, John Touche, Rt. Hon. Sir Gordon
Hicks Beach, Maj. W. Mott-Radclyffe, Sir Charles Turner, Colin
Hiley, Joseph Nabarro, Gerald Tweedsmulr, Lady
Hill, Dr. Rt. Hon. Charles (Luton) Neave, Alrey van Straubenzee, W. R.
Hill, J. E. B. (S. Norfolk) Nicholls, Sir Harmar vane, W. M. F.
Hirst, Geoffrey Nicholson, Sir Godfrey Vaughan-Morgan, Rt. Hon. Sir John
Hobson, Sir John Noble, Rt. Hon. Michael Vickers, Miss Joan
Hocking, Philip N. Nugent, Rt. Hon. Sir Richard Vosper, Rt. Hon. Dennis
Holland, Philip Oakshott, Sir Hendrie Wakefield, Sir Wavell
Hollingworth, John Orr, Capt. L. P. S. Walder, David
Hope, Rt. Hon. Lord John Orr-Ewing, C. Ian Walker, Peter
Hopkins, Alan Osborn, John (Hallam) Walker-Smith, Rt. Hon. Sir Derek
Hornby, R. P. Osborne, Sir Cyril (Louth) Watkinson, Rt. Hon. Harold
Hornsby-smith, Rt. Hon. Dame P. Page, Graham (Crosby) Webster, David
Howard, Hon. G. R. (St. Ives) Page, John (Harrow, West) Wells, John (Maidstone)
Howard, John (Southampton, Test) Pannell, Norman (Kirkdale) Whitelaw, William
Hughes Hallett, Vice Admiral John Partridge, E. Williams, Dudley (Exeter)
Hughes-Young, Michael Pearson, Frank (Clitheroe) Wills, Sir Gerald (Bridgwater)
Hulbert, Sir Norman Peel, John Wilson, Geoffrey (Truro)
Hurd, Sir Anthony Percival, Ian Wise, A. R.
Hutchison, Michael Clark Peyton, John Wolrige-Gordon, Patrick
Iremonger, T. L. Pickthorn, Sir Kenneth Wood, Rt. Hon. Richard
Irvine, Bryant Godman (Rye) Pike, Miss Mervyn Woodhouse, C. M.
James, David Pilkington, Sir Richard Woodnutt, Mark
Jenkins, Robert (Dulwich) Pitman, Sir James Woollam, John
Jennings, J. C. Pitt, Dame Edith Worsley, Marcus
Johnson, Dr. Donald (Carlisle) Pott, Percivall Yates, William (The Wrekin)
Johnson, Eric (Blackley) Powell, Rt. Hon. J. Enoch
Johnson Smith, Geoffrey Price, David (Eastleigh) TELLERS FOR THE NOES:
Jones, Arthur (Northants, S) Price, H. A. (Lewisham, w.) Mr. Chichester-Clark and
Prior-Palmer, Brig. Sir Otho Mr. Finlay.

Question put, That the proposed words be there added:—

The House divided: Ayes 311, Noes 235.

Division No. 20.] AYES [10.13 p.m.
Agnew, Sir Peter du Cann, Edward Kimball, Marcus
Aitken, W. T. Duncan, Sir James Kirk, Peter
Allan, Robert (Paddington, S.) Eden, John Lambton, viscount
Allason, James Elliot, Capt. Walter (Carshalton) Lancaster, Col. C- G.
Amery, Rt. Hon. Julian Elliott, R.W.(Nwcastle-uPon-Tyne,N.) Langford-Holt, Sir John
Arbuthnot, John Emery, Peter Leavey, J, A.
Ashton, Sir Hubert Errington, Sir Eric Leburn, Gilmour
Atkins, Humphrey Erroll, Rt. Hon. F. J. Legge-Bourke, Sir Harry
Awdry, Daniel (Chippenham) Farey-Jones, F. W. Lewis, Kenneth (Rutland)
Balniel, Lord Farr, John Lilley, F. J. P.
Barber, Anthony Fell, Anthony Lindsay, Sir Martin
Barlow, Sir John Fisher, Nigel Linstead, Sir Hugh
Barter, John Fletcher-Cooke, Charles Litchfield, Capt. John
Batsford, Brian Forrest, George Lloyd,Rt.Hn.Geoffrey(Sut'nC'dfield)
Beamish, Col. Sir Tufton Fraser,Rt.Hn.Hugh(Stafford&Stone) Lloyd, Rt. Hon. Selwyn (Wirral)
Bell, Donald Fraser, Ian (Plymouth, Sutton) Longbottom, Charles
Bennett, F. M. (Torquay) Freeth, Denzil Longden, Gilbert
Galbraith, Hon. T. G. D. Loveys, Walter H.
Bennett, Dr. Reginald (Cos &Fhr.) Gammans, Lady Lucas, Sir Jocelyn
Berkeley, Humphry Gardner, Edward Lucas-Tooth, Sir Hugh
Bevins, Rt. Hon. Reginald Gibson-Watt, David McArthur, Ian
Bidgood, John C. Gilmour, Ian (Norfolk Central) McLaren, Martin
Biffen, John Gilmour, Sir John McLaughlin, Mrs. Patricia
Biggs-Davison, John Glyn, Dr. Alan (Clapham) Maclay, Rt. Hon. John
Bingham, R. M. Goodhew, Victor McLean, Nell (Inverness)
Birch, Rt. Hon. Nigel Gough, Frederick Macleod, Rt. Hn. lain (Enfield, W.)
Bishop, F. P. Grant-Ferris, R. MacLeod, John (Ross & Cromarty)
Black, Sir Cyril Green, Alan McMaster, Stanley R.
Bossom, Clive Gresham Cooke, R. Macmillan, Maurice (Halifax)
Bourne-Arton, A. Grosvenor, Lt.-Col. R. G. Macpherson,Rt.Hn.Nlall(Dumfrles)
Box, Donald Gurden, Harold Maginnis, John E.
Boyd-Carpenter, Rt. Hon. John Hall, John (Wycombe) Maitland, Sir John
Boyle, Rt. Hon. Sir Edward Hamilton, Michael (Wellingborough) Marlowe, Anthony
Braine, Bernard Hare, Rt. Hon. John Marples, Rt. Hon. Ernest
Brooke, Rt. Hon. Henry Harris, Reader (Heston) Marshall, Douglas
Brooman-White, R. Harrison, Brian (Maldon) Marten, Neil
Brown, Alan (Tottenham) Harrison, Col. Sir Harwood (Eye) Mathew, Robert (Honlton)
Browne, Percy (Torrington) Harvey, Sir Arthur Vere (Macciesf'd) Matthews, Gordon (Meriden)
Bryan, Paul Harvey, John (walthamstow, E.) Maudling, Rt. Hon. Reginald
Buck, Antony Harvie Anderson, Miss Mawby, Ray
Bullard, Denys Hastings, Stephen Maxwell Hyslop, R. J.
Bullus, Wing Commander Eric Hay, John Maydon, Lt.-Cmdr. S. L. C.
Burden, F. A. Heald, Rt. Hon. Sir Lionel Mills, Stratton
Butcher, Sir Herbert Heath, Rt. Hon. Edward Miscampbell, Norman
Butler, Rt.Hn.R.A. (Saffron Walden) Henderson, John (Cathcart) Moore, Sir Thomas (Ayr)
Campbell, Gordon (Moray & Nairn) Hendry, Forbes Morgan, William
Carr, Robert (Mitcham) Hicks Beach, Maj. W. Morrison, John
Cary, Sir Robert Hiley, Joseph Nabarro, Gerald
Channon, H. P. C. Hill, Dr. Rt. Hon. Charles (Luton) Neave, Alrey
Chataway, Christopher Hill, j. E. B. (S. Norfolk) Nicholls, Sir Harmar
Clark, Henry (Antrim, N.) Hirst, Geoffrey Nicholson, Sir Godfrey
Clark, William (Nottingham, s.) Hobson, Sir John Noble, Rt. Hon, Michael
Clarke, Brig. Terence(Portsmth, W.) Hocking, Philip N. Nugent, Rt. Hon. Sir Richard
Cleaver, Leonard Holland, Philip Oakshott, Sir Hendrie
Cole, Norman Hollingworth, John Orr, Capt. L. P. S.
Cooke, Robert Hope, Rt. Hon. Lord John Orr-Ewing, C. Ian
Cooper, A. E. Hopkins, Alan Osborn, John (Hallam)
Cooper-Key, Sir Neill Hornby, R. P. Osborne, Sir Cyril (Louth)
Cordeaux, Lt.-Col. J. K. Hornsby-Smith, Rt. Hon. Dame P. Page, Graham (Crosby)
Cordle, John Howard, Hon. G. R. (St. Ives) Page, John (Harrow, West)
Corfield, F. V. Howard, John (Southampton, Test) Pannell, Norman (Kirkdale)
Costain, A. P. Hughes Hallett, vice-Admiral John Partridge, E.
Coulson, Michael Hughes-Young, Michael Pearson, Frank (Clitheroe)
Courtney, Cdr. Anthony Hulbert, Sir Norman Peel, John
Craddock, Sir Beresford Hurd, Sir Anthony Percival, Ian
Crawley, Aidan Hutchison, Michael Clark Peyton, John
Crosthwaite-Eyre, Col. Sir Oliver Iremonger, T. L. Pickthorn, Sir Kenneth
Crowder, F. P. Irvine, Bryant Godman (Rye) Pike, Miss Mervyn
Cunningham, Knox James, David Pilkington, Sir Richard
Curran, Charles Jenkins, Robert (Dulwich) Pitman, Sir James
Currie, G. B. H. Jennings, J. C. Pitt, Dame Edith
Dalkeith, Earl of Johnson, Dr. Donald (Carlisle) Pott, Percivall
Dance, James Johnson, Eric (Blackley) Powell, Rt. Hon. J. Enoch
d'Avigdor-Goldsmid, Sir Henry Johnson Smith, Geoffrey Price, David (Eastleigh)
Deedes, Rt. Hon. W. F. Jones, Arthur (Northants, S) Price, H. A. (Lewisham, W.)
Digby, Simon Wingfield Joseph, Rt. Hon. Sir Keith Prior-Palmer, Brig. Sir Otho
Donaldson, Cmdr. C. E. M. Kaberry, Sir Donald Profumo, Rt. Hon. John
Doughty, Charles Kerby, Capt. Henry Proudfoot, Wilfred
Drayson, G. B. Kerr, Sir Hamilton Pym, Francis
Quennell, Miss J. M. Stevens, Geoffrey Vaughan-Morgan, Rt. Hon. Sir John
Ramsden, James Steward, Harold (Stockport, S.) Vickers, Miss Joan
Rawlinson, Sir Peter Stodart, J. A. Vosper, Rt. Hon. Dennis
Redmayne, Rt. Hon. Martin Stoddart-Scott, Col. Sir Malcolm Wakefield, Sir Wavell
Rees, Hugh Storey, Sir Samuel Walder, David
Rees-Davies, W. R. Studholme, Sir Henry Walker, Peter
Renton, Rt. Hon. David Summers, Sir Spencer Walker-Smith, Rt. Hon. Sir Derek
Ridsdale, Julian Tapsell, Peter Watkinson, Rt. Hon. Harold
Rippon, Rt. Hon. Geoffrey Taylor, Sir Charles (Eastbourne) Webster, David
Roberts, Sir Peter (Heeley) Taylor, Edwin (Bolton, E.) Wells, John (Maidstone)
Robson Brown, Sir William Taylor, Frank (M'ch'st'r, Moss Side) Whitelaw, William
Rodgers, John (Sevenoaks) Taylor, W. J. (Bradford, N.) Williams, Dudley (Exeter)
Roots, William
Ropner, Col. Sir Leonard Teeling, Sir William Wills, Sir Gerald (Bridgwater)
Royle, Anthony (Richmond, Surrey) Temple, John M. Wilson, Geoffrey (Truro)
St. Clair, M. Thatcher, Mrs. Margaret Wise, A. R.
Scott-Hopkins, James Thomas, Peter (Conway) Wolrige-Gordon, Patrick
Seymour, Leslie Thompson, Kenneth (Walton) Wood, Rt. Hon. Richard
Sharpies, Richard Thompson, Richard (Croydon, S.) Woodhouse, C. M.
Shepherd, William Thornton-Kemsley, Sir Colin Woodnutt, Mark
Skeet, T. H. H. Tiley, Arthur (Bradford, W.) Woollam, John
Smith, Dudley (Br'ntf'd & Chlswick) Tilney, John (Wavertree) Worsley, Marcus
Smithers, Peter Touche, Rt. Hon. Sir Gordon Yates, William (The Wrekin)
Smyth, Rt. Hon. Brig. Sir John Turner, Colin
Soames, Rt. Hon. Christopher Tweedsmuir, Lady TELLERS FOR THE AYES:
Spearman, Sir Alexander van straubenzee, W. R. Mr. Chichester-Clark and
Stanley, Hon. Richard Vane, W. M. F. Mr. Finlay.
Abse, Leo Dugdale, Rt. Hon. John Jones, T. W. (Merioneth)
Ainsley, William Ede, Rt. Hon. C. Kelley, Richard
Albu, Austen Edelman, Maurice Kenyon, Clifford
Allaun, Frank (Salford, E.) Edwards, Rt. Hon. Ness (Caerphilly) Key, Rt. Hon. C. W.
Allen, Scholefield (Crewe) Edwards, Walter (Stepney) King, Dr. Horace
Awbery, Stan Evans, Albert Lawson, George
Bacon, Miss Alice Fernyhough, E. Ledger, Ron
Baird, John Finch, Harold Lee, Frederick (Newton)
Barnett, Guy Fitch, Alan Lee, Miss Jennie (Cannock)
Baxter, William (Stirlingshire, W.) Fletcher, Eric Lever, Harold (Cheetham)
Beaney, Alan Foot, Dingle (Ipswich) Lever, L. M. (Ardwlck)
Bellenger, Rt. Hon. F. J. Foot, Michael (Ebbw Vale) Lewis, Arthur (West Ham, N.)
Bence, Cyril Forman, J. C. Lipton, Marcus
Bennett, J. (Glasgow, Bridgeton) Fraser, Thomas (Hamilton) Loughlin, Charles
Benson, Sir George Galpern, Sir Myer Lubbock, Eric
Blackburn, F. George,Lady MeganLloyd(Crmrthn) Mabon, Dr. J. Dickson
Blyton, William Ginsburg, David McCann, John
Boardman, H. Greenwood, Anthony MacColl, James
Grey, Charles MacDermot, Nlall
Bottomley, Rt. Hon. A. G. Griffiths, David (Rother Valley) Mcinnes, James
Bowden, Rt. Hn. H. W.(Lelcs, S.W.) Griffiths, Rt. Hon. James (Lanelly) McKay, John (Wallsend)
Bowles, Frank Griffiths, W. (Exchange) Mackle, John (Enfield, East)
Boyden, James Grimond, Rt. Hon. J. McLeavy, Frank
Braddock, Mrs. E. M. Gunter, Ray MacMlllan, Malcolm (Western Isles)
Bradley, Tom Hale, Leslie (Oldham, W.) MacPherson, Malcolm (Stirling)
Bray, Dr. Jeremy Hannan, William Mallalleu, E. L. (Brigg)
Brockway, A. Fenner Harper, Joseph Mallalleu, J.P.W. (Huddersfield, E.)
Broughton, Dr. A. D. D. Hart, Mrs. Judith Manuel, Archie
Brown, Rt. Hon. George (Belper) Hayman, F, H. Mapp, Charles
Butler, Herbert (Hackney, C.) Healey, Denis Marsh, Richard
Butler, Mrs. Joyce (Wood Green) Henderson, Rt.Hn.Arthur(RwlyRegiS) Mason, Roy
Callaghan, James Herbison, Miss Margaret Mellish, R. J.
Carmichael, Nell Hewitson, Capt. M. Mendelson, J. J.
Castle, Mrs. Barbara Hill, J. (Midlothian) Millan, Bruce
Chapman, Donald Hilton, A. V. Milne, Edward
Cliffe, Michael Holman, Percy Mitchison, C. R.
Collick, Percy Holt, Arthur Monslow, Walter
Corbet, Mrs. Freda Houghton, Douglas Moody, A. S.
Craddock, George (Bradford, S.) Howell, Charles A. (Perry Barr) Morris, John
Cronin, John Howell, Denis (Small Heath) Moyle, Arthur
Crosland, Anthony Hoy, James H. Mulley, Frederick
Crossman, R. H. S. Hughes, Cledwyn (Anglesey) Neal, Harold
Cullen, Mrs. Alice Hughes, Emrys (S. Ayrshire) Noel-Baker, Francis (Swindon)
Dalyell, Tarn Hughes, Hector (Aberdeen, N.) Oliver, G. H.
Darling, George Hunter, A. E. Oram, A. E.
Davies, G. Elfed (Rhondda, E.) Hynd, H. (Accrington) Oswald, Thomas
Davies, Hoi- (Gower) Hynd, John (Attercliffe) Owen, Will
Davies, S. O. (Merthyr) Irvine, A. J. (Edge Hill) Padley, W. E.
Deer, George Irving, Sydney (Dartford) Paget, R. T.
Delargy, Hugh Janner, Sir Barnett Pannell, Charles (Leeds, W.)
Dempsey, James Jay, Rt. Hon. Douglas Pargiter, G. A.
Diamond, John Jeger, George Parker, John
Dodds, Norman Jones, Rt. Hn. A. Creech(Wakefield) Parkin, B. T.
Donnelly, Desmond Jones, Dan (Burnley) Pavitt, Laurence
Driberg, Tam Jones, J. Idwal (Wrexham) Pearson, Arthur (Pontypridd)
Peart, Frederick Slater, Joseph (Sedgefield) Wade, Donald
Pentland, Norman Small, William Wainwright, Edwin
Plummer, Sir Leslie Smith, Ellis (Stoke, S.) Warbey, William
Popplewell, Ernest Snow, Julian Watkins, Tudor
Prentice, R. E. Sorenson, R. W. Weitzman, David
Price, J. T. (Westhoughton) Soskice, Rt. Hon. Sir Frank Wells, Percy (Faversham)
Probert, Arthur Spriggs, Leslie wells, William (Walsall, N.)
Proctor, W. T. Steele. Thomas White, Mrs. Eirene
Pursey, Cmdr. Harry Stewart, Michael (Fulham) Whitlock, William
Rankin, John Stonehouse, John Wigg, George
Reid, William Stones, William Wilkins, W. A.
Reynolds, C. W. Strauss, Rt. Hn. G. R. (Vauxhall) Willey. Frederick
Rhodes, H. Stross, Dr. Barnett(Stoke-on-Trent.C.) Willams, D.J.(Neath)
Roberts, Goronwy (Caernarvon) Swain, Thomas Williams, L1. (Abertillery)
Robertson, John (Paisley) Swingler, Stephen Williams, W. R. (Openshaw)
Robinson, Kenneth (St. Pancras, N.) Taverne, D. Williams, W. T. (Warrington)
Rodgers, W. T. (Stockton) Taylor, Bernard (Mansfield) Wilson, Rt. Hon. Harold (Huyton)
Ross, William Thomas, George (Cardiff, W.) Winterbottom, R. E.
Royle, Charles (Salford, West) Thomas, lorwerth (Rhondda, W.) Woodburn, Rt. Hon. A.
Shinwell, Rt. Hon. E. Thomson, G. M. (Dundee, E.) Wyatt, Woodrow
Silverman, Julius (Aston) Thornton, Ernest Yates, Victor (Ladywood)
Silverman, Sydney (Nelson) Thorpe, Jeremy Zilliacus, K.
Skeffington, Arthur Timmons, John
Slater, Mrs. Harriet (Stoke, N.) Tomney. Frank TELLERS FOR THE NOES:
Mr. Short and Mr. Redhead.

Main Question, as amended, put and agreed to.


That this House shares the concern of the Government at the recent rise in the level of unemployment and supports the actions of Her Majesty's Government to deal with the problems of certain areas particularly affected and to promote general industrial expansion on a sound basis.

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