HC Deb 20 February 1962 vol 654 cc369-78

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Chichester-Clark.]

11.47 p.m.

Mr. John Storehouse (Wednesbury)

The case of Harris and Sheldon is not by any means the only example of a firm being denied the opportunity of improving its factory so that it can improve productivity and efficiency and put itself in a position not only of securing lower costs of operation but also of being more successful in the export trade.

I could refer to several examples of firms in my constituency who have been refused opportunities to redevelop existing factories which could be much improved if they had industrial development certificates without, however, adding in any way to the number of staff employed. In a number of cases the number of staff could well be reduced and it would make a contribution to the well-being of the country as a whole if these improvements were allowed to be made.

In what I say about this case I do not want in any way to throw doubt upon the wisdom of allocating factories and persuading firms to move to areas of high unemployment. There is a very strong case for it and I wholly support whatever efforts are made to encourage development in the areas where new factories need to be opened. But I think that the Board of Trade, in its administration of these provisions, has failed to realise that it is not only a question of getting new industry into the areas of high unemployment, but also of allowing established industries in the old industrial areas, like the Black Country, to improve and revitalise themselves so that they are in a position to put new techniques into operation and also to reduce costs and generally be more successful.

The firm of Harris and Sheldon is asking not to build a new factory in Willenhall, but to extend a factory which it built only eight years ago. It is asking to do this so that it can close down derelict premises in another area of Willenhall in Charles Holland Street. By doing so it will be able to co-ordinate its production in one unit. This will enable the firm to be more efficient. It will be able probably to do with less labour, it will be able to reduce costs, and it will be able to improve the conditions of employment of its employees and my constituents. It will be able to make a contribution to the national productivity drive.

I could undersand the reluctance of the President of the Board of Trade if this were an application for a new factory, but it is not. It is an application for an extension of a factory for which a certificate was granted in 1953. If the President of the Board of Trade feels so strongly about the allocation of certificates in the older industrial areas like my constituency, why did he allow Harris and Sheldon to build the new factory eight years ago? Surely he should have put his foot down then and insisted that this firm go to an area of likely high unemployment. But he did not. He allowed the firm to develop there, and now, very reasonably in my opinion, the firm is asking that its production should be co-ordinated in one factory rather than having to operate in two units separated by a mile and a half.

I have been to the site of the new factory and I have also been round the old factory in Charles Holland Street and I can assure the House that there is no question of any land being used for the extension of the Harris and Sheldon factory which is not already in the firm's possession, and which could possibly be used for any other purpose. It is, in fact, a site between the new factory and the main road. There could be no other use for this land. It seems to me really quite shortsighted in the Board of Trade to stand in the way of this firm's developing this land which it controls and which could be available for no other use.

In the area many new factories have been developed, and nobody in Willenhall can understand just how the Board of Trade operates on this. Some applications are approved, many are turned down, and some of the most worthy applications, in my opinion—and I have gone into several of them very closely—are turned down; and I should like on a future occasion to go into the reasons for that. But we understand from the then President of the Board of Trade, the present Colonial Secretary, from a communication which he addressed to me last April, that the building of this extra extension of the factory is not simply a question of a more economic arrangement of production. On what basis is this statement made? What investigations has the Board of Trade made into the operations of this firm? What right has it to put such a point of view in front of the Minister for signature? It is a question of securing proper methods of production and a better economic arrangement of the firm's production. There is no other question for the firm's application.

The President of the Board of Trade went on to say that the approval of this application would almost certainly mean that the Charles Holland Street premises would be taken over by another industrial user. What ground is there for that statement? Did the Board of Trade consult the firm and ask it whether it intended to sell this site to somebody else? The factory on this site is in a terrible state. I have been round it, and I know that the working conditions are far from satisfactory. The timber used in the work of Harris and Sheldon has to be humped around the place. There is no room for mechanical handing equipment, and extra men have to be used for manhandling jobs. If the Board of Trade were to ask the firm to agree that this factory should be shut down completely if the other factory site was developed, the firm might well agree. I ask the Minister what approaches have been made to the firm on that point.

The firm is involved in making equipment which, in itself, helps achieve higher productivity in the British retail trade. Much of this equipment is finding its way into the larger, well-known multiple organisations and co-operative societies, helping to improve the layouts of the shops and to achieve higher productivity, especially in self-service shops, food halls and supermarkets. It is making a real contribution to a more effective use of manpower in Britain. It is helping to reduce costs and also, eventually, to reduce prices to consumers. I should have thought that it was doing a wholly worthy job.

I have an extract from The Times which describes the objects of the National Productivity Year, which is due to begin next November. According to Mr. Harry Douglass, the Chairman of the British Productivity Council, this will be the biggest co-operative effort ever made by British industry. Its scope is tremendous, its potential enormous, and its urgency unchallengable. At a Press conference, Mr. Douglass said: I am disturbed that in Britain productivity is levelling off and I want that process to be reversed. If it is not reversed, I cannot get higher wages for my people, shareholders cannot get decent dividends, and the employers will have a much more difficult job. The object of the National Productivity Year—which begins at the end of the year, although that is no reason why we should not anticipate it; I am sure the Minister will agree—is to foster a more favourable climate of opinion to better methods and their proper use in industry and the community. The Prime Minister has said: On living standards now and our hopes for the future depend on a continuous increase in the efficiency of all the work we do. To this end, the company is trying to make a contribution. It wants two separate units to be co-ordinated into one. It wants its new factory to be extended so that productivity can be improved, so that the workers can get more out for a given number of hours' work and so that the firm can operate far more successfully than if it has to have an inefficient, out-of-date derelict building in another part of the town. Surely, this is a real contribution to achieving better productivity.

Rather than Ministers paying lip service to the National Productivity Year, they would be serving the country better if they gave far more detailed attention to applications by firms in my constituency, like Harris and Sheldon, so that they can improve their techniques and their productivity and contribute to the National Productivity Year. It is not good enough just to have these words. Press conferences will get us nowhere. We must have action.

In my constituency, there are many small firms that are being hamstrung by the Board of Trade, which will not allow them to develop their factories, to build new factories on existing sites and to redevelop and revitalise their processes, which would make a good contribution to better productivity and the lowering of costs, export prices and all the rest.

I do not want the Minister to say that the Board of Trade is interested only in the areas of high unemployment. Firms in my constituency are already making a contribution to providing employment in the areas of high unemployment. Only last week, a new unit was developed at Caerphilly. Several others are developing in the North-East and in North Wales. Firms in my constituency, from Wednesbury as well as Willenhall, are moving to the areas of high unemployment.

We do not, however, want the areas which are left behind—the solid industrial areas like the Black Country, which have made such a wonderful contribution to our industrial success—to be neglected. Therefore, I appeal to the Minister to look again at this case and to consider it in all seriousness, because he at least has the word of one Member of Parliament who has gone into it in great detail that this is a very worthy application indeed.

12.3 a.m.

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

I am grateful to have a few moments in which to comment on some of the remarks made by the hon. Member for Wednesbury (Mr. Stone-house). I represent a constituency in the north-east of England where there are still, I regret to say, a considerable number of pockets of unemployment. As far as anyone can see within reason, the control of industrial development certificates is the most effective way in which we can bring new work to areas of high unemployment.

I do not quarrel with the hon. Member for Wednesbury in his tribute to the Black Country and its contribution to the nation's economy and prosperity. I am sure that the firm of Harris and Sheldon is an excellent firm. I intervene to suggest that the Government are right at this time, whilst we still have pockets of unemployment in such areas as the north-east of England, to refuse the issue of this requested certificate.

Earlier to-day, as on many other occasions, hon. Members opposite who represent constituencies in the northeast of England directed quite a vocal campaign at my right hon. Friend the President of the Board of Trade, suggesting that he and the Government are not doing enough to bring employment to the north-east of England. I suggest that hon. Members opposite who represent north-eastern constituencies might well have been in their place for this debate. Of course, they are not here. I do not know where they are. Presumably, because the hour is late, they have gone to bed. They ought to have been in their place to object to the suggestion which has been made by their hon. Friend the Member for Wednesbury that an industrial development certificate be issued in an area of full employment.

If the hon. Member for Wednesbury really wishes to help this firm to expand, he might well consult with a former hon. Member of this House who represented Stockton-on-Tees, Mr. George Chetwynd, who is now the General Director of the North-East Development Association. If he did that he would be able to carry back to this excellent firm in the Midlands the certainty that it would be very welcome in the North-East, where there is labour and every other facility available, and where the firm could do a great deal to overcome our unemployment problem.

12.6 a.m.

The Parliamentary Secretary to the Board of Trade (Mr. Niall Macpherson):

The hon. Member for Wednesbury (Mr. Stonehouse) has availed himself of his undoubted right to raise a matter in which a constituent of his feels aggrieved by the decision of my right hon. Friend the President of the Board of Trade in refusing to grant an industrial development certificate for the expansion of premises in Willenhall for the construction of which a certificate was originally given in 1953.

There is no doubt about his right to do so, but whether the best way of dealing with a matter of this kind is on the Floor of the House is another matter. I would only say that the hon. Gentleman has not availed himself of the usual method of dealing with a problem in which an hon. Member has not obtained satisfaction through correspondence, namely, to discuss the matter with my right hon. Friend or myself.

Mr. Stonehouse

There has been correspondence about this matter going back over the last twelve months, but the hon. Member's right hon. Friend has refused to budge an inch; that was so, also, at Question Time today, so a debate on the Adjournment was the only course open to me.

Mr. Macpherson

I hope that the hon. Member will not interrupt again on a point like that, because I have already said that if he was dissatisfied with correspondence he could have discussed the matter with my right hon. Friend or myself. He asks what investigations have been made by the Board of Trade, and suggests that no detailed attention has been given to this matter. I assure him that very close attention has been paid to it.

There is no dispute that Messrs. Harris and Sheldon is a well-known and reputable firm of shopfitters, established in Birmingham for nearly ninety years. It has not provided just a local service. I understand that the business extends over the country. The hon. Gentleman says that this firm wishes to improve its efficiency and reduce its costs by moving from its premises in Charles Holland Street to a new extension of the premises in Bilston Road. That the premises in Charles Holland Street are old and inefficient is not a matter which is in dispute. Indeed, that is precisely why this firm was given an industrial development certificate in 1953 for 48,000 square feet; it was so that the firm could move out of those premises into new and up-to-date premises. The firm itself stressed the need for rehousing.

The fact, however, is that the firm built the premises for which it had obtained the certificate, but did not move from the old premises. No doubt its business expanded more than had been expected, but we cannot ignore this fact. It is extremely doubtful whether the Board of Trade would have granted the certificate at Willenhall in 1953 had it been known that the firm would go on using the premises at Charles Holland Street. Indeed, even before the certificate was given, an attempt was made to get the firm to move all its activities to a Birmingham overspill area. If the overspill policy is to succeed, industry must move out, as well as population; and if the distribution of industry policy is to succeed, industry must move out to the development districts. It was only because the proposed development at that time involved an exchange of new premises for old rather than a major expansion that the industrial development certificate was granted.

The firm has been treated generously. In 1958, it was given an industrial development certificate for a factory of 85,000 sq. ft. at Perry Barr to rehouse its works at Stafford Street, Birmingham. But since then pressure on our labour resources in the Midlands has grown. The hon. Gentleman well knows how anxious his own hon. Friends in the North-East and in Scotland are for new industry. A resolution was passed at the Scottish T.U.C. conference in Scotland last weekend calling on the Government to direct industry to Scotland. If the hon. Gentleman's party had been in power this firm could have been directed to go to Scotland—or the North-East, as my hon. Friend the Member for Newcastle-upon-Tyne, North (Mr. R. W. Elliott) has suggested—not to go there under direction, but to go there. Under such a policy, no doubt the firm could have been directed there.

The hon. Gentleman says that in this case and in others the grant of the industrial development certificate would reduce costs and make firms more efficient and more competitive in export. Superficially, this may be so, but unless one can reduce the inflationary pressure in these areas costs go on mounting, and that is the thing which industrialists sometimes leave out of account in calculating whether they will save the cost of moving from the area where they are at present to another, or of moving to a development district.

Mr. Stonehouse

Wages go up.

Mr. Macpherson

For example, the Toothill Report has shown that in Scotland, by and large, the cost of production and distribution is not higher than it is in other areas. Both because of the needs of areas of high unemployment and because of the inflationary pressure generated by the shortage of labour in areas where vacancies exceed unemployment—it is not just for the former reason—the Government have adopted a tougher industrial development certificate policy than hitherto. The Board of Trade has a statutory obligation to try to get as much new industry as possible to the development districts. No one will deny the need for that. At the same time, we seek to reduce the pressure of further industrial development in the areas which are already industrially congested and short of labour.

We have to certify that the development in question can be carried out consistently with the proper distribution of industry, and the test there is not so much on costs as on labour, because if one makes too great demands on scarce labour one is going to put up costs. Our refusal to grant another industrial development certificate for the firm's proposed expansion at Bilston Road was in accordance with that policy. Willenhall, like the rest of the Midlands conurbation, is an area of labour shortage. The rate of unemployment in January was only 0.8 per cent., compared with the national average of 1.9 per cent. and 4.5 per cent. for development districts.

The hon. Gentleman claims that the grant of an industrial development certificate in this case would result in a saving of labour. On the face of it, that is so. But there is no doubt that the number of people employed at Charles Holland Street and Bilston Road combined is far in excess of the number employed in 1953 at Charles Holland Street alone. If the move is made from Charles Holland Street to Bilston Road the company says that it will transfer only 75 people out of 150. But what is to become of the premises at Charles Holland Street?

The hon. Member asks what approaches have been made to Harris and Sheldon on that point. That point was put in correspondence with the hon. Member. Did he pass that on? If the firm disposed of the premises, they could be used by the purchaser to employ even more people than at the present time. We have to look at the total quantity of labour to be employed resulting from the development in question.

What I must emphasise is that it is our duty to try to steer industrial developments away from the congested areas to the areas where labour is available. Not all expansion can take place elsewhere. There are questions of raw material supplies, distribution and management. But we have to be satisfied that they cannot and we are not so satisfied in this case. Harris and Sheldon is an expanding firm with a nation-wide market. It should be capable of establishing a unit in the North-East or the Glasgow area. In the long term it would be very much to the advantage of the firm to set up now in an area in which future expansion should cause no problems.

Question put and agreed to.

Adjourned accordingly at a quarter past Twelve o'clock.