DISTRIBUTION OF INDUSTRY

HC Deb 26 June 1962 vol 661 cc968-1038

4.1 p.m.

Mr. Douglas Jay (Battersea, North)

The two new hon. Members from Scotland and the North-East Coast who have taken their seats in the House this afternoon should be sufficient warning to wake up the Government, if nothing else can, to the anxious fears of underemployment and unemployment which affect so many of our industrial areas at the present time.

In West Lothian, and in most of Scotland, unemployment and depopulation axe realities, and are deeply felt and resented. In Middlesbrough, and, indeed, the rest of Tees-side, the iron and steel recession, directly caused, incidentally, by the Chancellor's measures of last July, and declining shipbuilding and ship-repairing work, are spreading the old anxieties and fears again. The results of this summer's by-elections are really a vote of censure on the policies of the Government which have allowed these unnecessary conditions to return.

Two actions of the Government have brought back depression to these areas. First, there is the panicky succession of fits and starts which the Chancellor has calls an economic policy, which now lies in such ruins that one waits with trepidation to see what he will do next. The right hon. and learned Gentleman based his Budget this year on the assumption that a continued American expansion would result in higher exports and further expansion for the United Kingdom.

That assumption has already been proved false, and I believe that, in consequence, the Chancellor's Budget has been proved too deflationary already. Normally, the present Chancellor's Budget calculations are proved wrong by July. This year, following his conversion to planning, his Budget has been proved wrong before midsummer. Already, the industrial production index has experienced yet another drop, and as the present Chancellor blunders on from one fiasco to another it is the under-employed areas which always feel the cold wind first. I should have thought that, in view of the present American situation, one thing the Chancellor should do is to make a further reduction in the Bank Rate forthwith—this week.

Secondly, the Government have utterly failed to use adequately the powers given to them by this House in the Local Employment Act, 1960, and other Acts, to check the flow of employment in this country from the North and West to the Midlands and the South-East. In particular, they have allowed the growth of office employment in Greater London to get completely out of hand. Therefore, we find that, quite apart from the under-employment which is very serious in a great many areas, the latest figures show that unemployment is 100,000 higher than in 1961 and that the actual numbers are nearly double the level of 1951 or 1955.

There are still acute differences between the favoured and the less favoured areas. The towns with the lowest unemployment percentages in the country at the moment are Oxford, with 0.5 per cent., and Cambridge, with 0.6 per cent. They are "all right, Jack". But Wales, as a whole, still has 3 per cent., the North-East Coast 3.4 per cent., and Scotland 3.7 per cent., that is to say, seven times the level of Oxford and some other parts of the Midlands. In parts of the North-East Coast and Scotland, there are areas like The Hartle-pools with over 6 per cent., and there are a deplorable number of areas in Scotland itself, such as Greenock, Port Glasgow, Bathgate and Broxburn, with over 7 per cent., and some, like the Peterhead and Fraserburgh area, as high as 10 per cent. at present.

There is no serious doubt now about the cause of the re-emergence of this economic disease, or about the measures necessary to cure it. The cause simply is that, given the unplanned, laissez-faire world in which hon. Members opposite really believe, there is an irresistible tendency for employment and population, with gathering speed, to move into the South-East corner of these islands, causing intolerable congestion and housing shortages there, and, therefore, leaving the North and West in a state of depopulation and under-employment.

The cure is the determined control of the building of all new places of employment in the congested areas, combined with the construction of factories and industrial estates by the Government themselves in the under-employed areas. If they did those two things decisively, they would succeed without having to do very much else. But if they do not do them, whatever else they do will certainly fail. That is proved incontestably by what was actually achieved in the six years after the war by the results of the application of these policies. Let us take Scotland. Compared with the 20 or 25 per cent. unemployment which Scotland knew at times in the 1930s, the percentage had been brought down to 2.0 by June of 1951. After another eleven years of effort by the present Government, it has now gone up to 3.7 per cent. In the North-East Coast, it was actually down to 1.8 per cent. in June, 1951, and is now back to 3.4 per cent. What an eloquent comment these figures are on the story of those years, and how well, evidently, they are understood by the electors of West Lothian and Middlesbrough.

Let us now look at the story rather more closely. The areas classified as development areas under the 1945 Distribution of Industry Act included Scotland, the North-East Coast, Wales and elsewhere and about 15 per cent. of the population of Great Britain. Before 1939, they had been getting barely 5 per cent. of the total new factory space built. From 1945 to 1947, they got 45 per cent. of the new factory space, and through the whole of the six-year period from 1945 to 1951 they got 30 per cent. London and the South-East region, which got about 50 per cent. of the factory space before 1939, had its proportion cut to 12.3 per cent. in those years after the war. That turned the tide, hence the low unemployment percentages in Scotland and these other districts in 1951.

Then the era of Tory freedom began, and the old evil forces at once began to reassert themselves. London's percentage of new buildings had actually risen from 12.3 per cent. in 1951 to 21 per cent. by 1958. Worse than this, the development areas, which, incidentally, by the later years, had increased their populations from 15 per cent. to 18 per cent. of the national total, found that their own share had fallen to 18.6 per cent. by 1958–59. That is the main cause of the re-emerging muddle in which we now find ourselves, both in London and in the North-East. Do not let us forget that from 1957 to 1959, the present Ministers of Education and Aviation, when they were President of the Board of Trade, in effect suspended the working of the distribution of industry policy altogether. Some of those in Scotland and elsewhere who are now suffering should realise that they owe their troubles to the irresponsibility of those two Ministers.

Then we had the present Colonial Secretary, who is a little less doctrinaire. Under a great deal of pressure from this side of the House the right hon. Gentleman did rather better. He tried to put some control on London factory building, and did, in fact, persuade the great motor firms to go to Scotland and to Merseyside. I can assure the present Ministers at the Board of Trade that if they will take our advice, we shall always give them our support, as we did to the then Minister in that case.

The latest figures which I have—I hope that the Parliamentary Secretary will have later ones—show that the percentages of approvals going to London and the South-East Region fell from 21 per cent. in 1958, and 18 per cent. in 1959, to 12 per cent. again in 1960; and that the percentage going to the development districts, as they have now become, rose from 10 per cent. to 15 per cent. in 1959 and to 20 per cent. in 1960. That is some slight improvement, due, no doubt, to the spur of the General Election in 1959. But it is not nearly good enough. We have not yet got the development area share back to anything like the figure of 30 per cent. for pre-1951.

Mr. J. T. Price (Westhoughton)

When we are discussing the effect of Government restriction on the growth of factory development in London we ought also to remember that, while there has been a substantial growth in the amount of floor space available for factories in the London area, there has been more than a corresponding increase in the floor space allowed for office accommodation; and, that on balance, the amount of capital resources ploughed into London is greater than in the years to which my right hon. Friend has referred.

Mr. Jay

I am coming to that point, with which I shall deal at some length, but, I hope, at not too great a length.

I should like the Parliamentary Secretary, if he can, to give the House some corresponding figures for 1961. The first Report of the Board of Trade on the Local Employment Act shows that in all this it may well be misleading to consider only London and the South-East Region. For instance, in the year up to March, 1961, according to that Report, London's share of additional factory employment approved was barely half of London's share of the population. The shares of Scotland and Wales were considerably larger than their shares of the population. So far, so good. But I think that the House Should know that the Eastern Region—East Anglia and the Eastern outskirts of London—had a proportion which was double its population.

That, of course, is due to the new towns policy. The new towns are sucking industry and population rapidly into East Anglia. When new towns in East Anglia suck population and employment out of London, that is highly desirable. But we must face the fact that if they are sucking population out of Scotland and the North that may not be so desirable. I do not believe that at present we are quite certain which of those things is happening. I suggest to the President of the Board of Trade that there are two practical ways in which we might see that the right thing is happening and not the wrong thing.

First, we ought to lay down that firms moving out of London into the new towns in the South, and building or taking on new factories in those new towns, should sell to the Government the factories which they have abandoned to be used for storage or to be removed to provide housing sites. In that way we should ensure that other firms do not come to London to replace those firms which have left. Secondly, I think that we should move much further towards a policy of allocating houses in new towns not just to anyone who can get a job and who may come from anywhere, but to people who are on the housing lists of local authorities in London and whom we know really need the houses. If we do this, we shall be doing much more to ensure that the new towns are helping to improve the situation and not making it worse.

The other deplorable failure of the Government was referred to by my hon. Friend the Member for Westhoughton (Mr. J. T. Price). It is their refusal to tackle the crucial issue of control over office employment. In 1945, it may or it may not have been excusable to have failed to foresee that new office employment would, in ten years, be as important as factory employment. But it is certainly inexcusable to have failed to realise since 1955 that office employment forms a very high proportion of the new employment being created; and that, therefore, its control is crucial in deciding the distribution of employment and population between the regions and, of course, the possibility of decent housing, town planning, transport controls and all the rest of it either in the congested or the underemployed areas. The failure of the Government to act on this, or even to understand it, seems to me to be the main cause of the present unhappy state of Scotland and the other under-employed areas. I believe that a very few figures will prove this.

Office employment in Central London alone is now increasing at a rate of over 15,000 people a year; and of the additional employment created in Greater London throughout the 1950s less than 20 per cent. was covered by industrial development certificates. So 80 per cent. of the new employment in the South-East is now outside the control of I.D.C.s and the Local Employment Act altogether. Surely this alone explains to a great extent the depopulation in the North and the scandal created by the housing shortage and inflated land values throughout the London area.

As a result of this, in the ten years up to 1958, planning permission—not I.D.C.s; they are not necessary—was granted for 44.4 million sq. ft. of new office space in Central London alone. That is sufficient to provide employment for 300,000 more people, or four times the total of the unemployed persons in Scotland. Altogether, in an area within 40 miles of the centre of London, where there is 27 per cent. of the population of England and Wales, some 45 per cent. of all the new jobs were created in the Whole of England and Wales between 1952 and 1959. It is as a result of this that once more, in the last ten years, the flow of population to the South-East set in irresistably.

What have the Government done on top of all this pressure of migration into the South-East? They committed the supreme folly of passing the 1957 Rent Act which had the effect of throwing on to the market rented housing in London which was previously controlled. This was partly achieved by means of evictions, and the accommodation was able to be bought up by people coming in from outside. Undoubtedly, by this means the Rent Act facilitated and speeded up the in-flow and made the unbalance worse. At present it has made insoluble the problem caused by the housing shortage in London.

In London 20,000 houses a year are now being decontrolled and, in this way, being made available for sale. As a result, new population presses on the inadequate stock of housing and, exactly as one would expect, the final effect of the whole muddle is that the rising residue of homeless families thrown on to London local authorities is vaster than they can cope with, by means of the facilities at their disposal.

That is one side of the picture, but I think that we must also remember the other side. As a nation, we cannot secure the maximum production and economic expansion which we should like from our economy until all the areas in the country are fully employed. The development of the under-employed areas is a first necessity in the efficient use of our whole economy. The Government often quote the labour force which comes from East Germany as one of the reasons for the economic growth of West Germany in the 1950s. But we have 500,000 workers in our own country who are not being used. If we could bring them into our productive machine, we should be able to expand much faster without being inhibited by the fear of inflation and shortage in the congested areas. That is the reason, it is an economic as well as a social cause, for a more vigorous policy to check the process now going on.

I do not think that I need describe the facts in any more detail. They are obvious enough and well known by now. What is needed is to draw the right morals and take the necessary action without further delay. First, I invite the Government to make the changes in new towns policy which I have mentioned. Next, the President of the Board of Trade must use more resolutely the distribution of industry powers that he has. He must hold down with industrial development certificates new factory expansion, including extensions, in the congested areas to the very minimum, and by this I mean something a good deal lower than what is being permitted at present. Then, when he has done that and has thereby made sure that there are plenty of expansion schemes coming forward looking for sites, he must push on boldly with a positive policy of building more advance factories in the worst hit areas—those where employment is running at 6 to 7 per cent.—with Government finance.

Next, and most important, Ministers must tackle the office building problem if they want their sincerity in this to be taken seriously at all. If we look at this problem, there are two major practical obstacles in the way of progress, and we must have the courage to face them. First, office building is Wholly exempt from due I.D.C. system and is, therefore, not controlled by any national authority responsible for employment policy. This is the root of the trouble.

A legal right has been given—and I admit that this springs originally from the Labour Government's Act, but we should learn by our mistakes—to any owner, where no change of use is involved, to replace old office space with new in such a way as often to double, or nearly double, its employment capacity, or, if he is not given permission, to demand compensation on a level which local authorities find intolerable. The irony of it is that it is lack of control which pushes up values to levels which make it impossible to grant the compensation to regain control, as long as the responsibility is left with local authorities.

Offices normally employ more persons per square foot than any other form of employment; yet we have allowed a system to grow up in which offices are controlled by reference to cubic footage while factories are, in effect, controlled by the Board of Trade with reference to employment capacity. In addition, as I am sure the right hon. Gentleman knows, the owner who proposes to build new office space is allowed an extra 10 per cent. on the cubic capacity of the old building unless compensation is paid to him for it.

I suggest that the Government should accept these proposals. If they do not, I hope that they will suggest some effective alternatives. First, the I.D.C. system in some appropriate form should be applied to office development. The Government's objection to this—and we have constantly put forward this suggestion in the House—is a purely bureaucratic one. They say that it is impossible to apply the I.D.C. system to office development, because, whereas factories are built for specific demands, offices are very often built speculatively to be let to anybody who turns up and asks for it.

That is not wholly true, because I am sure the right hon. Gentleman knows that a firm like Slough Estates has built factories speculatively for an unknown tenant. But even if it were true, it would be irrelevant. Even though an office block is built for an unknown tenant, it is possible to refuse permission to Mr. Clore to build an office block, just as it is possible for the President of the Board of Trade to refuse the Ford Motor Company permission to build a factory. There is no substance in the Government's argument.

The Government must also tackle the question of the granting of planning permission for this office development, and with it the compensation problem. Here, at least, we ought to be sure—and I hope that the Government can assure us that this is so—that permissions are not now being given to build offices in the Greater London area where a change of use is involved. It is possible to refuse these permissions without compensation, and I hope we can be assured that that is being done.

Next, the law could well be amended to lay down that even where there is no change of use—I am sorry if this is complicated, but I think that this is the crux of the matter—compensation is payable only in the case of new office building employing no more than the previous one. If we could do that, it would enormously ease the pressure. That is what the law ought to have laid down anyway, but as it did not it seems to me time that it was amended. As the Minister of Housing and Local Government said in December that he was earnestly and actively considering this problem, I hope that the Government will say whether they propose to make a change in this additional 10 per cent. of capacity, which adds to the difficulties.

It is surely obvious that whatever else we do about the land values problem, the burden of compensation due to refusing permission for office development on grounds of national employment policy must be largely, if not wholly, shouldered by the Exchequer and not local authorities. After all, this will be done largely on national grounds, and not just on grounds of local town planning. This is a possible and practicable thing to do and if it is not done, this problem will never be effectively solved.

If the right hon. Gentleman says that all this is very complicated and difficult, and that it will take him his usual months and months of active and earnest consideration before he makes up his mind to do anything, I suggest a simple interim measure which would hold the line meanwhile. Why does not he introduce building licensing for building schemes other than housing in regions other than Scotland, the North, the North-West, Wales and the South-West? Why does not he leave building free in the areas of under-employment and gain control over it at least in the South and East? If he did that, it would show that he meant business.

Finally, there will be no hope of success in the whole of this tough task—and it is a tough one because we are swimming against a very strong tide—unless the Government show a different spirit from that which they have shown lately. Let me give one example. The Parliamentary Secretary to the Board of Trade, who is more responsible for this than anybody else, at Question Time on 10th April, made this remarkable statement: I do not accept that increased office building … has had an effect on the distribution of industry … When it was pointed out to him that at least it had had an effect on employment, he made an even more memorable statement: Matters of employment are matters for my right hon. Friend the Minister of Labour."…[OFFICIAL REPORT, 10th April, 1962; Vol. 657, c. 1121–2.] The hon. Gentleman is the Minister most closely responsible for this policy. Can we wonder that the situation is what it is, or that Mr. Charles Clore has made £50 million out of this muddle over the last ten years? Surely the hon. Gentleman knows that the whole object of the distribution of industry policy is full employment and full production balanced over the whole country, and that even the employment policy White Paper of 1944 laid it down explicitly that the main responsibility for this rested on the Board of Trade? Does not he know that the Act introduced by his Government in 1959, and administered by his Department and by him—or supposed to be—is called the Local Employment Act? Yet he says in 1962 that employment has nothing to do with him and is a matter for the Minister of Labour.

It is remarks of that kind which are rapidly convincing not only my hon. Friends but the electorate that what we require are a new spirit, new Ministers, and a new Government.

4.30 p.m.

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

The right hon. Member for Battersea, North (Mr. Jay) has based his case largely on the statement at the outset of his speech, which he more or less repeated at the end of his remarks, that the Government had utterly failed to use adequately powers given in the Local Employment Act, particularly in relation to office building in London.

The distribution of industry is one of those subjects on which it is a good deal easier to agree on principles than upon the application of those principles in practice. We all agree that Government policy should be directed at retaining a high level of employment and at making the best uses of our manpower. In a free society, however, policy has to be framed against the background of free choice—free choice of the type of work, free choice of where to work and, within certain limitations, free choice of where to set up a factory.

There is a great danger of oversimplification. That employment is available is not enough. There are areas where employment is available and yet depopulation continues and factories are having to close or to move because employers cannot get the labour they need. There are other areas where depopulation has been going on for a long time—for example, Mid-Wales and the Highlands of Scotland. Generally speaking, there is a tendency for urban areas to grow in population at the expense of rural areas and for large towns to grow more than the small towns. Taking the North of England and Scotland as a whole, migration has been on a considerable scale in the ten years from 1951 to 1961. The Government are studying all these trends. The right hon. Member for Battersea, North said that if we used our powers adequately, all would be well. What concerns the Board of Trade particularly is to carry out the Government's policy of trying to bring industry to the areas of high unemployment. That is the duty that is laid upon us by the Local Employment Act. In what I have to say, I hope to show that our efforts have been by no means unsuccessful, in particular since the passing of the Local Employment Act.

Few would not agree in principle that it is essential for our industry to be as efficient as possible, for it to reduce its costs of production in every way acceptable to management and to workers, so that we may be able to compete successfully in world markets. That means that the final choice of location must rest with industry. The industrialist can, of course, be helped by receiving knowledge from the Government of the local facts about labour supply, transport and other factors in his economic equation. The industrial development certificate method and the machinery of the Local Employment Act serve between them to bring these factors to the knowledge of businessmen. My first point is that this service is available and that it is constructive and not simply negative in concept.

Only the man or the company which is setting up a new enterprise can find the right balance between the complex questions involved, such as availability of labour of the right type, the supply and cost of the necessary materials, comparative local costs, the costs of transport and distribution and relations with suppliers, customers and local authorities. If the Government insist upon an industrialist going where they want him to go, who will compensate him for the extra cost of production and who will assess it, and how?

In principle, we would also all agree that it is right not to allow an industry to start up or to expand in an area where there is a scarcity of labour when other areas have a surplus. Apart from the waste of manpower and the human tragedy involved in unemployment, this can be done only at the expense of other enterprises by bidding up the price of labour and raising costs of production all round. In theory, the efficient firms would take labour from the less efficient. In practice, it is apt to become a rat race. That is why, for the past fifteen years, one of the two powers on which the distribution of industry policy has been made effective is the power to grant or refuse an industrial development certificate. The other weapon is the power to offer inducements to an industrialist to go to one of the areas which need more industry.

Therefore, the questions which are bound to be put, and which have been put by the right hon. Member for Battersea, North, are, first, whether the Board of Trade is exercising its power to grant industrial development certificates too leniently, as those who represent areas of high unemployment are apt to claim, or too stringently, as is asserted by those representing areas where labour is scarce; and secondly, whether the inducements offered are adequate and, even if they are adequate, whether special inducements should be given to areas which are said to have unique problems.

I take, first, the question of industrial development certificates. We have a duty under Section 17 of the Local Employment Act, in considering industrial development certificates, to have particular regard to the need for providing appropriate employment in development districts. In every case, we must, and do, first see whether the development in question could be steered to a development district. When I receive deputations from districts of high unemployment or visit such areas, I am told that the Board of Trade is granting far too many industrial development certificates to London and to the Midlands. In fact, for new ventures, hardly any industrial development certificates have been granted them in recent years.

It would be quite unreasonable, however, to prevent all development in those areas. For one thing, many applications are for extensions or new premises to replace old buildings by firms who are tied to their areas, such as, for example, industries which exploit local materials, extractive industries such as coal or gravel, or service industries, including bakeries, cold storage depots, and printers. For another reason, some applications for building development involve no extra labour or may result in a more efficient use of labour.

In any event, it is a strange way of promoting efficiency and progress in the economy as a whole to deny firms the opportunity to provide better premises and better working conditions. We could not say that any firm wishing to do so must migrate to a development district. If we did, we would get few applications for providing better premises and better working conditions.

The point I am trying to make is that we must keep a balance in this matter. Industrial development certificates ought not to be refused lightly. We need industrial expansion coupled with greater efficiency. It would be foolish to prevent a firm from developing in a certain place if, on balance, the economy would be worse off as a consequence. It is the balance of advantage that we must try to assess and it is often difficult to do so.

Every time that a firm which is already established in a congested area comes to us with proposals for the expansion of its premises, we are faced with a dilemma. If we approve the expansion, we add to the demand for labour where it is scarce. That means either that other employers in the area will lose labour through the new project, or that labour will be attracted from other areas and increase the pressure on housing, transport and other services of the congested area. If we do not approve the expansion, we may lose valuable production, possibly for export.

What we have to do, therefore, is to consider whether it is possible for the development to be carried out elsewhere, if not in a development district, at least in an area where labour is not too scarce. If we refuse to grant the certificate, the firm has either to move elsewhere or abandon the development, as in some cases happens. Therefore, in considering the grant or refusal of industrial development certificates, it is not easy to see where the balance of advantage lies.

In operating such a policy as this, nobody can always he right. Our success is, however, reflected in the comparative rates of growth of employment in manufacturing industry in different parts of the country. In the two years since the Local Employment Act came into force, additional jobs arising from the grant of industrial development certificates in Wales represented an increase of 6 per cent. in the numbers employed in manufacturing industry. That area was at the top of the table. It was followed by 5.2 per cent. in the Eastern Region, 4.7 per cent. in the Southern Region, 4.5 per cent. in the Northern Region, 4.4 per cent. in the South-Western and 3.4 per cent. in Scotland. At the other end of the list is London and the South-East——

Mr. Percy Collick (Birkenhead)

What was the figure for the North-West?

Mr. Macpherson

I gave the figure for the Northern Region, which covers it, of 4.,5 per cent.

At the other end of the list is London and the South-East Region with 1.4 per cent., the East and West Ridings with 1.2 per cent., and the Midland Region with 1.1 per cent.

These figures need interpretation. The figures are high in the Eastern, Southern and South-Western Regions because places there included in the development lists under the Act tend to attract development more readily than remoter areas. In consequence, most of them have been taken off the list or have been put on the stop list. The same applies to South Wales. The new towns, of course, benefit from factories in clearance areas —factories that have been cleared out of London—with special ties to the South. They do not get industries which could go to development districts. If that has not always been the case, it is so now.

The result is that 11 localities have been removed from the list since April, 1960, and there are at present 17 on the stop list. On the other hand, 10 have been added to the list. When the Act came into force, development districts contained 12.8 per cent. of the total insured population of Great Britain. These were areas of persistent high unemployment. Last week, active development districts—those not on the stop list—contained 7.5 per cent. of the insured population. By any standard,That represents very considerable progress.

In 1960–61, London and the South-East Region, with 21.2 per cent. of the insured employees in manufacturing industry, got 9.9 per cent. of the total estimated additional employment arising from the issue of certificates. Scotland, with 8.6 per cent. of the insured employees in manufacturing industry, got 12.1 per cent, of the estimated additional employment, and the corresponding figures for the Northern Region were 5.1 per cent. and 7.2 per cent.

Before turning from the issue of certificates, I want to reply, to some extent, to what the right hon. Gentleman said about office accommodation. He suggested that it should be controlled in much the same way as industrial premises are controlled, at least in London. I have considerable sympathy with the desire to do something to ease the traffic congestion in London, or at least to prevent it from getting worse, while, at the same time, bringing employment for office workers to areas where there is not enough of it. But I do not think that it is helpful to take the number of new office workers in a year, add together the figures for three or four years, and then say that this is equivalent to the whole of the unemployment of Scotland.

Assistance under the Local Employment Act can, of course, be given to anyone prepared to provide employment in offices no less than in factories. Indeed, the Board of Trade is actually building an eight-storey office block for Rolls-Royce at Hillington, Glasgow. The building will be 77,000 sq. ft. What is lacking is the negative power to refuse authority for office development in areas such as London. Nor would it be possible to prevent an applicant who was refused authority to build an office in London from building within 30 miles of Piccadilly, unless certificates for office building had to be obtained not only in London and other congested areas but throughout the country.

Mr. Jay

That is what we suggest.

Mr. Macpherson

That is not what I understood the right hon. Gentleman to put forward. I understood him to suggest particular control for London. If he is suggesting control for the whole country, then what I am about to say will show him how difficult that would be to operate.

Mr. Jay

The industrial certificate system applies to the whole country, but in under-employed areas they are readily granted. As I see it, the same would be true of offices.

Mr. Macpherson

It is easy enough to ask for control analogous with industrial development certificates. The right hon. Gentleman moved an Amendment to impose such control during the passage of the Local Employment Act, and that Amendment was negatived. He did not carry it to a Division.

Mr. Jay

It was steam-rollered.

Mr. Macpherson

It was not steamrollered. It was not divided on.

Offices are very different from industry. We have to consider whether such a power would really be practicable. There are no criteria to judge whether it is essential that a particular office should be located in London. How could the Board of Trade decide whether a Midlands manufacturer needed a London office for his exports sales, or whether a firm of accountants needed another 10,000 sq. ft. of office space? Offices in London are generally put up speculatively. They are often planned and completed before it is known who is to occupy them. It would be difficult enough to say who should have a new office in London. It would be impossible to control change of occupancy. One of the loopholes in the control of industrial development is that we have no control over the disposal of an empty factory. Offices change hands far more frequently than factories. There are far more of them and far fewer are purpose built. The fact is that control of office building is essentially a matter of local planning, for which responsibility rests with the local authorities. The right hon. Gentlement invited me to give answers about points which are really for the Ministry of Housing and Local Government. These are matters for the local authorities and that Ministry.

Mr. James Griffiths (Llanelly)

Do not the figures available to the Board of Trade and the Ministry of Labour show that in this country, as in most industrial countries, the proportion of total population employed in manufacturing industry is declining while the proportion engaged in services, including offices, is increasing all the time? If, therefore, we neglect offices, then the purpose of the distribution of industry policy, whatever the means adopted, will be nullified. If serious consideration is not given to this problem we shall not solve it.

Mr. Macpherson

Serious consideration is given to it, but the industrial development certificate procedure is not applicable to offices. But that is not to say that the Government have not done what they can, both by advice and example.

Mr. Jay

I invite the hon. Gentleman to think seriously about this problem and not just turn it down with a few rather hackneyed arguments.

Mr. Macpherson

This question, like other problems, has not escaped the notice of the Government. They are studying it. But it is not possible to control office building by the same method, at any rate, as we control industrial building. That is certainly not to say that the Government are not doing, both by advice and example, what they can to encourage firms to establish outside London their main offices, as opposed to their head offices, which may have to be in London.

There is, for instance, the example of the Ministry of Pensions and National Insurance offices at Newcastle, and the projected Past Office Savings Bank offices at Durham, the site of which I saw the other day. I have heard firms which have acted upon the Government's advice saying that they have found their employees healthier, happier and much more efficient away from the strain of London both on their nerves and on their purses. Again, the firms do not have to pay nearly so much for premises outside as in London.

On the other hand, the demand for offices in London reflects this City's importance as a financial and commercial center—an importance which may well increase if we go into the Common Market. I do not believe that to use a blunt instrument to keep out of London everyone who wants to set up an office here, whether essential or not, would really be in the national interest.

I now turn to the inducements. Are they adequate and proving successful? First, let me say this. People in different areas are apt to think that their case is unique and that they should have special treatment in the way of lower interest rates, more generous terms, bigger grants, and so an. In particular, such claims have been made for Scot land and for the North-East of England. I have also heard them made for other parts of the country. Representations have been made that the benefits of the Act should extend to a whole territory—to use a neutral word—for example, to Scotland as a country or to the North-East as a region.

But within these areas there are localities which are not in need of assistance. It is not necessarily true that development in one part benefits the whole area. The Local Employment Act is based on the conception of helping those localities which are in need of assistance, because in them there is, or there is expected to be, a high rate of unemployment which is likely to persist. Undoubtedly, if the same treatment were to be given to the whole territory some at least of the new ventures which would otherwise have gone to localities of high unemployment would go to places such as Edinburgh and Perth. While both the areas of the North East and of Scotland are suffering from closure of factories and pits and uncertainty with regard to the future of shipbuilding and the railways, and while both are severely affected by migration, the brute fact is that at any given moment there is only a certain amount of industry—not a constant amount—on the move.

It surely must be right to give all the localities where there is high and persistent unemployment, or the prospect of it, an equal chance of getting such industry as is on the move. Admittedly, the chances cannot be entirely equal. The needs and attractions of the localities vary, and it is no use saddling a place with an unsuitable industry, even if the industry were willing to go there. Secondly, it has been suggested that we should concentrate our assistance on growth points. As the Committee is aware, the Government are examining the recommendations of the Toothill Committee with regard both to Scotland and to its wider implications for the rest of the country. At present, I would only say that if assistance of this kind were to be concentrated on growth points, it would have to be accepted that many of the remoter places would not get industry at all and that people living in them would have to travel considerable distances to work or to move to the growth point.

Thirdly, it is suggested that the full benefits of the Local Employment Act should be made available to overspill receiving areas in the same way as the development districts, whether or not the over-spill receiving areas are in development districts. It is a proposal made particularly for Scotland and it is also being studied. Again, my only comment at present is that it would be likely to result in the diversion of some industrial developments away from localities of high unemployment.

It was suggested that even if the inducements were adequate in 1960 they would not be adequate in the present situation, changed as it is by the more rapid closure of coal mines and the altered outlook in shipbuilding and the railways. That argument is quite fallacious. The 1960 Act was not passed to deal with the situation in 1959 or 1960. It was designed to deal with the inevitable ups and downs of economic life, including the rise and decline of industries, and to deal with just the kind of situation facing us now in some parts of the Kingdom. Where there is a prospect of higher unemployment through closure of pits in a particular locality, we are able to list it as a development district and make it eligible for the benefits of the Act. Indeed, we have done so recently with Seaton Delaval and Wingate in the North-East, and the Kirkcaldy-Glenrothes area, Lesmahagow and Cumnock in Scotland. Only today we have restored Llanelly to the development district list. We have also considered Bathgate where unemployment is persisting at a somewhat higher rate than at one time was thought likely. We have the shale mines there which are closing down and a coal mine there has already closed. On the other hand, the build up of labour by B.M.C. has been somewhat slower than expected and more of the workers have been drawn from outside the district. In all the circumstances, my right hon. Friend has decided to resume acceptance of applications for assistance in the Bath-gate and the adjoining Calders area of Midlothian.

Mr. Collick

Can the hon. Gentleman tell me what is the situation on Merseyside? Is it possible that the Minister w ill restore Merseyside to the list? We have now 4.5 per cent. unemployment, which is three times the national average, aggregating over 27,000 workers?

Mr. Macpherson

As against that there is a very great number of jobs in prospect in the area. We have to balance that in taking into account the prospective unemployment in the area. We have to consider whether existing unemployment is likely to persist in the light of the jobs in prospect. That is why Merseyside, as having benefited very considerably, is at present on the stop list.

On the more general issue of the adequacy of assistance offered, it is at least doubtful whether high grants or lower interest rates would have resulted in more industrial development areas of high unemployment. In general, firms go to such areas either because they themselves find that they cannot get labour where they are or because they are refused industrial development certificates to expand where they are. Admittedly, some firms may be influenced by the higher inducements offered in Northern Ireland and Eire. It has to be remembered that the rate of wholly unemployed in Scotland and the North-East of England is 3.3 per cent. and 3.4 per cent. respectively, while in Northern Ireland it is 74 per cent.

The right hon. Gentleman raised the question of advance factories. On that point the Board of Trade has power, of course, to erect such factories and it has exercised its power cautiously. If we were to pepper the country with advance factories all at the same time it is very likely that many of them would stand vacant. What we have done is on two occasions to build one advance factory in each of the three countries—in England at Speke and South Shields, in Wales at Holyhead and Pembroke Dock and in Scotland at Coatbridge and Shotts. Unfortunately, there was some delay in acquiring a suitable site for the factory at Shotts, but it is now going ahead.

We have also converted an old Admiralty establishment at Carfin and six buildings there have been adapted for industry and have been let. Recently the Board of Trade acquired from the Admiralty some land and buildings at the old R.N.A.S. station at Donibristle. We have decided to convert the big engineering shop there into a factory for industrial use in advance of getting a tenant at an estimated expenditure of about £100,000. While it would be wrong to use the powers to build advance factories indiscriminately, I can tell the Committee that the Government are considering their future policy as regards advance factories in the light of experience gained so far and of current and prospective conditions.

Mr. Jay

Can the hon. Gentleman say whether any are being built now and whether the ones previously built under the Act have been successfully let?

Mr. Macpherson

Four of the six factories in the two groups were successfully let. One is likely to be let in the near future and one is just starting to be built. Of the Carfin factories—there were seven of them—six have been converted and adapted for industrial use and have been let. At the moment, the only one that we have in mind, apart from that at Shotts, is the conversion of the factory at Donibristle. At the moment we are considering the policy for the future.

It is the results that really matter. In the first two years of the working of the Act, the total assistance offered by way of finance and the provision of Board of Trade factories, taken together, excluding offers which were declined, was £69 million for 300 projects to provide 70,300 jobs. This is a very considerable figure. The percentage of expenditure was 29 per cent. in England, 11 per cent. in Wales and 60 per cent. in Scotland. Of this total, some £25 million has been spent or committed on Board of Trade factories, ranging from the 450,000 square feet factory for Fisher and Ludlow at Kirkby down to the Southford Ltd. engineering venture at Bargoed.

In addition to all the concerns setting up or expanding in Board of Trade factories, there are many others building their own factories, some with Board of Trade financial assistance, others by raising the finance themselves. In the North East of England, for example, companies like Hepworth and Grandage, and James A. Jobling and Co, both at Sunderland, Airscrew-Weyroc Ltd. at Hexham, and Tube Investments Ltd. at Washington are transforming the districts in which they are establishing themselves or expanding.

In Wales, the establishment of factories such as that of Ferodo, at Caernarvon, provides another heartening example of co-operation between industry and the Government and a great improvement in employment prospects. In Scotland, companies such as Skefco Ball bearings at Irvine, Standard Telephone and Cables Ltd., and Rheostatic Ltd., at East Kilbride, and Ferranti, with a new factory at Dalkeith, are all making very great contributions towards providing new jobs for workers in or from areas where unemployment is high.

The financial assistance which the Board of Trade has offered over the first two years of the Act has helped companies of all sizes and of very varied interests to establish themselves or to expand and to provide jobs for workers in the development districts. Excluding offers which have not been accepted, purely financial assistance of £43.8 million has been offered—£13.3 million in England, £2.7 million in Wales, and £27.8 million in Scotland. The Board of Trade has offered assistance to all kinds of projects, of a great variety and of different sorts. I have a note here of bakers and boatbuilders, canners and cabinet makers, distillers and die-casters, hoteliers and hackle-makers. That is an illustration of the great variety of assistance given.

Mr. Jeremy Thorpe (Devon, North)

What percentage of that total has been accounted for by Section 7 help, that is, the provision of basic services such as transport and electricity?

Mr. Macpherson

That would be accounted for largely through the Votes of Departments other than the Board of Trade. Assistance has gone to large companies in industrial centres providing employment for thousands of workers and also to small firms providing a few much needed jabs in remote areas. They all have this in common. that, under the terms of the Act, they must be likely to be able to carry on successfully without further assistance from the Board of Trade and thus provide continuing employment.

These successes are real and substantial. They have been achieved by the combination of a tough but realistic I.D.C. policy on the one hand—I assure the right hon. Member for Battersea, North that it is a tough policy and that if he had the task of listening to deputations from people whose I.D.C.s are refused, as I have, he would realise that is so—and on the other hand of persuasion and of providing information about the amenities of the development districts; of substantial Government aid and of the co-operation of industrialists and entrepreneurs on the success of whose ventures everything depends.

Naturally—and there has been some misunderstanding about this—not all the jobs have matured. After all, the Act has been working for only two years and two months. Some firms may not reach their estimates, but others may exceed them. All these are developments which are going forward in localities of high unemployment. Perhaps some would have gone ahead without assistance and some do, but the majority would certainly not have done so either on the same scale or at the same pace, if they had gone ahead at all.

As new threats to employment arise, the localities affected are added to the development district list. To be on the list is no guarantee that industrialists will decide to set up or expand in that locality, but at least those whose jobs are threatened can take courage from the fact that in two years 129 projects in England, 45 in Wales and 126 in Scotland have accepted offers of assistance under this enlightened piece of legislation.

I hope that no hon. Member will grudge the cost—most of it, in any case, will come back to the Exchequer—when he reflects that more than 70,000 new jobs have been created in areas which badly need them, 47 per cent. in England, 41 per cent. in Scotland and 12 per cent. in Wales.

Mr. Harry Randall (Gateshead, West)

The hon. Gentleman refers to 70,000 new jobs, but is it not a fact that reference to the employment register shows only about 50 per cent. of that number?

Mr. Macpherson

The firms are only starting now and have, naturally, to work up to their peak. They apply for an industrial development certificate and state the number of jobs which they expect to provide when the building is completed without needing further extensions. That is the criterion on which one works. The firms could not have worked up to their peak within two years and two months. Some might never work up to that peak, while others may expand beyond the existing I.D.C. and employ many more than they originally estimated.

I am not claiming that our present policy is so perfect that it cannot be improved in any circumstances. What I can claim is that it is a great improvement on what has gone before and that the Government are always prepared to consider further improvements and will consider those which the right hon. Gentleman has suggested today. I am also claiming that it has been and is being remarkably effective. It is designed to be fair to all parts of the country and to give help where help is needed. It is operated in the national interest in such a way as to be as fair as possible both to industry and to areas which need industry. The Government cannot please all industrialists or all areas, but at least they endeavour, with considerable success, to operate this policy sensibly and sympathetically.

Great credit is due to the Board of Trade Advisory Committee, which is entirely composed of business and professional men and one trade unionist, and which has handled 500 cases in the last two years and recommended assistance in more than 200 of them. I take this opportunity of publicly thanking the Committee for giving so much of its time as well as the benefit of its individual experience and its collective wisdom. The policy and the way in which it has worked merit the support of the House of Commons and the country because it has shown and is showing substantial results.

5.7 p.m.

Mr. A. Woodburn (Clackmannan and East Stirlingshire)

I am sure that the Minister was very satisfied with the seemingly impressive figures which he reeled off. No one will deny that many of the things about which he told us have done some good, but although the figures seem impressive we are dealing with a population of 50 million in Britain, 5 million in Scotland alone. One essential figure which he did not mention was the number of jobs disappearing. Has he replaced the jobs disappearing in Scotland and the North-East coast, because if that is not done, the wastage will increase?

But the figures mean nothing unless they are related to human facts. The depressing figures were not those which the hon. Gentleman gave. What is depressing is that jobs are disappearing and none are coming in to replace them. Every hon. Member on this side of the Committee was gratified to see the arrival of my hon. Friend the Member for West Lothian (Mr. Dalyell). His election is a victory for this side of the Committee, but there is something about the West Lothian result which is even more impressive than that victory. It is the fact that nine out of every ten votes were cast against the Government, not necessarily because the voters did not like the Tories—many of them would have voted Tory in past elections—but as an indication of their indignation at Scotland's raw deal. We can reel off all the statistics we like, but in Scotland the shipbuilding industry is disappearing, the coal industry is disappearing and the railways are being closed down because those industries are disappearing, and now the steel industry is shrinking. Much of the basic industry on which the population of Scotland has lived for generations is shrinking and withering away.

The Minister has said that there has been a shrinkage and wastage of population in Scotland for the last ten years. He is greatly under-estimating the position. This movement has gone on for the last hundred years. People are disappearing from the islands to the mainland, and from the Highlands to the towns. From the towns of Scotland they are disappearing to the Midlands of England and to London in order to find profitable employment.

The Minister has sought to narrow the debate to questions affecting the Board of Trade, but this is not a debate about the Board of Trade; it is about the location of industry; about where the populations of this country will live, and whether they will be able to get work where they live. It is a question which goes far beyond the Board of Trade. The hon. Member has told us about his limited powers of controlling the development of offices. But the Government control town and country planning. Why should they allow offices to be built in the centre of London if there is no justification for them? The Government will have to spend hundreds of millions of pounds in trying to solve London's transport problem—a problem which they are aggravating. Part of that money could be used to send industry to other parts of the country. In this way, in due time, a good deal of expenditure would be avoided.

Towns in the north of England and in Scotland, on which £300 million or £400 million have been spent, may wither away, and the capital may be lost, merely because the Government think that they cannot guide or direct anybody to a particular spot. The idea of a free choice on the part of industry is nonsense. American firms have come to Scotland, as have Italians. Industries from England have come to Scotland, and from all these we have had reports that Scottish labour is splendid. On the aircraft on which I was travelling this morning a man told me that Scotland can produce goods with an efficiency which cannot be matched by the South. But because directors wish to live in or near London, industries must go there.

That is nonsense. Public capital was used to build the Great West Road and other arteries of transport, and industries have no right to receive public capital unless they are carrying out a public purpose. They should be located according to public requirements. Other countries can do this. Even Fascist Spain can establish industries where they are needed. This Government are starting to do it about twelve years after coming into office, not having foreseen the problems that would arise.

Why must we wait until there is high unemployment in an area? That is the situation that has developed in Scotland. The Government should foresee what is happening. It is an old Tory idea that children should be given food only when they show signs of malnutrition. After the harm has been done and the children are starving we start giving them food. This is nonsense. We cannot have healthy children unless we feed them when they require food, and we cannot have healthy industry unless we send it to areas where people are available. In areas of high unemployment the skilled men have already disappeared to the Midlands and to London, and only the unskilled workers are left.

This is not an academic question; it concerns the lives of men. All the figures that have been given have no effect on people who fear that they will be unemployed next year, or even next week. The houses that they have spent money in purchasing may become liabilities instead of assets. People must be able to live where they want, and if we are not willing to direct industry we have no right to direct people. If we starve them in one area and force them out into the Midlands or into the South we are directing them just as much as any direction of industry which the Board of Trade carries out.

I know that many hon. Members want to speak, and I shall be brief. I can assure all hon. Members that Scotland feels that she is having a raw deal, and that her lifeblood is being allowed to drain away. The figures that have been given may sound impressive, but something more must be done if the confidence of the Scottish people is to be restored and they are to be made to feel that they will be allowed to carry on their lives in the way they want.

The argument always arises whether we ought to interfere with private enterprise. I do not object to private enterprise; I realise that at the moment there is no other machinery through which we can work. Hon. Members opposite believe in private enterprise, and today it is on trial. In Scotland it is failing. It is not delivering the goods. There are great areas of Scotland where private enterprise cannot live. What is the Government's reply to this problem? They cannot force private enterprise to go there because it cannot live there, and it would be unreasonable to expect it to make sacrifices. As the Minister rightly said, we would have to compensate it for its losses.

But the Government can do something if they believe in private enterprise. The first thing they can do is to send some orders to the North-East and to Scotland, instead of sending them to Oxford and Birmingham and the outskirts of London. Orders were sent there during the war and very efficient industries were built up by the Ministry of Supply because of that fact. I know that the Board of Trade cannot do it, but when I was at the Ministry of Supply I did my darnedest, against tremendous resistance from all sorts of farces.

One of the secrets is not to worry about getting new people to the area. Never mind about Americans or anyone else; if the orders are given indigenous industries will flourish and grow. Because Government orders were given, towns in the north-east of Scotland have developed flourishing industries. Arbroath now has a flourishing engineering industry. Once industry starts developing a living is provided for the railways and other forms of transport, and lower subsidies will be required from the Secretary of State in order to keep the area alive. People will begin to live again because the means of life are being sent to them.

The next step is to induce industry to go to these areas. The Minister says that we cannot give industry special favours, but the Government did so in Malta. Why should Scotland be treated less favourably than Malta? Governments can give freedom from Income Tax and special subsidies to industry going to Malta. Why should not that policy be adopted in regard to Scotland? Industries should be established there to the maximum extent. The Government have been too late, and their policy has been too narrow. This has caused a feeling of despair to sweep over Scotland. The Secretary of State has an overall responsibility for Scotland and the Government an overall responsibility for the whole country. The Government do not seem to have any policy. Every Ministry acts on its own. We should have a comprehensive policy, so that the Government can decide how the whole country should be developed.

If we go into the Common Market we shall have to make plans. The Common Market is sending industries to the south of Italy and other parts of Europe where it is required. As a result, Italians who were working in Belgium and Switzerland have flooded back to the land of sun, where they would rather work, if jobs are available, than in the mists of Belgium. Italy is now becoming prosperous. Wages are rising. They are even becoming customers for our Commonwealth produce. Must we wait until we enter the Common Market before we get on with planning? If so, Scotland will be enthusiastic about going into the Common Market. Planning cannot come too soon for her.

I say to the Government, "Do not wait until we go into the Common Market; get busy now. Send orders to places where they are needed. Enable people to live where they want to live and help to spread industry over the country." It is about thirty years since a great report on the location of industry was published. It seems to have been put on the shelf and forgotten. It is time that the Government got down to this problem. We do not want industry to be concentrated in the Thames Valley and around Birmingham. We want it to be properly located and spread over the country. As we spread the population we shall lower costs.

The idea about the difficulty of transport is so much nonsense. Americans who come to Scotland laugh about this. A thousand miles transport in America is nothing to them. The idea that people boggle at 100 or 50 miles transport is nonsense. Let the Government get down to this question and consider it as a whole and, if necessary, appoint a Minister for the location of industry. I am sorry that the Minister of Labour has left the Front Bench. He and his Ministry know far more about this question than those in other Departments. They should be inspiring the Government to discover where the black spots may develop. Before a black time comes, industry should be sent to those spots. The Government should be prepared to see that industry is provided before a slump comes. Then confidence would be restored.

The hon. Member for Glasgow, Pollock (Mr. George)—who, I regret to say, has had to give up his post as Parliamentary Secretary to the Ministry of Power—said the other day that he had no objection at all to uneconomic pits closing, and that it was right that they should, but before they were closed there should be compensating industry in the area concerned so that there would not be unemployment. That, in a nutshell, is what we suggest the Government should do. We hope that they will get down to the job.

5.22 p.m.

Mr. Paul Williams (Sunderland, South)

I am very glad to be able to follow the right hon. Member for Clackmannan and East Stirlingshire (Mr. Woodburn). I want to take up what he said about putting industry on the spot. The right hon. Member did a rather strange thing. He praised Fascist Spain. I am not sure whether he was praising Fascism, planning, or Fascist planning, or all of them, but it seemed strange coming from the other side of the Committee.

Mr. Woodburn

Good roads and good houses and such things are needed whether they are provided by Fascist dictators, Communists or anyone else. I want good planning and roads. There is no reason why a democracy should not provide them just as well as Fascists.

Mr. Williams

I agree with the right hon. Member. It shows that tolerance is needed.

He made great play about office development. That, I agree, is something which is difficult and if possible we should guide it into certain parts of the country. But again, as in industry, there is a danger of direction and dictatorship. It may be, as my hon. Friend the Parliamentary Secretary said, that in directing industry we could prevent suitable development. Encouragement and persuasion are more valuable.

It ill becomes the Opposition to criticise development of office building when hon. Members opposite, with hon. Members on this side of the Committee, are pressing for an Offices Bill to see that that development is improved. I should have thought that hon. Members opposite would be glad to see improvements in office development in Central London and would go further and express the hope that such developments should take place in other parts of the country as well.

Again referring to what my hon. Friend said, I think that we must maintain a reasonable degree of balance about this matter and see what in fact is passible. When we cast our minds back a very short time to pre-war years we find that figures of unemployment Which today we regard as intolerable would have been appreciated considerably in those years, especially in the North-East. That is not to say that everything is perfect—certainly not—but we have to get the matter into balance. Then we see that activity has taken place, partly during the war and since the war, under Governments of both parties. We must take a slightly more detached view of the matter.

Before making two individual points on a wider front, I wish to pay tribute to the activities of the Board of Trade in the North-East. We know that there are individual parts of the North-East where problems still continue, and will continue. As my hon. Friend said, the Act has been operating for only two years and two months. We are not at the crest of the wave yet, but we are seeing a great deal of steady build up in the supply of jobs.

I have sometimes criticised the phrases "jobs in prospect" and "jobs in the pipeline". Those are phrases Which I dislike intensely and I hope that the new junior Minister of Power will be able to rub out some of these phrases in Ministerial language. Human facts emerge as a result of this Act. For example, Sunderland is off the classified list for the first time in twenty-five years. I am glad that Sunderland can now look the rest of the nation straight in the eye and say, "We don't need a subsidy. We don't need assistance. We stand on our own feet."

I know that some moan about the situation and say that it is still delicate. The problem of 5 per cent. unemployed is substantial and real but how much better it is when a town, an area or a region is able to stand on its own feet. I regard Government policy on major economic affairs as the key factor in a town which needs industry to be attracted to it. It is the Government's policy which is the key factor, and the rôle of the regional controller for the Board of Trade is important. I pay tribute to the Board of Trade and its regional controllers. Those I have met are intensely human and they understand our problems. They know how to guide industry in the most helpful way.

The two points which I want to put to the Board of Trade are concerned with estate management. The Industrial Estates Corporation owns and rents out factories. Is that the right long-term policy? I have my doubts about it. I think that there is a danger in a development district of the State being forever the landlord. An industry comes in and rents a factory and then if perchance it falls on hard times it withdraws back to its firm base in its home area and abandons the development district. That may be bad or good, but it is a fact and the way in which human beings behave.

I should like the Board of Trade to adopt a policy of selling the factories in the industrial estates so that they could chain the new tenants to the area concerned. Someone who comes in and buys a factory is much more likely to sink lasting roots in the locality than if it rents a factory on the estate. I urge the Board of Trade to consider if it cannot be more positive in encouraging the managing corporation to sell factories and to take the initiative in selling. Then it could staple down the new tenants to the localities to which they move. I do not know what the policy of the management corporation is at the moment, whether it is positive or, as I suspect may be the case, naturally obstructive to selling factories.

Secondly, what about the possibility of selling whole trading estates to free enterprise corporations to operate profitably for the community, perhaps involving county councils and county borough councils in part of the financing? This seems to me a way of securing a much more local interest in trading estates than exists at the moment.

If the latter is not possible, may I return to the point about selling factories? One of the problems of the Board of Trade at the moment is finding the cash to build new factories. If it is not one of its problems then the Treasury is not doing its job. If it is one of its problems, here is a way of alleviating it by the sale of existing factories. The management corporations should gather in the receipts from that sale and go forward to provide further factories. This seems to me a way of internally providing finance for further development. No doubt there would be Treasury objections to that type of machinery but that kind of thing can be argued out internally. The first point, therefore, is to sell the factory so that the tenants have a more personal interest in the area and to use the cash from that sale for further development. Then the question of floating off individual estates as private undertakings might be a profitable line for the Board of Trade.

Mr. Collick

This is an extraordinarily interesting argument. It runs something like this—it became necessary for public money to be put up to start trad- ing estates, because private enterprise for one reason or another was unable to do so, and now, having successfully established the estates, we are to sell them back to private enterprise. It seems a queer sort of business to me.

Mr. Williams

It is not a queer argument at all. It is a perfectly natural thing to do. This may appear to the hon. Member to be a doctrinaire point of view but I do not regard the State as being the right landlord for this sort of operation. The job of the State is to prime the pump and, having done so, to float off the machine and let it operate as best it can. It is the job of the State to fill the gaps in the present situation. It seems to me a way of helping the economy nationally and of getting industry to develop itself on the right lines.

There should be a limited degree of praise for the actions of the Board of Trade thus far. Whatever criticisms were made of it when it was passed, this Act appears to be working satisfactorily. There are areas where it is criticised for not having worked fast enough. It is criticised for having encouraged development in certain areas and not elsewhere, but on balance I should have thought that it was working with a reasonable degree of competence and satisfactorily for areas of high unemployment and that the Committee should approve generally of this policy.

5.33 p.m.

Mr. Jeremy Thorpe (Devon, North)

I hope that the hon. Member for Sunderland, South (Mr. P. Williams) will forgive me if I do not follow in great detail his line of argument. He referred to areas which have been typified as a West Lothian kind of constituency. I want to speak of problems typified by the Montgomeryshire kind of constituency and by the constituency which I represent. I represent a town which was scheduled for assistance under both the Distribution of Industry Act, 1958, and under the Local Employment Act, 1960. I should like to examine whether the latter Act has been effective in attracting industry to the area and whether the Government have any discernible policy in this respect, and to make one or two suggestions on how they could improve their efforts.

We have gone a long way since we had problems of chronic unemployment to deal with which depressed areas were scheduled under the 1934 and 1937 Acts. I believe that the 1960 Act is wider and more flexible in its approach than were its predecessors, the Distribution of Industry Acts, 1945 and 1950. It is more flexible because the emphasis is no longer wholly on industrial employment and it recognises that two quite separate problems face any Government. There is the problem which relates to the declining industrial areas and there is the problem of non-industrial areas where no alternative employment is available. They are two quite different problems. I should like to touch upon the second one.

The first is a question of revitalising industrial areas where there are already basic services, where there is a pool of labour available and where there is already a market and a reasonable possibility that industrialists could be attracted because the basic ingredients are there. Then there are the non-industrial areas which I believe are the more intractable problem. These areas are largely the fringe areas of the country which depend to a large extent on agriculture and tourism. In these areas there is very little alternative employment and, in some cases, possibly only one industry or factory in a town. This in itself is an unhealthy state of affairs because if there is only one factory it needs only a recession in that particular industry for there to be widespread unemployment. If there is only one boss and a man has an argument with the boss, it is virtually impossible to find alternative employment. Every one agrees that it is preferable to have a variety of factories and industries not merely as alternative employment but because it is a healthier way of bringing about wage competition.

I make no apology for mentioning one town which is scheduled for assistance. It typifies many similar towns which hon. Members represent, including perhaps some hon. Members who would like to speak on this subject but who may not have the good fortune which I have had to be called to take part in the debate. This is the town of Ilfracombe which for four months of the year has unemployment which rises to approximately 10 per cent. of the working population and sometimes even higher. Our experience of the 1960 Act is that we have had 12 inquiries, and four firms have applied for assistance under the Act. Every single one of them has been rejected. The same 100 per cent. rejection was experienced under the 1958 Act. These were firms from as far afield as Birmingham, Southend, Stroud, Worcester and Blackpool. The only benefit that we have derived is a grant under Section 5 of the Act for the purchase and clearing of an industrial site.

As I indicated in my maiden speech on 10th November, 1959, I do not believe that the problem in areas of this kind is one of subsidising individuals or individual firms. The problem is to open up the area by improving communications and by improving the basic services there. If these basic services are not improved, I do not believe that any amount of financial inducement will persuade firms to open up in these areas. This is why I ask the Parliamentary Secretary to the Board of Trade to say what assistance has been granted under Section 7 of the 1960 Act which empowers any Minister in charge of any Government Department to make adequate provision, if he thinks there is inadequate provision, for basic services such as roads, rail, air transport, light, heating and water.

We have now the fantastic situation that at a time when the Government, under the 1960 Act, are trying to attract firms to Ilfracombe the railway service from Taunton which leads to the town is under threat of closure. How can we expect to be able to attract industry through the medium of one Government Department when at the same time another Ministry is considering closing branch lines which lead to the area concerned? It is like giving a man a blood transfusion and cutting his arteries at the same time. There must be far more co-ordination. I hope that the President of the Board of Trade will let us know what assistance has been given by any of the Ministries under Section 7 of the Act for the provision of basic services.

The President of the Board of Trade must realise that it will be the smaller firms which will open up in these areas. Having studied the operation of the Act, I believe that the smaller a firm is the more difficult it finds it to obtain assistance under the Act. The President of the Board of Trade must be very much more flexible in his approach, realising that in these areas not only manufacturing concerns but industries ancillary to tourism, fishing, intensive agriculture and the like can be a means of providing alternative employment.

Applications must be dealt with by the Board of Trade more quickly. I have spoken to every industrialist in my constituency who has applied for assistance under the Act. We are spending public money and the public, therefore, has the right to be satisfied that the money is wisely spent—I concede that at once—but the industrialists to whom I have spoken complain, first, about the complexity of the application and, second, about the time it takes for the Board of Trade to reach a decision. We must streamline the method of dealing with applications so that, from the moment of application, no more than three months, or four months at the very outside, are allowed to pass before a decision is reached. I have known cases where there has been more than a year's delay and the firm has lost interest and gone elsewhere.

The fringe areas of which I am speaking not only have large-scale unemployment in proportion to their total population but, much more serious, there is large-scale rural depopulation. In Montgomeryshire and in my constituency one can find villages with populations smaller than they were 100 years ago. As the right hon. Member for Battersea, North (Mr. Jay) said, this process is adding to congestion in the towns to traffic problems and the problems with which the Minister of Housing and Local Government is trying to deal. They are problems in the solution of which the Board of Trade could do very much more.

We are entitled to have a little more information about the industrial development certificate system. I wish to refer to an instance which occurred very near my own constituency, though not within it. In judging the working of the industrial development certificate system, obviously one is only able to draw upon one's own experience and make comparisons. The case in question arose in Tiverton, and I told the hon. Member for Tiverton (Mr. Maxwell-Hyslop) that I intended to raise the matter. I am delighted to know that any town is to have a new industry providing alternative employment, but I am sure that the hon. Gentleman will agree, as I should agree, that we must, in arranging these matters, have regard to a system of priorities and we must put industry first in places where there is a high level of unemployment.

In Tiverton there is one main industrial employer, John Heathcoat and Company, a textile manufacturing company well known throughout the West Country. Lord Amory was, until his appointment as High Commissioner in Canada, one of the directors. It is a well-known firm with a long industrial tradition in the West Country, and it is the main employer of labour in Tiverton. There is in Tiverton virtually full employment. The figures for June showed that there were about 90 people not employed there but, according to the Ministry of Labour's statistics, they are in the main either old people or people not suitable for industrial employment.

In 1961, the sale of a site to the Charles Churchill Machine Tool Company of Birmingham was contemplated. In October, 1961, or perhaps before that date—these things take a little time,—the Churchill Company applied for an industrial development certificate and was refused. It is quite understandable that the President of the Board of Trade and his advisers may well have thought that, in a town which had, comparatively speaking, a high level of employment, a case could not be made out for such expansion. I do not think that anyone would have been surprised by that decision. The Churchill company made inquiries also in my constituency to see whether there were possibilities for expansion there. It has now set itself up in the Isle of Wight.

We do not know what opposition there was in Tiverton itself. At a dinner in May, 1961, the deputy-chairman of the Heathcoat Company, so he was reported, said that if there was to be expansion in Tiverton obviously the established firms must have a prior claim on available labour. That is a perfectly reasonable claim but a claim which might lead one to believe, to put it at its lowest, that he would not be over-enthusiastic at having a competitor on Tiverton's labour market. Be that as it may, the Churchill application was turned down.

In January, 1962, it was reported that an application had been received from a company which wished to purchase six acres of an industrial site in Tiverton. In April, 1962, the sale was confirmed. The directors were not named. The products which they would manufacture were not mentioned, and the name of the company itself was not given. It was indicated that the company was American, that it was 50 per cent. owned by Heathcoats, and that there would be advantages in combination and co-operation between experts in the two companies. A deputation led by some very distinguished people from the County of Devon, one of them the chairman of the county council, went to the Board of Trade. Five months or so after an I.D.C. had been refused to Churchills an I.D.C. was granted to this other company.

There are many people in the West Country who feel that this is, perhaps, according a high priority to the convenience of a local firm rather than interpreting in a regional or national sense the policy behind the Local Employment Act. There are many who question the wisdom of this particular move.

Perhaps the hon. Member for Tiverton is hoping to catch the eye of the Chair so that he may refer to this matter later. I mention it because it seems strange that in one county there should he a town which is scheduled for special assistance but which has had no success so far while in another a decision is taken which, in effect, completely reverses an earlier decision taken only five months before. Much of Ilfracombe's lack of success is, perhaps, attributable to a lack of basic services, such as communications, although the town itself has made great efforts in acquiring an industrial site and industrialists with whom I have spoken have expressed themselves as very grateful for the spirit of co-operation shown to them by the chamber of commerce, the town council and the trade unions.

Contrary decisions, such as the Tiverton case, taken in this way lead one to ask for a little more information about how the I.D.C. system works and about this particular case. I hope that the President of the Board of Trade will give us this information when he replies.

It may be said that for a firm to expand and to share experts in the way suggested is valuable as a matter of convenience, but this has not been regarded in the past as a sufficient or overriding consideration. We know of the steel strip mills, for instance, which were split up, different parts of the enterprise being allocated to different parts of the country. Various car manufacturers which have wanted to expand in the places of their first choice have had to go elsewhere. I want the right hon. Gentleman to explain a little more the operation of the system, particularly since the Parliamentary Secretary has said that he has to be a hard man turning down application after application when deputations come to him.

The non-industrial and rural areas have and are continuing to suffer from depopulation. They have little alternative employment and present a totally different problem from the declining industrial areas. The provision of basic services like water, drainage, electricity, better roads and improved communications by rail is more important to the future of these areas than the subsidising of firms which might wish to set up in them.

5.50 p.m.

Mr. Rupert Speir (Hexham)

Unfortunately, this is a short debate and since a number of hon. Members wish to speak, I hope that the hon. Member for Devon, North (Mr. Thorpe) will forgive me if I do not follow him in his remarks.

It may surprise the right hon. Member for Battersea, North (Mr. Jay) to hear that I speak as a great supporter of the Local Employment Act. I congratulate the Government on having introduced it and I thank the Board of Trade for the helpful way in which it has been operated in my part of the country. I say "surprise" in view of the song and dance which the right hon. Member for Battersea, North usually makes about the location of industry. It was a Conservative Government and not he and his right hon. and hon. Friends who introduced the Local Employment Act. That Measure has brought great advantages which none of the previous Acts contained. None of the previous Measures allowed the Government to anticipate trouble in threatened areas. They could only deal with the trouble once it had arisen and I am astonished that he and his right hon. and hon. Friends, when they were in power, did not introduce amending legislation to make such anticipation possible.

Mr. Jay

That is quite untrue, because the Distribution of Industry Act, 1945, empowered the Government to take account of the balance of distribution of industry and, in doing that, were able to consider the future as well as the present.

Mr. Speir

When I wrote to the Board of Trade I used to be told time and again that the existing legislation precluded the Department from taking into account threatened as opposed to actual unemployment areas. It is, therefore, somewhat amazing to think that it was left to a Conservative Government to introduce the necessary amending legislation. Time and again the right hon. Member for Battersea, North and his hon. Friends say that we Conservatives believe in a free-for-all and laissez-faire policy. I suggest that they address those remarks to the small number of hon. Members who sit, now and again, on the Liberal benches. The Local Employment Act gives the lie to that suggestion. Instead of the workers having to uproot themselves and their families and drift South—to the Midlands, London and the new towns—the Act has enabled the Government to look ahead and to take action in time.

I have no doubt that the new towns are extremely attractive. After all, we are spending about £400 million adding to those attractions. However, is it not time that we reconsidered this policy? The older towns, if they were allowed to spend £400 million, could make themselves attractive to industrialists who would wish to establish businesses in these areas. The older towns have all the traditions, as well as the churches, the clubs, the "pubs", the cinemas, the sewers—in fact they have the lot—and if they had a little more money to make themselves more attractive new industries would be attracted to them.

The Local Employment Act has worked extremely well in the short time it has been in operation. Already, it has very largely cured the unemployment problem in South Wales and it is doing the same on Merseyside. It is certainly helping to cure the problems of the north-east of England. In the Hexham division we have had two "designated" areas under that Act. They were depressed areas in pre-war days, and more recently, with the closures of mines and quarries, they could have become depressed areas once again. But the Government took action and as a result of the introduction of the Local Employment Act we have been able to do something which I do not believe we could have done under the old Socialist legislation—we have been able to look ahead.

The Board of Trade has been extremely helpful and has encouraged one industry after another to come to the Hexham area and to south-west Northumberland, where they have been welcomed with open arms by the local authorities and the local people. New ventures, industries and factories, have been, and are being, established in large numbers in south-west Narthumberland, and instead of being faced with the horrors of unemployment I am receiving letters from industrialists saying that they would like to expand but that there is a scarcity of labour in the area.

I admit that the situation in southwest Northumberland is, better, for one reason or another, than in other parts of the north-east of England. Perhaps the district has deserved its luck, for there is a true saying that the Almighty helps those who help themselves.

In any case, the situation in the North-East is not helped by those who paint an over-gloomy picture of the difficulties and who exaggerate the problems of the area. It is very encouraging to know that industrialists who have recently gone to this part of the country cannot speak too highly of the quality of the workers there. They are delighted with their work and are agreeably surprised with the labour relations that exist. One prominent industrialist, a newcomer to the North-East, told me recently, "You can reason with them in this area." Many others have spoken in a similar vein.

It is that kind of remark, that sort of reputation, which will help to solve the difficulties of the North-East and which will make the area more attractive to industrialists. That sort of reputation is probably more important than any amount of financial assistance or support from the Government. The North-East is establishing the reputation of being a sensible, reasonable and trouble-free area and I hope that all hon. Members who represent parts of the North-East, and who speak in today's debate, will do all they can to safeguard and enhance this reputation.

5.58 p.m.

Mr. Charles Grey (Durham)

I entirely agree with the sentiments expressed in the latter part of the speech of the hon. Member for Hexham (Mr. Speir). Few, if any, hon. Members would disagree that the North-East, as an area, has to be projected properly. But I object to the first part of his speech. The hon. Member might even regret that he changed his mind and decided to fight the Hexham seat because, if he continues to make any more speeches containing the views expressed in the earlier part of his speech today, he has lost Hexham already.

I shall deal with the Local Employment Act later. The fact that we are having this debate proves conclusively that the distribution of industry policy of this Government has completely failed. When the Act was passed it was intended that industry would be spread more evenly throughout the country. That was the intention and it is well known how well this policy worked under the Labour Government immediately after the war. At that time a real attempt was made to send industry away from the South to the North-East, Scotland and elsewhere. It is only after eleven years of Tory rule that the problem has again arisen and the Act has ceased to operate as it should.

Mr. Speir

Which Act?

Mr. Grey

The Distribution of Industry Act. I said that I would deal with the Local Employment Act later. I intended to say that the distribution of industry policy being operated now is more unfairly balanced than at any time, compared even with pre-war days. I have no doubt that there have been one or two puny efforts made by the Government to put the situation right. One effort was the Local Employment Act, 1960, which the hon. Member for Hexham tries to claim is a huge success.

Mr. Speir

Where are the Welsh Members today?

Mr. Grey

Perhaps the hon. Member will allow me to make my speech without interruption, since I allowed him to do so.

Hon. Members opposite support the Government Front Bench in claiming that the Local Employment Act is a huge success.

Mr. Speir

Hear, hear.

Mr. Grey

If the Government and back bench Members opposite think that, I can show that there are thousands of people who think differently. At the moment, there are 45,000 people on the dole in the Northern Region. Will any one of them say that the Local Employment Act is a huge success?

We all remember the great hullabaloo that there was when it was decided to introduce this Measure. It was said that it would be the instrument which would search for and dig out pockets of unemployment. That was the intention. The Act was to be some magic box from which employment would flow to the development districts. But, like many other Acts of the Government and like many other boxes of the Government, it has a Treasury lock. The only man who could open that box today, Houdini, died years ago. No one can open that box today.

I repeat that the Local Employment Act is a "phoney" piece of legislation. As for the benefit which it is said the North-East has obtained from it, we would have been no worse off if it had not existed.

Mr. Speir

Nonsense.

Mr. Grey

That is true, and I will prove it.

I hope that when the Minister replies he will not try to prove how good the Local Employment Act has been in the North-East. It is deader than dead. The Parliamentary Secretary talked about the jobs in prospect. I believe he said that there were 35,000 jobs in prospect for England. Two or three weeks ago he was in Newcastle, where he said that there were over 22,000 jobs in prospect for the North-East. If there are only 35,000 jobs in prospect for the country, there will not be many left for other areas.

Even if it were true that there are 22,000 jobs in prospect for the North-East—we know that there are not, but even supposing that it were true—that is no comfort at all. This is no huge success story because that figure only takes care of the appreciable number of children leaving school. It does not take account of the contraction in the mining, shipbuilding and ship-repairing industries. Neither does it take account of the latest redundancies on British Railways. All this will add up to a formidable figure.

At present, there is a pool of skilled labour in the Northern Region. The proportion of unemployed to vacancies in the Northern Region is about ten to one compared with three to one in Birmingham and one to one in the London area. In Spennymoor, part of my constituency, the unemployment rate is about 5.3 per cent. The Minister should regard that as very serious. It will be worse in a few years' time, when there will be further redundancy in shipbuilding and ship-repairing, on British Railways and particularly in the collieries.

Naturally, we on this side become very angry when the Minister talks about jobs in the pipeline and then hides behind a load of platitudes. All that I can say about the jobs in the pipeline is that it is time that they saw the light of day. We are getting fed up with all this talk and it is about time that there was more drive behind the efforts of the President of the Board of Trade and of the Parliamentary Secretary.

I pay a great tribute to the Parliamentary Secretary for visiting the North-East. He visited sites, talked with many people and has been brought up to date with the very serious situation in that area. His journey will have been worth while if he has come back prepared to answer two questions which have been asked time and again by many hon. Members on this side and even by some hon. Members opposite.

The first question is what immediate steps he has in mind for reducing the number of unemployed. The second is what long-term plan is in contemplation to enable the region to stand the strain if an economic blizzard hits the country. Whenever there is economic stress, the Northern Region feels it, not worse than any other area, because Scotland and Northern Ireland feel it as well, but as badly as any other area. We are entitled to have answers to these questions. We do not want to be told stories about the Local Employment Act. We have heard them time and again.

If the hon. Member for Hexham can tell us about the number of people who have received grants under the Local Employment Act, I can tell him about the numbers of people who have applied for grants, but whose applications have been refused. At Hetton, in my constituency, a person applied for a grant to start a brick factory, but he was turned down. My hon. Friend the Member for Durham, North-East (Mr. Ainsley) has a similar case. Hon. Members representing north-east constituencies can bear out the fact that far too many applications for grants have been turned down. There is definite proof that more applications for grants have been refused than have been granted.

Mr. Speir

No.

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

Is it not correct that out of 57 applications to introduce new industry in the North-East only 18 have been granted and that the rest have been refused?

Mr. Grey

That proves my point. If the President of the Board of Trade does not do something about this matter now, there may well be a good deal of unnecessary hardship and poverty.

I know that we have not the massive unemployment which we had in the 1930s. But do the Government really believe that they make a success of things if they prevent them from getting as bad as they were in the 1930s? I do not believe for one moment that we shall ever return to those days.

Mr. William Baxter (West Stirlingshire)

May I draw my hon. Friend's attention to what has happened in certain parts of Scotland, especially in Bonnybridge and Denny? I met people of that area last night and we set up an industrial committee. The conditions there are worse than they were in the 1930s, and it is time that something was done about them. There are areas in which conditions are not as bad as they were in the 1930s, but they are very much worse in parts of Scotland. Does my hon. Friend expect the crowd of nitwits opposite to do very much about them?[HON. MEMBERS: "Do not be offensive."] It is time that someone was offensive about this situation.

Mr. Grey

What my hon. Friend says emphasises my point. If conditions in some parts are worse than they were in the 1930s, they must be bad. However, I do not believe that the North-East will ever get back to the conditions of the 1930s.

The Government cannot pretend that this is a success story by claiming that conditions are better than they were in the 1930s, because we shall not return to those conditions, in spite of the Government.

I believe that the crime of the Government is that, with all the modern means at their disposal and with all the legislation at their fingertips, they are still allowing by their deliberate acts certain areas of the country like the North-East, Scotland, Northern Ireland and even Wales, to be infinitely worse off than any other areas in the country. No doubt, Scottish and Northern Ireland hon. Members will support that point of view, as well as Welsh Members.

I want to emphasise the discrepancy between the North and the South, which is the chief fault here. There ought to be greater effort made to spread industry more evenly across the country. The Northern Region now has 3.5 per cent. unemployment, which is about three times the national average. We on this side of the Committee are angry about it, and we are getting fed up, because we feel that nothing has been done. What we want now is a real spirit and drive for the proper distribution of industry, and we say that if the Government themselves will not do it they should get out and let somebody in who will.

6.12 p.m.

Mr. Stanley R. McMaster (Belfast, East)

I should like to draw particular attention to one of the points just made by the hon. Member for Durham (Mr. Grey)—the position of Northern Ireland.

In Northern Ireland, during the past twelve months, unfortunately, we have had increasing unemployment. We are experiencing difficulty at the moment in attracting new industries, because of the uncertainty which precedes the entry of the United Kingdom into the Common Market. As a result, not so much industrial development has been taking place in the past six months as in the years preceding that period.

I noted with interest the Question asked at Question Time today by my hon. Friend the Member for Caithness and Sutherland (Sir D. Robertson), who wanted a Development Council to be set up in Scotland to match that over which Viscount Chandos presides in Northern Ireland. In spite of all the great efforts which have been made by the Northern Ireland Development Council, the Ministry of Commerce in Northern Ireland and the assistance of my right hon. Friend the President of the Board of Trade and his Department, we are facing unemployment which has risen from 7 per cent. to just over 8 per cent.

The shipbuilding industry in my own constituency has suffered particularly from the recession in shipbuilding in the United Kingdom and in the shipping industry as a whole. Over 12,000 men have been laid off at Harland and Wolff's yard and in the past fortnight, the chairman of another large and important firm—Short Bros. and Harland—has forecast that unless new orders come from the Government for the Belfast air freighter, there will be redundancy in that factory. The Chairman of the Development Corporation, Lord Chandos himself, has pointed to the difficulties to be faced during the coming year in finding new industries willing to set up in Ulster.

It was with these fears in mind that the Ulster Unionist Members in this House spoke during the debates on the Local Employment Act, 1960. We were assured at that time that the Board of Trade would use its influence in areas covered by the industrial development certificate to attract or to direct industries to Northern Ireland. This need is greater today than it has ever been since the war. Therefore, I should like to draw particular attention to the needs of Northern Ireland in this debate, and to ask my right hon. Friend whether he will give the same undertakings are were given during the progress of the Local Employment Bill through the House of Commons, namely, that any firms in overcrowded areas which are looking for a development certificate in other areas in which the use of industrial development certificates is not desirable because of the great pressure of industry there will have their attention drawn, first, to the needs of Northern Ireland, simply because of the unemployment which now exists there and the other difficulties which we are experiencing at present.

We hive in Northern Ireland many very skilled engineers who have been trained in such exacting industries as shipbuilding, and who are experienced not only in general engineering, but in all forms of machine engineering and electronic engineering. Many of them have been trained in apprenticeship schools and are now engaged in producing advanced electronic computers and machines of that category. For this reason, and for the others which have already been expressed in the debate—that where there is a pool of unemployment it is for the economic good of the country as a whole that work should be sent to those areas in order to take the maximum advantage of our labour force—I make this plea to my right hon. Friend. This applies particularly to Northern Ireland, where there are many middle-aged men who have reached an advanced degree of efficiency but who now find themselves unemployed owing to the recession in the shipbuilding industry, after spending many years working in that industry.

I suggest that it is not reasonable to expect such men to be prepared to break their family ties and seek work in Britain. These are men who are in middle age, with young families and houses, who are settled in that area, but who find themselves unemployed. They feel that they are justified in asking that the policy of the Imperial Government should he to direct industries to such areas, where they will be able to continue to give of their best. These men are known for their hard work and their industry, and for the lack of industrial disputes. The trade unions have a fine record of co-operation and of conscientious working with management in order to avoid industrial disputes. Therefore, I press this point most strongly.

My hon. Friend the Parliamentary Secretary, in his opening speech, referred to the "rat race" which occurs in areas in which there is over-employment, and in which wages are forced up from one firm to the next, and in which it is not always the most economic firm which offers the best wages. A race like that can only do harm to industry and to the United Kingdom when engaged in competition with countries abroad. If industries are sent to areas of high unemployment, we do not get the same disproportion in wages and salaries as between one part of the country and another.

Finally, I should like to ask my right hon. Friend the President of the Board of Trade to consider, along with his colleagues in the Government, what other work which is in the direct control of the Government can be attracted or directed to Northern Ireland; work such as that in Ordnance Factories and that referred to in a recent Question by my hon. Friend the Member for Belfast, North (Mr. Stratton Mills) concerning the manufacture of clothing for the British Army. Work like that has been sent to the Irish Republic, when it could equally well be done at the taxpayers' expense in the clothing and making-up industries of Northern Ireland. There is scope here for an inquiry in order to find out whether ordnance work and work of this nature is being properly shared out throughout the United Kingdom as a whole.

These are the points which I am particularly glad to have the opportunity of making in this debate, and to which I hope I shall be able to receive an answer from my right hon. Friend the President of the Board of Trade.

6.20 p.m.

Mr. James Boyden (Bishop Auckland)

I have considerable sympathy with the hon. Member for Belfast, East (Mr. MacMaster), and I am sure that he will vote with hon. Members on this side of the Committee in the Lobby tonight.

This is how the so-called success of the Local Employment Act looks to people in my constituency. The unemployment figure at the time of the General Election was just under 2,000. Today, it is 2,500 with a percentage rate of 5.3. Although there have been slight dips from time to time, unemployment has steadily mounted and has reached nearly 2,500 every month this year. On several occasions the Parliamentary Secretary has spoken to members of local councils in my constituency. He has spoken to the North-East Development Council and has expressed good will. But the fact remains that the good will have not led to action. We are told about jobs in the pipeline, but the unemployment figure rises.

When the Parliamentary Secretary came to Newcastle recently he surprised me by saying that the Board of Trade did not have adequate time to take action when collieries were closed and that there was room for improvement. I hope that in the fortnight which has elapsed since he visited Newcastle the hon. Gentleman will have furbished up his administration and that now he will be able to tell us that when the Coal Board contemplates closing collieries the Minister of Power passes full information to the President of the Board of Trade so that immediate action may be taken.

I hope that the hon. Gentleman will be able to tell the Committee that he can take action in advance of unemployment which may be caused in that way, that action can be taken about two years in advance of pit closures. Otherwise, how in heaven's name can it be expected that factories will be developed to take up the unemployment caused when collieries are closed unless action is taken eighteen months or two years in advance?

The hon. Member for Durham, North-West (Mr. Ainsley) and myself spend our time with this problem. It is up to the Board of Trade to take the matter far more seriously and to initiate action rather than express pious sentiments. The President of the Board of Trade knows the situation regarding the railways is precarious. There are 2,300 people employed in the Shildon workshops and some of my constituents are employed in Darlington railway shops. When we ask what factory development has taken place in Shildon the answer is, none. It is true that Shildon has been put in a local development district and the name of the place has been written down on a piece of paper, but nothing has happened.

The district council has taken an interest in one particular 12-acre site and has tried to draw industry to it, but nothing has happened. The Bishop Auckland Council is trying to develop a large area at Fielden Bridge, about which I have spoken to the Board of Trade, to attract industry. The only result has been that one industrialist "nibbled" but went away and there is no prospective development there at all. The Barnard Castle Rural District Council is concerned with the same problem and has discussed with all sorts of people what could be done. They showed the Parliamentary Secretary a site at Evenwood but nothing has happened. The Barnard Urban District Council is in the same position and as the area about which the hon. Member for Barnstaple spoke—[HON. MEMBERS: "North Devon."]—when the hon. Member for Devon, North (Mr. Thorpe); I suppose that we shall not see him in this Chamber after the next election——

Mr. Thorpe

The hon. Gentleman should not be so certain.

Mr. Boyden

We do not see any of his colleagues in the Chamber at the moment.

An Hon. Member

They may be in the two Standing Committees.

Mr. Thorpe

They cannot be in three places at once.

Mr. Boyden

In rural areas like those on either side of the Tees, the rural districts of the North Riding and Durham, although the actual unemployment figure is not above the national average we know from experience of the incredible difficulties facing girls who wish to get office jobs and young men who wish to take up apprenticeships. It may mean travelling from areas far up the Tees to Darlington and Middlesbrough, which is an inhuman demand to make of young people.

There is a considerable amount of under-employment which is not shown in the figures. Many women who would wish to work are unable to do so. Many alder people over 60 who would like to work cannot do so. I think that the migration from my constituency is higher than the figures show, but census figures give the migration to be at the rate of 600 a year——

Mr. P. Williams

They are coming into my constituency at the rate of 2,000.

Mr. Boyden

That is very fortunate for the hon. Member for Sunderland, South (Mr. P. Williams), but perhaps he would have greater success at the Board of Trade than I have.

The census figures of migration for my constituency from 1951 to 1961 is 5,900. In the constituency of my hon. Friend the Member for Durham, North-West the figure is 5,000. I think it fair to say that the actual figure of unemployment for Bishop Auckland is 2,500, to which should be added another 1,000 migrating or not on the insurance books but desiring work, to make a total of 3,500 needing jobs. This gives a percentage of about 7 or 8 per cent.

In discussions with officials we are frequently told that some areas of the country are unattractive to industry. It is beyond the capacity of the local councils which I have mentioned and of the Durham County Council on their own to remedy the industrial neglect of years by tidying up the pit heaps, cleaning the rivers and dealing with land which industrially is derelict. They cannot refurbish some of the very good villages in which people want to live because of the industrial and social economy from which we suffer. It is up to the President of the Board of Trade, in collaboration with the Ministry of Housing and Local Government, to ensure that a great deal more money is spent not only on industrial improvement but on social amenities so that industrialists will be attracted to the area. That social problem is as serious as the need for money to be spent industrially in the area.

I hope that the Minister will talk to his colleagues in the Government about the need which exists in my constituency and other Durham constituencies in this respect.

6.27 p.m.

Mr. R. E. Prentice (East Ham, North)

Hon. Members on both sides of the Committee have naturally dealt with this problem from a local point of view. I wish to try to draw together some of the conclusions which we may reach about the national picture. Hon. Members on this side of the Committee who have taken part in the debate have shown a sense of urgency regarding the level of unemployment. But it seemed to me that the only speaker from the other side of the Committee who shared that sense of urgency was the hon. Member for Belfast, East (Mr. MacMaster). In view of the appalling rate of local unemployment in Ireland, I hope that he and his hon. Friends who represent constituencies in Northern Ireland will vote with us in the Division Lobbies.

The speech of the Parliamentary Secretary and those of the hon. Members for Hexham (Mr. Speir) and Sunderland, South (Mr. P. Williams) were essentially complacent speeches. I was amazed that the hon. Member for Sunderland, South should devote most of his speech to talking about whether factories should be owned by the State or by private enterprise when the rate of unemployment in Sunderland is 4.5 per cent. I should have thought that the hon. Member would have been obsessed with that figure.

Mr. P. Williams

May I quote some figures to prove the success of the Local Employment Act? At Hepworth and Grandage there are 1,000 jobs; at Jackson the Tailor, 1,000 jobs; at James R. Jobling, 1,200 and at Steels Engineering, David Brown and Ericsson's there are 1,185. At Perdio there are 1,000, and there are another 200 expansions. So the Act is working.

Mr. Prentice

We would all agree, I think, that there have been new jobs provided by the Act and that there are jobs in the pipe-line. But the relation of those figures to the problem is something about which I wish to speak in a moment.

Let us start with the Hay figure for unemployment, which is 423,800. Full employment is a relative term. A year ago the figure was 299,276. Under Governments from both sides of the House the figure for unemployment since the end of the war has been below the 300,000 mark. But figures such as we have at present include at least 100,000 unnecessary cases of unemployment. For those 100,000 people and their dependants the problem is urgent and we should have regard to the frustration and hardship involved.

As was pointed out by my hon. Friend the Member for Bishop Auckland (Mr. Boyden), the figures always underestimate the actual amount of unemployment involved in particular regions. In the areas of local unemployment retired people are not able to stay on at work and do not register for employment. Married women do not register for employment. Also, there is a good deal of short-time working in various industries, and therefore the problem of unemployment and under-employment in the areas about which we have been talking is much worse than the figures show, and I suggest that the figures themselves should give us cause for concern.

This is only part of the problem affecting those areas. The tragedy is the way in which so many young and enterprising people from Scotland, Wales and the North East have had to leave their families and friends and go to other areas to find work. Some areas of the country are, relatively speaking, in decline.

Perhaps I might refer to the other side of the problem, the effect on those areas which are already overcrowded. I represent a constituency in the Greater London Area. I put it to the Government that in Greater London, in the Birmingham area, and in the other crowded areas, every social problem with which the Government and local councils have to grapple is aggravated by more people coming into an area which is already too small to hold them. Housing progress made by local councils is cancelled out by more people coming in and demanding homes. The cost of land goes up, whether it is to be used for public purposes or for industry. Indeed, industrial costs are increased because of the rising cost of land on which to build factories, offices, and so on. There is a scarcity of open space for every public purpose. There is more and more congestion of traffic and people have to spend longer and longer travelling to work. Recently I saw some figures which suggested that in the Greater London area the average worker would have to spend between 2½ and 3 years of his life in rush-hour travel because of the way in which some areas are becoming congested, resulting in people having to live further away from their work. Some town planners have held out the prospect that one day everybody in Great Britain will live in a great, elongated city, probably called Londbirm, stretching from London to Birmingham, with the rest of Great Britain becoming a desert.

It is against that tendency that we have to consider whether the Government's policy is adequate. Hon. Gentlement opposite talk as though this all started with the Local Employment Act, 1960. In fact, hon. Gentlemen opposite have been in office since 1951, and it is their policy since then which is being debated today, and on which the country will wish to record a verdict.

When hon. Gentlemen opposite say that there are so many thousands of jobs in the pipeline, might I remind them that during the fifties—that is, taking the period from the beginning of 1951 to the end of 1960—the number of people in civil employment went up by nearly 200,000 every year. Nearly 200,000 new jobs were created for most of those people. Over half of those new jobs were in the three regions centred on London—London and the South East, the Eastern Region, and the Southern Region. Almost one-quarter of those new jobs were in two Midland Regions, and the other quarter were in the remaining six regions of the country. It is against that hind of process that we have to consider the figures given to us this afternoon by the Parliamentary Secretary.

I suggest that several things are happening at the moment which are likely to make the position even worse. One thing is that the industries and services which on the whole exist in the South, the East and the Midlands, are expanding, and on the whole it is the older declining industries which are to be found in the North, in Scotland, and in Wales. The pace of change is quickening all the time. This is something which in itself we welcome. Technological change is speeding up. The pattern of trade is changing. If this country enters the Common Market, this will encourage the faster development of expanding industries and will present greater challenges to older industries which are having a struggle to exist. For these reasons there will be more people moving, or wanting to move, from the older industries to the newer ones, or from the older areas to the expanding ones.

London, and to a lesser extent Birmingham, are commercial centres in which people work in offices, in professions, and so on. We know that the pattern of work has changed, in the sense that fewer people work at the bench and more do jobs in offices. The figures show that in recent years 15,000 new office jobs a year have been provided in central London. All this produces a snowball effect on smaller industries. It produces firms which do not come within the scope of the Government's control. It produces service industries. Bakeries, laundries, and that sort of thing go where there is a market and people move into London because jobs are available. This in turn leads to other industries moving in because there is a market, and so the snowball effect continues. A policy that is inadequate now will be even more inadequate in terms of the challenge with which we shall be faced in the next few years.

I promised to speak for only a few minutes, but I should like to reiterate briefly the constructive points we put forward. We all recognise that this is a national problem of great difficulty and complexity. We all supported the 1960 Act, although we said that it did not go far enough. We recognise that some things have been done under it, but not enough has been done. We say that the whole of this policy depends on a policy of economic growth. The Parliamentary Secretary says that it all depends on how much industry is on the move; that it depends on how much industry wants to move. I therefore think that the first requirement of this policy is to create a situation in which firms are eager to expand and will therefore respond positively to the controls which the Government exercise. Secondly, the Government should make more drastic use of both the positive and negative side of the Local Employment Act.

I do not want to repeat what my right hon. Friend the Member for Battersea, North (Mr. Jay) said about this problem of office development, but I take up what the hon. Gentleman said about the difficulties of controlling it. The hon. Gentleman produced two excuses. He said that it would be difficult for the Government to decide whether or not to grant permission for new office accommodation because they had no criteria on which to work. This seems to me to be about the most feeble excuse that could be advanced. Of course, it would be a new problem, just as the control of industry was at one time a new problem, but surely the Government could start from the point that anyone who wanted new office accommodation in London or in Birmingham would have placed on him the onus of proving why it should be there rather than somewhere else? How this onus of proof would be balanced could be worked out by the experts, but if the Government started from that point most of us feel that a good deal of office accommodation could be put up in other areas.

The other point made by the Parliamentary Secretary—and I think that in a sense it is a valid point—was that as offices are built speculatively and that those who build them do not know which firms will occupy them. But surely it is not beyond the wit of the Board of Trade and whichever Department handles this to devise a system of permits whereby those who want to occupy offices must get permission to do so, and those who want to build offices must show that there are enough people with permits to occupy the offices which they will build. This might in the first instance lead to delay in the provision of new office accommodation in London and these other crowded areas, but that would not be a bad thing.

Surely the difficulties could be overcome if the determination were there? We put it to the Government that as more and more people move into commercial and professional jobs and away from the factories the whole policy of being able to control the distribution of industry will depend on the Government taking this further step towards controlling office building, and that if they do not take such a step a future Government will have to do so.

What we need is far more co-ordination in the Board of Trade, in the Ministry of Labour, in the Ministry of Transport and in the Ministry of Housing and Local Goxernment, to produce a major strategy for the distribution both of industry and population in this country. It is absurd that the hon. Member for Devon, North (Mr. Thorpe) should have to tell us that at a time when one of the major obstacles to creating new employment in his constituency is the lack of transport facilities, British Railways should be considering closing down the railway line which leads to that area. There must be more co-ordination and a real strategy to deal with the whole problem.

When the 1959 General Election campaign was in progress, the then President of the Board of Trade, now Minister of Education. said: We intend to tackle unemployment with the methods of mobile warfare. The only adequate comment on the success or failure of that intention is the comment which has been made by the electors of West Lothian and of West Middlesbrough in the last few weeks. We shall back them up in the Division Lobby later this evening.

6.42 p.m.

The President of the Board of Trade (Mr. F. J. Erroll)

The hon. Member for East Ham, North (Mr. Prentice) and I both agreed to restrict our winding-up speeches to a short time to allow as much time as possible for back-bench Members to make their contribution. I suggest that that decision was an entirely right one, because in consequence we have been able to have an interesting debate with a number of different points of view put forward.

At the time of the passing of the Local Employment Act, 1960, four main areas were in need of new industrial development: South Wales, Merseyside, the North-East Coast and Scotland. In the short space of two years, two out of the four are now virtually free of development district status. That is the measure of the great progress which has been made. It is also significant that in this debate today, no Welsh Members have been present.[Interruption.] I beg pardon of the right hon. Member for Llanelly (Mr. J. Griffiths). No Welsh Members have spoken today, nor, apart from an intervention, did anyone speak in regard to Merseyside.

Mr. J. Griffiths

My only comment is that the time for debate has been limited. I restrained myself because many of my hon. Friends wanted to speak. Before the debate began, however, an area in South Wales had to be re-scheduled.

Mr. Erroll

I said "virtually free" from development district status. I do not want to arouse hon. Members' anxieties.

I was going on to make the point that that state of affairs shows that we have satisfied two out of the four main problem areas. I was grateful that two of my hon. Friends, the Members for Hexham (Mr. Speir) and for Sunderland, South (Mr. P. Williams), should have taken a little of the time of the Committee to point out the success of the policy which we have pursued in the regions of their constituencies.

Mr. Collick

The Minister will, I am sure, readily agree that I made the point that one of the areas, Merseyside, still has 4.5 per cent. unemployment, which is three times the national average.

Mr. Erroll

Yes, but there are many more jobs in prospect—[HON. MEMBERS: "Oh."]—and they will become realities.[Laughter.] Hon. Members opposite laugh about jobs in prospect, but they never admit when those jobs become realities. In a serious matter of this sort we should have a serious debate. We try to give as much information to hon. Members as possible about what is in prospect, but, naturally, these jobs take time to mature, but they do mature, nearly all of them. They certainly have done in South Wales and a great number of them already have on Merseyside.

I welcome this debate on the distribution of industry policy because I believe that we have a very good story to tell. It is by no means complete, but we are making good progress. I remind the Committee particularly because the hon. Member for East Ham, North made the point that we should not simply think of progress since the passing of the 1960 Act, that all the main Acts have been passed by Conservative Governments.

There were the Special Areas Acts before the war, the Distribution of Industry Act, 1945, was passed into law by the Conservative Caretaker Government, then we had that highly effective and useful but small piece of legislation the Distribution of Industry (Industrial Finance) Act, 1958, and, finally, the Local Employment Act, 1960. Taken together these Acts, particularly the last one, have been a great success. [Interruption.] That intervention comes ill from the hon. Member for Greenock (Dr. Dickson Mabon), where a large new dock is going up.

Dr. J. Dickson Mabon (Greenock)

But where unemployment runs at 8 per cent.

Mr. Jay

The Minister has made a debating point. He knows well that the 1945 Act was introduced into the House by the late Mr. Hugh Dalton, of the Coalition Government, and not the Caretaker Government.

Mr. Erroll

And we saw it through on to the Statute Book.

The Acts have been forcefully administered while, at the same time, it has been recognised that only a minority of industrial development is mobile. One of the facts of life which we must recognise is that a firm which has existing works and continues to employ about the same number of people is not a candidate for being moved. It is established in its own place and there is nothing to be done about it. All that one can hope is that when the firm is expanding it may be prepared either to move in toto or to set up a separate subsidiary factory in a place of our proposal.

Many factory extensions cannot be hived off, because to attempt to hive off the extension would be to cut the enterprise in half. As distinct from worms, one cannot cut private firms in two and expect both halves to go on wriggling. It is a serious decision for a firm to decide whether to hive off the extension to another part of the country, perhaps several hundred miles away from its headquarters, or to go in toto to another part of the country. However generous may be the assistance which the Government can give, the full cost and risk of a false decision rests upon the firm itself.

I was interested to listen to the many percentage figures which the right hon. Member for Battersea, North (Mr. Jay) quoted in his speech. He referred to figures which appeared in his book, which I enjoyed reading, that the development areas got 30 per cent. of new factory building between 1945 and 1951 but got only 18½ per cent. between 1953 and 1958. It is necessary to break down the earlier percentage figure a little more, because, in fact, development areas got 45 per cent. of a smaller total of factory building in the three years 1945 to 1947 but got only 19 per cent. in the four years from 1947 to 1951. Therefore, the change in the percentage going to the development areas came about not with a Conservative victory, but with the appointment of the right hon. Member for Huyton (Mr. H. Wilson) to the presidency of the Board of Trade.

Mr. Jay

It was because so many factories were started in the first two years that fewer would have been finished if that amount extra had been started some years afterwards.

Mr. Erroll

I call that a model of explicity.

In a debate like this, we have to face the fact that the two sides of the Committee are arguing from opposite premises. The Opposition do not like the free enterprise system or the way it works. It is against that background that I make the point that the Opposition say that they would control industrial development certificates more strictly. What would they do when firms decided not to expand rather than to move where they were told to go?

1 suppose that it would be said that they were failing the nation, which, of course, would mean that they would then be nationalised. Are the Opposition prepared to go as far as that in applying a policy which, they say, they would apply more toughly than we would? I assure them that there is no way of doing more than we are doing within the ambit of the free enterprise system and the right of a man to set up a business where he wants to do so.

If they were good boys and went where they were told, the firms would probably still be nationalised, because they would then be in receipt of State aid for going to a development district; and according to Labour's pamphlet Signposts for the 'Sixties, they would be nationalised through the receipt of subsidies or loans because it was part of the policy of the party opposite to nationalise firms engaged in receiving State money. While it is, naturally, quite proper for the Opposition to criticise what we are doing, it is hollow of them to suggest that they would be able to operate a tougher policy without encountering difficulties of the sort which I have described.

During the few minutes remaining, I should like to say something about office building in London. I know that this is a problem, but the important thing to realise is that a concentration on the problem of London offices is no substitute for getting on with the job of securing a proper distribution of industry. I listened with great interest to what the right hon. Gentleman had to say on this subject, because I know that he has made a close study of it. He said that we were failing to control office employment. Does he mean that we should limit the number of office workers—because that is office employment—or does he mean that we should control the office blocks or the people who wish to rent offices?

The great difference between control of industry by means of industrial development certificates and control of offices by a somewhat similar system is that with the one we have one works, one occupier, whereas in one office block there may be a couple of dozen occupiers. The sort of control which the hon. Member for East Ham, North outlined struck me as being one which would be extremely cumbersome and tedious to operate in practice and would probably lead to a severe reduction in the amount of essential office building which ought to be going on.

Do right hon. and hon. Members opposite really propose that the number of office workers in the South-East of England should be limited? If office building is limited it merely means that office workers must work in bad or over-crowded offices, and businesses would be forced to use residential property as offices, which would still further aggravate the housing shortage. That took place in West London through the delays in rebuilding the City.

Do not let us forget that invisible exports are still worth about £2,000 million a year, and many of these exports —such as insurance, banking, tourism, shipping, and other services—are run from offices. I do not think that a bank or insurance company would be able to compete with the best in Europe from the depths, of Wales or Scotland. Offices in the suburbs are a help, but they do not deal with the main question. Again a large firm might not be able to recruit mainly from a particular suburb.

It was the select Committee on Estimates which criticised the division of the Admiralty offices between London and Bath, when the Government tried in a practical way to give effect to the decentralisation of offices from the capital. It was done to restrict the growth of offices in Whitehall, but we were strongly criticised for the £39,000 per year spent on travelling and the 26,000 bags and packages which had to be transported between the two. We were criticised for waste of time, energy and efficiency.

Where we can move office accommodation as an example to industry, we do so. The Ministry of Pensions and National Insurance Offices at Newcastle have been mentioned, and there are the Premium Bonds administration office at St. Anne's-on-Sea and the Post Office Savings Bank on the north-east coast. In view of the time we have spent on offices in this debate, I would remind right hon. and hon. Gentlemen that, in discussion on the Local Employment Act, although a lot was said about extending I.D.C. control to offices, the Opposition did not bother to divide the House when the opportunity came. They did not feel very strongly about it and the problem was much the same then as it is now.

It is often said that the Government have the powers but do not use them. In fact, however, we make full use of them. We have been refusing industrial development certificates in the southeastern area. I have made a special analysis of the 46 schemes of over 50,000 square feet approved in London and the south-eastern area last year. Eight Were for non-manufacturing industries, 31 were of the type essentially tied to their present districts. Only 7 were new projects—and all these were successfully moved out of the central area.

Nobody likes to be refused. Every industrialist seems to think that he is a special case, but we argue patiently with each firm. I was grateful to my hon. Friend the Member for Sunderland, South (Mr. P. Williams) for his generous remarks about the work of Regional Controllers. I accept that local authorities usually want industrial expansion in their own areas and support the firms. The local Member of Parliament, of: whichever party, usually enters in support and local branches of trade unions, without regard to the needs of their unemployed fellow members in other parts of the country, usually press their local interest as well.

I would like to have had time to deal with the interesting case raised by the hon. Member for Devon, North (Mr. Thorpe) about the development at Tiverton, but surely it was right that the firm from Birmingham—not the Churchill Machine Tool Company which is, I remind him, in my constituency, but a subsidiary of Charles Churchill and Company, Ltd., which wanted to build boats should have gone to the Isle of Wight, which is a development district. The proposed development the mentions was only granted on condition that the firm set up additional employment in Cornwall snore than equal to the amount of additional employment we are getting in Tiverton. We are getting two for the price of one, which is a very good bargain.

Mr. Thorpe rose——

Mr. Erroll

I cannot give way, for I have very little time left.

Under Section 7, in the twelve months ended 12th March, 1961, grants totalling approximately £250,000, and in the twelve months ended 12th March, 1962, grants totalling over £1 million were made for water, sewerage and road schemes. We continue to do our best to steer firms to development districts. We like to offer a migrant firm a choice of locations in different development districts, because whichever district it chooses helps to reduce unemployment equally. As circumstances change we change the list, but we do resist having too many new places on it if possible, because we prefer to concentrate on the districts most greatly in need.

I was glad that my hon. Friend the Member far Belfast, East (Mr. McMaster) was able to make the case for Northern Ireland. I endorse what he said. We will do our best to encourage migrant firms to go to Northern Ireland, though I cannot go all the way with him on Government contracts.

We try to encourage not only British firms, but also firms from overseas, particularly the United States. We have set up an office in New York so that we can contact American firms interested in setting up in this country. One of my officers there—an excellent man and, incidentally, a Scot—spends a great deal of his time on pressing the advantages of the development districts. He is a most devoted official, determined to bring new industry to the right places in Britain.

We can be proud of the results of this policy. In the first two years of operation of the Act, assistance totalling almost £70 million has been offered and accepted for three hundred projects estimated to produce over 70,000 new jobs. I admit that there is a lot to be done in Scotland and on the North-East Coast, but as proof of our determination I mention what has been achieved in South Wales and what we are achieving on Merseyside. These successes are real and substantial. They have been brought about by a tough but realistic industrial development certificate policy. We have secured the co-operation of private industry, which is essential in a matter of this kind, and have brought thousands of jobs to those in need of them. I ask the Committee to endorse this policy.

Mr. Jay

In view of the unconvincing nature of the right hon. Gentleman's reply, I beg to move that Item Class IV, Vote I (Board of Trade), be reduced by £5.

Question put:

The Committee divided: Ayes 206, Noes 263.

Abse, Leo	Bellenger, Rt. Hon. F. J.	Bowden, Rt. Hn. H.W. (Leics, S.W.)
Ainsley, William	Bence, Cyril	Bowen, Roderic (Cardigan)
Albu, Austen	Bennett, J. (Glasgow, Bridgeton)	Bowles, Frank
Allaun, Frank (Salford, E.)	Benson, Sir George	Boyden, James
Allen, Scholefield (Crewe)	Blackburn, F.	Braddock, Mrs. E. M.
Awbery, Stan	Blyton, William	Bray, J. W.
Bacon, Miss Alice	Boardman, H.	Brockway, A. Fenner
Baxter, William (Stirlingshire, W.)	Bottomley, Rt. Hon. A. G.	Brown, Rt. Hon. George (Belper)
Brown, Thomas (Ince)	Jay, Rt. Hon. Douglas	Randall, Harry
Butler, Herbert (Hackney, C.)	Jeger, George	Rankin, John
Butler, Mrs. Joyce (Wood Green)	Jenkins, Roy (Stechford)	Reid, William
Callaghan, James	Johnson, Carol (Lewisham, S.)	Rhodes, H.
Chapman, Donald	Jones, Dan (Burnley)	Roberts, Albert (Normanton)
Cliffe, Michael	Jones, Elwyn (West Ham, S.)	Roberts, Goronwy (Caernarvon)
Collick, Percy	Jones, Jack (Rotherham)	Robertson, John (Paisley)
Corbet, Mrs. Freda	Jones, J. Idwal (Wrexham)	Robinson, Kenneth (St. Pancras, N.)
Craddock, George (Bradford, S.)	Jones, T. W. (Merioneth)	Rodgers, W. T. (Stockton)
Cronin, John	Kelley, Richard	Rogers, G. H. R. (Kensington, N.)
Crosland, Anthony	Kenyon, Clifford	Royle, Charles (Salford, West)
Dalyell, T.	Key, Rt. Hon. C. W.	Shinwell, Rt. Hon. E.
Darling, George	King, Dr. Horace	Short, Edward
Davies, G. Elfed (Rhondda, E.)	Lawson, George	Silverman, Julius (Aston)
Delargy, Hugh	Ledger, Ron	Silverman, Sydney (Nelson)
Diamond, John	Lee, Frederick (Newton)	Skeffington, Arthur
Dodds, Norman	Lee, Miss Jennie (Cannock)	Slater, Mrs. Harriet (Stoke, N.)
Donnelly, Desmond	Lever, L. M. (Ardwick)	Slater, Joseph (Sedgefield)
Dugdale, Rt. Hon. John	Lewis, Arthur (West Ham, N.)	Small, William
Ede, Rt. Hon. C.	Loughlin, Charles	Smith, Ellis (Stoke, S.)
Edelman, Maurice	Lubbock, Eric	Sorensen, R. W.
Edwards, Rt. Hon. Ness (Caerphilly)	Mabon, Dr. J. Dickson	Soskice, Rt. Hon Sir Frank
Edwards, Robert (Bilston)	McCann, John	Spriggs, Leslie
Edwards, Walter (Stepney)	MacDermot, Niall	Steele, Thomas
Evans, Albert	Mclnnes, James	Stewart, Michael (Fulham)
Fernyhough, E.	Mackie, John (Enfield, East)	Stones, William
Finch, Harold	McLeavy, Frank	Strachey, Rt. Hon. John
Fitch, Alan	MacMillan, Malcolm (Western Isles)	Strauss, Rt. Hn. G. R. (Vauxhall)
Fletcher, Eric	Mallalieu, J.P.W. (Huddersfield, E.)	Stross, Dr. Barnett(Stoke-on-Trent, C.)
Fraser, Thomas (Hamilton)	Manuel, Archie	Swain, Thomas
Gaitskell, Rt. Hon. Hugh	Mapp, Charles	Swingler, Stephen
Galpern, Sir Myer	Marsh, Richard	Taverne, D.
Ginsburg, David	Mayhew, Christopher	Taylor, Bernard (Mansfield)
Gordon Walker, Rt. Hon. P. C.	Mellish, R. J.	Thomas, George (Cardiff, W.)
Gourlay, Harry	Mendelson, J. J.	Thomson, G. M. (Dundee, E.)
Grey, Charles	Milne, Edward	Thornton, Ernest
Griffiths, David (Rother Valley)	Mitchison, G. R.	Thorpe, Jeremy
Griffiths, Rt. Hon. James (Lianelly)	Monslow, Walter	Tomney, Frank
Gunter, Ray	Moody, A. S.	Wade, Donald
Hale, Leslie (Oldham, W.)	Moyle, Arthur	Warbey, William
Hall, Rt. Hn. Glenvil (Colne Valley)	Mulley, Frederick	Watkins, Tudor
Hannan, William	Neal, Harold	Weitzman, David
Harper, Joseph	Oliver, G. H.	Wells, Percy (Faversham)
Hayman, F. H.	Oram, A. E.	Wells, William (Walsall, N.)
Healey, Denis	Oswald, Thomas	White, Mrs. Eirene
Henderson, Rt. Hn. Arthur (RwlyRegls)	Owen, Will	Whitlock, William
Herbison, Miss Margaret	Padley, W. E.	Wigg, George
Hewitson, Capt. M.	Paget, R. T.	Wilkins, W. A.
Hill, J. (Midlothian)	Pannell, Charles (Leeds, W.)	Willey, Frederick
Hilton, A. V.	Pargiter, G. A.	Williams, D. J. (Neath)
Holman, Percy	Parker, John	Williams, Ll. (Abertillery)
Houghton, Douglas	Parkin, B. T.	Williams, W. R. (Openshaw)
Howell, Charles A. (Perry Barr)	Pavitt, Laurence	Willis, E. G. (Edinburgh, E.)
Howell, Denis (Small Heath)	Pearson, Arthur (Pontypridd)	Winterbottom, R. E.
Hoy, James H.	Peart, Frederick	Woodburn, Rt. Hon. A.
Hughes, Cledwyn (Anglesey)	Pentland, Norman	Woof, Robert
Hughes, Emrys (S. Ayrshire)	Popplewell, Ernest	Yates, Victor (Ladywood)
Hughes, Hector (Aberdeen, N.)	Prentice, R, E.	Zilliacus, K.
Hunter, A. E.	Price, J. T. (Westhoughton)
Hynd, John (Attercliffe)	Probert, Arthur	TELLERS FOR THE AYES:
Irvine, A. J. (Edge Hill)	Proctor, W. T.	Mr. Ifor Davies and Mr. Redbead.
Janner, Sir Barnett	Pursey, Cmdr. Harry
NOES
Agnew, Sir Peter	Black, Sir Cyril	Clarke, Brig. Terence (Portsmth, W.)
Allan, Robert (Paddington, S.)	Bourne-Arton, A.	Cleaver, Leonard
Allason, James	Box, Donald	Cole, Norman
Arbuthnot, John	Boyle, Sir Edward	Collard, Richard
Ashton, Sir Hubert	Braine, Bernard	Cooper, A. E.
Atkins, Humphrey	Brooke, Rt. Hon. Henry	Cooper-Key, Sir Neill
Balniel, Lord	Brown, Alan (Tottenham)	Cordeaux, Lt.-Col. J. K.
Barber, Anthony	Bryan, Paul	Corfield, F. V.
Barlow, Sir John	Buck, Antony	Costain, A. P.
Barter, John	Bullard, Denys	Coulson, Michael
Batsford, Brian	Bullus, Wing-Commander Eric	Craddock, Sir Beresford
Bell, Ronald	Burden, F. A.	Critchley, Julian
Berkeley, Humphry	Butcher, Sir Herbert	Crowder, F. P.
Bevins, Rt. Hon. Reginald	Campbell, Sir David (Belfast, S.)	Cunningham, Knox
Bidgood, John C.	Campbell, Gordon (Moray & Nairn)	Curran, Charles
Biffen, John	Cary, Sir Robert	Dance, James
Biggs-Davison, John	Channon, H. P. G.	d'Avigdor-Goldsmld, Sir Henry
Bingham, R. M.	Chataway, Christopher	de Ferranti, Basil
Birch, Rt. Hon. Nigel	Clark, Henry (Antrim, N.)	Digby, Simon Wingfield
Bishop F. P.	Clark, William (Nottingham, S.)	Donaldson, Cmdr. C. E. M.

Doughty, Charles	Lagden, Godfrey	Quennell, Miss J. M.
du Cann, Edward	Langford-Holt, Sir John	Redmayne, Rt. Hon. Martin
Duncan, Sir James	Leather, Sir Edwin	Rees, Hugh
Eden, John	Leavey, J. A.	Renton, David
Elliot, Capt. Walter (Carshalton)	Leburn, Gilmour	Ridley, Hon. Nicholas
Elliott, R. w. (Nwcaste-upon-Tyne, N.)	Lilley, F. J. P.	Ridsdale, Jullan
Emery, Peter	Lindsay, Sir Martin	Robinson, Rt. Hn. Sir R. (B'pool, S.)
Emmet, Hon. Mrs. Evelyn	Linstead, Sir Hugh	Rodgers, John (Sevenoaks)
Erroll, Rt. Hon. F. J.	Litchfield, Capt. John	Roots, William
Farey-Jones, F. W.	Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)	Ropner, Col. Sir Leonard
Fell, Anthony	Lloyd, Rt. Hon. Selwyn (Wirral)	Russell, Ronald
Fisher, Nigel	Longbottom, Charles	Scott-Hopkins, James
Fletcher-Cooke, Charles	Longden, Gilbert	Sharples, Richard
Forrest, George	Loveys, Walter H.	Shaw, M.
Fraser, Ian (Plymouth, Sutton)	Lucas, Sir Jocelyn	Skeet, T. H. H.
Galbraith, Hon. T. G. D.	Lucas-Tooth, Sir Hugh	Smith, Dudley (Br'ntf'd & Chiswick)
Gammans, Lady	McAdden, Sir Stephen	Smithers, Peter
Gardner, Edward	McLaren, Martin	Spearman, Sir Alexander
Gibson-Watt, David	McLaughlin, Mrs. Patricia	Speir, Rupert
Gilmour, Sir John	Maclay, Rt. Hon. John	Stevens, Geoffrey
Glover, Sir Douglas	Maclean, Sir Fitzroy (Bute&N.Ayrs.)	Stodart, J. A.
Glyn, Dr. Alan (Clapham)	McLean, Neil (Inverness)	Stoddart-Scott, Col. Sir Malcolm
Goodhew, Victor	Macleod, Rt. Hn. Iain (Enfield, W.)	Storey, Sir Samuel
Gough, Frederick	McMaster, Stanley R.	Studholme, Sir Henry
Gower, Raymond	Macmillan, Rt. Hn. Harold (Bromley)	Summers, Sir Spencer
Grant-Ferris, Wg. Cdr. R.	Macmillan, Maurice (Halifax)	Tapsell, Peter
Green, Alan	Macpherson, Niall (Dumfries)	Taylor, Sir Charles (Eastbourne)
Gresham Cooke, R.	Maddan, Martin	Taylor, Edwin (Bolton, E.)
Grosvenor, Lt.-Col. R. G.	Maginnis, John E.	Taylor, Frank(M'ch'st'r, Moss Side)
Gurden, Harold	Maitland, Sir John	Taylor, W. J. (Bradford, N.)
Hall, John (Wycombe)	Manningham-Buller, Rt. Hn. Sir R.	Teeling, Sir William
Hamilton, Michael (Wellingborough)	Markham, Major Sir Frank	Temple, John M.
Hare, Rt. Hon. John	Marshall, Douglas	Thomas, Leslie (Canterbury)
Harris, Frederic (Croydon, N.W.)	Marten, Neil	Thomas, Peter (Conway)
Harris, Reader (Heston)	Mathew, Robert (Honiton)	Thompson, Kenneth (Walton)
Harrison, Brian (Maldon)	Matthews, Gordon (Meriden)	Thompson, Richard (Croydon, S.)
Harrison, Col. Sir Harwood (Eye)	Mawby, Ray	Thornton-Kemsley, Sir Colin
Harvey, Sir Arthur Vere (Macclesf'd)	Maxwell-Hyslop, R. J.	Tiley, Arthur (Bradford, W.)
Harvey, John (Walthamstow, E.)	Maydon, Lt.-Cmdr. S. L. C.	Tilney, John (Wavertree)
Harvie Anderson, Miss	Miscampbell, Norman	Touche, Rt. Hon. Sir Gordon
Hastings, Stephen	Montgomery, Fergus	Turner, Colin
Hay, John	More, Jasper (Ludlow)	Turton, Rt. Hon. R. H.
Heald, Rt. Hon. Sir Lionel	Morrison, John	Tweedsmuir, Lady
Hendry, Forbes	Mott-Radclyffe, Sir Charles	van straubezee, W. R.
Hill, Dr. Rt. Hon. Charles (Luton)	Nabarro, Gerald	Vane, W. M. F.
Hill, Mrs. Eveline (Wythenshawe)	Neave, Airey	Vaughan-Morgan, Rt. Hon. Sir John
Hill, J. E. B. (S. Norfolk)	Nicholls, Sir Harmar	Vickers, Miss Joan
Hirst, Geoffrey	Nicholson, Sir Godfrey	Walder, David
Hobson, Sir John	Noble, Michael	Walker, Peter
Holland, Philip	Nugent, Rt. Hon. Sir Richard	Walker-Smith, Rt. Hon. Sir Derek
Hope, Rt. Hon. Lord John	Orr, Capt. L. P. S.	Wall, Patrick
Hornby, R. P.	Orr-Ewing, C. Ian	Ward, Dame Irene
Hughes Hallett Vice-Admiral John	Osborn, John (Hallam)	Watkinson, Rt. Hon. Harold
Hughes-Young, Michael	Page, Graham (Crosby)	Wells, John (Maidstone)
Hulbert, Sir Norman	Page, John (Harrow, West)	Whitelaw, William
Hurd, Sir Anthony	Pearson, Frank (Clitheroe)	Williams, Dudley (Exeter)
Hutchison, Michael Clark	Peel, John	Williams, Paul (Sunderland, S.)
Iremonger, T. L.	Peyton, John	Wills, Sir Gerald (Bridgwater)
Irvine, Bryant Godman (Rye)	Pickthorn, Sir Kenneth	Wilson, Geoffrey (Truro)
James, David	Pike, Miss Mervyn	Wise, A. R.
Jenkins, Robert (Dulwich)	Pitt, Miss Edith	Wolrige-Gordon, Patrick
Johnson, Dr. Donald (Carlisle)	Powell, Rt. Hon. J. Enoch	Woodnutt, Mark
Johnson, Eric (Blackley)	Price, David (Eastleigh)	Woollam, John
Jones, Rt. Hn. Aubrey (Hall Green)	Price, H. A. (Lewisham, w.)	Worsley, Marcus
Kerby, Capt. Henry	Prior, J. M. L.	Yates, William (The Wrekin)
Kerr, Sir Hamilton	Prior-Palmer, Brig. Sir Otho
Kershaw, Anthony	Profumo, Rt. Hon. John	TELLERS FOR THE NOES:
Kimball, Marcus	Proudfoot, Wilfred	Mr. Chichester-Clark and
Kirk, Peter	Pym, Francis	Mr. Finlay.

It being after Seven o'clock, The CHAIRMAN left the Chair, further Proceeding standing postponed until after the consideration of Private Business set down by direction Of THE CHAIRMAN OF WAYS AND MEANS under Standing Order No. 7 (Time for taking Private Business).

Mr. DEPUTY-SPEAKER resumed the Chair.