HC Deb 03 December 1963 vol 685 cc985-1035

3.37 p.m.

The Secretary of State for Industry, Trade and Regional Development and President of the Board of Trade (Mr. Edward Heath)

I beg to move, That this House welcomes the emphasis placed by Her Majesty's Government on regional development as a means of promoting the growth and well-being of the country, and, in particular, approves the programmes outlined in the Command Papers on development and growth in North-East England and Central Scotland (Command Papers Nos. 2206 and 2188). The Queen's Speech announced that Plans for comprehensive regional development will be laid before you for central Scotland and North-East England. Plans appropriate to other regions will follow. In my speech on the Loyal Address, I gave the background to the White Paper on the North-East of England and Central Scotland, and I should like now to say something more about that as well as on the present position of the location of industry generally. But, today, the House is discussing regional development as a whole. We are, therefore, examining the problems of other regions, and I have no doubt that many hon. Members will have particular points about their own constituencies that they will wish to raise.

I should like to say this by way of introduction on the question of regional development as a whole. We have three objectives in this policy. The first is to bring about a more even spread of economic activity throughout the country and thus to be able to make the fullest use of all our resources. It should enable us to avoid excessive pressures in areas where demand is already strong and, in particular, where it is strong for land and manpower. If we are able to achieve this, we can secure and maintain a faster rate of expansion.

The result of this would be to reduce the intense local pressures in the Midlands and in the South, which often, in the past, have endangered the price structure for the country as a whole and, as a result, the balance of payments. Moreover, if we are able to achieve this, then there is greater assurance of continued steady progress for the whole country in the economic sphere.

The second objective of the policy is to maintain the individual character of the regions. This has been a source of great strength to us in the past, but it sometimes seems today that the regions and even the great cities of our country play a smaller part in our national life than they used to do and, in particular, in our national affairs. To me, this is a matter for regret. We do not want the diversity of regions to be weakened by an unchecked drift towards the South and an endless future of uniform asphalt conurbations. The diversity and versatility of our regions must be maintained.

Our third objective is to secure a more even improvement over the country as a whole of the general quality of life in all its aspects. If we are to have a more even/spread of employment as our first objective throughout the country the different regions must be able to offer a full life in all its aspects to the people who are to work in them. This applies to a large variety of activities—to theatres, housing, schools, research laboratories, universities, and, indeed, holiday camps. The plain fact is that the need for modernisation and, therefore, for the improvement of these amenities and the quality of life is greatest in the regions where industry developed first.

In pursuing these three objectives we are looking at things as part of the whole. Hitherto, in the House we have tended to debate regional problems mainly in terms of moving industry from one place to another. That is still of the greatest importance, but rising material standards are not our only objective in putting forward comprehensive policies for regional development. They are a means to an end, a means to the improvement of the conditions of life for our society widely spread over the country as a whole.

These, then, are the three objectives of regional policy which I submit to the House: a more even spread of economic activity; the preservation of the character of the individual regions; and a more even improvement in all the facilities to enable a better quality of life to be enjoyed throughout the country.

Turning to the White Papers before us, we are considering the programmes for the development of the North-East of England and Central Scotland. We began there because the needs of those areas are most urgent. I think that no hon. Member and very few people in the country have quarrelled with that order. Certainly, in the visits which I have been paying to the other regions I have found no quarrel with it. Their problems stem from deep-rooted changes in the industrial structure which, to some extent, have been intensifying in recent years. These changes spring from the altered conditions of world demand in some cases and from the effect of technological advance on the demand for labour in others.

It is, therefore, right that we should give these two particular areas this degree of priority, and these policies which we have put forward have, I suggest, been warmly welcomed both in the North-East and in Central Scotland. However, when looking at regional development policy, it is not only a question of bringing into use unemployed resources in those two areas. In the South, and especially round London and Birmingham, there is a very different economic picture which creates problems of equal magnitude. It is here that we have the great concentrations of population and, together with it, a strong natural increase in that population. There is an employment growth sucking in more labour, not only from other part of the country, but from overseas.

Perhaps I may give the figures. There are 17¾ million people living in the South-East as a whole, taking the area from the Wash to Dorset. The population of this area grew by 1¼ million between 1951 and 1961. This was a growth of 7.7 per cent, compared with the national rate of 5.5 per cent. As I told the House last month, during the debate on the Address, the South-Eastern study covering this area, a study of land use and population, is well advanced. Perhaps the most daunting figure which has emerged from it is that over the next 20 years we expect an even more rapid rate of growth—a rate of 3½million people, or 20 per cent. The greater part of this increase will be not from migrants, but from people born in the South-East.

To sum up, looking at these regional problems, each region has different problems. Some are different in kind and others in degree. They arise from the natural growth of population, sometimes from migration inwards, sometimes outwards. This has become particularly clear as a result of the revised figures which were provided only a short time ago. These have made an impact in revealing the scale of the problem in the South-East and the Midlands.

Secondly, the problems arise from the changing economic structure in the North—from the decline in activity in coal and, overall, in shipbuilding, especially in recent years, and from the heavy pressure on resources in the Midlands and the South.

The policies we are putting forward aim to bring together the different elements required for a comprehensive treatment for these different types of problem, and this is shown by the range of Departments involved in the creation of the policies. As I think the House will recognise, it is the first time that any Government has attempted to deal with comprehensive regional solutions of this kind. It is, I think, a concept which is widely approved. The arguments as I have read them in public and as, no doubt, we shall hear them in this debate are about the way in which it should be carried out.

Let us, therefore, look closely at how these policies should be implemented. When I spoke on the Address I referred to four main themes running through the White Papers. The first, which I emphasised and about which I should like today more today, is the theme of the growth areas. This was dealt with by the N.E.D.C. Report on Conditions Favourable to Faster Growth, earlier this year, which mentioned the previous background to it. There has, I think, been a general welcome for the Government's decision to adopt the concept of growth areas for Central Scotland and the North-East. These areas have been very carefully chosen. They are those which have the highest potential for rapid expansion. They are the ones placed to generate regional as well as local growth.

A large number of factors were taken into account before the choice was made, and perhaps I may mention some of them. There is the question of the availability of land for factories and houses; the presence of a plentiful water supply; the presence of ample labour resources; good communications or the possibility of providing them; and an existing nucleus of industry which had proved to be successful.

In Scotland, this examination led to a series of growth points. In the North-East, it led to a single, larger growth zone, but the principles which determined the choice were the same in both cases. They were the considerations which I have mentioned to the House. In our view, the areas which we have chosen are those which can best help to create growth throughout these two regions. It is inherent in this approach that some places within a region will be specially favoured. Without this, the concept of growth places would have no meaning.

I hope that the right hon. Member for Battersea, North (Mr. Jay) will argue this, because one of the things on which we must make up our minds is whether we wish to have a concept of growth places. I know that there are hon. Members whose constituencies lie outside the growth zone in the North-East who are anxious about prospects for employment in them, and I ask them to recognise two things when we examine this concept. The first is that the extra effort which we are putting into the growth zone will be beneficial to the whole region. The prosperity which is created in it will undoubtedly spread outwards to the surrounding places in the same area and region. The second is that the White Paper takes nothing away from places outside the growth zones which they have already.

Mr. William Ross (Kilmarnock)

And that is not much.

Mr. Heath

The hon. Member knows full well that they have all the inducements which are available to development districts. The development districts will continue to enjoy the benefits of free depreciation and assistance under the Local Employment Acts.

The other thing which I should like to emphasise is that there is no question of bringing to a halt public investment in places outside the growth zone. I am sure that many of these places will be able to attract new industry as a result of the inducements which are available under the Acts. Some of them will become points for local expansion. but it would not be realistic to regard them as having a potential for generating regional growth on anything like the same scale as the places which have been named as the growth zone. Where the development programme, the public investment in the growth zone, looks likely to alter the travel-to-work pattern from the areas immediately outside it, which concerns both the North-East and Central Scotland, then we shall pay particular attention to the whole question of the local communications between the growth points and places from which they are nicely to draw their labour.

The first question which I should like to put to the right hon. Member for Battersea, North, so that we may know the basis for this debate, is whether he and his party accept the concept of the growth zone as I have explained it to the House. In other words, does the right hon. Gentleman agree that we should concentrate our resources on these places?

Mr. Archie Manuel (Central Ayrshire)

That is a Government job. It is not the Opposition's job.

Mr. Heath

Does the right hon. Gentleman agree that we should concentrate our resources on those places, or is it the suggestion that we should spread our resources over a much wider area? This is fundamental to the concept of regional development as it has been put forward in the White Papers. If the resources are spread over a much wider area— this is the decision which the Government had to make and which they have made—that is less effective than concentrating on growth where we believe success to be possible.

Alternatively, if the right hon. Gentleman and his hon. Friends want us to put an equal amount of resources over the whole of the zone, then we would make greater demands on our resources, and he and his hon. Friends are already saying that we are exceeding the possible supply of those resources. The right hon. Gentleman must face this dilemma.

The second feature of the policies is the build-up of capital investment in these growth zones. Perhaps I should remind the House of the scale of this investment. Public investment in the North-East will be about £80 million this year, compared with £55 million in 1962–63. That is the scale of the increase in this region. Next year it is planned to rise to £90 million and then the percentage of the gross national product deployed in the region will remain the same. In Central Scotland public investment is expected to rise from £100 million last year to about £130 million this year and to more than £140 million next year, and then in the same way to retain that proportion of the gross national product.

I give these figures in answer to those who question whether enough is being done under the two White Papers in investment in the two zones. I think that I have demonstrated to the House that there is a considerable increase in scale in both cases. Of course, it means proportionately rather less for the other regions, but in making regional visits both to the Midlands and the North-West, I have found no envy of the fact that these two regions are to receive proportionately a higher amount of the public investment. In talking to employers and trade unions as well as local authorities and the development councils in these other areas, I have found absolutely no jealousy, but full recognition that this is the right policy.

Mr. E. Shinwell (Easington)

And Merseyside?

Mr. Heath

If the right hon. Gentleman thinks about Merseyside, he will realise that there are considerable problems there; but I found no envy on Merseyside of the action being taken for the North-East. I was pleased to find that. Merseyside is concentrating on how it can develop its own policies with the Government's into a comprehensive plan.

The third feature to which I drew attention in my speech on the Address was that of continuity of policy in the two White Papers. I should like to stress this again today and to add something to it. I do not want there to be any misunderstanding about the nature of the Government's financial commitment to Central Scotland and the North-East. First, there is the undertaking that the special inducements to industry available under the Local Employment Acts will continue to be available in the growth areas so long as the need for them lasts. Both White Papers are quite categorical about this and paragraph 7(ii) of that on the North-East says that no part of it will be removed from the lists until there is strong evidence of a general and sustained improvement in employment in the region as a whole. The growth areas can be fully assured of a stable policy and continued benefits under these Acts.

Secondly, let me state the Government's intention about public investment in the growth areas. The proportion of the total public investment which is going to the North-East and Central Scotland up to the end of the next financial year is, as I have already said, a significantly higher proportion than the proportion of the general population living there. We have already said that we envisage that for some years after 1965 the growth areas will receive the same generous proportion of a steadily expanding level of total public service investment.

What I wish to add is that even if it were necessary to moderate the growth of public service investment in the country as a whole, exceptions would be made for these growth areas where the programme will be maintained so long as the necessary resources are available. Local authorities, the construction industries and those who live in the regions can look forward with confidence to continued backing from the Government for the development and modernisation of the basic public services for which the investment is being used. This, I suggest to those who are asking whether enough is being done, is a commitment of no mean order. It is a unique commitment of a Government to the regions. Those are some of the characteristics of the programmes for Central Scotland and the North-East of England.

Dr. J. Dickson Mabon (Greenock)

If it is true that this is to represent a static proportion of what we hope will be a rising national income, then the figures themselves are very important. In the Press notice which accompanied the White Paper on Central Scotland, the figure mentioned for the two years 1964–65 and 1965–66 was £400 million, which is far short of what the right hon. Gentleman has said. Will he look again at these figures, in view of their obvious importance?

Mr. Heath

I will certainly do that. My right hon. Friend the Secretary of State for Scotland will be winding up the debate tonight, and will be able to deal with that in detail. The undertaking in the White Papers is quite clear—this proportion of the gross national product having been reached, it will be maintained in the successive periods after that. That applies both to Scotland and the North-East of England.

Perhaps I may now say something in more detail about the other areas, which have their problems although often very different. I have said something of the problems of the South-East. As I said in my speech on the Address, we are working on plans for other regions whose problems are also pressing. A study is in hand for Wales. Its general objective is to carry out a survey of the population and economic prospects over the next 20 years. On this we shall be able to base our plans for the use of land and investment. My right hon. Friend the Secretary of State for Scotland has similar studies in hand for parts of Scotland outside the central zone.

In conjunction with my right hon. Friend the Minister of Housing and Local Government, I am setting up an interdepartmental group under Board of Trade chairmanship to carry out a survey of economic and planning problems in the North-West. I visited the North-West 10 days ago and discussed with the authorities there and with many individual bodies the particular problems of that area, which has both areas of congestion and areas of lack of employment. The group will take as its starting point the land use studies undertaken by the Ministry of Housing and Local Government on Merseyside, the Manchester conurbations and certain other parts of the region. These studies are now well advanced.

Mr. Percy Collick (Birkenhead)

Has the right hon. Gentleman no more than that to say about Merseyside? What he has said will be most disappointing if that is all he has to say.

Mr. Heath

What I have said about Merseyside is that many of the land studies are well advanced and that we will now have a group, as we had for the North-East, which will be able to bring together those studies and the economic problems of Merseyside and then lead to a comprehensive policy for the area as a whole. When I was in Merseyside I found that this proposal was welcomed as a policy in the interests of the whole of the North-West.

A delegation from the South-West has already been to see me to discuss that area's problems and I have undertaken to visit the area early in the new year. My task will be to see that regional plans are related to the needs of the country as a whole.

Mr. Charles Loughlin (Gloucestershire, West)

Can the right hon. Gentleman say how long it is to be before we can expect some action to meet the situation in the South-West?

Mr. Heath

I have dealt with the South-West in the general context of the economic action now being taken, but I can give no specific date for the publication of a White Paper on the long-term policy. This is to be discussed in the new year.

Mr. Loughlin

After the election or before?

Mr. Heath

If necessary, we can continue after the election.

Mr. Stanley R. McMaster (Belfast, East)

I hope that my right hon. Friend will have something to say about Northern Ireland.

Mr. Heath

I shall, but my hon. Friend knows that responsibility for these matters in Northern Ireland rests with the Government of Northern Ireland, with whom we are in communication about them.

The regional studies will be built up together in the light of the approach which I have mentioned. This is important from the point of view of some of the proposals which have been put forward by right hon. Gentlemen opposite as to the way in which this is to be handled. This is a combination, as the hon. Member for Cardiff, South-East (Mr. Callaghan) once said, of the intertwining of national and regional policies. Many policies have to be laid down on a national, but implemented on a regional, basis.

With this we are now creating the machinery. As I told the House, I have established an interdepartmental steering group under the Board of Trade's chairmanship, composed of senior officials from other Departments concerned, including the Scottish Development Department. This group is already at work. It has three main tasks. They are, first, to consider the line on which future regional plans should be prepared and to maintain contact with the progress of the work on them; secondly, to maintain oversight of the implementation of the regional plans; and, thirdly, to advise on the general policy which bears on regional development. It will draw on the advice of other Departments and also be the channel for communication with the Government of Northern Ireland so that a full exchange of information of these matters can take place with that Government.

I have also asked the group to pay particular attention to the question of research, statistics and economic advice on regional matters, because there is still much more work to be done in this respect. My right hon. Friend the Secretary of State for Scotland is responsible for implementing the plan for Central Scotland and the main instrument for implementing the plan in the North-East will be the Regional Development Group. This consists of senior officials, both administrative and technical, in the region of the Department concerned.

I think that this is important in connection with the discussion which is also taking place on whether it is right to try to carry through plans of this kind by an organisation of the representatives of the Departments in the region, or whether some fresh machinery, elected or unelected, should be created for this purpose. We considered that the means of implementing it should be through the regional representatives of the Whitehall Department. This group will meet as frequently as is necessary and not less than once a month. It held its first meeting six days after the White Paper was published and it will hold a second meeting on Thursday of this week. The regional officials of the Department are all senior men in close contact with the local authorities. They do not need day-to-day supervision, but they do need a direct link with the Departments in Whitehall and with the inter-departmental steering group so that their views and experience may be used in the formulation of a policy as well as in its implementation.

This link will be provided by the Chairman, who is the Under-Secretary in charge of the Regional Development Division which has been created at the Board of Trade. He was involved in preparing the North-East proposals and thus will be in close touch with the progress in the region.

Mr. Shinwell

May I ask whether this task is of a practical character on the general line of policy formulated by the Government for a particular region? Will their task be to expedite the implementation of the plan, and, for example, make decisions about road construction, or housing, or the like?

Mr. Heath

Yes, Sir. The task is entirely of a practical nature, to carry out exactly what the right hon. Gentleman has described. They will be meeting frequently. There will be a firm link between my own and other Departments in Whitehall, and with myself, through the Chairman, the head of the Regional Development Group, who will be chairing their meetings. We believe that this is a simple, practical and effective means of implementing the proposals without the creation of some other all-regional structure of a new kind.

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

Would not it also be possible for the group to recommend a crash programme which might deal with the unemployment in the area until the long-term schemes become operative and stop the drift away from the area?

Mr. Heath

As I said, one of its tasks is to keep us informed of any proposals which it is thought need to be undertaken and either implement or expedite whatever proposals it likes to put forward. Regional officers are, of course, entitled to do so; indeed it is their duty to do so. They can do so after effective discussion under this arrangement.

Sir Robert Cary (Manchester, Withington)

Are these individuals to be independent commanders in their own regions, capable of taking independent action? Or are they entirely responsible to the Board of Trade?

Mr. Heath

They are senior officials. In some cases they have delegated powers, Many senior officials do have delegated powers in the regions, under which they can act. They are implementing policy laid down by the Government in the White Papers and, therefore, their task is of a practical kind. At the same time, they can put forward proposals to their own chairman or directly to the central Department in Whitehall.

Mr. Edwin Wainwright (Dearne Valley)

There has, as yet, been no mention of Yorkshire. At present, South Yorkshire has not a heavy rate of unemployment. But the right hon. Gentleman must be aware that the Iron and Steel Board, with the large efficient plant that it has, will make certain that it will close down the small steelworks throughout the whole of South Yorkshire. Will the right hon. Gentleman take note of this issue, because it could affect South Yorkshire seriously in the near future?

Mr. Heath

I will take full note of that, and I am sure that when I am in Yorkshire, at the end of next week, all these problems will be laid before me.

This is the machinery we have created to implement our policy and we shall see what developments are necessary. We are not being rigid and dogmatic. But I think that the structure for implementing this is one of the most important aspects. Some hon. Members have suggested, and there has been discussion in the Press, that there should be full regional autonomy. It has been suggested that the arrangement should be subject to the planning authorities in land usage rather than industry. But I think that this is a matter for policy decisions at the national level and implementation at the local level which combines control and flexibility through the existing machinery.

These are long-term plans, and, as I said in the speech on the Address, the complete programme will take a considerable time. But promises of continuity for Government policy support that fact. Many other questions con- cern the immediate future and action is being taken to deal with this. As many points of this kind will be raised in the debate, I should like to say something about it now.

The immediate action affecting the regions under discussion in the White Paper, or which could well affect them in the next few months, is, first, the general expansion of the economy which is making itself felt in the regions more remote from the South. Secondly, the shipbuilding credit scheme, of which £75 million has meant orders for all the major yards in the country. Thirdly, the action of the Local Employment Acts of 1960 and 1963 which affect all the development districts. Fourthly, the extra investment already made in the North-East during this year while the proposals were being formulated.All these will contribute to further employment and to the benefit of the people in the North-East and Central Scotland.

Let me say a word about the Local Employment Acts. The hon. Member for Kilmarnock (Mr. Ross) has constantly been critical of what has been achieved by them. I suggest to the House that a considerable success has been achieved. Under these Acts, £93 million has gone to nearly 500 projects estimated to provide nearly 100,000 jobs. Of these, Scotland has had £47 million for 242 projects and 38,000 jobs. The North-East has had £15 million for 111 projects and 17,000 jobs.

When the hon. Gentleman and other hon. Members point to the unemployment figures, and say that this scheme has been a complete failure, the position is that because of the decline in the structural industries in these regions there has been an increasing amount of unemployment which this has been used to counteract, and has counteracted to a considerable extent.

The provision of 38,000 jobs in Scotland and the £47 million expenditure of inducing industry to go there is a considerable achievement, even if it has not been able entirely to replace the unemployment caused by the structural change.

Mr. Ross

We have never said that nothing was done. We have said that the Act has not succeeded. The basis of the Bill was its ability to anticipate unemployment. We knew, because we had statements in the House, of the number of coal pits which would be closed. We knew about the unemployment which was coming. The fact is that we have a higher figure of unemployment now than before, and this shows that the Act has not succeeded.

Mr. Heath

I cannot accept that analysis. These facts were well known to the Chancellor of the Exchequer when he was the Board of Trade and I was at the Ministry of Labour and the measure was passed. It was to anticipate that that the Act was passed. In so far as it has been possible to induce industry to provide 38,000 jobs in Scotland, the Measure has been successful. That ought to be acknowledged.

These jobs are either in new industries diversifying the structure, or in established industries which are expanding there. One of the best yardsticks by which we can judge the prospects of an area is the extent to which its own industry is expanding. In this respect, the number of firms expanding in development districts is encouraging. This is borne out in the applications we have so far received under the 1963 Act because it shows that a very large number of firms already in this district are using the facilities to expand. This is an encouraging feature.

In the North-East I can tell the House that the Cummins Engine Company is this afternoon announcing a large new project in Darlington to go up alongside the Chrysler-Cummins factory already announced. This factory is for the manufacture of diesel fuel systems and other engine components and will provide jobs for over 700 people. It should be completed at the beginning of 1965. Construction is beginning immediately. This, again, is an example of anticipation of industry going to an area in which it is known that because of structural changes there will be redundancy. This is an excellent example of a firm accepting this inducement to provide considerable employment.

Mr. Jeremy Thorpe (Devon, North)

Is not it a fact that over 50 per cent., of the applications received are turned down? Can the right hon. Gentleman tell us what the number of refusals?

Mr. Heath

Yes, the figure is nothing like that. I do not think that I have the figures here now, but I will try to give the hon. Gentleman a breakdown a little later.

The introduction of the standard grants has completed the pattern of inducements available to industry. Combined with the free depreciation in the Finance Act, this now provides a package which meets every kind of demand. So far as the 1963 Act is concerned, we have received1,150 applications for standard grants; that was up to last Friday. Of these, 352 have been for projects in Central Scotland;341 for projects in the North-East. For a time this was an overwhelming response and I acknowledge that this was so. But we have now approved, or otherwise dealt with, over two-thirds of the applications, and the time cannot be far off when we shall be getting claims for buildings and meeting them.

Mr. Ross

How many have been approved?

Mr. Heath

We have approved that number, over two-thirds of 1,150.

Dr. Dickson Mabon

The right hon. Gentleman said "otherwise dealt with".

Mr. Heath

I say that we have dealt with over two-thirds, which is about 750. Some have been withdrawn. The number of those withdrawn is 100, and that includes those withdrawn as well as those rejected.

Mr. Collick

How many for Merseyside?

Mr. Heath

I cannot give a detailed breakdown of each region in the area. I have given the broad details in respect of the White Papers with which we are concerned.

Mr. Wainwright

Will the right hon. Gentleman—

Mr. Heath

No, I cannot give way again.

I wish to say a word about the advance factories, because those who ask what is being done at the moment must acknowledge that there is a considerable programme of advance factory building. Fifteen will be completed by the end of this year. Of the 15, five have been let, and another17 will be completed next year. I am now considering a further programme of advance factory building, and I hope to make an announcement about this soon.

There is sometimes criticism about the operation of the policy of industrial development certificates. We are criticised from both sides—by those who say that the policy is too severe, and by those who say it is not tough enough. But there is no doubt that the policy has been effective in bringing a much greater share of new jobs in proportion to the existing employment to the areas which have problems.

I should like to give the figures to the House. The estimated additional employment arising from the industrial development certificates granted in the North-East since the 1960 Act amounts to 7.6 per cent, of the number employed in manufacturing industries in the region, and in Scotland it is 5.4 per cent. These figures compare with the national average of 3.6 per cent, and the Midland region average of only 1.5 per cent. This shows that the development districts in the North-East and Scotland are getting a much greater proportion of space under the I.D.C.s than the congested areas of the Midlands or the South.

Mr. George Lawson (Motherwell)

I apologise for interrupting the right hon. Gentleman, but this is a very important statement and I should like him to comment on the fact that over the last few years—and the situation is still continuing—Scotland has had substantially less than her share of industrial building. It runs at about 8 per cent., and sometimes at 1½ per cent. of the industrial building going on in the country. Does not this mean that the relative position of Scotland continues to worsen all the time, and, if so, does not it make nonsense of what the right hon. Gentleman said?

Mr. Heath

I think not. My figures show that under the I.D.C. policy, and its implementation, relatively, Scotland is getting a much larger share than either the Midlands or the South-East—

Mr. Lawson


Mr. Heath

—and that this is the justification for a severe policy for those who are employed, and are industrialists, in the Midlands and the South-East.

Lastly, may I say a word about the shipbuilding credit scheme. This scheme will allow for about 800,000 gross tons to be built, and all the major shipbuilding areas have obtained a reasonable share.

Those, then, are the factors which are bearing on the immediate situation in these areas and show what the Government have done to increase employment opportunities in the areas of the development districts in particular. To those who are critical of this position, I ask what more do they suggest should be done by way of inducements? Employers feel that the inducements are now satisfactory and well worth while, and they have not put forward any alternative suggestions as to the inducements they would require to go to these areas. Or are we now to move into a policy of the direction of industry? I hope that the right hon. Gentleman and his hon. Friends will not suggest that, and that we shall continue to rely on a policy of inducing industry to go to these areas.

The right hon. Gentleman and his hon. Friends have not always been clear whether they are prepared to agree to the direction of industry. Let us be quite clear that we are not going to do so. The right hon. Gentleman says, in the Opposition's Amendment that this requires a national plan. I suggest that this is not a situation which calls for a cut and dried national plan of the kind they suggest, imposing a rigid theoretical framework on the different regions whether they fit into it or not.

Hon. Gentlemen opposite have said in their publication, Signposts for the Sixties, that they have no desire to see that. They say that a rigid national plan is neither desirable nor necessary since so many decisions must be taken locally. What is needed is a small central planning staff with the powers necessary to ensure that the plans of the local authorities, the Ministry of Transport, the Ministry of Housing and Local Government, and those of the Board of Trade all fit together. This is exactly the form of co-ordination of the Departments which has been adopted under the machinery which I have explained to the House. The right hon. Gentleman will have to explain how he wants to have a national plan into which everything else is to be fitted, whereas his party's policy document calls for exactly the reverse.

Mr. Edward Short (Newcastle upon Tyne, Central)

On a point of order, Mr. Speaker. The right hon. Gentleman has quoted from a document. Is it not the rule that the document in question has to be placed on the Table?

Mr. Speaker

I have yet to learn that that party propaganda comes within the rule. Might I remind the House that the more noise and interruptions there are, the fewer hon. Members will get into the debate.

Mr. Heath

Perhaps the right hon. Gentleman would like to read the document for himself to refresh his memory on what he has been asking for in the past.

Mr. W. A. Wilkins (Bristol, South)

I saw the Minister reading the document to which my hon. Friend referred. In these circumstances ought not he to lay it on the Table?

Mr. Speaker

It is not a document of a character that comes within the rule.

Mr. Heath

In fact, the document is lying on the Table, though it is well covered at the moment.

The procedure we are following here is a practical one. We are surveying the regions as individual areas, and we are dealing with them in the order of the most urgent problems. We are now identifying the nature and scope of the rest of them, and on this basis we shall decide in each case on the action which is required. I believe, therefore, that we are meeting the needs of the House in providing a long-term policy to deal with the structural basis of each of the regions. We have taken immediate steps to deal with the pressing problems in the months ahead while these proposals are being implemented and coming to fruition. We believe that we are meeting both the short-term and the long-term requirements of regional development, and we believe that it deserves the support of the House.

4.27 p.m.

Mr. Douglas Jay (Battersea, North)

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: regrets that Her Majesty's Government's belated proposals for regional development while omitting many important areas, offer neither any immediate effective help nor a long-term remedy for unemployment and depopulation, declares its determination to ensure healthy and balanced development of all parts of the United Kingdom, and asserts that this will be achieved only through regional planning within the framework of a national plan". I welcome most warmly the conversion of the Minister to so many truths which we have been preaching for the last 10 years. I welcome particularly his conversion, or professed conversion, to the policies of expansion and regional planning which we have been preaching and which the Government have been declaring to be impracticable for the last 12 years.

The right hon. Gentleman ended his speech with some fine words about all the things he hopes to do, but I cannot help recalling that when the present Chancellor of the Exchequer, who is here today, moved the Second Reading of the Local Employment Bill, on 9th November, 1959, he ended his speech with these words: The Bill provides a new framework for dealing with the problem of local unemployment and will add success in this field to the many that the Government have had in other fields."—[OFFICIAL REPORT, 9th November. 1959; Vol. 613, c. 47–8.] Three years after that Bill became law unemployment had risen to 6 per cent, in Wales, to 6.2 per cent, in Scotland, and to 7 per cent, on the North-East Coast. Evidently, therefore, one ounce of hard experience in this matter is worth tons of Ministerial verbiage, and for this reason I approach the Government's new White Papers and the right hon. Gentleman's speeches with a somewhat sceptical eye.

The more carefully one examines these White Papers, the more insubstantial and unbalanced they appear to be. The first thing that emerges is that the Government are now almost totally reversing the main idea of the Local Employment Act, 1960. In 1960, the Chancellor's wonderful new concept was to abandon the comprehensive development areas of 1945 and substitute small separate development districts. Now, four years later, the Government are abandoning the separate development districts and returning to the general concept of broad industrial areas. But, of course, they do it in a hopelessly arbitrary, unbalanced, and indefensible way. The list of growth areas contained in these White Papers is extraordinary. It is not only far less rational than the list of development areas of 1945. It is the least defensible of any list of these areas published or compiled since the Special Areas Act, 1934.

First, it leaves out of the new growth areas half the areas in Great Britain threatened by unemployment and needing development. It leaves out, incidentally, the whole of Wales, although unemployment in that region reached 6 per cent, in February, this year. It leaves out Cornwall, the whole of Merseyside—Merseyside itself, this October, had an unemployment figure of 5.1 per cent.—the Burnley area with unemployment at 5.7 per cent., Barrow, 5.2 per cent, and the whole of West Cumberland, where it was 5 per cent. All these areas have been included in almost all previous lists of development areas.

But even more extraordinary is the Minister's decision to exclude, completely arbitrarily, large under-employed areas within Scotland and the North-East Coast. On the North-East Coast, he excludes almost all North-West and South-West Durham, declining coalfields with heavy unemployment, which have been always included in all previous lists of development areas up till now.

Mr. Heath

From what are they being excluded?

Mr. Jay

The right hon. Gentleman should know that they are being excluded from the growth areas, which, presumably, mean something. I am coming in a minute to discuss what they mean. Presumably, the right hon. Gentleman is not telling us that his growth areas are meaningless, and presumably he has looked at his own map.

The growth areas on the right hon. Gentleman's map exclude Bishop Auckland, Crook, Willington, Stanley, Consett, and Prudhoe, in Durham. They exclude the Blyth coalfield area in Northumberland and the declining Orfield, in North Yorkshire, including Saltburn, which now has unemployment of 10.9 per cent.

The treatment of the North-East Coast is even more peculiar than this. I am not sure that the right hon. Gentleman quite realises what he is doing. Let us take Sunderland, The Hartlepools and Easington. Although those three areas appear on the map to be included in the growth areas, the text of the White Paper rather shamefacedly admitted that they will be excluded.

Mr. Rupert Speir (Hexham)

The right hon. Gentleman is quite wrong in his information. Prudhoe is not in Durham, but in Northumberland. It also remains a designated district under the Local Employment Act, and gets all the benefits of that Act and of free depreciation.

Mr. Jay

I said that Prudhoe was in the North-East, which it is, and I said that it was excluded from the growth area, which it also is.

I am making the point that the White Paper abort the North-East growth areas says that priority will be given to the conurbations of Tyne-side and Tees-side, and to the Darlington-Aycliffe area in the public investment programme. I think that the Minister should tell us—the hon. Member will be interested in this with his knowledge of geography—that is he including The Hartlepools or Sunderland in the "conurbation of Tyne-side and Tees-side"? Of course, he cannot. What, in fact, emerges is that not merely these other areas, but Sunderland and The Hartlepools, two of the largest cities of really heavy unemployment anywhere in the United Kingdom, are being excluded also from the growth areas.

The exclusions in Scotland seem to me no less extraordinary. Not only are the Highlands and Islands, Peterhead and Aberdeen completely excluded, but also the industrial areas of Dundee, Dumfries, Kilmarnock, Ayr, Greenock, Gourock and Port Glasgow, where unemployment in October was 8 per cent., Glasgow itself, Paisley and almost the whole of Clydeside are all left out. How can the Minister justify omitting all these vital industrial areas, even in Scotland and the North-East Coast, from his list? Does the Minister think that West Durham, or Dundee, or the Greenock area are just not worth developing, or has he written them off as derelict areas past hope?

Will he also tell us, because he did not make it clear today although he touched on the point, what is the criterion for the selection of the growth areas? It seems to me that we could have one of two rational criteria if we are to have these growth areas at all. Either we could choose the areas most in need, or those most promising for development. I ask the right hon. Gentleman, if the criterion is need, why does he leave out Greenock, Gourock and Port Glasgow? If it is suitability for development, why does he leave out Paisley and Linwood, where very promising developments by Rootes and Pressed Steel are going forward?

Even more extraordinary, why include Newcastle and leave out Glasgow? Is that because the Secretary of State for Scotland is in the Cabinet, or why is it? Perhaps the Minister would at least answer this: why include Team Valley and leave out Hillington? We get no answer. The real reason is that no rational answer can be given to those questions, because there is no rhyme or reason in this selection at all. It is not a coherent plan, or even a coherent policy. It is just the amalgamation, in a rather clumsy fashion, of two quite separately prepared projects, which do not add up even to a regional plan, let alone a national plan.

The Minister may say—I think that this is what he had in mind a few minutes ago—that it does not really matter what is in the growth areas and what is not, because the other areas are still development districts. That, I think, is a muddle anyway. But, presumably, the Minister believes that his growth areas mean something, and that some substantial benefits accrue to them. If that is not so, then this new policy is almost wholly a sham. But if the growth areas do enjoy some benefits—and I suppose that that is his case—then it is obvious that the excluded areas are deprived of them.

Next, I warn the House, however, against supposing that the new benefits going to the growth areas are very substantial. What are they in fact? According to the White Papers they are priority for investment in public ser- vice. That is what is going to the growth areas. The first question which I would ask the Minister is whether the building of Government-financed factories in these areas—and this is the biggest single weapon in development area policy—is included for this purpose in public investment. I would be glad if the Minister would tell me right away; but I do not think that he knows. If it does include Government-financed factories in public investment, then all the excluded areas are being deprived of some important benefits which they are getting now.

That must be so, and I hope that we shall know before the end of the debate whether this item is included or not. It is the most crucial weapon in development area policy, and I do not think that Ministers, know what they are doing about it, judging from the right hon. Gentleman's demeanour.

Mr. Heath

What would be important would be if we were saying that no advance factories will ever be built anywhere except in the growth zones. That is not our policy.

Mr. Jay

I am not talking only about advance factories. The right hon. Gentleman should know that advance factories are not the only Government financed factories by a long way.

Let us see how great this new public investment effort will be, even within the arbitrary selected growth areas. We are told that total public service investment in Central Scotland will increase from the already announced programme for this year of £130 million to £140 million in 1964–65, and then will grow at the same rate as elsewhere. That is the sum total of the change announced in this White Paper over and above the policies that we have heard before. Everything else is a gathering together of already known schemes, announced last winter or on previous dates. Let us, therefore, look at this figure carefully.

Since everything is supposed to grow at 4 per cent, a year nowadays—apart from M.P.s'salaries—the present year's £130 million programme ought to rise anyway to over £135 million, without any change in policy; so the real change announced in all this is a rise from about £135 million to £140 million. But that is within the margin of error of the figures. According to the Government's latest White Paper on Public Investment the turn-out last year was 3 per cent, less than the forecast previously published.

Even so, I hope that Scotland will particularly note that the minor increase which is promised is not for the whole of Scotland, but merely for Central Scotland. The White Paper contains no guarantee—and perhaps the Secretary of State will say something about this tonight—that there will be any increase in Scotland as a whole, or that the increase in Central Scotland will not be financed or balanced by decreases in Dundee, Aberdeen, Dumfries, Kilmarnock and, indeed, the Greenock area—unless that is included in Central Scotland. We should be given an assurance tonight that this increase is for Scotland as a whole and is not just a shift from one part to another.

In the North-East the change is equally negligible. Here the White Paper tells us that the total public investment is to rise from £80 million this year, as a result of the decisions already taken, to nearly £90 million, and thereafter simply to grow with the national income. As 4 per cent, would carry £80 million to over £83 million anyway, the increase, if it comes off, will be from rather over £83 million to rather under £90 million. That is the whole measure of what is promised for these areas in the two White Papers, when we look at the hard kernel of facts under all the verbiage about infrastructure, modernisation and the rest.

I grant to the Secretary of State that, although he is an ex-Chief Whip, he is never at a loss for words. Another sphere in which there is a truly astonishing contrast between Ministerial words and the actual proposals contained in the White Paper is the regional organisation which we are now getting. We were constantly told—not merely by the sycophantic Press, but by the previous Prime Minister, in this House, on 1st August—that a great new and revolutionary experiment in regional government was to be unfolded, and that it had taken Lord Hailsham—as he then was—12 months of profound cogitation to work it all out. What is the result, in hard facts? In Scotland nothing—absolutely nothing. In Scotland, a development group of officials—as it is called—which is already in being, will—and I use the exact words of the White Paper—"continue in being". That is a revolution! Modernisation in this case means simply "as you were".

To be fair to the right hon. Gentleman—as I always am—in the North-East there is a change. Some officials are to be moved from one building in Newcastle to another building in Newcastle. That is the extent of the revolution on Tyneside. The Minister described this organisation today; but he did not seem to realise that from 1944 to 1951 regional controllers in all the economic Departments, including a Ministry of Town and Country Planning Controller, who linked up with the town planning machinery, met every week, in regional distribution of industry committees, in every regional capital and not just in Newcastle and Scotland. At headquarters, there was substantially similar machinery to that which the right hon. Gentleman announced today. The only difference is that in those days we did not announce it in public.

But after 1951 the party opposite discontinued all this. It abolished the regional controller of town planning, and closed down the Board of Trade offices in Dundee and Swansea. All this was done as; a financial economy. Now the Government audaciously appoint a Ministry of Housing controller and two other departmental controllers in one regional capital only, namely, Newcastle. Modernisation here means that the Government are moving about one-tenth of the way back to 1944.

Some optimists have already supposed that under this exciting new policy rail communications will be improved, or at least preserved, as part of the development in the growth areas. For instance, they have supposed that there would be electrification of the line from Glasgow to Gourock—something that has been proposed for about 25 years—or at least a promise not to accept Dr. Beeching'S proposal to close the railway line from Carlisle to Stranraer, the chief link with Northern Ireland, which has a higher unemployment percentage even than Scotland or the North-East Coast. But no such assurance on these points is to be found anywhere in the White Paper. I wonder whether the Secretary of State cart give us any assurances on these matters this evening.

We were delighted when the Prime Minister, at Question Time last week, summarily threw over the whole policy of Dr. Beeching and the Minister of Transport. Apparently nothing is to be closed, anywhere, until there is some alternative means of getting through. What a pity the Prime Minister never told the authors of these two White Papers about this important decision—because the author of the Scottish White Paper, in describing the great new future envisaged for die railways in this modern age, uttered this rousing piece of prose—which, to be fair, I shall also quote exactly—about the favoured growth area in central Scotland: The closures of passenger lines suggested in this area are unlikely to have any widespread serious impact. But arrangements have been made to ensure that, when any closure proposal comes before the Minister of Transport, he will, in consultation with the Secretary of State for Scotland, take account of its consequences in terms of the planned economic development of the area concerned. I am sure that these ringing words will warm the heart of every patriotic Scotsman.

Nor is there any change recorded in the White Papers concerning the Government's policy for derelict sites. The Distribution of Industry Act, 1945, included not merely a Section empowering the Government to give grants for basic public services in these areas—which the Government have failed to use for most of the last 12 years—but a separate Section giving power to the Board of Trade to clear derelict areas and charge 100 per cent, of the cost to the central Government account. The Governments that we have had since 1951 have never used that power, and even now they are offering, as a great advance, only 85 per cent, of the cost to local authorities, instead of providing 100 per cent, themselves.

All that we really have in these White Papers, therefore, is a rather modest programme, applied in only a few areas, without any real assurance that even this will be carried out. One very strong piece of evidence which leads me to doubt whether it will be carried out is the complete absence in the White Papers, or in Ministers' speeches, of any convincing declaration that the Government, this time, will resolutely restrain over-expansion in the congested South- East. Without that we shall not cure depopulation or unemployment in the North and West, or the appalling housing shortage, traffic chaos and infringement of the green belt in the South. For these are different aspects of one and the same phenomenon. The dereliction in the North and West is caused simply by the drift to the South-East.

I have given figures to show this on previous occasions, and I shall not give them again. At any rate, I gather that we have at least converted the right hon. Gentleman to an understanding of this truth. The Buchanan Report has made painfully clear the appalling economic cost—quite apart from the human and social cost—of this Gadarene process. The worse we allow congestion to become, the greater will be the economic cost of decongestion.

There is no mystery about what is happening. The tens of thousands who are coming and have been coming from the North to the South-East and the Midlands in search of jobs and houses do not come because they want to. They come because employment is expanding in the South-East, but not in the North. That, in turn, is happening because those who build new factories and new offices find it more convenient, profitable and pleasant to do it in the South-East of England.

The right hon. Gentleman asked us about our policy. I will, therefore, tell him that it is a most dangerous fallacy to believe that individual firms or property developers can be induced by incentives, bribes, or whatever one calls them, alone to prefer the North of England. I assure the Minister emphatically, speaking as one who has had the job of discussing this point with numbers of firms, that in the great majority of cases the determining factor is not any careful calculation of economic gain.

It is what the people concerned call the "convenience" of the management. That usually means the wish of two or three top people to live not too far away from London. Let us face this quite frankly. We should, if we mean this seriously. However much money is spent—I am all in favour of doing it—on beautifying Gateshead, it will not be made more attractive to the average managing director than Mayfair. Even Lord Hailsham prefers Marylebone, apparently.

Let us have all these incentives and embellishments as a supplement to restraint. But if the Government try to make incentives a substitute for restraint in the congested areas, they will fail. Incidentally, they will fail at a very great cost in public money. That is the real reason why the Government have spent all the money which the right hon. Gentleman quoted earlier under the Local Employment Act and why, at the end of the day, unemployment is higher than it was at the beginning.

The Labour Government, during the first six years after the war, spent almost no money, but invested a great deal in factory building and the purchase of trading estates. And unemployment fell to 1.8 per cent, on the North-East Coast and to 2 per cent, in Scotland. During the past four years a great deal of money has been spent, and unemployment has risen and not gone down. It is no good the Minister pretending that the Government are exerting effective restraint yet either on factory building or on office building in the South. I ask him to examine the figures carefully.

I will give the Minister the figures that matter. In the whole six years from 1945 to 1951 about 30 per cent, of all new factory building in Great Britain in terms of square feet went to the development areas. Throughout 1960, 1961 and 1962 the share going to the development areas was under 20 per cent. It was actually less in those three years than the share going to the London and south-eastern region alone, excluding the eastern region and the southern region, and excluding all office building. Those are the significant figures. If Ministers in this debate pretend that they are really using the I.D.C.s resolutely, let them give us the corresponding figures for 1963 before the end of the debate. Then we shall know where we are on factory building.

Nor has anything effective been done even now to check the London office boom, which is the real source of the trouble. I know that the Minister of Housing and Local Government has given slightly greater powers of control to local authorities, thus half closing the stable door after the house has dis- appeared over the horizon. He has started a Location of Offices Bureau, which no doubt with the very best of intentions is doing its best to restrain office developers from building in Central London and inducing them instead to go to Croydon, Watford, Ealing and certain places of that nature. I hope that they will; but this will make no difference to the main issue.

Instead of discussing this in generalities, let me quote four instances where, in my view, the Government have lost a chance to check this over-congestion in the South-East. First, the Ford Motor Company has been allowed to build a major new research and development unit at Basildon. It could perfectly well have gone to Merseyside, where Fords already have a major factory at Hales-wood. In each one of these cases an argument can be advanced for letting such a unit be built in the South. But if each one of these arguments is accepted, we are bound to lose the main battle. That is what has been happening.

Secondly—I know that the Minister of Housing and Local Government is interested in this—the present release of sites in London by the railways has offered the greatest chance since the war to find land for new council house-building in London. The Government should have laid it down that all railway sites suitable should be used for housing without exception, and the Government themselves if necessary should compensate the railways. Instead of that, Ministers have merely told the railways that, in so far as they allow new offices to be built for employing so many thousands of people, they must also allow a similar number of houses to be built to house those people; with the result that no net contribution is made to this problem by the greatest opportunity we have had since the time of the blitz. This is another example of what might have been done.

Thirdly, does the House realise this? Do the Ministers concerned realise this? Planning consents already given in Central London, for which buildings have not yet gone up, will raise the office population in Central London from 825,000 now to 1 million. That is an increase of 175,000 office jobs. If those consents are allowed to go ahead, I see very little results likely to accrue from all the brave new words we have had this afternoon.

Fourthly, may I bring to the notice of the Minister of Housing and Local Government the rather sad tale of No. 93 Albert Embankment, just across the river? In May, 1963 the L.C.C., rightly I think, refused an application for a 10-floor office block on that site and insisted that flats should be built instead. In October, 1963, the present Minister, after all his protestations in the House, overruled the L.C.C. and gave permission for 10 floors as offices, two as commercial and only two as fiats. These are the hard facts behind all the things we are told in the House.

Therefore, the real cause of the Government's failure over these years has been the cherished illusion that this problem could be solved by incentives in the under-employed regions alone without restraint in the congested areas. It cannot be done. The right hon. Gentleman rightly said in his last speech that we are up against powerful forces. But they are also permanent forces. It is another illusion, on which the Local Employment Act was founded—incidentally, it expires in 1967, whereas the Distribution of Industry Act was permanent—that a temporary effort in this field can be made and then the whole thing given up. If that is done, the truth is that the drift will set in once again.

The right hon. Gentleman asked me what we thought about this new conception of growth areas. I will tell him. I am afraid that this new conception is still partly founded on the basic self-deception I have been talking about; the hope that somehow something called "self-sustaining growth" will avoid the necessity for control at the other end. It will not. Of course, it is true that some new industries will generate others. But the idea that the northern areas can be launched into a permanent orbit of prosperity, and then let go, without any restraint in the South-East and the rest of the country, is just another illusion. It is an illusion which, if we fall into it, is likely to give us another five years of failure like the last.

I warn the Government that, if this failure drags on much longer, the un- employed in these areas—after all, there are 90,000 in Scotland alone—will not be willing to accept much longer the present miserable level of unemployment benefit which they receive.

Therefore, we on this side found our policy on a fair and square rejection of all this self-deception, and a wholehearted acceptance of the permanent need for both positive planning at one end and negative planning at the other. Since the right hon. Gentleman asked me what we mean to do. I will state our programme for brevity's sake in nine brief practical points.

Point No. 1: schedule all underemployed industrial areas as single comprehensive development areas, without any muddled distinctions between growth areas, on the one hand, and development districts, on the other. Then use all the necessary powers within them wherever they are needed.

Point No. 2: as an emergency crash programme, because we are in an emergency in these areas, build far more adequate-sized advance factories, not just factories of 10,000 sq. ft., as the right hon. Gentleman is building now; and put them in the areas where unemployment is now worse.

Point No. 3: use the existing financial powers, not just to give grants for basic services in the development areas; but let the Board of Trade itself embark once again on a really adequate scheme for the clearance of derelict sites with 100 per cent, grant from the central Government. Let that go not merely for the North-East Coast and Scotland, but to Wales, Merseyside and West Cumberland as well.

Point No. 4: use the I.D.C.s as effectively as they were used before 1951; and get the development areas' and Northern Ireland's share of the total factory building in the country back at least to where it was in the first years after the war.

Point No. 5: tackle the London office problem effectively, either by applying the I.D.C.s to offices, by decisively strengthening local authority powers, or if necessary by establishing building licensing in the congested regions only. And, incidentally, allocate all suitable London railway sites to housing.

Point No. 6: establish a real regional organisation, with regional controllers of each of the Departments concerned in each regional capital, working regularly together and directly linked once more with the local authority town-planning machinery.

Point No. 7: be prepared to steer to these development areas not just private projects, but new projects launched either in partnership between private and public enterprise, or by public enterprise alone. The Government cannot say that this is impracticable. They have been forced to do it themselves in the case of Wiggins Teape, though they did it in a rather clumsy way. I will tell the right hon. Gentleman that even in East Pakistan there is such a programme now in force, in which new industries are being started by partnership in this way. In this modern age I do not see why Great Britain should lag behind Bengal.

Point No. 8: why not transfer some more central Government offices to the needy areas? If the Ministry of National Insurance could go to Newcastle, under the Labour Government of course, why cannot the National Assistance Board go, and perhaps some parts of the Stationery Office as well? Why cannot the private banks and insurance companies, which have vast bureaucratic organisations, also assist in this campaign? If Fords, Vauxhall and Rootes can go to Scotland and the North-East Coast, I do not see why the Prudential, the Pearl and a few others could not also go.

Point No. 9: organise now a really far-reaching programme for credits to developing Commonwealth countries, to be spent on surplus capacity in the United Kingdom. It is madness that India and Pakistan, for instance, should be prevented by lack of credit from buying the ships, aircraft, steel, and machine tools which they need for their development plans, when surplus unused capacity exists to manufacture those very things in our own under-employed areas.

I know that the Government have at last, under pressure from my hon. Friends, allocated £15 million for this purpose. In my view, the sum ought to be more like £150 million than £15 million.

Mr. McMaster


Mr. Jay

All these things could be done, with sufficient resolution and energy. Indeed, they should have been done by now. But if anyone thinks that they will be done by right hon. Gentlemen opposite, I can only refer him to the last 10 years' miserable record of muddle, vacillation and failure.

5.5 p.m.

Mr. Patrick Wolrige-Gordon (Aberdeenshire, East)

I am glad that the right hon. Member for Battersea, North (Mr. Jay) clarified his policy in those nine clear points, because his earlier description of it as positive planning at one end and negative planning at the other had me mystified. We from the North-East of Scotland do not complain that Government money is to be fed into the centre of the country. We applaud the proposal of the White Paper to invest so heavily in Central Scotland. We hope that it will do the people and the country good. We applaud my right hon. Friend also for this further step in the modernisation of our country.

But then, we come to the vital question—"What about us?" There are several important questions, arising from the White Paper, concerning every parish pump in every part of the country which is not mentioned. The first is, "Where do we go from here?" At the moment these parts of the country feel inevitably left out in the cold and we got some reflection of this in the anguished tones of the right hon. Member for Battersea. North.

If a man is in a snow-storm one can cover his middle with as much clothing and protection as one likes, but if one forgets his gloves it is quite possible that his fingers will freeze. If one forgets his socks it is possible that his feet will freeze. I do not think that Scotland can afford to lose either its hands or its feet.

Yesterday I asked my right hon. Friend when he expected to publish his development plan for North-East Scotland. I was grateful for his reply, for he confirmed that the Scottish Development Group was making a survey to be completed within the next year or eighteen months and, of course, we can assume that a programme for development will follow that survey, provided the political situation remains unchanged.

Mr. Manuel

The hon. Gentleman knows the drain of population from the seven crofter counties at present. Is he prepared to agree to still more depopulation over another eighteen months?

Mr. Wolrige-Gordon

The hon. Member is trying to make my speech. My next point is to consider what is happening now and what will happen before that further programme is presented. Migration is the most serious problem we have. I believe that the Government will have to change their attitude and policy towards migration, because migration does not end unemployment in any area. It merely conceals it.

Even with the Government's twin gardens of Eden we in the North-East of Scotland have lost, and are losing, men steadily to the centre of Scotland, the north-east of England, the home counties and overseas. From my part of the country it averages about 1,000 men a year.

This is a vicious circle. Lack of opportunities creates unemployment. Unemployment creates lack of opportunities. The wage scale in the South tends to be much higher and, inevitably, skilled men drift towards the South. Then one finds that there is lack of the skilled personnel one needs on which to build the new industries one wishes to attract. The Government must therefore take account of migration when considering policy for development districts. It should be as important a factor as the unemployment figures.

May I ask my right hon. Friend to say more about the Scottish Development Group? How is it composed? How does it operate? These plans must be converted into action. Who will take the action? Will it be the Scottish Development Group, which has composed the plan? If it is, how will the group do it?

As the White Paper makes clear, Government resources will be directed towards the infrastructure, the essential services on which modern industry depends. But the real work of providing employment and making a profit will be done by industry. Will the S.D.G. be able to work with and help industry? For example, will it be independent of the Government? Will it be able to raise funds, advance loans, raise capital from abroad, advertise in foreign journals and employ its own staff of lawyers, technologists and scientists? Will it be able to do anything and everything to assist industry in its development and offer the necessary inducements to bring it to the development districts?

I ask this because we have experience of all sorts of bodies in the North-East. We have B.O.T.A.C., the Industrial Estate Management Corporation, the Rural Estates Development Association and the Secretary of State's Department. But when people consider our advance in industrialisation in these last years—and there has been a very considerable advance—none of these bodies occur naturally to them. Their minds turn naturally to a board whose main aim is the electrification of our countryside. They think of the North of Scotland Hydro-Electric Board.

I think that we need something more definitive than that now. Grateful as I am for the initiative of that Board we surely need a body that is clearly responsible for the development of the area; unless the Government, apart from supplying the social services, will undertake the active association and co-operation with industry that will be needed.

We in Buchan are grateful for what the Government have been doing to assist us, and even if the Government sat back the people would not. Nevertheless, grants and loans have made a very great difference to us. There is real progress and much healthy development. Development and its future will depend on our communications more than anything else, situated as we are far from the main centres of commerce in the country.

The White Paper says that the contribution that the railways can make to the promotion of economic growth in Central Scotland is indisputable. That is true of the North every bit as much, if not more, and it will become more true when Dr. Beeching has completed his promised transformation of our railway services and we have a truly efficient freight service on our tracks again. I urge my right hon. Friend, when he approaches the development programme for the North-East of Scotland, to bear in mind the essential need of the railway freight service in any development which is to come.

I conclude with a point put to me by many firms in my constituency. Industry always has to face increased costs, and recently there have been increases in telephone and postal service charges and in National Insurance contributions. One firm—and this is typical—tells me that in order to generate the profit needed to pay these additional costs it would require an additional week's production and sale on the present level of operations.

This kind of cost increase in the nation as a whole is usually accepted philosophically, because there is the general feeling that nothing can be done about it; but it can bear very much more heavily on a firm in a development district which is far removed from the main industrial centres than it does on a firm actually in those centres which does not have the problems of communications and distance to contend with.

5.18 p.m.

Mr. Peter Doig (Dundee, West)

I am very pleased to be here today but I regret the cause of the by-election which brought me here. The late John Strachey was the longest-serving Member Dundee has ever had. He was very highly respected not only there but throughout the world.

However—to get to the White Paper which, I may say, concerns my constituency very much—I am very pleased that the Government have at long last recognised the need for planning. It is a little unfortunate, however, that as they have rather belatedly come to this point of view, it is inevitable that they make rather a bad job of it. This plan is definitely a bad plan.

The trouble with the country as a whole is that industry is concentrated very largely in the London area and the Midlands. All that the plan seeks to do for Scotland is to reproduce a pocket edition of that situation in Central Scotland. It aims to create a smaller edition of a big thing and will not help the country at all. The plan required will produce not so much growth areas but growth industries in areas of high unemployment.

I recall a message from the Prime Minister to my opponent in the by-election which said: We will strive to attract more industries to Dundee. As Dundee is not one of the growth areas but was formerly a development area, I should like to know whether, when industrialists are looking for sites in Scotland, Dundee will be on the list, or whether they will go to growth areas only. If it is to comprise only the growth areas I feel that Dundee should be designated as a growth area.

My reason for saying this is that Dundee has consistently had high unemployment over a long period of years. The Prime: Minister said that: … we intend to ensure that the long association of jute with Dundee is maintained by an efficient and viable industry. The dictionary describes a "viable" industry as a self-supporting industry without outside help or protection. This is exactly what the jute industry cannot be, unless it shrinks to less than one-third of its present size. If this is what the Prime Minister means, Dundee will be very much in need of new industry, and particularly growth industry.

The Prime Minister went on to say something which is repeated in the White Paper. He said: The Tay Road Bridge, on which work has now started, will be of great importance to Dundee. It will provide a direct route to the South.… Surely the Prime Minister has not read about what his own Government are doing in another Department.

If hon. Members will look at the sum of over £100 million which is to be spent on new roads they will find that there is no connecting road between the Tay Road Bridge and the Forth Road Bridge. When this was drawn to the attention of St. Andrew's House we were told that there was no intention of making this anything more than a communication between Dundee and a small area of Fife. If hon. Members look at the subsidies which the Government gave towards the Forth Road Bridge and they realise that they gave nothing but permission for the Tay Road Bridge, it will be seen that this is the policy and that the Prime Minister is out of step, as of course is also the White Paper.

The next mention made of Dundee is in connection with an airport, which is something for which Dundee has been asking for a long time. All the Government can say about it is that Dundee's need for regular air communication with the industrial and commercial centres in the South is, along with other airfield requirements for the area, now being urgently considered. If the Government had any intention of providing Dundee with an airport it ought to have been mentioned in the White Paper, because the White Paper is supposed to be the plan for developing Scotland.

The White Paper says that Dundee is becoming increasingly a part of the central industrial belt of Scotland, but as far as growth areas are concerned Dundee is left out in the cold. It is also left out in the cold where airports are concerned. It seems to me that all this was just a bit of election whitewash to try to persuade people to support the candidate and that the Government have no intention of doing these things. If they have the intention, all this should have been in the White Paper.

I am convinced that the people of Dundee, as was shown by the votes in the by-election, have no faith whatsoever in the Government's vague promises, vague statements and vague inducements. The people have no faith that the Government have any intention of helping Dundee. The only hope for the future of Dundee, for the jute industry, the airport, and the connecting road between the Tay and Forth Bridges, is the speedy return of a Labour Government.

5.25 p.m.

Sir Fitzroy Maclean (Bute and North Ayrshire)

I am glad of the opportunity given to me to congratulate the hon. Member for Dundee, West (Mr. Doig) on a vigorous and eloquent maiden speech. Hon. Members are sometimes advised not to make a maiden speech for six months or so. I could not make mine, for reasons beyond my control, until I had been a Member of the House for four years, but the hon. Member's self-assurance and confidence in speaking so soon has been fully justified in the event. It was a very polished performance and I can assure him that it was a great deal better than a good many speeches we hear from hon. Members who have been here for very much longer.

The hon. Member represents a great city. I was there the other day, and I very much admire it. The hon. Member spoke up vigorously for it. He succeeds a man who was a friend of mine and one for whom I had a great liking and admiration. We were in the House for nearly twenty years together and I had many dealings with him. While gaining a vigorous new Member, Dundee has certainly lost a great representative in John Strachey. The hon. Member was certainly not non-controversial. I hope that we shall hear often from him while he remains a Member of the House but, to be as controversial as he was, I will not say that I hope he remains with us for many years.

I have listened carefully to the debate and in particular to the speech of the right hon. Member for Battersea, North (Mr. Jay). It seems to me that hon. and right hon. Members opposite are trying to have it both ways. They attack the White Paper in the same breath as they accuse the Government of stealing their ideas. They said for a long time that the Local Employment Act did not do enough and that it was too negative. The White Paper presents a plan which is essentially positive, and they still attack it. They say, again in the same breath, that it is nothing but an isolated stunt and then go on to show, what is much nearer the truth, that it is the continuation of previous policies.

The right hon. Member for Battersea, North even tried to have it both ways by calling Mr. Hogg Lord Hailsham. I thought that that was an unnecessarily deliberate mistake from such an experienced politician.

Continuing, the right hon. Gentleman reeled off a list of nine or ten points to avoid the accusation that the Labour Party had no policy. But enumerating nine or ten different points is an old trick which takes nobody in. If one looks carefully at them one finds that they do not add to very much. The right hon. Gentleman said that he would schedule all areas. It seems to me that there is not very much difference between doing that and keeping the existing areas, as the present Government are doing, and then adding growth points to them. It surely comes to very much the same thing. The right hon. Gentleman also talked about going back to before 1951, which is indeed an alarming thought. He talked airily about tackling the London office problem. Finally, he talked about building big advance factories. Nobody pressed more strongly than I did to get an advance factory in the constituency of the hon. Member for Central Ayrshire (Mr. Manuel.)

Mr. Manuel

Nobody pressed harder than I did.

Sir F. Maclean

I am very glad that we have got it.

Mr. Manuel

It has not started yet.

Sir F. Maclean

We both pressed hard for it. The fact remains, however, that there are a good many advance factories in the country which are still not occupied. I do not think that that, by itself, can be regarded as a solution.

What the right hon. Gentleman did not say is whether a Labour Government would resort to the direction of industry and the direction of labour. Of course, that is the 64,000 dollar question, and, as usual, it remains unanswered. It will probably have one or two answers in the course of the debate, but they will probably, as usual, be conflicting answers.

Mr. Manuel

In challenging our programme for the location of industry, the hon. Gentleman should recognise that we say that factories should be placed, either by private enterprise or by Government-sponsored arrangements, in areas of high unemployment. If the factories do not go there, the labour has an economic compulsion to move. Therefore, by our putting the factories there, there will not be the direction of labour; that is, people will not be directed economically to another area.

Sir F. Maclean

If I understood the hon. Gentleman aright, what he is advocating is what the Government are doing already. I hope that he will support the White Paper as enthusiastically as I do myself. In fact, the White Paper represents the culmination of a carefully thought out programme over the years which is already bearing fruit, as my right hon. Friend showed in his opening speech arid as, no doubt, the Secretary of State for Scotland will further show in winding up.

The Opposition attacked the Local Employment Act in 1960, and they attacked the Act of 1963. They also showed very little enthusiasm for the fiscal inducements which the Chancellor provided in his last Budget. But the fact is that all these Measures are bearing fruit already, and to them must be added the various great projects—here I speak only of Scotland—introduced under the last Secretary of State and under my right hon. Friend who is now Secretary of State, namely, Ravenscraig, Bathgate, the Forth Road Bridge, the Fort William paper mill, and others. As the right hon. Member for Battersea, North was forced to admit, they are already producing results.

It has been said that the Local Employment Act does not do enough, and is too negative. What the present White Paper does is to build on success. It is essentially positive. In its own words, it represents a positive approach to regional economic development. Here it follows the advice of the Toothill Report, which, as far as I remember, did not receive a particularly unfavourable reception opposite. The Toothill Report laid down that the immediate relief of unemployment should not be the only factor in giving assistance to a particular area and that the building up of industrial complexes or centres was an equally important aim. In other words, it suggested that we should do exactly what the Government now propose to do, that is, to build on success. The theory of growth points and growth areas is the theme of the White Paper—that and the provision of the infrastructure which industry needs, housing, schools, communications and so on.

In Committee this morning, I said a few words on behalf of the Scottish tourist industry, and I now return for a minute to that theme. I was very much encouraged to hear my right hon. Friend mention holiday camps as part of the infrastructure. If holiday camps are to be included, hotels ought also to be included, and, surely, they ought to be given the tax benefits which other branches of industry enjoy.

The increased public service investment foreshadowed by the White Paper means that Scotland will have its fair share of Government public investment in the United Kingdom. This is very much to be welcomed. If ever there was a positive approach, this is it, and yet the Opposition still blindly attack the White Paper. The right hon. Member for Battersea, North was asked a perfectly straightforward question—did he or did he not accept the concept of growth areas? But his answer was not all that clear. What the Opposition must remember is that, unless resources throughout the whole country are fully utilised, the economy as a whole will not develop nearly so fast. That is the point of the Government's policy. What is now proposed will undoubtedly help Scotland as a whole, and that is what matters. The White Paper presents a balanced picture, and this is important, too. It will help both the areas of high unemployment and the areas where there is high industrial potential, each in the most appropriate way.

I have seen it suggested that the plan will benefit only the areas coloured orange on the map. This is certainly not so. Growth points are called growth points for the obvious reason that they are growth points and are intended to grow not only economically but also geographically. It is surprising how many people are incapable of grasping that. As paragraph 122 of the White Paper points out, it is misleading to regard them as being tightly confined … their beneficial influence will spread widely … investment in the infrastructure services will … take place outside them. As my right hon. Friend said, the growth will be regional as well as local. I was very glad to hear him say it.

In the constituency of the hon. Member for Central Ayrshire, a growth point has been established at Irvine. I hope that he is grateful for it. I for my part greatly welcome it because I know that it will help the neighbouring towns of Ardrossan, Saltcoats and Stevenson in my constituency and Kilwinning in his, just as much as it will help Irvine itself. In other words, it will be a growth area and, as my right hon. Friend said, "beneficial to the whole region."

Meanwhile—and again this apparently needs emphasising for the benefit of some hon. Members—the provisions of the Local Employment Act still apply in the development districts. The White Paper, as we have been told, takes nothing away. The Government, by implication, have set themselves a number of targets, the reduction of unemployment, the reduction of the rate of depopulation, and the provision of a substantial number of new jobs every year. It is, as my right hon. Friend said, a unique commitment and one which, in my view, deserves the support of both sides of industry and—though I doubt that it will get it—the support of both sides of the House.

Mr. William Hamilton (Fife, West)

Will the hon. Gentleman say precisely where these targets are mentioned? I can see no precision in the target figures in the White Paper, certainly not as regards Scotland.

Sir F. Maclean

That is what I meant when I said "by implication."

5.41 p.m.

Mr. J. Grimond (Orkney and Shetland)

I join in the congratulations so justly offered by the hon. Member for Bute and North Ayrshire (Sir F. Maclean) to the hon. Member for Dundee, West (Mr. Doig) on an excellent maiden speech. I did not think it too controversial. The hon. Gentleman was no more critical of the Government than many hon. Members from Northern Ireland perpetually are. I thought the point particularly apposite when the hon. Gentleman said that we do not want to create in Central Scotland the same troubles which we are now trying to cure in other parts of the country. I am delighted, as one who comes from those parts, that Dundee will have such excellent representation.

I join also, in the remarks made about the late right hon. Member for Dundee, West, Mr. John Strachey. Apart from his personal and most likeable qualities, he was one of the ablest Members of the House. It never seemed to me that he got his deserts. I am amazed that no recognition of his stature was ever given to him, not even, for instance, academic recognition in the form of an honorary degree, of which, I should have thought, he would have been an eminently suitable recipient.

The main thing which struck me about the Secretary of State's speech was that it should be made now. This is no criticism of the right hon. Gentleman, but it is a criticism of the Government. They have been in office for 12 years, and yet it is only now, apparently, that they are beginning even to think about the problem, a problem which has been pressed upon them for years and years. The Secretary of State told us that he could not do everything at once, but he would tour various regions in the country. No doubt, that will be very agreeable, but, speaking for my own constituency, we have had visits over the years from many Ministers.

We have not suffered from a lack of visits. We have entertained Secretary of State after Secretary of State. We even entertained the Prime Minister, when he was a Minister of State. I begin to wonder what happens when Ministers get back to their offices if we now require still further visits by yet another Minister.

If I may say so, the right hon. Gentleman must not presume upon his highly agreeable character and upon the reception which he receives. He says that no one complains to him. In my constituency, we are extremely polite people. We treat our guests with courtesy, and, what is more, we have now some doubt whether complaints will do any good. Therefore, I do not put much weight on the fact that the right hon. Gentleman has not actually been torn to pieces, or stoned in the places that he has so far visited.

Where do Liberals differ from the Government on this question of regionalism? Fundamentally, we differ because we do not think that the Government proposals go to the heart of the matter. Let me illustrate that in four ways. The Government are concerned to apply some special measures to two regions only, because in them is high unemployment. The Secretary of State made it very clear that he was opposed to starting with any regional structure. He felt that he ought to concentrate on these two regions, and that to do otherwise would be to dilute his effort.

We believe that the government of the country ought to be decentralised, and that a regional structure should be built up covering the whole country. Although we fully agree about the extreme importance of unemployment, we would still hold that view even if there were no unemployment. We still believe that we need a regional approach to areas like South-East England, though for a different purpose, even where there is no problem of unemployment. The problems of depopulation, the problems of low wages in certain areas, and the problems of lack of confidence in certain areas, are as great as is the problem of overall unemployment.

There are two points about the financial implications. First, a lot of the money already being spent in regions other than those with which the right hon. Gentleman is dealing could, in our view, be spent better. We think that a great deal of Government effort and expenditure in the Highlands, for instance, is not going into development, but is being dribbled out to keep things going; arid that much of it is wasted. Further, a regional structure of government would be very much concerned with differing development in regions, because different regions have different development tasks. In South-East England, for instance, it would be very much concerned with the whole question of town and country planning.

Secondly, the Government are to direct their measures from Whitehall. The Secretary of State touched on this subject, and I know that he will agree that a most important question is how far we should proceed on the present system, and how far we should get more local participation. The fact that he is prepared to see it directed from Whitehall makes me doubt whether the Government appreciate one of the main root causes of the disease. We have to ask why this drive to the South-East has taken place. One of the answers is that it is because we have concentrated so much power and influence in London. It has not happened fortuitously, but because we have a highly-centralised form of Government.

Not only in government, but in industry and social life, power and influence has been centralised in the South-East. The promotion of the indigenous growth of a healthy society in the different regions can be done by not only creating economic growth points, but areas of influence and power in these regions. Otherwise, I think that we shall find this same cycle repeating itself as soon as the special measures are removed. This can only be avoided if we allow decisions to be taken in the regions, and if the Government themselves give a lead by devolving some of their powers and getting them exercised in the regions.

Thirdly, we must have some national economic plan, as is made very clear by the Crowther Committee. This is open to misunderstanding. When I talk about it, I do not mean a rigid plan. I fully agree with the right hon. Gentleman that it must take account of, and be built on, the differing needs of different regions. We must have some overall economic conspectus, but that at present seems to be rejected by the Government.

Lastly, the Government do not seem aware that all this will require new machinery. It is not only a question of setting targets, but of equipping ourselves with the machinery that can reach them. I want to pursue some of these points of difference with the Government in rather more detail.

Without a plan for all regions, how can we have a proper analysis for any particular region? For instance, the Government propose to reduce the rate of migration from North-East England from 4,000 to 2,500—but why 2,500? Is it because they have looked at the rest of Britain and have decided that the rest of Britain can and should absorb that amount of migration from the North-East? Is it the result of any budget about any potential use of resources in the North-East, such as has been suggested by the Economist? While we are on the question of growth of population, in the centre of Scotland it is given as 600,000, but what effect is that expected to have on Dundee, Aberdeen, the Border country, or the Highlands? I do not see how we can have a sensible policy for these regions unless there is an overall policy for all regions.

Again, how can we bring together all the Reports—the Hall Report, the Beeching Report, the Rochdale Report, the Buchanan Report—unless there is an overall outline of how we see the development of all Britain? Unless those Reports are brought together, they will lose a great deal of their value. I think that the Government have started at the wrong end, and piecemeal. First of all, they get Dr. Beeching to tell them what lines he proposes to close. They do that before they had the Buchanan Report—far less any industrial plan.

The right hon. Member for Battersea, North (Mr. Jay) realised the importance of paragraph 74 of the plan for Central Scotland, but he left out the first sentence, which I find a rather illuminating one. It reads: Full consideration has been given in drawing up this programme for Central Scotland to the effect of the proposals in Dr. Beeching's report. That really is topsy-turvy—the whole plan is to depend on whether or not Dr. Beeching is to close railway lines. This may be just a Freudian slip, but it is a revealing one.

Again, one of the most striking features of the Beeching plan is the assumption that the present pattern of industry will continue, and the liner train services all tend to run to London. We know that the Scottish Office was not consulted at all before Dr. Beeching drew up his plan; no wonder that we view with some alarm what is proposed for the Highland railways.

We have this morning a debate in the Scottish Grand Committee, when the Secretary of State interjected to point out that the passenger services in the Highlands would not be closed without reference to the Minister. But he does not seem to appreciate, first, the appalling illogicality of the Scottish Grand Committee discussing the expansion of the tourist industry whilst Dr. Beeching is discussing closing the railway lines somewhere else. Nor does he seem to realise, whatever happens, the appalling effects of uncertainty. How can people make any plans? How can they think of setting up new industries or start attracting people to Scotland if they do no know what stations and railway lines are to be closed?

Now, after 12 years, the Government are dealing with only two areas. How long will it be before they get to the other areas? How long will it be before they can do anything for South-West England of Wales? In the debate on the Gracious Speech, the Secretary of State said that he had not yet reached the South-West. It is rather like the times in darkest Africa when those in authority rode among the natives, showing the flag. Twelve years, and he has not yet got around to the South-West.

We believe, also, that if we are to have healthy development in the regions there must be some participation by the people in the regions themselves. We have pointed out for years, and it is reported on by both Crowther and Buchanan, that the patchwork of local authorities makes any rational town and country planning impossible. I do not deny that, in the early stages, most of the funds will be provided centrally, and that, at this stage, the local participation has, perhaps, to be negative, but the Government should be thinking, for instance, of how they will encourage the process, which is already happening, of county councils forming joint committees, the breakdown of nationalised industries into regional groupings, and so on. All that is going on: it is high time the Government took notice of it, and told the House what they intended to do to encourage it, because it meets a real need.

Here, I must read from the Crowther Report, because it is extremely apt. Paragraph 45 states: First, there must be a clear statement of national objectives. Regional planning cannot work in isolation. Unless there is a policy on a national basis dealing with the location of industry and population, from which would flow policies in respect of roads, ports, air facilities, etc., regional planning cannot be successful. Without such a policy it is impossible to know what populations and what kinds of employment must be planned for locally, nor the rate at which development can take place, nor can there be any certainty that some uncontrolled drift of events will not reduce all local plans to futility. That sounds lo me to be all too likely. It is, therefore, really essential that a national plan, built from local plans, should be at the very heart of this movement to regionalism.

The Toothill Report pointed out that the basic trouble in Scotland was the slow rate of growth. The Government have told us that they are aiming at a 4 per cent, annual increase in the gross national product, but what rate is aimed at in the regions? What industries are expected to expand? The service industries in these regions are already expanding, and expanding rather fast. What we now need is expansion in productive industries, but it would be interesting to know how far the Government have been able to analyse what, rate of expansion they expect to get even in these two particular regions.

The Scottish Council says in its criticism of the Government's proposals that they are not an industrial plan at all, and that is true. They are a plan to improve v/hat is inelegantly called the infra-structure, but they are not an industrial plan. There is very little new in them. The only new thing for industry is that the Government have promised to keep the inducements going a little longer. There are areas shaded on the map, but, as the Secretary of State has carefully pointed out, these areas will not get any special treatment industrially. This is like something from "1984"; all areas are being developed, but some are being developed faster than others. But we do not know why. There is no directive, no timetable.

Looking at the infrastructure, it is true—and here, again, I agree with the right hon. Member for Battersea, North—that allowing for rise in prices and increase in national wealth, there is to be no vast improvement. The amount spent on roads in Central Scotland is to be increased from £83 million to £101 million—but I hope that this will not be at the expense of other areas in Scotland. What effect will that have on the total sum allotted to roads? I do not believe that we have suitable machinery for administering even the present scheme of grant and loan, and I therefore have even more doubts about whether the machinery is capable of doing the much more radical job we want to see done.

I want to illustrate the present difficulties and delays of getting grants and help even under the present Acts. A furniture-making firm called Shapland and Petters wanted to set up a factory at Barnstaple. It was agreed with the Board of Trade that it would be reasonable for the firm, I understand, to apply for a loan of £150,000. It withdrew its labour from two areas of high unemployment One was Ilfracombe, where the rate of unemployment is 10 per cent. Six months went by and eventually the project fell through. During this time the firm supplied an immense amount of information.

Hon. Members will know from their own knowledge that the amount of information which is needed is very great, and for small firms this creates a difficulty. However, it having been suggested that the firm should get £150,000, this was eventually reduced to £125,000—at one time it went down to £100,000—and the firm felt that it could not proceed and the project fell through. This means that 450 men will not get jobs, and if they are paid out of taxation at £6 a week the sum will come to very nearly as much as the amount which would have been spent on this factory.

It is essential that there should be speed of decision. To my mind, it is an entirely new form of activity, and I want to press this on the Secretary of State. No one suggests that the Government Departments are not most expert at doing their traditional jobs, but when it comes to taking decisions over industrial matters, I believe that they lack sufficient personnel with industrial and business experience.

Mr. Heath

I have studied this case very carefully myself. There is a great deal of information which ought to be given—

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