HC Deb 18 June 1963 vol 679 cc367-86

10.27 p.m.

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

I beg to move, in page 2, line 6, at the end to insert: (6) In subsection (1) of this section "persons" described therein shall include persons carrying on a statutory undertaking.

Mr. Deputy-Speaker (Sir Robert Grimston)

It may be for the convenience of the House to discuss at the same time the next Amendment, that in the name of the right hon. Member for Battersea, North (Mr. Jay), in Clause 2, page 2, line 7, at the beginning to insert: (1) In section 3(1) of the principal Act (building grants) "persons" described therein shall include persons carrying on a statutory undertaking.

Mr. Prentice

Our purpose in moving the Amendment, and also putting down the next Amendment, is to have some discussion about the treatment of public enterprises under the Bill and the Local Employment Act, 1960. This is a point which was raised on Second Reading and also discussed during the Committee stage.

I think it fair to summarise the Government's arguments as follows. They say that the law already provides, both in the 1960 Act and in the Bill, that public enterprise can be treated in the same way as a privately-owned enterprise from the point of view of this legislation. But the President of the Board of Trade said on Second Reading: No grants will be made available to them, because all their financial needs are met by separate legislation and it would be a matter of paying part out of one pocket and part out of another. There would be no advantage to the concern in being paid partly through the medium of the Bill."—[Official Report, 1st May, 1963; Vol. 676, c. 1264.] The Parliamentary Secretary said more or less the same thing when we discussed the matter in Committee.

It seems to us that this avoids a most important point. When the publicly-owned industries obtain their finance, under existing legislation they borrow money which they have to repay normally at the market rates of interest. They are also under a statutory obligation to make ends meet taking one year with another. They get no subsidy in the form of the grants that are provided for in the Bill or the aid provided for in the 1960 Act. In other words, there is a discrimination here in practice between the treatment of privately-owned enterprise setting up business in development districts and publicly-owned enterprises doing the same thing.

10.30 p.m.

This seems to us to be wrong for two reasons. First of all, it may deny a publicly-owned enterprise a chance of supplying extra jobs in a development district. If it is merely to make an ordinary commercial choice between setting up in a development district and elsewhere, without any financial encouragement from the Government in making that choice, then, of course, various factors have to be taken into account which may lead to the setting up of the business outside a development district.

For example, if the Central Electricity Generating Board is proposing to site a new power station it will take into account all the various factors affecting that power station. If it were to get, as provided under the Bill, a 10 per cent. grant towards its machinery and plant and a 25 per cent. grant towards the building, that would, of course, be a factor in the equation and might lead it to establish the power station in a development district, providing jobs in building the power station, providing jobs afterwards in starting the power station, and providing an enterprise which would stimulate indirectly other forms of enterprise in that district. Therefore, the point we are discussing now is relevant to the provision of more jobs in development districts.

The other reason why I would stress that it is quite unfair to discriminate in this way is that there are several important aspects of competition here. There is competition between, for instance, oil and coal. An oil company under this Clause and Clause 2 could get grants for the establishment of an oil refinery. B.P. recently established a refinery in Belfast under the Northern Ireland legislation and was helped, and the same might apply in a development district in this country, but if the N.C.B. were to modernise a coal mine or to establish an ancillary plant at a coal mine, that would not, by the practice of the Government as described hitherto, be given any kind of grant at all. That would be discrimination by the State in favour of oil against coal. Apart from the principle of discrimination, that might affect employment in the coal industry, which employs more people in relation to output than the oil industry, and that is an important consideration when we are considering development districts.

Therefore, while admitting that the words we propose in the Amendments would not alter the legal position, we move the Amendment to challenge the Government and their practice hitherto, and we invite—and challenge—them to say they will change that practice in future, because it seems to us, both as a matter of general principle and as a matter of providing jobs, wrong that privately-owned industry can qualify and publicly-owned industries cannot for the grants provided for.

The Parliamentary Secretary to the Board of Trade (Mr. David Price)

As the hon. Member for East Ham, North (Mr. Prentice) recognises, and, indeed, said very fairly, this Amendment adds nothing to the Bill. Therefore, it can be said to be unnecessary. As I explained in Committee, the phrase "persons" without any qualification includes persons carrying on a statutory undertaking, and so, as I think the hon. Member recognises, there is no question but that nationalised undertakings are legally eligible for grants under the principal Act.

As I explained in Standing Committee, and as the hon. Member has reminded us, it has been hitherto the practice to exclude the nationalised industries by administrative action from B.O.T.A.C. assistance. The reasons for this I gave in Standing Committee and my right hon. Friend gave on Second Reading, but this Bill, by introducing the new standard grants, makes the value of grant finance rather then loan finance more important than hitherto. No doubt with this in mind, the right hon. Member for Battersea, North (Mr. Jay) and some of his hon. Friends pressed me to includenationalised industries within the benefits of the new provisions, and the hon. Member for East Ham, North has further developed that case tonight.

Since the Committee stage, we have had another look at this exclusion. Hon. Members will appreciate that the purpose of the standard grants is to encourage people to establish in development districts enterprises they would otherwise establish elsewhere or not establish at all. The nationalised industries have a general duty to meet public demand for transport, fuel, power, and so forth, and their expansion is based, in agreement with the Government, on estimates of the trend of demand for the particular service or product in question.

Therefore, it will be seen that, in general, grants of this particular character are not needed to increase the total of their investment. The only purpose of such grants would be—and I think this is important—to influence them in the location of their new developments. This is likely to happen in fewer cases than appears at first sight. Coal must be dug where it lies; power transmitted to places where people want to consume it. Therefore, over most of their activities, I think siting is not in practice so much a matter of discretion but is determined by the pattern of location and demand.

We can well imagine exceptions to this. The most obvious one would be the establishment of a research organisation or administrative office, and hon. Members opposite have mentioned one or two other examples. The hon. Member for Hamilton (Mr. T. Fraser) quoted the case of a coal ancillary installation, such as tar distillation. One recognises that there would be clear cases where the availability of these grants might make all the difference in determining whether an establishment was located within or without a development district. There may well be occasions where there is a choice in the location of a power station as well.

Where there is a genuine choice of location, the Government would consider making grants to nationalised industries, but it must be a genuine choice of alternative sites. We would judge each case on its merits, as we do with private industry. We do not think that the making of grants to nationalised industries would normally be necessary because the location of the vast majority of their establishments which provide significant employment is determined by patterns of location and demand and virtually little choice is left to the management.

There is little point in giving grants to provide services which the nationalised industries are already obliged by Statute to provide, and which they would in any case provide. However, we recognise that occasions will arise where genuine choice of location presents itself, and in these circumstances we agree that it would be sensible to let the nationalised industries have the benefit of the grant aid if the development goes to a development district.

Mr. James Dempsey (Coatbridge and Airdrie)

I was not on the Standing Committee. What does the hon. Member mean by "genuine choice"? Does it mean a genuine choice of helping to solve an unemployment problem or of benefits which might arise as a result of siting of development?

Mr. Price

Let us take a simple example. A coal field may lie partly in a development district. The National Coal Board may decide to put up a tar distillation plant and have to make up its mind between two sites, one of them lying in the development district. But, on balance, it may appear that the choice should, for transport reasons, be in favour of the site which is not in the development district. The grant would then go to the Board if it decided to establish the new activity in a development district, helping to provide the employment we wish to see in development districts. I hope that that makes the position clear.

If the Post Office were to build a new telephone exchange its choice would be determined simply from the point of view of providing a service, which it has a statutory duty to provide, and that would not be altered by the question of a grant. There would be no choice whether it should be in a development district or not.

Mr. E. G. Willis (Edinburgh, East)

Will the hon. Gentleman give us a definition of a choice that is not genuine?

Mr. Price

The definition of a choice that is not genuine would be the one that I have just given—the telephone exchange. It would have to be sited where it would meet local needs. There would usually be no choice at all as to its location.

Mr. Charles Loughlin (Gloucestershire, West)

As I see it, if private industry wants to develop in a development district it will get a grant. If a nationalised industry wants to develop in the same area, and by doing so will provide additional employment in that area, what is the subtle difference in the matter of being eligible for a grant?

Mr. Price

It is not so much a distinction between ownership; the distinction lies in the type of activity. Many of the activities of what we loosely refer to as nationalised industries are not so much the manufacture of products as the provision of services. Where these are provided they naturally follow the pattern of location of population and involve the bringing of standards up to a common level. The exception to which I have referred was the case of a tar distillation plant—where there is actual manufacture. I do not suggest that there are not other cases. Hon. Members could go on indefinitely thinking of various examples and asking me whether or not they would be eligible for grant, but no hon. Member would be able to develop his case in detail, and I would not have the necessary information to give a definitive judgment. But I am telling the House that this is a change that we feel it right to introduce administratively, as a result of the changes which the Bill will itself introduce into the system of financial assistance for ventures in development districts.

As was rightly pointed out in Committee, hitherto it largely took the form of loan finance. Now the element of a straight grant is coming in, more clearly identified, and on a rather larger scale than hitherto. Therefore, we have examined the position again, and we feel that it would be right m individual cases to make these grants available where there is a genuine choice open to a public enterprise in determining where to locate an activity.

The Amendment would not in any way alter the position with regard to our making grants to nationalised industries; the Board of Trade already has the legal power to do that. But it is a discretionary power. I hope that what I have said will meet the views of hon. Members opposite. We are prepared to use that discretionary power in a way that we have not done in the past.

With that general outline of the way in which we intend to administer these provisions, I hope that the hon. Member will be willing to ask leave to withdraw the Amendment.

10.45 p.m.

Mr. Douglas Jay (Battersea, North)

The Parliamentary Secretary at least listened to the arguments we advanced in Committee and has admitted that there is a problem which the Government were not previously willing to admit, but I do not think he has gone the whole way to meet the substantial point we made.

The Parliamentary Secretary first laid down a curious new doctrine, namely, that in the case of the nationalised industries there is hardly ever any choice of location because everything is determined by demand. That is not so. B.O.A.C. has had for a long time a repair and service organisation at Tre-forest, and that might be in any one of many places. This, I think he would say, is a form of manufacture—although perhaps that is not the right term—and covered by the point he made, but that makes a dent in his doctrine.

The main example we adduced in Committee was this. Suppose a power station were to be built in Scotland and the C.E.G.B. was considering whether it should be fired by coal or oil. If under the hon. Gentleman's definition the sinking of a pit to provide coal for the power station was not eligible for grant but the building of an oil refinery was eligible, it could happen that as a result of the operation of the grant oil would be cheaper and, instead of the power station employing 10,000 people in a pit to produce coal in the area, the refinery would employ only 200 to produce oil.

We want to be assured that a project launched by the National Coal Board, if these were the circumstances, would not be ruled out under the definition put forward. Unless he can say that it would be in the discretion of the Board of Trade, he has not met our points.

Mr. John Brewis (Galloway)

My hon. Friend the Parliamentary Secretary spoke mostly about nationalised industries, but we are actually discussing statutory undertakings. I want to call attention to statutory undertakings in rural areas where the need for employment is great.

I refer particularly to agricultural marketing boards, which provide much employment in rural areas, especially the Milk Marketing Board. On the widest definition of "statutory undertaking", the Milk Marketing Board would be so considered and, therefore, not eligible for grant if it wanted to set up a new creamery in a rural district. I ask if the understanding is that if the Milk Marketing Board—not being a nationalised industry in the accepted sense, but more like an agriculturalco-operative—wanted to set up a creamery, it would not come to the Government for a grant, which is one of the main arguments against the proposal, because it would mean transferring money from one pocket to another?

My hon. Friend produced a new conception, the idea of "a genuine choice". If the Milk Marketing Board wanted to start a new creamery, it naturally follows that it would do so in a dairying area because it would have to be near where cows are milked. Would the Board be excluded from grant because it set up the creamery in a milk producing area which happened to be a development district?

Mr. Bruce Millan (Glasgow, Craigton)

My right hon. Friend the Member for Battersea, North (Mr. Jay) raised the question of choice in relation to the South of Scotland Generating Board—I am interested in the Scottish question—and whether there was a choice between building a power station fired by coal or oil. My right hon. Friend spoke from the point of view of getting the capital grant properly payable to the National Coal Board, but another alternative would be to pay the grant to the South of Scotland Electricity Board if it chose to build the kind of power station that would provide employment rather than the kind that would not.

If I understood the Parliamentary Secretary's argument aright, the choice that had to be involved for the nationalised industry or statutory undertaker was one of location. That is perfectly legitimate—the Government have made a considerable step forward, and it should be welcomed—but in the kind of case I have mentioned the choice would not simply be one of site, although, in the case of the South of Scotland Electricity Board, the question of choice of site is involved as well as the kind of fuel to be used in the power station, because if the power station is oil-fired it will be in a different part of Scotland from where it will be if it is coal-fired.

There is, however, an even more important choice involved, and that is the choice between giving employment to large numbers of miners or not giving that employment. That choice is very much more important—or, at least, just as important—as choice of site, because choice of site assumes that the number of jobs to be provided will be the same and that the only decision to be made is whether the jobs will be provided in one place or in another. In the case I have in mind, the choice is even more important because that actual number of jobs provided is affected. The Government could well look at that side of the question again, because it involves a tremendous point of principle.

I may not have been absolutely following what the Parliamentary Secretary said, but he seemed to be tending to restrict this new procedure, or possibility, to manufacturing industry only. He used the Post Office as an illustration. Quite apart from telephone exchanges, and so on, the Post Office also has research establishments, and some of us have been extremely interested in them. I think that the Dollis Hill research station has now gone to Harwell new town, but some of us were very concerned about getting it to Scotland or some other development district a good deal further north than Harwell.

Would the grant be payable in that case? There is a choice of site, and if the grant could be payable in those circumstances it would be a considerable step forward, because the Post Office and other nationalised industries use the economic argument: "If we go to Scotland or somewhere else we get very far from London, which involves extra expense, and so on." If this kind of grant were payable, it would be of some little assistance. One should not exaggerate the assistance in the case of research establishments, where the costs are very largely costs of personnel rather than costs of buildings and capital equipment, but if the new Government principle could be extended to that kind of case it would make the new step forward even more valuable.

Mr. Thomas Fraser (Hamilton)

I should like to take the Parliamentary Secretary a little further into his definition of the circumstances in which a grant would be paid to a nationalised industry in respect of some enterprise which was ancillary to its main purpose or function. In the Standing Committee I drew the hon. Gentleman's attention to the position of the National Coal Board in some of its ancillary activities, and the hon. Gentleman was good enough to refer to me in his speech tonight. He said that where the National Coal Board had, for example, the intention of putting down a tar distillation plant, if it had a genuine choice of sites and chose to go into a development district rather than to build out-with a development district, they would so administer the grant as to give the nationalised industry—that is, the National Coal Board—the grant to attract it into a development district.

In a very great many cases the National Coal Board will have no such choice. The Board operates very widely in the areas in which there is large-scale unemployment, unemployment which in many cases is the result of the great redundancies which have been caused in the mining industry. When the Board was putting down a new colliery in a development district, it might find that it would be greatly to its advantage and in the national interest to put down a tar distillation plant alongside the colliery. There would be no possibility of the Board having a choice of sites. If the Board did it in Scotland, I assure the hon. Gentleman it would not have a choice in Scotland of doing it inside a development district or outside a development district. It would have to be inside. In that case, according to the hon. Gentleman's definition, there would be no possibility of a grant.

If in those circumstances a representative of Scottish Tar Distillers Ltd. went to the National Coal Board and said, "We had better build this plant", they would build the plant on exactly the same site as the Board had proposed to build it on, and Scottish Tar Distillers Ltd. would get the grant. Would it not be totally absurd that we should use the taxpayers' money to assist private industry at the expense of the National Coal Board, which is owned and operated in the interests of the taxpayers as a whole? We take money out of the taxpayers' pockets to give it to anybody except the taxpayers. This is utterly ridiculous.

What I have said about tar distillation plants applies equally to brick works. Many brick works are constructed in colliery districts alongside collieries. This was not started by the National Coal Board. This was started by the coal masters, by the private coal interests, who found that they had a lot of residue from coalmining which was very suitable for the manufacture of bricks. Brick works were erected alongside collieries. This is so today. The National Coal Board is a big manufacturer of bricks. It has built a lot of very modern brick works.

If the Board is discontinuing colliery undertakings because they are uneconomic or because the coal has been worked out, the brick works will generally, if they are alongside collieries which are being shut down, go too. This has been our experience. In some cases the Board has been induced to build new brick works alongside large new collieries.

Once again, there will be no choice of site. The Board is either going to do it or not do it. Under the definition given by the hon. Gentleman, the Board, where it had no choice of site, would not get any grant for machinery or plant or for buildings in the provision of such brickworks. However, if a private enterprise firm interested in brick manufacture proposed to build a brick works on exactly the same site, it would get a grant. This is ridiculous.

11.0 p.m.

The Parliamentary Secretary's remarks about the operations of the Post Office were not very comforting to us. Reference has already been made to the research establishments that might be built, and we would all like to see the Post Office producing a lot more of its own plant or machinery, particularly in the development districts.

Similar comments can be made even about telephone exchanges. In the centre of Lanarkshire we were to have had a new automatic telephone exchange completed in the town of Hamilton by 1962. The completion date was continually pushed back, and we are now told that it may be completed in 1964, 1965 at the latest. The result of the completion date being pushed back has been that Lanarkshire cannot have Subscriber Trunk Dialling—although S.T.D. is an extremely important matter, particularly from the industrial point of view. I hope that the President of the Board of Trade realises this.

Some of the most important industrialists in the area have been losing orders to firms in areas which have S.T.D. because their customers, particularly those in London and the south of England, simply cannot make contact by telephone with Lanarkshire during the day. I can give the President of the Board of Trade, as I have given the Postmaster-General, the names of companies which have been losing orders because of this difficulty. One company in the area has spent hundreds of pounds putting a telephone line into another exchange area which has S.T.D. By this means the company is able to take advantage of the S.T.D. system operating in that other area.

This is an important matter, because the Parliamentary Secretary will find it difficult to persuade anyone to begin manufacturing goods in any area which does not have S.T.D. One way to attract new industry is, therefore, to give priority for automatic exchanges to be installed in the areas where industry is to be attracted.

Returning to the power station question, the Parliamentary Secretary seemed to think that the electricity authority for England and Wales had no choice of siting but had to build in the places where the electricity was required. That is not true. He will find, if he consults his right hon. Friend the Minister of Power, that power stations are, generally speaking, now being built near the coal fields, if they are to be coal-fired and near to the oil refineries if they are to be oil-fired. With the more efficient transmission of electricity it is now cheaper to have the generating station adjacent to the source of the fuel and transmit the electricity to where it is needed rather than transmit the fuel to the generating station.

Twenty years ago it was cheaper to build generating stations at the point of consumer demand. Now it is cheaper to build them at the point of availability of the fuel to be used. This has become a relevant factor in regard to the power station which, we believe, is to be built in Scotland between now and the time when it will come into commission in about 1969. If this power station is oil-fired, it will be built somewhere on the Clyde estuary in the west of Scotland. If it is coal-fired, it will be built on the estuary of the Forth in the east of Scotland. If it is built on the Forth, it will give jobs to 10,000 miners in Fife. If it is built in the west of Scotland, it might not provide any jobs in the oil industry. At most it might lead to the building of a new oil refinery on the Clyde, and that might give employment to 200 people.

If this power station is to be developed in the east of Scotland, it is not a matter of just giving grants to the South of Scotland Board but also a matter of whether the Coal Board will enjoy grants, because new mines will have to be put down. It will not simply be a matter of continuing employment in existing pits, for new mines will have to be put down in the Fife and Alloa area to supply the power station. No grant might be made for this purpose, but a grant would automatically be available to one of the oil companies for building a refinery in the west of Scotland. Surely this would influence the decision whether the power station would be coal-fired or oil-fired.

We could easily have the position under the Bill, and under the Act as it is being administered by the right hon. Gentleman, that he would give a grant in a development district and the net result would be to reduce employment there by 10,000. The whole purpose of the grant is to increase employment, but a grant to an oil refinery might put 10,000 miners out of work.

I hope that the right hon. Gentleman will accept the Amendment. Alternatively, if he wishes to say that the Amendment is unnecessary because he accepts the argument, let him say that from now on he will treat statutory undertakers, including the Milk Marketing Board and all other such authorities, in exactly the same way as he treats subscribers to Aims of Industry.

Mr. Loughlin

May I ask the Parliamentary Secretary a very simple question arising out of his refusal to treat nationalised industries in an equitable way? I am surprised that his right hon. Friend, who is sitting beside him, has not attempted to reply to the discussion. I am tempted to the point of view that this is another illustration of the inherent opposition of the right hon. Gentleman and his hon. Friends to any form of social industry.

It may be essential to develop a transport system of one kind or another in a development district. It may be found that as a result of the actions of another Department there is no transport service of any kind in that development district. Let us assume that a private enterprise organisation puts into that district a service which is essential to the district, in precisely the same way as services are provided by nationalised industries. It is necessary for a transport service to be built up in that area, and the private enterprise organisation builds it up.

Will the Ministry then take the same attitude towards private enterprise and say that this is an essential industry which would have been built up in any case by private enterprise and, therefore, it is not entitled to grant? That is the approach to nationalised industries. Are the Government content to sit back and refuse to reply to the arguments which have been advanced from this side of the House? Are they reaching the point again which was reached in the previous debate this evening when the Executive rides roughshod over the House on every possible occasion? Will they sit there and say and do nothing, knowing that they have their majority in the Division Lobbies, with no question of the case being answered or not? Can we have some reply to the points which have already been expressed from this side of the House?

Mr. E. G. Willis (Edinburgh, East)

The Parliamentary Secretary really must reply to the very powerful speech of my hon. Friend the Member for Hamilton (Mr. T. Fraser). At the commencement of his speech, in particular, my hon. Friend put his finger on the important difference between the Government's treatment of private and public enterprise. He quoted the case of the tar distillation plant established by the National Coal Board close to a colliery and one established by private enterprise. The private enterprise plant would obtain a grant, but the Coal Board's plant would not obtain one. Surely that is quite unfair.

I have long been a Member of the House, and I remember the nationalisation Acts being passed. I remember the clamour made by hon. Members opposite, when they were on this side of the House, that public enterprise should function competitively and equally with private enterprise. The great argument was that we must not show preference. There must be equality of treatment and the competitive ability of the two must be the same. This was the great cry of hon. Gentlemen opposite. As long as I can remember, this has always been their argument, but they are not prepared to look at it the other way and to say that we must not place private enterprise in a privileged position.

I understand that the philosophy now being expounded by the Parliamentary Secretary is that we can place private enterprise in a privileged position and give it grants, but we must not do this for public enterprise. It must be kept cribbed, cabined and confined, and then we must carry out a propaganda campaign to show how inefficient it is. This is appalling humbug and hypocrisy. I was about to say that it was not understandable, but after watching the Tories over a number of years one must say that they are running true to form. Surely the Parliamentary Secretary must admit that it is quite wrong that where there are two bodies doing exactly the same job and serving the same ends, one publicly and the other privately owned, the Government should say, "We will give the privately owned industry 10 per cent. grant towards the cost of plant and machinery and 25 per cent. grant towards the cost of buildings but we will give nothing to the publicly owned industry." I do not know what justification there is for it. The hon. Gentleman ought at least to have answered this argument, but up to the moment he has not done so.

11.15 p.m.

My hon. Friend moved the Amendment, and all that the hon. Gentleman has done so far is to reply to it—we are grateful to him for that—to explain that the Government had rather changed their mind in relation to public enterprise. He then stated the position as it would be in future. But he must have realised that when he did that he had then started the debate, and a debate ought to be replied to by the person who started it. Instead of that, we have had this rather arrogant treatment by him. Tonight he reminds me of his first appearance at the Dispatch Box when he tried to treat the House in a similar fashion. It is not quite good enough.

My hon. Friend raised a number of other points in connection with the proposed power station in Fife and the grants which would be applicable, and pointed to the desirability of associating the aid with the employment created—the value of the project in relation to the work created in districts where it is necessary to create work. As I understand it, the purpose of the Local Employment Act is to assist work undertaken for this purpose, and one would have thought that this was the type of work whih should qualify.

The hon. Gentleman ought at least to have the courtesy to reply to these arguments. What is the answer to the point about treating private enterprise preferentially compared with public enterprise? What is the answer to his hon. Friend's point about the Milk Marketing Board? If the hon. Gentleman does not feel inclined to answer us, he ought at least to answer his hon. Friend's very simple question about the position of the Milk Marketing Board in establishing a creamery in a development area. There are rural milk producing areas in Scotland which could well benefit in this way. The volume of employment might not be large in terms of numbers, but it would be exceedingly important in terms of benefit to the area. One can think of the Forestry Commission wishing to establish sawmills, and developments by other types of industry. Would they qualify? These questions are relevant, for in the areas concerned this type of employment is exceedingly important.

Surely the hon. Gentleman will answer some of the very proper questions which have been put arising out of his statement. We all welcome the statement as far as it goes, but it has given rise to a number of important questions, and surely the hon. Gentleman can at least answer them. I sincerely trust that he will now decide to answer.

Mr. D. Price

I am glad that the hon. Member for Edinburgh, East (Mr. Willis) is pleased with some of the things I had to say even if he is not pleased with everything. He was very generous just now.

Mr. Willis

I am always generous.

Mr. Price

The right hon. Member for Battersea, North (Mr. Jay) mentioned the B.O.A.C. workshops at Treforest. That is precisely the sort of case we have in mind, where a nationalised industry has a genuine choice of location. Clearly there are many places where they could have gone. I thank the right hon. Gentleman for that most excellent example.

May I now pass quickly to the matter of oil-fired versus coal-fired power stations. We have a long-stop limitation which would, on an oil refinery, limit the grant available on the criterion of the cost per job. The House will recall that on Second Reading I made a point of this, and said that whereas this was a standard grant, we had to have some limitation because there could be really enormous sums being given under the 10 per cent. grant with very few people employed in relation to very large sums of capital expenditure.

In fact, the amount of money which would be going to a power station in relation to employment would be very large. However, I am doubtful—I would not be more over-certain than this—how far the availability of grant one way or the other would make a difference in the choice by the C.E.G.B. in deciding marginally whether it wished a power station to be coal-fired or oil-fired. Certainly if a case could be made marginally that the amount of grant that was going to a new oil refinery was going to make a difference, we would be prepared to look at it, but I have my doubts as to whether the actual sums involved would make as great a difference as some hon. Members think.

Mr. T. Fraser

If the Minister reads this Bill in conjunction with the principal Act he will see that if he gives a grant it must be 10 per cent.

Mr. Price

Section l(3,a) of the principal Act says: …the Board shall have regard…to the relationship between the expenditure involved and the employment likely to be provided. The Bill that we are considering tonight merely makes amendments and additions to it. Clause 1(2) of the Bill states: A grant may be made under this section in any case where the Board consider it expedient for the purposes of Part I of the principal Act to make such a grant, and the Board shall, in making such a grant, impose such conditions as they think fit for securing that the machinery or plant will continue to serve those purposes.

Mr. Fraser

Am I not right in saying that when one reads this Bill along with the principal Act one sees that the Minister may or may not give a grant, but that if he gives a grant under Clause 1 of this Bill he must give a grant of 10 per cent.? That is what subsection (3) says.

Mr. Price

I think that if the hon. gentleman reads it in conjunction with Section 1 of the principal Act—"Purpose for which Part I powers exercisable, and duration of powers"—he will see that this has an overriding effect on the whole Act.

Mr. Fraser


Mr. Price

In reply to my hon. Friend the Member for Galloway (Mr. Brewis),the sort of statutory bodies he has in mind would be eligible in the same way as the nationalised industries under the same sort of terms.

The hon. Member for Glasgow, Craigton (Mr. Millan) mentioned the example of the Post Office research station. Again that would be the sort of case that one would have in mind, of a project where there is a genuine choice of location.

With regard to the question by the hon. Member for Hamilton (Mr. T. Fraser) about the new telephone exchange in central Lanarkshire. I suggest that the problem there is not whether the exchange is or is not going to central Lanarkshire, but what position it occupies in the programme of my right hon. Friend the Postmaster-General. I suggest that that is a matter between the hon. Member and my right hon. Friend, as it were—whether it is in the programme; and payment or non-payment of standard grant will not determine whether the exchange is or is not built in central Lanarkshire. That is the sort of case I have in mind as one in which I do not think it would help anybody to make standard grant available.

The hon. Member for Edinburgh, East and one or two others, including the hon. Member for Gloucestershire, West Mr. Loughlin), raised the question whether there is some element of unfairness between public and private enterprise in these matters. As I said earlier tonight, in my first remarks, quite a large part of the activities of the nationalised industries are services rather than the manufacture of products, and in many cases the nationalised industry is a statutory monopoly and there is no private enterprise competitor. Of course, there is a number of activities—tar distillation would be a good one—in which a private enterprise or a nationalised concern could be putting up a works; either could, for instance, put up a tar distillery. Again I would say that one must remember that the nationalised industry as against the private one has access to finance on a better scale—cheaper, or more freely available, or, at any rate, more certainly available—than a private firm. I think the cases in which public and private enterprise are in direct competition, in the sort of cases covered by this Bill, are not as great as hon. Members have in mind.

Mr. Loughlin

Would the Minister consider the railways, for instance? If the railways are to close down because they cannot get grants, and private enter- prise is to provide road transport, is that equitable, does he think?

Mr. Price

The hon. Member will not expect me to become involved now in the far bigger issue of competition between road and rail. Nor do I think he would want to distort the whole of this Bill and the grants made under it in trying to resolve by it the argument between road and rail. Even if I rightly suspect what his attitude on this issue is, I do not think even he would want to use this Bill as a method of co-ordinating the transport of this country.

In reply to the hon. Member for Hamilton, the position is that no grant would be given if the cost per job test were not met; which means that the oil refinery would be out completely.

I hope that may go some way to answering some of the points which hon. Members have made.

Mr. Jay

Just to clear this point finally, is it not the case plainly, for the Act and the Bill, as my hon. Friend the Member for Hamilton (Mr. T. Fraser) says, that if a grant is given it must be 10 per cent., neither more nor less?

Mr. Price

I can confirm that the right hon. Gentleman is correct in that interpretation.

Amendment negatived.