INDUSTRIAL DEVELOPMENT CERTIFICATES (Hansard, 1 December 1965)

§ Mr. Peter Emery (Reading)
I beg to move That an humble Address be presented to Her Majesty, praying that the Town and Country Planning (Industrial Development Certificates: Exemption) Order 1965 (S.I., 1965, No. 1561), dated 6th August, 1965, a copy of which was laid before this House on 13th August, in the last Session of Parliament, be annulled. As we do not have the full 90 minutes one might have hoped for in which to marshal' our arguments for saying that this Statutory Instrument should be annulled. I hope that we may have the co-operation of all hon. Members if, in speaking particularly briefly, I ask them to be equally brief in order that the matter can be discussed by as many as possible of those hon. Members who have genuine points to make.
We have put down this Prayer because we think that it must be a nonsense to reduce from 5,000 sq. ft. to 1,000 sq. ft. the area by which any industrial firm can expand. We believe that, basically, nothing will be achieved by the Government except a direct control of the expansion of industry in a manner which is entirely unhealthy. It must be very clearly realised that this provision will affect 60 per cent. of the population and over two-thirds of our firms. It is therefore a matter of very considerable importance, so I shall deal purely with the facts.
There are two ways in which this Statutory Instrument will affect factory ex- 1582 pansion and the modernisation of industry and plant. Do the Government fully realise just how small an area 1,000 sq. ft. is? It is not enough to accommodate more than five lathes. I was consulting a firm in the Midlands only last week. It wanted to put in new packaging plant to enable it to increase its export trade. The firm needs double this amount of space for that equipment. I was told, "You know, when we have to go through all these procedures with the Board of Trade it makes us wonder whether the Government want us to take this action at all". I could give hundreds of examples on the factory expansion side of big industry.
On the other side, there is the really small firm which normally cannot afford to put money into the expansion of its own business and rents its factory. It can expand only by taking over some other new property which is usually built in small lots by a speculative builder. Let us be quite fair about this. Although hon. Members opposite condemn most of the time this form of speculative building it has been a godsend in producing factory space for small industry. The Government are entirely wrong in believing that by controlling factory expansion through this Order they will make it take place in specified parts of the country. In theory this sounds delightful, but in practice it does not work.
This is even more true in the case of small firms. They cannot afford to go elsewhere and they would be put completely out of business in many cases if they had to move from localities with which certain service industries are connected. One can think of some firms in the Midlands, for example, in the neighbourhood of Nottingham, with hundreds of thousands of square feet of factory space, which have to apply to the Ministry for permission to erect a bicycle shed or something equally small. I am only too willing to echo their complaint that this is the sort of control with which a Socialist Government have always been branded. It was expected that the present Government would have got away from that old form of control of industry, but they are now back to the old ways.
Why are parts of Lincolnshire included in this Order? The House will know that the Ministry of Housing and Local Government gave notice way back in February of the possibility of this Order 1583 of confusion if the Bill had been a being made, but there was no indication then that Lincolnshire would be included. Does its inclusion now mean that industries in that county will not have had the notice which has been given to everybody else?
How do the Government propose to use the retrospective powers in the Order? Does the House realise that it will be possible for the Government to apply its powers to a period before August, if planning permission had not been granted, although the Order was not laid until August? Can we have a direct statement from the Minister of State, Board of Trade that the Government have no intention of using the retrospective powers in that way? Can the hon. Gentleman tell me also how many extra applications for industrial development certificates are expected from industry to cover the very large amount of improvement which has been carried out in the last few years involving factory spaces of between 1,000 sq. ft. and 5,000 sq. ft.?
I believe that industry has not woken up to the full implications of this provision and that the Board of Trade will find itself inundated with applications from genuine firms for genuine expansion. But why make industry go to all this trouble for ordinary reorganisation and expansion? We on this side of the House contend that the control of offices and house building, the creeping control of prices, and this further control of industry are only symptomatic of the overall fact that the Government are returning more and more to controls for controls' sake without any resultant benefit. It is for these reasons that we move the Prayer and hope that the Government will withdraw this Order.

§ Mr. Gordon A. T. Bagier (Sunderland, South)
After listening to that short oration from the hon. Member for Reading (Mr. Peter Emery), one can readily understand what happened during the 13 years of Tory Government. The hon. Gentleman's remarks amply illustrate that Government's complete failure to appreciate that, in a small and compact community like ours, there must be some measure of planning. When the hon. Gentleman implies that we must allow a free- 1584 for-all—[HoN. MEMBERS: "He said nothing of the kind."]Yes, this is what he said, and——

§ Mr. Speaker
Order. We cannot discuss planning in general. The hon. Gentleman must relate his remarks to the Order.

§ Mr. Bagier
I direct my remarks at once to the question of industrial development certificates, Mr. Speaker, which is of great importance to my area. I represent a constituency in Sunderland, in the north-east of England, where the present rate of unemployment is 3.6 per cent., more than twice the national average, and where it has been extremely high in the past. In the 10 years leading up to 1964, three-quarters of all new jobs created were in and around the conurbations of Birmingham and London. This very fact underlines the failure of the previous Government to realise that, if we are to get the best potential out of the work force available, either we have to take work to the workers or there will be migration from such areas as mine down to the Midlands and the South.
Such enforced migration cannot be right and the Government are emphasising that, to get the best out of our work force, we must bring a measure of discipline into the movements of industry.

§ Mr. Speaker
Order. The hon. Gentleman must come to the Order, and deal with the question whether the area for which a certificate is not needed should be reduced from 5,000 to 1,000 sq. ft.

§ Mr. Bagier
As regards the provision of new jobs, whether the area be 5,000 sq. ft. or 1,000 sq. ft. it is of paramount importance to have some measure of planning. The Government are prepared to say——

§ Mr. Speaker
Order. The hon. Gentleman must take note of what the Chair says. Many hon. Members wish to speak on the Order. If he cannot speak to the Order, he must not continue.

§ Mr. Bagier
May I conclude in this way? I am interested in jobs in my area, and my point applies to any extensions of 5,000 or of 1,000 sq. ft. Did the hon. Member for Reading or his Government consider, while they were in power, the number of unemployed in areas such as mine?

§ Mr. Speaker
Order. I must ask the hon. Gentleman not to continue his speech.

§ Mr. Geoffrey Lloyd (Sutton Coldfield)
I shall be both brief and practical about the effect of the Order. I am told that the area of this Chamber is about 3,000 sq. ft. Hitherto, about the area of the Chamber plus half as much again was free for people to use in the development of their factories or new industries without being required to obtain the permission of an official of the Board of Trade. Now, the Government are reducing it to one-third the area of the Chamber. Everyone can see at once that this is pretty small.
In the Midlands, we understand and appreciate the needs of constituencies such as that represented by the hon. Member for Sunderland, South (Mr. Bagier). We realise that Birmingham and the Midlands are being asked to be, so to speak, an industrial blood donor to the more anaemic areas. Our fear is that we are being asked to do it in too great a volume for the health of industry in the prosperous areas.
What particularly concerns us in Birmingham is not big industry, because that question does not arise so much on this order, but small industry. The health of the Midlands and the kind of prosperity to which the hon. Member for Sunderland, South referred, has been largely due to small men in Birmingham, the seed bed of the enterprise of the area.
I should like to sum up my argument by putting a question to the Minister of State. Within the last two months in Birmingham three motor car workers have given up their jobs. They have saved a little money and got a small factory, just about of the size that would come under this Order, in which they are repairing motor car radiators. They think, and I hope they are right, that they are on to a good thing. If they succeed, as many master men before them have done in the Birmingham area, they will want to go into something bigger than this third of the size of the Chamber of the House of Commons.
How would they be treated over an I.D.C.? These are not men who could be asked to go to Glasgow or to the constituency of the hon. Member for 1586 Sunderland, South. If they were asked to do that, they would have to fold up. They have not the credit to do that kind of thing. chey are not men who could employ a highly-paid professional man to represent their case to the Board of Trade. These three Birmingham workers who became master men—will they be fairly treated under this Order?

§ Mr. Cyril Bence (Dunbartonshire, East)
I have some knowledge of the Midlands. I am surprised to hear what the right hon. Gentleman had to say about the little man in the City of Birmingham. My experience in Birmingham over 40 years has been that it is difficult for the little man, even before I.D.C.s, to get started in Birmingham. [An HON. MEMBER: "Nonsense."] I am not talking nonsense. It has become increasingly more difficult for small groups of men to start industrial enterprises.

§ Mr. Geoffrey Lloyd
Of course it is difficult for a man to start up a new enterprise, but it is easier to do so in Birmingham, and always has been, than in almost any other city.

§ Mr. Bence
I did not think I would be controversial in saying that it is difficult for a small man to raise capital and get moving on a manufacturing process in the second half of the 20th century, when large industries are pretty well entrenched. I appreciate the problem of the small man and the small factory unit wanting to increase output by enlarging its premises. It is not so simple as that.
I understand that the hon. Member for Reading (Mr. Peter Emery) does not disagree with the principle of the certificate system, but with the size of the unit permitted. Hon. Members opposite are not objecting to the principle, but the size. But it is always possible, even at that figure, for a firm to put up premises under that size in several units. This has been done. The hon. Member for Reading said that this was having little effect in the rest of the country. That is not so. We have had a report this week from the chairman of the industrial council for Scotland that the inquiries and the expansion of newer industries in Scotland is going on at a rapid pace.

§ Mr. Peter Emery
I have no wish to cast doubt on what the hon. Member is presenting to the House, but is he telling us that these inquiries are inquiries of under 5,000 square feet? The inquiries referred to in Scotland are, on the whole, all for expansions above that size. These are very small units. It is not that which we want to see, but a bigger movement to other areas. It is so as not to limit the normal ordinary expansions of industry in these smaller areas that we have moved this motion.

§ Mr. Bence
The point is that if the Order was negatived and we went back to the 5,000 square feet, the inducement to move would be that much less. The inducement is greater if one reduces the floor space for which an I.D.C. has to be sought.
I support the principle of giving considerable inducements to get manufacturers out of the centre of Birmingham, London or other conurbations into areas where development is needed. It is highly desirable if ground space in the centre of a conurbation can be released by inducing a small manufacturer to move out from the dense city area into a development district where he can build a factory as big as the one he is giving up or an even bigger one and increase his production. It is better to give him an inducement to do that than to give him freedom to expand his existing factory in the city, even by 1,000 sq. ft. Land in such areas is scarce and we need it badly. It is desirable to give an inducement to move out even if all the man wants to do is to increase his existing floor space. It is much better that this should be done outside the "coffin" between Birmingham and London. Such a man should be encouraged to go, for instance, to Scotland and build a larger factory there, whether it is 5,000 or 1,000 sq. ft. larger.
When an inducement is given to move out from an old factory, which is often functionally very backward, those running the business can frequently obtain a new factory tailor-made to their production. They can put in new machinery and equipment, and all the latest technological devices for production. It is in the interests of the workers and the country that the State should induce people to move from their old premises 1588 in the cities and not to add to those old premises and swallow up more land in the congested areas. I am surprised that hon. Gentlemen opposite should ask for the Order to be negatived.

§ Sir Edward Boyle (Birmingham, Handsworth)
I have listened with some surprise to the speeches from the Government benches. There is no question of the Opposition being against location of industry policy or against a policy of I.D.C.s in principle. On the contrary, as I remember very well—I mention this only in passing, Mr. Speaker, and I shall not pursue it—the very first Measure that we introduced in the 1959 Parliament, exactly six years ago, was a major Bill on the whole subject of location of industry, emphasising the importance—

§ Mr. Speaker
Order. I think that the right hon. Gentleman has gone far enough on that subject. He must come to the Order itself.

§ Sir E. Boyle
I promise that I will not develop that further, Mr. Speaker.
What we are discussing tonight is whether uncontrolled I.D.C.s should be reduced from 5,000 to 1,000 sq. ft. In reply to an hon. Gentleman opposite, it is true that between 1951 and 1964 the proportion of the national income devoted to new capital issues doubled from 6½ to 13 per cent., and during those years we had a number of bursts in industrial investment. This was always associated with a large number of factory extensions, not least in the Midlands. Whatever our views on specific controls are, surely it must be agreed that there is a level of detailed specific control which is bound to result in a lower rate of growth than we might otherwise achieve. In other words, it is absurd to suppose that there is no lower limit to the level of specific control that we can have without affecting growth.
One of the most ambitious target figures in the National Plan—some would say that it is too ambitious—is that we must achieve each year a 7 per cent. increase in manufacturing investment. I say without question that this Order is totally inconsistent with the Government's own objective in the National Plan of an extra 7 per cent. a year in manufacturing investment. They will not get it with the very detailed, miniscule, specific controls 1589 proposed in the Order. As one who does not take an absolutist view on specific controls or economic measures generally, I regard this as one of the most foolish Orders to have been introduced by the Government.
I cannot believe that the growth points in the regions or the level of growth can be in any way affected favourably by going into such detail as this. I am sure that our own figure of 5,000 sq. ft. was the right one and I hope that we have the maximum possible support against the Order.

§ Mr. Julian Snow (Lichfield and Tamworth)
The Minister of State will be surprised, in view of the conversations I have had with him recently about the refusal of an I.D.C. to a big concern in my constituency, to know that, by and large, I support this Order. I feel lack of sympathy for both the right hon. Member for Sutton, Coldfield (Mr. Geoffrey Lloyd) and the right hon. Member for Birmingham, Handsworth (Sir E. Boyle) on this. To those of us in Staffordshire, Birmingham is now the "great wen" of this century. We feel very harshly treated and I draw my hon. Friend's attention to the fact that tomorrow we shall consider the West Midlands Special Review Order, which truncates Staffordshire and reduces its revenue by nearly one-third and the total result of which will be an ever-increasing problem in meeting its financial position.

§ Sir Douglas Glover (Ormskirk)
This Order is an absurdity. No one on this side of the House objects to industrial development certificates of a figure. But does the Minister of State think that, as a result of the Order, all projects from 5,000 sq. ft. down to 1,000 sq. ft. will be refused? Or will his Department be inundated with the paper work involved in considering all those projects which up to now would have gone through without an I.D.C.? Will these be granted or refused?
If they are refused, then, as my right hon. Friend the Member for Birmingham, Handsworth (Sir E. Boyle) has said, it will inhibit the growth of the country. If they are not to be refused, then the Order is a nonsense because it is unnecessary.
1590 The Minister of State is a sensible man. He is one of the few hon. Members opposite for whom I have great regard both personally and for his ability. But does he realise that the Order says that no firm in the districts mentioned—two-thirds of the industrial complex of Britain—will be able to extend its premises by more than the size of one semidetached council house without getting an I.D.C.? Such a firm will not even be able to modernise its offices or perhaps use the old offices to extend into the factory without an I.D.C. The Order means that a firm will not be able to extend by an area bigger than one-third the size of this Chamber on one floor without an I.D.C., with all the detail, all the legalities and all the justifications that have to enter into it. I ask the hon. Gentleman to look at this again because it will inhibit the growth of those vital small firms which cannot afford to move to Newcastle and other development districts but which are perhaps the most vital growth element in the country. This Order makes it virtually impossible for them to expand.

§ The Minister of State, Board of Trade (Mr. George Darling)
I am sorry that I have been left so little time in which to reply. In opposing the Order, the hon. Member for Reading (Mr. Peter Emery) and the right hon. Member for Birmingham, Handsworth (Sir E. Boyle) are somewhat handicapped because, as a result of the Summer Recess, the Order has been in operation for three months. We are not now having an academic discussion. I can explain to the House how it has been working. If I had time, I could tell the House that it had been working successfully and I could state what some of its beneficial effects were. I should like at some time to engage in an academic discussion with the right hon. Member for Handsworth, who approached the matter from an academic point of view, but tonight I shall speak of practical matters and in the few moments I have left I shall begin by answering the questions of the hon. Member for Reading.
The hon. Gentleman cannot say that the Order will not work, for it is working and working successfully.

§ Mr. Peter Emery
In limiting extensions.

§ Mr. Darling
No, not in limiting extensions. There has been no limiting of extensions in the sense the hon. Gentleman was talking about. We have not inhibited the expansion of manufacturing industry.
The hon. Gentleman asked why Lincolnshire was not in the anticipatory note which was sent out to help local authorities. The reason is that after the anticipatory note was sent out, the regional boundaries were redrawn, as the hon. Gentleman will remember, and within the eastern area there now comes the southern part of Lincolnshire. For reasons which we discussed in Committee and which I will not go over again, we agreed that an Order of this kind would have to be introduced on the basis of Board of Trade regions and not smaller districts.
The hon. Gentleman asked about retrospective powers. At the beginning, there was a very small element of retrospection, in other words, for those projects which had received planning permission but not been finally settled, and these were very few. However, because we have been operating for three months, those cases have practically all disappeared and otherwise there has been no element of retrospection.
The hon. Gentleman was completely confused about service industries, because neither above nor below 5,000 sq. ft. have we in any case stopped the development of service industries which obviously have to be in the localities where the services are to be performed. Of course it would be foolish and a nonsense to stop garages from going where they ought to go, even if they were not to go to development districts, or laundries or any other such services, whether above or below 5,000 sq. ft. We do not intend to do so.
The hon. Gentleman asked how many extra applications we expected, as though the operation of the Order would so flood the Board of Trade administration that we would not be able to cope with it. We have so far dealt with just over 500 applications, the vast majority of which have been approved right away. No complaints have been received so far by the Board of Trade about delays in 1592 notifying the result of applications. From our experience so far, the procedure is being speeded up and I can tell the hon. Gentleman that the operation is being undertaken quickly and successfully with a very small increase in staff and at surprisingly small cost. If the right hon. Member for Handsworth likes, I will give credit to the machinery which was set up by the previous Administration to deal with this kind of thing. It was working extremely well.
Although at this stage we cannot form conclusions about the full effects of bringing in I.D.C. control on smaller industrial projects in the overcrowded Midlands and South-East, two tentative conclusions have already clearly emerged.

§ Mr. John Farr (Harborough)
On a point of order. May I ask for your indulgence and guidance, Mr. Speaker? It appears to me that there has been totally inadequate time for discussion——

§ Mr. Speaker
Order. The hon. Gentleman must leave that matter to the Chair.

§ Mr. Darling
The first and most encouraging is that speculative building in the wrong places, of the type which the hon. Gentleman was talking about, has now completely stopped. The other is that we have been able to steer, within the area of the Order, a small but very valuable proportion of the applicants to far better sites than they would otherwise have had. These have been sites where the labour situation justifies their being established. The Order is working so extremely well that I hope that the House will reject this Motion.

§ Mr. Peter Emery
Before the hon. Gentleman sits down, would he answer the point about how many applications have been refused? If he argues that everything is being approved, we do not need this Order.

§ Mr. Patrick Jenkin (Wanstead and Watford)
The debate has unfortunately been fairly——