INDUSTRIAL DEVELOPMENT CERTIFICATES

HC Deb 09 December 1965 vol 722 cc741-59

Order read for resuming adjourned debate on Question [1st December], 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.—[Mr. Peter Emery.]

Question again proposed.

10.6 p.m.

Mr. Patrick Jenkin (Wanstead and Woodford)

We are now given the opportunity to resume the debate which we began on 1st December, when we had a short discussion of the merits and demerits—I must confess that they were mostly the demerits—of the Order.

I remind the House that the Order is intended to reduce the exemption limit from 5,000 sq. ft. to 1,000 sq. ft. above which an industrial development certificate must be obtained before planning permission may be applied for. Our case against the Order falls under four heads. First, it imposes new burdens and restrictions on manufacturing industry. Secondly, it reduces the exemption limit to a wholly derisory level. Thirdly, it covers a far wider field than the mischief of which the Government have complained. Fourthly, the I.D.C. procedure, and this extension of it by reducing the exemption limit, has been a wholly negative and restrictive measure and is far less effective than the positive incentives which are necessary to deal with the problem.

I will deal briefly with each of the four heads. There is no doubt, whatever the Minister of State may say, that this lowering of the exemption limit will impose a substantial additional burden on industry. Hitherto the great majority of applications for planning permission for industrial development have not needed I.D.C.s because they were below the limit which applied. Only developments of significance required a certificate. This was reinforced by the right hon. Gentleman the President of the Board of Trade on Second Reading of the Measure—the Office and Industrial Development Bill—which gave him power to make this Order. He said that in the Midlands and South-East in 1963 less than 10 per cent. of planning consents for industrial development were given pursuant to an I.D.C. and that more than 90 per cent. of the applications did not require to go through this procedure at all.

The reduction from 5,000 sq. ft. to 1,000 sq. ft. must now sweep into the net the great majority of this 90 per cent. which have hitherto not had to bother about the procedure, and it will bring in all the trivial applications which the procedure will now cover. The result was well put in our earlier debate by my hon. Friend the Member for Ormskirk (Sir D. Glover) when he said that a great many of these people will just not bother. They must already go to the local authority for planning permission and now they will have to go to the Board of Trade as well. As a result, many of them will feel that the game is not worth the candle and thus we will get inefficiency of operation perpetuated, modernisation discouraged and expansion hampered. To quote the words which I used on Report: In Hampshire, Herefordshire and Hertfordshire hindustrial hinnovation will 'ardly hever 'appen".—[OFFICIAL REPORT, 14th April, 1965; Vol. 710, c. 1455.] My right hon. Friend the Member for Birmingham, Handsworth (Sir E. Boyle) made the very valid point that the National Plan calls for a massive increase in industrial investment—7 per cent.—and that this Order by imposing this additional restriction will lead to a national loss of investment that will go unmeasured, and be largely immeasurable, but which will do significant damage to national efficiency. We are told that the Government intend to be gritty, and that is certainly true; this Order is another piece of sand in the machine.

My second point is that the Order reduces the exemption limit to a wholly derisory point—the equivalent of about half a dozen ordinary domestic garages. It is an area much less than the Floor of this Chamber. I took the trouble to measure just how much of the Chamber it would cover—and in doing so caused some consternation to the custodians, who did not know what I was up to. The area from the Bar of the House to the Bar behind your Chair, Mr. Deputy Speaker, and bounded by the second benches on both sides is about 1,000 sq. ft. Every industrial development, every new estate, every factory extension of that size or over will have to go through all this rigmarole of obtaining an industrial development certificate. It is nonsense, all this grinding cumbersome paraphernalia, and it reduces the limit to completely derisory dimensions.

Thirdly, the Order goes far wider than is required to deal with the mischief of which complaint is made. In the Second Reading debate, and in the Committee and Report stage of the Bill, the one point made by the Government when they felt that the existing procedure was not working was that industrial estates were being allowed to spring up where each individual unit was less than the 5,000 sq. ft. limit, but where the total area was substantially more. What was being complained of was speculative industrial estates. It was made perfectly clear by the Minister in Committee that he would not use the Order to prevent normal factory extensions. Yet, when all these things are covered, the Order sweeps in with this reduction of these extensions as well. It covers a field far wider than the speculative industrial estates of which the Government were complaining.

The Minister of State said in Committee that the Order would be administered with sympathy and understanding. was reminded of the oysters: 'I weep for you'", the Walrus said, 'I deeply sympathise.' With sobs and tears he sorted out Those of the largest size Holding his pocket handkerchief Before his streaming eyes. The only difference is that the Minister does not even confine his attention to the largest, but goes for the very smallest as well.

In any event, in his attempt to achieve the objective, is the Order necessary? It has been clear for some time that if some one puts up an industrial estate that does not have any tenants for the buildings being put up, he is not allowed to say that the tenants will all be different people. That was made clear in Circular 9/62 issued by the Minister's Department in 1962 which stated: If the developer does not know who will occupy the buildings he will require an industrial development certificate, for he will not be able to show that of his total development not more than 5,000 square feet will be occupied by a single undertaking. Why has that not been applied in practice? Why is it not perfectly adequate to cover the case of the industrial trading estate? As it is, we have this sledgehammer of an Order reducing the limit to 1,000 square feet in order to crack this somewhat limited nut.

My last point, and it is one of great substance, is that the industrial development certificate procedure has not yet been so successful that it warrants its extension in the operation. The procedure was introduced in 1960. We have had five years' experience of it. The Board of Trade publishes every year figures of the additional employment that has been created pursuant to industrial certificates, and publishes that information region by region.

The area covered by this Order comprises five of the standard Board of Trade regions, London and the South-East, Southern, Midland, Eastern and North Midland. Although figures published in the past included part of Lincolnshire now in the Humberside region, I do not think they will come within the overall figure. These five congested regions account for about 53 per cent. of the total employees in manufacturing industry. Of the total additional jobs attributable to I.D.C. consents in each year in the whole country the proportion accounted for by additional employment in the five congested regions has varied considerably over the years.

I am sure that the Minister of State will accept, because it is drawn in part from figures from his Department, that over the first three years the proportion of jobs attributable to I.D.C. consents actually increased from 43 per cent. to about 48 per cent. Then, in 1963, there came a dramatic change. The proportion of new jobs in the congested areas covered by this Order fell to 33 per cent. and in 1964–65 they fell below 30 per cent. Why should there be this sudden dramatic reversal of the trend? I suggest that the reason is that in 1963 my right hon. Friend the Member for Barnet (Mr. Maudling) introduced a Budget which brought substantial additional attractions to investment in the development areas in the form of free depreciation and substantially improved development grants.

At that point the Government switched from the stick to the carrot and it had this immediate and dramatic effect. The lesson one draws from this is that the carrot will always be far more effective than the stick, yet in this Order we are offered more of the stick.

The Minister of State, Board of Trade (Mr. George Darling)

Hear, hear.

Mr. Jenkin

The Minister of State says, "Hear, hear" and displays his philosophy in so saying because his Government slashed the carrot substantially by changing the form of investment allowances. It is sometimes said that the Government have abandoned Socialism and are adopting some other philosophy. Not on your life!

This Order is Socialism. It is economic planning at its very worst. The Minister of State's right hon. Friend the President of the Board of Trade warned us years ago in a book entitled "Socialism in the New Society." In a chapter headed, "Employment in the Right Place," he said: At this point in the argument we are mainly concerned with the economic need for locating new sources of employment in the right place. Here there is a vast field for collective planning, constructive as well as negative, the surface of which has hardly yet been scratched…. This is a scratch indeed that we are getting. This is a perfect example of what we are coming to know as the "Thou shalt not Government." Thou shalt not build offices without a permit. Thou shalt not invest thy capital abroad. Thou shalt not advertise cigarettes on television. Thou shalt not advertise fuel. Thou shalt not build more than 100,000 sq. ft. without a licence. Now, thou shalt not build a factory extension of more than 1,000 sq. ft. without a certificate. So goes on and on the mounting tide of restriction.

This is Socialism. We were warned by the First Secretary of State and Secretary of State for Economic Affairs before the election when he told the country: The great thing the next Labour Government will do is to introduce planning into every aspect of our life. This is it. This miserable Order is one more shackle on industry and those who work in it. It is time that we called a halt. Had we still been within the time limit as we now are not, we would have divided the House against this Order—

Mr. Darling

Oh, no. Hon. Members opposite would not.

Mr. Jenkin

Yes, we would. As it is we are now too late because the debate was adjourned, but we must express our profound dislike of this Order and of the restrictive and utterly negative philosophy which has given it birth.

10.20 p.m.

The Minister of State, Board of Trade (Mr. George Darling)

In the absence of any support for the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin), I should like, by leave of the House, to reply to some of the points which have been raised in the debate and which I was not able to deal with in my very brief intervention last week. The lack of support for the hon. Member is a clear indication that, following even my brief intervention last week, the hon. Gentleman is now merely beating the air.

I want to make two general observations. First, it is very significant that, even when the hon. Gentleman had some support last week, not a single former Minister of the Board of Trade now sitting on the Opposition benches put in an appearance to support him or the hon. Member for Reading (Mr. Peter Emery). The reason for their very noticeable absence is to be found in the speech made by the right hon. Member for Barnet (Mr. Maudling) when he moved the Second Reading of the Local Employment Bill, 1960, to which the provisions of this Order are closely related. I do not want to quote the right hon. Gentleman at too great length, but he was well aware that if there was to be a sensible distribution of industry policy, a policy which was to be effectively operated, there had to be strict control—the "stick", if the hon. Gentleman prefers that term—of industrial expansion in the overcrowded Midlands and in the South-East. In the course of his speech the right hon. Gentleman emphasised the need for that very strict control.

The right hon. Gentleman went on to say that one purpose of the 1960 Act—incidentally, industrial development certificates were initiated in 1948, not 1960—was to close loopholes which had appeared in the administration of industrial development certificates. Let me quote the right hon. Gentleman's words: The only changes which I think should be noted"— that is, changes from the original procedure, the immediate post-war procedure— are two designed to close loopholes which exist at present in the I.D.C. system. First, I understand that there is at present no control over change of user, and, therefore, it is possible, for example, to build a warehouse, and later to change it to a factory, without having to get an I.D.C. Secondly,"— this is the point— since I.D.C.s do not apply below an area of 5,000 sq. ft., it is possible for ingenious people to build large factories comprising a large number of buildings none of which is individually of a greater area than 5,000 sq. ft…. These are two examples of how the purpose of Parliament in this matter can he frustrated and we are closing those loopholes."—[OFFICIAL REPORT, 9th November, 1959; Vol. 613, cc. 43–4.] That was the purpose of the appropriate Section of the 1960 Act.

It was quite clear then that the right hon. Member for Barnet fully realised that his efforts to get a better distribution of industrial activity in the United Kingdom could be frustrated if the I.D.C. control were evaded by the proliferation of small factories in already congested areas.

Unfortunately, the action taken by the right hon. Member for Barnet in 1960 to close this loophole has proved to be somewhat abortive. The hon. Member for Wanstead and Woodford has quoted the Circular issued, not by the Board of Trade but by the Ministry of Housing and Local Government, in 1962. The hon. Gentleman rightly quoted the sentence at the end of the paragraph under "Fresh Development". The paragraph above is also pertinent: If no single undertaking is to occupy more than 5,000 sq. ft. of such contiguous or adjacent buildings, an industrial development certificate would not be required. Taking the two together, what has happened, as I shall explain later—I do not want to take too long, but I want to quote the kind of thing which has been going on—is that estates have been built on planning permission from local authorities, and the estate developer has been able by advertisement to get the individual tenants that he requires. As I will show, whole estates have been built in the Midlands and the South-East, completely evading what the right hon. Member for Barnet wanted to do, and frustrating the purposes of this Circular. Many factory estates have been developed, and a large number of individual factories, not on estates, have been built here and there below the 5,000 sq. ft. limit, adding considerably to the already great unsatisfied demand for scarce labour and making worse, as the hon. Member should know, in overcrowded London and the Midlands, the congestion of traffic, and the pressure on housing and social services.

Mr. Peter Emery (Reading)

I am trying hard to follow the hon. Gentleman's case, but would not he agree that in certain counties in the South—in the old county of Middlesex and in Surrey, for example—where the planning permission has not been granted until the occupiers of the new estates were known and the nature of the business to be carried out in the new buildings was apparent, all this has been properly carried out and there has been no evasion?

Mr. Darling

No, there has been evasion, as I will show. Hon. Members can gauge the amount of this uncontrolled factory development by the fact that in the Midlands and the South-East only about 10 per cent. in number of industrial planning approvals were supported by industrial development certificates. This is the degree to which this has gone on. We have gone carefully into it and we have found, in terms of square feet, that the amount of industrial floor-space approved without industrial development certificates in many parts of these regions was greater than the space approved under the control. In other words, all our efforts to carry out the agreed and widely approved policies of the previous Government for the better distribution of industry were completely frustrated in many of these areas by the amount of factory building, which was greater in extent than the number of I.D.C. approvals.

The whole business was creating grave anomalies. This is the kind of thing that the hon. Member for Wanstead and Woodford has not begun to consider, because in carrying out these agreed policies under the 1960 Act we were refusing I.D.C.s for developments which could go to development districts, but as the firms concerned hived off their expansion projects to development districts other firms moved in to upset completely the "stick" part of the operation.

This is a very real problem. The attitude of hon. Members opposite, that this uncontrolled factory building should go on, has surprised me, because no one can deny that the fairly widespread expansion of these small factories has exacerbated what was already a difficult industrial situation. Yet hon. Members opposite, faced with this problem, run away from it. The hon. Member for Wanstead and Woodford said tonight, and we had the same sort of speeches last week and in debates on this year's Measure, "Do not do anything to control this situation."

Mr. Patrick Jenkin

Nonsense.

Mr. Darling

And hon. Members opposite have added, "We do not care how much chaos is created by inaction but do not control small factory developments."

Mr. Jenkin

No.

Mr. Darling

Oh, yes.

This, of course, is a classic example of the laissez-faire attitude which was responsible for the spread of slums over this country and so on.

Hon. Members went on to talk about controls for controls' sake and Socialists wanting only to build up a glorious bureaucratic machine. There was nothing new in that sort of criticism. It was just about on a par with the jibes we used to get when we were trying to control the standards of houses in order to ensure that working-class houses had baths, when the Conservative Party used to say that if we did that the tenants would only use the baths to put the coal in. I had expected that the two bright young hopes of the Tory Party, the hon. Member for Wanstead and Woodford and the hon. Member for Reading, who are leading in this debate—without any followers or supporters—would have been a little more enlightened and would have had some concern for the proper planning of industrial developments. I am sorry that they have disappointed me.

Mr. Patrick Jenkin

No doubt because of his many cares, the hon. Gentleman has forgotten the speech which I made at the Report stage of the Measure under which this Order is made when I said that I entirely welcomed the whole concept of the regional policy and welcomed the strengthening of the regional policy as it applied to offices. But does he not recognise that there is a question of degree, a question of how far down the scale one should go in imposing massive restrictions on industry in attempting to pursue this policy? Our case is that the Order has gone too far.

Mr. Darling

I am coming to that. I shall show that it has not gone too far.

Last week, I said that we had had no complaints about the way in which we had operated this new I.D.C. control. I do not want the House to misunderstand this. We have had a considerable volume of complaints and protests from industrialists protesting bitterly about new and uncontrolled small factories being built next door to their own plants. These are genuine complaints—not the manufactured complaints which we have had tonight—from employers who already have considerable difficulty in recruiting and holding on to the workers they need, and who see new factories going up next door to their premises and poaching their workers, despite the promises by the previous Government and the present Government that this sort of thing would stop. One can understand that they are naturally incensed.

I want to read one or two from a very large number of letters which I have received from industrialists on this problem. I know that hon. Members will forgive me if I do not give the names of the firms, for good reasons. The first comes from a small manufacturer who is on an established industrial estate in Surrey. He sent it to my right hon. Friend the First Secretary of State. It says: Dear Sir, I will be glad to know why developments as per the enclosed letter"— which I shall read— are still permitted, as I was under the impression that this Government and the preceding one was, as a matter of policy, discouraging development in the South-East in favour of areas where the manpower shortage is not so acute. The enclosed letter, from a firm of estate developers, says: Dear Sir, A new factory estate will be commenced shortly inside the Greater London Council area"— it gives the address— where single-storey factories will be erected from 5,000 square feet upwards"— that, of course, would take in the ancillary buildings— and let on lease. If this would be of interest to you, we shall be glad to give you full details, if you let us know the floor space that you need. We can also offer similar Estates in other parts of Surrey and throughout the Home Counties. If hon. Members want further proof of the way in which the previous Government's arrangements have been evaded, they have it there.

Let me quote some other employers. This is from a large, well-known manufacturing firm in Hertfordshire, writing to the Board of Trade: I am very perturbed at industrial developments that now appear to be taking place in two areas where we are currently operating. Then the letter mentions the name of the first place, in the Home Counties, in Hertfordshire. It goes on: Here there is an industrial development taking place where a number of factory units of apparently 5,000 to 10,000 square feet are being erected, and where in due course, no doubt, industry from elsewhere will be offered facilities. The other development is in Sussex, where I understand the local Council is planning a similar development on seven acres of land, which, if it goes through, is likely to have similar results. These results can only be to the serious detriment of existing employers. In both areas the chronic shortage of labour has become particularly acute this last 18 months, and unless housing development, and the entry of additional population into these areas, takes place concurrently with the industrial development, there could be the most deplorable results on local labour conditions and costs. I will quote another, from a firm in Nottingham, written to the President of the Board of Trade: Dear Sir, We have just read in the Press that a group of local developers plan to build no less than six factories of 4,000 sq. ft. each in this area. The size of each of these factories will excuse developers from applying for an industrial development certificate and the factories will all be sold separately to different companies. During the past few years this company has experienced the greatest difficulty in recruiting additional staff. Continued pressure on the local Labour Exchange Manager has produced no result whatever and we are told that there are always many hundreds of registered vacancies, with only a handful of unemployed people on the books, most of whom are unsuitable for general employment. The Exchange manager tells us that this shortage of labour applies not only to us but to almost every firm in this area. In desperation we turned to the West Indian High Commissioner's Office, and last year recruited several parties of girls direct from Jamaica. Although this company is not a large one, it supplies… and then it mentions the components supplied to the motor car industry, which I will not mention because I would give the name of the firm away. We think you will agree that it is not in the national interest that supplies to major manufacturers should be jeopardised at times of full production. Furthermore, while we are being compelled to take such exceptional measures as the recruitment of staff direct from overseas, we do not think that this kind of development should take place. Although it stands within the letter of the law it is entirely at variance with Board of Trade policy. It goes on to say that we have refused an industrial development certificate to them. We are writing therefore, and on behalf of our sister companies, to ask you to use your good offices to prevent this disastrous venture going forward. Time is now short and swift action will be required if it is to be effective. I will give another example, written by one of our major engineering firms, supplying machinery and equipment to the textile industry, situated near Leicester: I should like to draw your attention to a situation which is causing our subsidiary"— and he mentions the name of the subsidiary— much embarrassment. At this Company needles are manufactured for the hosiery industry, and we used to employ a labour force of upwards of 700 male and female operatives, but due to licences being granted to small manufacturers who have built factories in this area, we are now able to employ only 580 operatives. Not only have operatives been taken away from our factory but there is every possibility that more will leave us as competition is becoming stronger now that the firms"— in the industry concerned— are able to offer very high rates of pay on account of the bonus system employed. We are endeavouring to put in automatic machinery to keep up our production, and we are also trying to expand our output and supply more needles for export. At the moment we have six automatic machines awaiting operators and this represents something like 60,000 needles a year. We have many more letters of the same kind.

What I find hard to understand in the arguments deployed by hon. Members opposite against this new control is that they totally ignore these widespread complaints and this side of the picture. They weep crocodile or walrus tears for the speculative estate developer who has found a way to evade the 1960 Act, but, apparently, they do not care a tinker's cuss about the difficulties and problems of the established industrialists.

We do not take such a onesided view. We are concerned about the established employers' difficulties and we want to help them. That is why we have introduced this new control. We do not want to stop proper developments which should take place, but we do want to stop the crowding in of new factories, many of them admittedly fairly small but adding up, in many parts of the Midlands and the South-East, to a serious threat to proper development and to the day-to-day operations of large numbers of employers.

We are not really doing a disservice to the estate developers. We can suggest many sites to them within the regulations where we would be happy to see a lot of small-scale industrial expansion taking place. All that we are doing under the Order is to keep them away, if we can, from the places where they would only make more difficult a fairly desperate labour shortage.

In his protest against this sensible control, the right hon. Member for Birmingham, Handsworth (Sir E. Boyle), whom the hon. Member has quoted, put forward what I regard as an ill-considered argument. He said that the Order was inconsistent with the Government's objective of an extra 7 per cent. of manufacturing investment. He argued that if we stopped these minor expansions, we could not get that extra 7 per cent. That argument, as deployed by hon. Members opposite, begs a whole lot of questions.

What we want—and I assume that it is what the hon. Member wants, too—is effective investment which will produce a satisfactory return in increased output, higher productivity and more efficient services. What the hon. Member ignores is that already, in the congested parts of the country, there is a lot of past investment in terms of factories and machines which is not being fully used simply because very few factories have their full complement of employees.

I have recently visited a number of factories in the Midlands and I have not been in one factory which had its machines fully manned. Some of the machines were idle through sickness or, perhaps, a little bit of absenteeism, but in discussion with management I was told that most of them were unmanned for the simple reason, which the employment statistics reveal with devastating clarity, that there are too many unfilled jobs. The figures have to be taken into consideration.

In the Midlands Region there are 59,000 vacant jobs which have been notified to the Ministry of Labour exchanges; in London and the South-East 118,000 vacant jobs have been notified, and in the Eastern region there are 41,000 vacant jobs. That is over 200,000 vacancies, and these are an underestimate because in many parts of the regions employers have stopped notifying vacant jobs. It is a waste of time. They cannot get any workers when they notify vacancies.

It would not be an inaccurate guess to say that in the three regions there are at the moment a quarter of a million unfilled jobs, so that quite a lot of the investment is being wasted. It is not being used. There are no workers on the machines, and apparently the hon. Gentleman accepts the situation with equanimity if not indifference, though I can assure him that the employers in those regions do not share his complacency or the complacency of the right hon. Gentleman the Member for Birmingham, Handsworth. They are complaining all the time about the situation and about uncontrolled development which makes the shortage of workers far more acute in their own districts.

I do not want to go into all the aspects of the argument about incentives, which the hon. Member for Wanstead and Woodford has quite clearly not properly considered. I would suggest that he ought to be concerned about another aspect of it. He ought to be concerned about the wage drift and the wage inflation that results from the situation. He ought to be concerned, too, about the extent of the poaching of labour that is going on, and he ought to be concerned about the startling contrasts between the pressure of vacant jobs, say, in the Birmingham conurbation and the remarkably low activity rates in some areas not very far away from Birmingham within the regions covered by the Order.

Does he want to say, in the arguments that he is putting forward against the Order, that we are doing wrong in trying to steer some industrial development away from areas of unfilled labour demands to areas, perhaps not many miles away from the Birmingham conurbation, where there are people available for employment? Are we doing wrong in that operation? Does he think that we are doing wrong in trying to stop speculative factory estates where the employment situation is driving industrialists up the wall?

If I may say so as calmly as I can, in seeking to oppose the Order the hon. Gentleman and his hon. Friend the Member for Reading are doing a grave disservice both to the established industrialists, whom they claim sometimes to represent and do not quite succeed in representing, and to the aim of achieving a better balance of employment throughout the United Kingdom.

Without that better balance the increase of 7 per cent. in our manufacturing investment would be, as I have said, to some extent ineffective due to the local shortage of workers. The right hon. Member for Sutton Coldfield (Mr. Geoffrey Lloyd), who is not with us tonight, tried to make our hearts bleed about three workmen who were going to set up a motor radiator repair factory of some kind in his constituency. He was beating the air, too, because that would be outside the purpose of the Order. It is one of those local services which go through, anyhow.

I have left some notes to reply to people who do not even bother to turn up to hear the replies; which shows how seriously they take this piece of Socialist planning which they think ought not to be foisted on the community.

I can only end up as I began, by saying that what we are trying to do in the Order is to carry out the very sensible proposals which the right hon. Member for Barnet had in mind when he introduced the 1960 Act. Unfortunately, I repeat, what he wanted to do then has been frustrated, and we are closing up the loophole which he failed, regrettably, to close in the 1960 Act.

I am glad that hon. Members opposite cannot vote on the Order, because it is going to save them a lot of embarrassment.

10.49 p.m.

Mr. Peter Emery (Reading)

The very first thing that one should say in all seriousness, because I do not believe that the Minister of State has dealt with it in a really serious manner, is that we on this side of the House, as is known only too well, have no opposition to a proper policy dealing with the distribution of industry. After all, it was a Conservative Government who started this. It was a Conservative Government who carried it through, and it does the Minister of State no good to try to suggest that we are opposed to this sort of policy. It is blowing into the wind to do so.

The Minister of State is mistaken in his judgment of industry. His knowledge of it has been gained from outside it in recent years, and not from being concerned with management. The complaints are coming from management, from the people which the party opposite is trying to encourage to modernise and go ahead.

Mr. Darling

I have given evidence of managements complaining about the building of small factories. Has the hon. Gentleman any evidence to support his case?

Mr. Emery

If the Minister will be patient I shall be delighted to give it to him. The Minister is sure that he knows what industry wants. I challenge him to circularise the 100, or indeed the 1,000 firms which export most from this country. I challenge him to ask them whether they wish to be restricted in such a way that they cannot expand their factories by more than 999 sq. ft. without getting permission from the Board of Trade to do so. If he does that, the Minister will get an answer which wily put him straight. Industry is against any such restriction.

Since the Minister began his speech, a week ago now, I have been in close touch with the Midlands. I have evidence from six firms which today export more than £17½ million worth of goods. Their attitude is summed up by one managing director who said: It is typical of the present Government's approach that they plead with us to do one thing, yet they fail completely to understand our problems about modernisation and expansion. The Minister of State quoted four letters. It is interesting to note that one of the letters was obviously from a soured person who had had his application for an I.D.C. refused.

Mr. Darling

He had not.

Mr. Emery

Apparently he had, judging by the letter he wrote, and I am glad to hear that the Minister has now reversed his decision.

All four letters referred to the speculative building of factories. What the Minister has failed to deal with is the expansion of factories, not only the building of new ones, undertaken by builders for profit. The Minister knows that this is done to carry out expansions for small industries which do not themselves wish to put their money into bricks and mortar. If the Minister wishes to control that, the Government have powers to do so. The Minister knows that, I know that and it was admitted during the Committee stage of the Bill.

The Minister has completely misunderstood the position of industry if he believes that by stopping expansions of less than 5,000 sq. ft. ——

Mr. Darling

But we are not.

Mr. Emery

If we are not, why do we need this Order? I asked the Minister—it was the only direct question which he failed to answer—how many of these applications had been turned down. In his speech on 1st December last he said: We have so far dealt with just over 500 applications, the vast majority of which have been approved right away."—[OFFICIAL REPORT, 1st December, 1965; Vol. 721, c. 1591.] If so, why do we need the controls?

Mr. Darling

To prevent speculative building.

Mr. Emery

Then let us have the controls on speculative building and not on all industry. This is a real weakness. If the Minister thinks that we cannot do that without doing everything, will he say so? Will he tell us that he will at all times give approval to industries which want to expand their factories by up to 5,000 sq. ft. in order to carry out modernisations?

Mr. Darling

The hon. Member should have quoted me a little further. I went on to say that there were two conclusions coming out of this. The first was that we have stopped the building of speculative factory development altogether—none of it is going on now, as far as we can discover—and the other was that we have been able to steer a number of proposed developments into areas which are not so tight for labour. That is why we have found it difficult to state how many we have turned down. Nobody has yet found a way to exercise control over the things we want to control without providing that all proposed developments have to obtain I.D.C.s. We are doing the sorting out very quickly, but nobody has yet found another way of doing it.

Mr. Emery

I am sorry. This is just not on as far as I am concerned. I do not consider that it is justifiable to put on this form of control in respect of the whole of industry in order that a minimal number of factories can be steered elsewhere. We on this side of the House, showing our willingness to go some way with the Minister in Committee, moved Amendments to limit this reduction to 2,500 sq. ft. and, on Report, to 3,000 sq. ft. This again proves how incorrect the Minister is to suggest that we are against any form of control of industry.

We believe that the Minister is wrong in saying that this is a carrot which will get industry to move to other areas. My hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin), whom I congratulate on his first speech from the Dispatch Box, said that the Government, in their Finance Bill last April and in their degrading of the whole matter of investment allowances, as they applied to industry, were acting against the very policy that they are attempting to propound this evening.

The whole case put up by the Minister is that this is designed to deal with speculative factory building. He has not answered my question about the use of the town and country planning procedure. In Middlesex and Surrey—and I am sure that this applies to other counties—the people concerned with these matters believe that the controls exist for all industry. He has not answered the direct question about the effect on ordinary industry, and told us why it should be hampered by control, so that any firm which wants to install six new lathes has to get permission from the Board of Trade.

This Order is a major mistake. It will not obtain what the Government want. It will limit expansion. I am only sorry that if we voted tonight——

It being One hour after Ten o'clock, the debate stood adjourned.