INDUSTRIAL DEVELOPMENT (ECONOMIC ASSISTANCE) (Hansard, 30 July 1965)

§ Mr. Derek Page (King's Lynn)

Certain areas of Britain are recognised as meriting special economic assistance, and help is available by various means, such as preferential financial arrangements, and, in particular, by preference in the allocation of industrial development certificates. Inevitably, if one area of the country benefits in such ways, there must be a corresponding burden on the rest of the country, and it is therefore plain justice that we should look very carefully at the standards we set for judging the case of specific areas for such economic help.

1020 The criterion used at the moment is that of unemployment and unemployment only. It is generally recognised that a level of unemployment of more than 44 per cent. entitles an area to such economic assistance. The latest figure for unemployment in the country as a whole is 1.2 per cent. in Norfolk, it is 1.4 per cent. and in the King's Lynn area 1.7 per cent. One would imagine from those figures that areas such as Norfolk and King's Lynn would not merit any particular economic preference.

But I claim that this does not necessarily follow, because the criterion which we use is far too narrow. We should certainly take into account earnings as being a useful extra criterion of the need for economic help. To quote a few figures, the average earnings in the country are about £18 a week. In the northern region, which is largely composed of the north-east development area, one of the areas entitled by reason of unemployment to special assistance, earnings average £17 6s. 2d. a week in spite of unemployment. Northern Ireland, which has a very bad unemployment problem, averages £14 13s. 8d. a week. The figure for Norfolk is not readily available, despite persistent efforts by myself and my hon. Friend the Member for Norwich, South (Mr. Norwood). Unofficially it seems that the average earnings are around £13 to £14 a week. There are very many farm workers, many of whom are on the basic rate of £10 2s. a week, with a take-home wage of £9 10s. There are many factory workers, on the basic rate, for unskilled men of about £11 a week, and for skilled men about £12 a week.

It would seem, according to fairly well informed sources, that average earnings are about £13 to £14 a week. This is considerably less even than Northern Ireland, and it looks worse when we consider that these workers, by reason of their low earnings, are subject to the wage stop, should they go on to National Assistance. A typical worker in the North-East, paying 48s. a week in rent and with a wife and three children, who has been earning an average of £17 a week, will receive £13 1s. a week should he be so unfortunate as to go onto National Assistance. This is £3 a week more than many farm workers get for 1021 a full week's pay and in my opinion is quite indefensible.

I do not begrudge them the money but I take exception to so many of my people having to endure such hard conditions, and being considered ineligible for any special economic assistance, such as the build up of new industries. We must bear in mind that our taxes go to the Treasury, and although farm workers do not pay Income Tax they pay indirect taxation, and the Treasury helps development areas. I should like to draw attention to the difficulty of measurement. It has been said, in response to efforts by myself and other hon. Members from the area, that figures are not available, that it is not practicable to get figures on earnings for an area such as Norfolk. I am not taking Norfolk as a sole example of this type of problem, but it is one with which I am familiar.

The normal sample taken by the Ministry of Labour for calculating earnings is a sample of 8,000. I do not know of any statistical reason why this is essential. I should think that statistical methods can work quite efficiently with far smaller samples.

It has been said that these figures cannot be broken into separate counties, yet Members may have seen a map in the Observer a few weeks ago which gave the national average income per head of population, county by county. It was interesting to note that Norfolk had just about the lowest figure for the whole country, which backs up the various points I have mentioned. We have regularly given statistics for Northern Ireland, which has a population of 1,400,000. These figures are broken into 50 separate industries. But we are told, in the case of Norfolk, with a population of 561,000, that it is just not possible to get statistics.

That is very difficult to accept. If there is any truth in that it would mean that for many of these smaller countries, like British Honduras and Bermuda, no economic statistics at all would be possible. What is needed is a really adequate review of the statistical information, so that we can measure true earnings and take them into account. A number of other indications of the economic level of Norfolk are available. I obtained 1022 information, by way of an Answer to a Parliamentary Question, about the incidence of the wage stop. This is a plain index of the economic level.

There are 60 per cent. higher wage stops in Norfolk than the average for the rest of the country. This, of course, indicates a low economic level. We also have an Answer which I received two days ago to a Question about how many children receive free school meals, which also is an index of economic need. The figures were that, although the average for England and Wales is 4.3 per cent., in Norfolk it is 6 per cent. That is 40 per cent. above the national average, a firm indication that the unemployment level is not the true criterion of the economic prosperity of the area.

If we are to assess the factor of earnings, figures are essential. I appeal particularly to my hon. Friend to undertake to investigate the possibility of obtaining adequate statistics of earnings. I should be obliged if he would look into the possibility of doing this, so that we can continue this discussion at a future date on a rational basis, which is virtually impossible when official statistics are not available.

The incidence of low earnings, of course, strikes one particularly in its impact on the low earnings families, but it runs throughout the community. If the earning capacity of the workers is low, the economic well-being of the rest of the community, from shopkeepers to solicitors, is inevitably low, because the purchasing power of the community as a whole must be small.

I am particularly concerned with the conditions of the indigenous population. We have a certain inflow of population and for them the prospects of life are very good indeed. They come with their industries to a very beautiful part of the country and, because they are coming with skilled jobs and there is low employment and therefore a need for their skills, they can look forward to great prosperity. The needs are those of the indigenous population and particularly of the farm workers in the villages.

The picture of life which results from this low level of the economy is appalling. One sees so many examples of the distress in which farm workers' families—and, indeed, factory workers' families 1023 who live out in the villages—find themselves.

A constituent of mine wrote to me: Our rent is now £2 2s. 4d. a week and is going up 33⅓ per cent., so that with that and coal to buy, it will leave us with about £5 a week for everything else. This is quite appalling. I know of the distress of many of my constituents who live in the villages and who, because of the poor public transport in many parts, have to pay, either in whole or in part, for car transport into the factories. This eats a big hole in their earnings.

Another factor which we must take into account in their earnings is emigration. If emigration is high, this will plainly tend to keep down the level of unemployment. Again, we have no official statistics, but one extremely well-informed authority a few months ago took the trouble to check on how many young voters—that is, those who had gone for the first time on the register and were 21—had gone from the area by the time they were 25. It was found that 60 per cent. had gone.

This is a very high rate of emigration and one can imagine the distress which this must cause to families. One cannot blame the youngsters, but it is an indication of the low level of the economy that these youngsters should leave. This factor of migration, I believe, should be taken into account in assessing the needs for developing the economy of these areas.

Apart from these personal and local factors, I draw attention to the need for taking into account the modern factors tending to industrial efficiency in locating new industry. So many of our factories and industrial centres are located in places which were favourable to the growth of industry in the 19th century and with 19th century technology. We have the cotton and wool towns and the engineering which grew up with them along the side of the Pennines because there was coal and water. These factors were important then, but they are not necessarily so important in the modern scientific age.

I suggest that the availability of good ports and the availability of labour, possibly coming from the land, and the need to be within reasonable reach of London, are sound economic factors which make it much more suitable for many industries to go to an area such as King's Lynn and Norfolk than to go to 1024 areas such as the North-East. We must take these economic elements of cost into account if we are to work our way towards greater efficiency.

King's Lynn has done a great deal to help itself. I must pay tribute to the efforts of the councillors and the officers of the council in their tremendous efforts to build up the infrastructure and to attract industry. They have gone all out on this, and all credit to them. Credit is also due to the Minister of State and to the President of the Board of Trade for the assistance which they have given and their readiness to discuss the problems of specific I.D.Cs. We owe them a debt for their availability. I must pay tribute also to the Department of Economic Affairs for their assistance in various ways. All round we have received attention to our problems.

But these problems have been dealt with on an ad hoc, case-to-case basis, and if we are to deal with these matters efficiently it would be much better if we got our criteria on the right basis. I ask the Minister of State, therefore, to give serious consideration to these points: first, to the provision of adequate statistics, both of earnings and of migration; secondly, to the assessment of modern factors of industrial efficiency, as against 19th century factors; and thirdly, to the inclusion of these factors in his consideration of areas entitled to economic assistance.

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

My hon. Friend the Member for King's Lynn (Mr. Derek Page) has put forward in a most reasonable and persuasive manner some cogent arguments for altering or at least adding to the criteria for Government aid in regional economic development. This is a most interesting subject, one very dear to my heart, and it is very important, as he pointed out, in relation to the changes which are urgently needed in our national economy. One factor which we should all agree is handicapping the much-needed rapid growth in industrial production in this country is the overloading of resources in some parts, in particular the Midlands and the London area, which goes along with underemployment of resources elsewhere, particularly in the development districts but not entirely there.

1025 My hon. Friend argues, probably with some justification, that the underemployment of resources, especially manpower, because it is not confined to the development districts, ought not to be the sole criterion of need for Government aid—in other words, that the sole criterion should not be the level of unemployment. This creates some difficulty for me, because even if we wanted to change the criteria we need legislation, and it would be out of order for me to start discussing that point on an Adjournment debate. I admired the dexterity with which my hon. Friend skated round that problem.

There is a further problem, as my hon. Friend knows, that the present legislation under which we now work comes to an end in 1967, and the Government are considering what should happen, therefore, in two years' time. I could not anticipate any future legislation, even if it was in order for me to do so. However, if I can skate round it in a similar way, I would say that to get a fairer picture and a more useful understanding of regional problems, we ought to look at other factors such as emigration, depopulation and activity rates, and also the level of earnings. To what extent one ought to assess these and get them into balance for guiding the Government aid for regional development is something which must be much further discussed. But I do not quarrel with the approach that my hon. Friend has made.

On the question of earnings rates, to which my hon. Friend attaches special importance, as he knows, the figures are published by the Ministry of Labour, and therefore it is really a problem for that Department and not for me. As he has said, he has been trying to get a breakdown of the figures from the Ministry, so that we can have a clearer indication of the level of earnings in smaller areas of the country than is the case, because the earnings refer to regions. There are considerable difficulties here, and I notice that my hon. Friend chose Northern Ireland to give an indication of the kinds of statistics that he wants.

The earnings figures are based on information from industries, and it is relatively easy to identify the industries in Northern Ireland and the employees of those industries. It is far more difficult to identify the employees of industries in a county. In any case, I must say to 1026 my hon. Friend that it is not really a question for me. There are difficulties here, and, if the figures are going to be used for the basis of comparisons between different areas, one has to take other factors into consideration such as relative costs, prices, rents, rates, the cost of living locally, and so on.

It is true that in predominantly agricultural areas such as East Anglia earnings levels are likely to be lower than in highly industrialised parts of the country. I could quarrel with my hon. Friend when he talked about old-fashioned areas like the towns along the Pennines and suggested that there is no reason why their industries should remain there. I am all in favour of moving industry round the country, because that is one of the prime jobs on which I am engaged, but moving the steel works away from Sheffield, for instance, would not gladden my heart in any way. In any case, they have to be fairly close to supplies of scrap, iron ore, limestone and so on.

Whether they would be better situated in Norfolk than in Lincolnshire, to where they are moving, is a moot question. But I agree that there are industries which should be moved from one part of the country to another, and perhaps my hon. Friend and I could talk about them and see which we would select for movement. But the claims of the development districts, the areas with a relatively high level of unemployment, must come first. They must have special consideration at the moment. I think one point that should be borne in mind is that if the reduction in unemployment in these areas continues at the rate that unemployment has been reduced over the last few months—and we still need to get a better balance in our economy of relieving the pressure on our resources in the over-congested districts like the Midlands and the London area—then if the unemployment figures are rapidly disappearing, other criteria could be considered. This is a strong point in my hon. Friend's argument. It is something which we will have to consider, but so long as we are working with the present legislation, while it remains an important factor, we must work to what is laid down in the legislation.

My hon. Friend mentioned migration and complained about the statistics which are available. The Ministry of Labour 1027 publishes annual statistics, as he probably knows, giving the number of employees migrating from one region to another. One can obtain this information easily, as the Ministry does, from the National Insurance records. I agree that these statistics do not provide all the information and reasons which my hon. Friend is seeking about workpeople moving into a region or moving out of a region for specific reasons. None of these statistics can show the motives for the movement of population.

I do not agree with my hon. Friend that the sole reasons for moving are such things as the low levels of earnings or lack of employment opportunities. People move for a variety of reasons which may be quite unrelated to the lack of employment opportunities. The movement of population is not in itself an evil thing. Indeed, we will never get our economy properly balanced unless we stimulate and encourage the proper movement of labour because there is far too much sticking in one spot and not enough movement.

One can appreciate the reasons why people do not want to move—the lack 1028 of housing in certain areas and the other social values which people attach to the areas in which they live. I agree with my hon. Friend that we are aiming at a much better balanced economy than we have today. We cannot afford to have any of our resources—manpower, factories, machines and materials—underemployed.

We must make full use of all our assets everywhere and equally we must try—because this is the other side of the picture—to damp down the overheating, congestion and over-expansion in the Midlands and the London area by stimulating and aiding the movement of industry from areas where there are far more jobs than people to fill them to places where labour is under-employed.

I agree that there is under-employment in certain areas, which is not fully disclosed in the figures of registered unemployed. I assure my hon. Friend that the views which he has expressed will be taken into consideration in the legislation which we must prepare before 1967.