DEVELOPMENT AREAS

HC Deb 02 August 1966 vol 733 cc273-382

4.12 p.m.

Mr. Michael Noble (Argyll)

At about this time each year, we have in the past had a debate looking rather particularly at the trade and industry of Scotland. This year, it is our hope that the debate will spread a good deal wider to cover the problems of all the development areas, especially in view of the economic situation confronting them at this moment. But often in the past when these debates have taken place at a time when, perhaps, there was more than usual anxiety about the problems of these areas, the Committee has been apt to forget to give credit to those who through their work and effort have wrought considerable achievements for the areas in which they live and work.

It is right, therefore, at the beginning of my speech, that we should look back for a minute or two with some pride on what has been achieved in the development areas over the past few years. When I say "we", I include the industrialists who have in many cases invested very large sums of their own money in bringing new projects to these areas, the Government of the day—I am a little doubtful about how much credit the present Government can take, but this may well be developed during the debate—and also the ordinary people who have stayed and lived and worked in these areas to produce, at least, some very impressive results.

I am reminded that in 1964, at the Scottish Industries Exhibition held in Glasgow, the organisers were able to boast that industry in Scotland had so changed that they were able to offer to the world everything from super-tankers to watches, sheet steel, light bulbs and lasers. This shows the great change in the pattern of industry which has taken place in Scotland.

The biggest single factor affecting most industry in Scotland has been the enormous growth of business machinery and electronics. The names of Ferranti, Elliot, I.B.M., Plessey, Pye, Honeywell, Pewlett Packard, and Beckman, among others, come to mind. They have all established new industries in Scotland. Since 1959, the number of people em- ployed by this rather modern and, perhaps, sophisticated type of industry has risen from just over 7,000 to over 16,000, a rate of growth about three times that of these industries in the rest of the United Kingdom.

Every hon. Member from the developments areas will agree that we have had a good deal of help in employment from the motor industry, too. In Wales there has been Rover, on Merseyside Ford, in the north-East Chrysler and Cummins, and in Scotland, Rootes, B.M.C. and Leyland. These are all comparatively new industries to these areas and, if they have brought some problems, they have at least brought a welcome diversity of employment.

The old development districts and the new development areas were, in the past, particularly strong in engineering products. It is a source of pride that some of the older firms such as Weir and Motherwell Bridge in Scotland and some of the new firms like Caterpillar Tractors and Euclid, together with electrical engineering firms such as Bruce Peebles, have all been so successful.

The same story can be repeated in many other industries. In paper, there has been great investment recently by many of the older mills, which is sometimes overshadowed by the more glamorous larger investment of Wiggins Teape. In petrochemicals, the Distillers Company and many of the oil firms have combined to produce quite startling results in output and in exports. In the older industries such as whisky, textiles and food, all have played a very important part in the last few years in increasing our employment and by both their variety and their enterprise have been of great benefit to the areas concerned.

We should put on record that over £400 million worth of exports left Scotland last year. The figures are not yet final and may reach over £450 million, but this means that in a comparatively small country with a working population of only just over 2 million, each workman was, on average, exporting £200 worth of work in a year. It is a startling figure.

If this were the whole story which we had to discuss today, there would be no need to worry, but, instead of the pride and exuberance which we might well have for so much well done, anxiety has once again put its icy fingers on the pulse of confidence, and it is on confidence alone that industrial expansion can be based.

Everyone on both sides of the Committee is delighted that, in terms of actual numbers, unemployment in Scotland has been decreasing steadily over the past few years and stands at the moment at the lowest figure for 10 years. But this, as the Committee knows, is not the whole picture. Unemployment in the United Kingdom as a whole stands at 1.1 per cent. In the Northern Region, unemployment last month stood at 2 per cent. In Wales it stood at 2.2 per cent., double the national average. In Scotland it stood at 2.5 per cent., nearly two and a half times the national average. Thus, relatively, the problem in Scotland is worse today compared with the United Kingdom than it was three, four or five years ago. This is why the President of the Board of Trade must look very carefully at what he and his Department have been trying to do.

He has claimed in the House over and over again that it is his tough policy of I.D.C.s which is making the economy work, but if these figures are correct—he knows they are—it means that in spite of all that he has done with his tough I.D.C. policy, the overheating in the economy is more severe in the South and that he and his colleagues have been unsuccessful in spreading this expansion properly over the whole of the United Kingdom.

In the House on 20th July, the Prime Minister said that a figure of 1½ to 2 per cent. unemployment would not be regarded as intolerable by hon. Members, if that should be the figure after what he referred to as "the shake-out". However, unemployment in every single one of the main development areas of which I have spoken is above this figure and is likely, I am afraid, to go considerably above it in the next few months. In May of this year, the Ministry of Labour was already drawing attention to the fact that, corrected for seasonal influences, the unemployment trend in Scotland was already in decline.

I can remember, as I am sure can many other hon. Members, the tremen dous attacks which were made on my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) on the ground that when he brought in his "stop" measures, as they were called by the Opposition, in 1961, he had applied the brake after the car had already begun to stop. If that was true then, how much more true it is today: the measures introduced by the Government are much fiercer than those which my right hon. and learned Friend brought in and the trends to which I have referred have already shown the slowing-up of the economy.

I now turn to what is not politically controversial, the problem of the way in which we should look at the development areas, the philosophy behind our two policies. Our policy was to concentrate on development districts and, within those districts, on the growth areas. I know that this was not always a popular conception.

It was based, of course, on the best advice available to us from industry and elsewhere at the time, but it involved a concentration of Government efforts on success, and attempts to bring together into certain selected areas all the necessary money which could be spared to make them attractive to incoming industries. The success of this can be seen in the new industries going into new towns in the development areas all over the country.

It was also our policy that, at least for Scotland, when the new studies were complete, we should evolve a system of growth areas to cover the Highlands, the Borders, the North-East and the areas outside the central belt. I am afraid that, at all times, Government resources in development are limited. Therefore, this policy of concentrating all the money possible on the areas likely to produce the best results is the best choice of many.

But this Government have chosen to go in exactly the opposite direction. They have decided to have development areas enormously greater in space than those previously adopted. This is, of course, attractive from many political points of view. Inevitably, when one concentrates, hon. Gentlemen on both sides complain bitterly that their constituencies are left out, whereas if there is a great "blanket", more people are happy. But it is noticeable—I know that the President of the Board of Trade is well aware of it—that several of my hon. Friends and perhaps some of his are not entirely happy about the exclusion of Edinburgh and Leith. There is also the problem of Bridlington in Yorkshire, which has given a good many headaches to him and me upstairs.

We have said and we believe that, because these areas are so large, the amount of jam which can be spread is too thin. I remember the Secretary of State for Scotland explaining on a television programme in Scotland with me before the election that there was no question of the jam being too thin because there would be an enormous extra amount of jam, and that the fact that the area was mach bigger was insignificant if the Government were able to put in three or four times as much money. How hollow this must seem to him now.

There is an important extra point. If one makes these areas very large, it is inevitably much more difficult to attract the industry which is wanted to any area within the development area. This point was made clearly by the Highlands and Islands Development Board in its reactions to the Selective Employment Payments Bill and the White Paper which went with it. In his discussions in Committee on that Bill, the President of the Board of Trade made it clear that the likely result was that the I.D.C. policy would have to be used within the development areas.

If that is so, it is impossible for him to maintain that he has done anything useful in changing from our policy of growth areas. If it is essential to use the I.D.C. policy within the development areas, we are back almost exactly to where we started with the growth area, with this one very important exception—where in the past, growth areas were known and received guarantees that "stop-go" cuts or anything of that sort would not apply to them and industrialists knew exactly the help they would get if they went to those areas. Under the system which the President outlined in general terms to the Committee on the Industrial Development Bill, it is clear that industrialists will never know the position from month to month or from six months to six months. The second big difference in philosophy between us is that, whereas we both believe that, if results are to be achieved with this difficult problem, it is almost certain that some system of differential taxation will be needed, we went for free depreciation. This was immediately successful and greatly welcomed by the industrial firms concerned. I know well enough that there were one or two companies—it is easy to pick the exceptions—which were small and growing fast and which complained that they could not make enough profits to write off their costs in time.

This is true, but, at the same time, it was a most useful method for the big companies situated in the Midlands or, perhaps, overseas which wanted to establish subsidiary or satellite companies in the development areas, because they could write off almost the whole of their development costs at once. The present Government have turned from free depreciation, with the exception of ships, and have put the incentives of the Industrial Development Bill in their place. They have made no attempt to deny that industry would much prefer to have had free depreciation, but, because they have made the development areas so much bigger than the development districts, it was going to be impossibly expensive to give free depreciation throughout. That desire, again, to make the thing too big has undoubtedly meant a less satisfactory incentive for industry.

The President of the Board of Trade took a great many weeks over this, and I am not sure whether he himself is entirely satisfied yet, although his Answers to Questions have been changing considerably. But he does, at last, admit that most firms that were in development districts in the old days and are now in development areas are worse off for their industrial incentives than they were in 1964. He has argued often in the past that if we take it on a discounted cash loan basis, the situation is not quite so bad. I would just refer him once again to the report from G. & J. Weir, a very large and competent engineering firm in Glasgow. The figures for that firm's own investment programme—in a development district in the past, in a development area today—discounted in the most modern and fashionable method, show they are 50 per cent. worse off under the industrial Development Bill than they were under free depreciation in 1964.

What really are the main problems which arise in any policy to bring in, maintain and keep industry in the development areas, and to which a Government have to give most of their attention? In the first place, one certainly needs a high degree of readiness on the part of industry to invest and, as we know, investment at the moment is turning down very sharply. The latest figures from the Confederation of British Industry in May show a steady intention to reduce investment. This cannot be surprising to any hon. Member in view of Government policy over the last two years and the many hundreds of millions in extra taxation which are coming out of businesses, factors which, naturally, are seriously affecting their investment capability.

A second problem and perhaps one which is tremendously acute in every development area is the problem of emigration. We do not know, and the Secretary of State for Scotland cannot, I am sure, tell us today, what is the position; but all the indications are that emigration which reached a record figure last year is likely to be equalled and indeed exceeded this year.

One of the problems of any industrialist who wants to start up a business in a development area is to get good management and high skills. In Scotland we have had a large share of both of these, but if one looks back at the pattern in the past one sees that England, the Midlands, the South and other parts were prepared to pay varying sums, perhaps £300 to £400 a year more for young executives and up to £3,000 to £4,000 a year more for senior, highly-skilled executives, and the same pattern was visible, also, in the highly-skilled categories of craft workers. Over the last year or two these differences have been gradually narrowing but there is still a very significant difference. It may be a matter of only 5 or 6 per cent. but it is significant.

If that is so, I hope that the President of the Board of Trade will explain to the Committee how this very severe freeze of wages and prices can have anything but a disastrous effect on emigration from the areas of which I am speaking, because, as I understand it, the only way in which a young executive or highly-skilled craftsman can improve himself if he is working in Scotland, Wales, in the North-East or on Mersey-side, since he cannot get an increase in wages from his employer where he now is because it is illegal, is to go to an area where there is already a higher rate, at which it is frozen. There, if he can get a job, he will get the reward for his skill. Thus, the effect of this wage freeze over the next 12 months seems to me to be certain to accelerate the process from which Scotland has suffered in the past, and to remove from our industries exactly those people whom we can least afford to lose. This, I believe, is one side-effect of the Government's policy which would be very serious.

The next broad problem which is of tremendous importance whether one lives and works in the South-West, Wales or Scotland or on Merseyside is both the speed and cost of transport. What has the Government's record been? These liner trains should have been in operation two years ago and are only just starting in a very halting way now. Also, if we look at air services which a great deal of modern industry demand as a perfectly natural part of the way of life we find there has been no movement whatever to get the new runway at Turn-house and this was all but ready two years ago. There has been no move to get an air service at Dundee, and, as hon. Members on both sides of the Committee will know, this has also been asked for and is greatly needed in that area. It seems to me to be a little curious that new towns like Glenrothes and Cumbernauld can produce their own airstrips for industrialists who want to work in their new towns, but the Government can do nothing to help Turnhouse or Dundee which in themselves have infinitely greater potential than the new towns.

The Committee should be told the Government's intention about the development of ports, because we know that a considerable number of millions is to be cut off the programme for developing ports. We know, too, that in Scotland, Grangemouth, Leith and Glasgow all have very considerable schemes to develop their ports and we know how important this is for the export trade to which I have already referred. It is time that the Committee was told what really is the intention about cuts in the road programme, because this also is of very great importance to industry. It is not always the road nearest a particular industrial site which is the most important. Unless the picture has changed a good deal since I was at the Scottish Office, I suspect that the Secretary of State for Scotland knows that probably the most important section of road to industry in Scotland is the M6 outside our country, over Snap. If this bottleneck could be removed the whole industrial traffic flowing across the Border would be more effective and more efficient straight away; so that it is not satisfactory just to say there can be no cuts in Scotland. It is important that the whole of the road programme should be considered at one time.

We should be told something about the Government's intentions in cutting the electricity programme. It is almost certain that this will be a cut in investment. It is perhaps fortunate that in the past Scotland has had practically no electricity cuts, and, according to my recollection, only one or two very minor and short periods of load-shedding.

Tied up very much with our industrial expansion and its possibilities is the whole problem of houses, both for workers and management. At this time of the year, with seven months gone, it should not be impossible for the Secretary of State, who has been extremely coy about it for the last few months, to give up a rather closer estimate of what the house-building programme for Scotland is likely to be by the end of the year. He has said that it will be between 35,000 and 40,000. I do not remember any previous occasion on which a Secretary of State had to hedge quite as widely as that.

Another factor, which is not directly under either the Secretary of State or the President of the Board of Trade, concerns the problem of rates. The valuation which has taken place in Glasgow has thrown up such a considerable increase in the valuation of that city that the Corporation will lose automatically, as these things happen, £2 million in equalisation grant.

On the other hand, the increase in rateable values has been such that in the commercial centre of the city the amount of rates likely to be paid is about four times what it is in other large cities. It was said by the Chairman of the House of Fraser, last week, that, on the assumption which he had to make on the valuations that had been given and the likely rate burden, the whole profit of his enterprises in Glasgow would disappear in extra rates.

The Secretary of State may say that he is open to appeal against this. He can rightly point out that we do not yet know exactly what the rates will be fixed at in Glasgow. But the situation there is very serious, and if we are to provide real incentives for people to move into areas such as this, and to bring employment, there is a real need to look at the rate problem.

Are the rents of council houses in Glasgow to be frozen, as we yesterday understood that rents in Birmingham are to be frozen? If so, the economic situation of Glasgow would indeed be desperate, because, if it is losing £2 million in Exchequer equalisation grant and cannot put up its council house rents which the Secretary of State for Scotland, I, and every Member of the House knows to be much too low, it will have no means of getting out of the "red" and solving its own problem. If the rents are to be frozen, I hope that the Secretary of State will see that the rates in Scottish cities are also frozen, not at the present level but at the level which will operate after the revaluation has taken place.

There are obviously other problems of great importance to all the development areas. I can sum one up under the general expression of training. The industrial training boards, set up under the industrial training Act, which received broad agreement on both sides of the House, can do a great deal, and are already beginning to get results in achieving a higher level of skill. But this is expensive to industry. Can the Minister tell the House how much extra steam is being put behind Government training centres? A few years ago real problems arose, because even if we could have filled the number of places available in training centres the trade unions were refusing to accept people who came out of them. I hope that this situation has changed, and that the Government are going ahead as fast as they can with this type of training centre, because it is vital if we are to get the necessary flexibility of labour.

At the same time, we need a good deal more training of management. I see that Strathclyde University is starting a new scheme for this, and I hope that the Secretary of State can tell us of other schemes which he is encouraging. Another extremely important point for the almost immediate future of Scotland is that the only type of sophisticated machine singled out by the Government for special help under the Industrial Development Act is the computer. A computer industry is already established in Scotland, but if we are to get the most efficient use of computers in industry the keys to the problem are the men who go by the name of systems analysts.

I do not pretend to be an expert in the wizardry of the computer, but these people are absolutely vital. They need a considerable amount of training, and if we need an eight-fold expansion of the number of people available in this field over the next five or six years I hope that the Secretary of State will see that a large number of these young men are trained in Scotland.

Many of these problems are well known to hon. Members. But what have the Government done to try to remove them, or mitigate their effects since they came to power a little under two years ago? We have had a two-years' credit squeeze. On top of that, from 20th July, we have had the arrival of the full "Ice Age". This is most fully demonstrated in one quite short set of figures. In 1962, the Scottish banks made advances to industry—and, I imagine, to others—of £403 million. In July of this year the figure was £532 million. I cannot quote comparable figures for other development areas; it just happens that the Scottish banking system roughly coincides with one of the main development areas.

This £532 million is within £10 million of the ceiling which the Bank of England has set on the credit which the banks can give. This is serious at any time, but it is particularly serious at the moment, because the best estimate of the money needed to pay for the forced loan for which the Government are asking under the Selective Employment Tax is £2.7 million a week. Thus, the reserve between what the banks are already lending and the ceiling which the Bank of England has set—and the Chancellor of the Exchequer has told us that he will not in any way allow the banks to exceed their ceiling—is under one month off the S.E.T. payments.

If we consider special deposits—which have some effect on the ceiling-we see that they are today two and a half times higher than they were during the credit squeeze of 1962. This proves that the Governments own chosen action during the last two years has resulted in the tightest credit squeeze we have seen probably this century. Consider the results of the actions which right hon. Gentlemen opposite have taken by their own positive choice on the sort of industries which are scattered throughout the development areas. There has been no attempt to try to help the industries which exist in the development areas and no attempt to make taxes like S.E.T. selective between those areas which need help and those which do not.

When considering these matters one must think of tourism, an industry which is spread widely through the South-West, Wales, Scotland and other parts of the country. This industry has been singled out for particularly brutal attention by the Government. Action against the industry has been taken in various ways, although I need not detail it because the Government's brutal measures towards this industry have been illustrated in many debates.

The President of the Board of Trade has said that he has great sympathy for the tourist industry because of its particular difficulties, many of which have arisen from the Government's action. The Scottish Tourist Board has had an advance of £75,000. That is fine. Britain also has a £5 million scheme, covering the whole country, to ensure that it has the hotels which attract big dollar spenders. However, not many of these hotels will go to the development areas. There will be one or two British Railways' hotels in Scotland, but in these areas expenditure is required more to improve the existing amenities and bring them up to the standards of the hotels which attract foreign tourists.

Although the Government have given £75,000 to the Scottish Tourist Board and £5 million under this scheme—although they are not gifts; certainly, the £5 million is not a gift—the Committee must take into account the large sums which the Government have been taking out of the industry by way of extra taxation in the last two years. It has amounted to many times what they have given.

These Government measures—including increased postal charges, dearer petrol, dearer electricity and coal and many other commodities—reveal that, by their own chosen action, the Government have taken positive steps to damage the economies of almost all the development areas. A favourite example of mine when discussing this subject is whisky, a commodity which could easily have been exempted if the Chancellor had wished to do so. This is a particularly Scottish and almost entirely highland product. No attempt was made to exempt whisky. This commodity has been hit twice. The duty has already been increased and now the price will be increased as a result of the Chancellor's use of the Regulator—all despite the fact that the evidence shows that consumption of whisky at home is dropping. At the time of last year's Budget I told the right hon. Gentleman that this would be the trend.

The industries which we have been trying 10 attract to the development areas—particularly those making domestic appliances and office machinery—have all been hit by the use of the regulator, tighter hire-purchase controls, or by the special incentive which discriminates against office machinery in respect of investment allowances. These industries and their products have been hit by deliberate Government action.

We must also consider the problems of shipbuilding. The industry's order books are reasonably satisfactory, but profits are low. If we consider this and other major industries in the areas about which I have been speaking we see that the reason for low profits is simply that wages have increased by about 10 per cent. while productivity has not risen at all. The President of the Board of Trade will have to think carefully about the results of the wage freeze and the measures announced in the White Paper last week. He will have to consider the effects all this is likely to have on the Geddes Report and, for example, on Fairfields, where it is not just a question of paying higher rates for higher productivity. One of the major problems at Fair-fields is the regrading of the different types of grades that exist in its engineering shop. As I understand the White Paper, the firm cannot take that action if it involves increasing wages for any grade. I have a shrewd suspicion that the workers affected, who have fought for these grades for generations, will not give them up unless they get something for doing so.

Mr. Norman Buchan (Renfrew, West)

Is the right hon. Gentleman not aware of the decision of the National Union of Boilermakers, which deals with this problem; that that union is removing many of these demarcation points? Are not his remarks, therefore, out of date by 24 hours?

Mr. Noble

The hon. Gentleman may be right. I have not seen the announcement to which he is referring. However, there are other problems which the wage freeze may make more difficult to solve, and I put it no higher than that.

Mr. William Baxter (West Stirlingshire)

I have listened with great interest to the right hon. Gentleman's remarks and I have been trying to find a logical theme in them, even in regard to the wage freeze. I have understood that the right hon. Gentleman has taken my hon. Friends to task because we did not support the wage freeze introduced by the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) in 1961 and, seemingly, the right hon. Gentleman supports the idea of a wage freeze from that point of view.

However, he went on to discuss the present wage freeze with which, apparently, he is dissatisfied. He illustrated the point by saying that there were seven areas of the country which would be particularly affected, but, if that is so today, it was much more so when the right hon. and learned Member for Wirral introduced his Budget in 1961. What is the right hon. Gentleman getting at?

Mr. Noble

I felt that I should not give way to the hon. Gentleman and exactly what I feared occurred; he made a long speech. I am not supporting a compulsory wage freeze. There was no compulsory wage freeze in 1962, although I will not go into the details of that because there will be an opportunity to debate that and other matters tomorrow.

The problem was summed up by the Prime Minister on 20th April when he said that if the country was told the truth it would be prepared to face the problems and give of its best. That may or may not be true, but I doubt very much whether the country has been told the truth yet, or anything approaching it. We need only consider some of the remarks that have been made by hon. and right hon. Gentleman opposite. For example, the Secretary of State for Scotland said in his election address: Not for us the Tory crisis cure that in 1957 and 1961 hit the weakest and poorest and brought Scottish expansion to a standstill and raised our unemployment figures above 100,000". I do not believe that there are many people in his own constituency or in Scotland, who thought that he meant, "We shall not do what the Tories did, but much worse." That is what is happening.

Let us look at the right hon. Gentleman's comments on the Scottish Plan. After all, his own Prime Minister told him to speak the truth and be frank about it. On 27th July in Answer to a Question whether he would publish a revised version of the White Paper on the Scottish Economy, he replied: No, Sir. I see no need to depart from the strategy of development outlined in the White Paper…I can assure the hon. Gentleman that the objects and targets which we hope to achieve under the Scottish Plan remain as they are. This is a little odd when, on the same evening, the First Secretary, speaking on the National Plan, on which the Scottish Plan was based, said: One thing I am constantly asked about…is: how does this affect the National Plan? I will be absolutely frank with the House. It means that the rate of growth we intended to get, and were set to get, and on the basis of which we predicted all other things for 1970, is no longer available."—[OFFICIAL REPORT, 27th July, 1966; Vol. 732, c. 1709–10, 1849.] The First Secretary was honest; the Secretary of State for Scotland was not.

In exactly the same way, when asked the perfectly simple question whether the Highland Development Board approved or disapproved of the Selective Employment Tax, the right hon. Gentleman shuffled and havered and went all round, and never once attempted to answer the question. Of course, he could have been frank with the house, but it was not in his nature to do it.

The Prime Minister himself, on 20th July last, answering the right hon. Gentleman the Member for Orkney and Shetland (Mr. Grimond), stated: …have exempted, as the Tories never exempted, from the necessary steps which have had to be taken, all the development areas…instead of driving these areas into an intolerable level of unemployment…. They are already at the level which the Prime Minister said in that statement was intolerable.

He realised very quickly, I think, that what he had said was entirely away from the truth, because when picked up at the end by my right hon. Friend the Leader of the Opposition, he said: I was not suggesting that those who are living in development areas will be exempt from the increased postage charges or tourist control. I was referring to restrictions on capital investment…."—[OFFICIAL REPORT, 20th July, 1966; Vol. 732, c. 642–653.] That was a very different answer from his first.

We have to face the fact that over the next 12 months or so, Scotland, and the rest of the development areas, too, have a very difficult task to maintain their impetus, which was started under the Conservative Government and which carried on despite the Socialist Government. I know that the President of the Board of Trade intends to follow his Prime Minister's advice, and be very frank with the House. I hope that he will not try just to bamboozle us with the usual speech he reads about the number of sq. ft. of factory space——

Mr. William Hamilton (Fife, West)

Very important.

Mr. Noble

Yes, the information is very important, but we have heard it several times before. I can remember the sort of response my right hon. Friends used to get if they dared to mention a "job in the pipeline", which was very important, too.

The President of the Board of Trade should tell us how many of the advance factories he has announced—for which, quite rightly, he has taken a good deal of credit—are built and actually employing labour, how many are started, and how many are not even started, because a number of my hon. Friends have these factories in their areas, and one has been announced for my area for a very considerable length of time, but not a brick is yet on the ground. The situation is serious. It can be faced if the country is told the. truth. I am totally satisfied that we have nothing like the truth at present.

5.5 p.m.

The President of the Board of Trade (Mr. Douglas Jay)

I agree with the right hon. Gentleman the Member for Argyll (Mr. Noble) that this is an opportune time to debate progress in the development areas, for two reasons. First, the new Industrial Development Bill, which gives us much greater powers to bring long-term prosperity to these areas, should receive the Royal Assent in a few weeks' time. Do not let us forget that this Bill gives us not merely wider powers, but permanent powers, and replaces the foolish provision introduced by the party opposite of short-lived temporary powers that would have expired next March altogether. Indeed, if the right hon. Gentleman and his hon. Friends had had their way in voting against the Second Reading of that Bill, we should have had no powers after next March.

Secondly, very rapid progress has been made in the development areas in the last two years. Unemployment is lower throughout them than for 10 years past, the spread of unemployment between the worst-hit areas and the Midlands and South-East is lower than for a very long time, and the prospects are now much brighter than appeared possible even a few years ago.

I agree with the right hon. Gentleman that we should always pay tribute to all those in industry, the official machine, the industrial estate companies, and the rest, who have contributed to this effort. Perhaps the greatest heroes of all are some of the factory managers who successfully start up a new unit in what to them is an unfamiliar area. But I believe that the present Government have greatly contributed to this success by tightening up the I.D.C. control markedly in the South-East and the Midlands in the autumn of 1964, and by launching a far more vigorous drive through advance factories, new industrial estates, and all sorts of other ways, in the development areas.

As a result—and I think that the right hon. Gentleman would like to know the facts and figures, whether in sq. ft. or anything else, and I propose to give the information in terms of sq. ft.—the percentage going to development areas of the national total of factory building, as measured by I.D.C. approvals, has risen markedly, and that going to the congested areas has fallen in the past two years.

The percentage of the national total going to Scotland, Wales, the Northern Region and the North-West together was 39 per cent. in the five years 1960–64. In the year ended June, 1965, it had risen to 46 per cent., and in the year ended June, 1966, it had risen to 49 per cent.—virtually 50 per cent. In the case of Scotland, the percentage rose from 11.9 per cent. in the year ending June, 1964, to 14.5 per cent. in the year ending June, 1966. In Wales, for the same period, it rose from 4.8 per cent. to 11 per cent. I am here giving the facts and figures to the Committee——

Mr. John Brewis (Galloway)

What about the Northern Region?

Mr. Jay

The percentage there has remained about the same, because it was markedly higher than in Scotland and Wales in the previous period.

For the congested areas—East Anglia, London, the South-East and the West Midlands—which had got 40 per cent. in the five years 1960–64, the figure fell to 32 per cent. in the year ended June, 1965, and to 29 per cent. in the year ended June, 1966. I think that those figures show decisively that we are achieving our object of spreading out industrial development more evenly over the country as a whole, to the benefit of Scotland and Wales in particular.

I have now further decided, as part of the measures of restraint announced by the Prime Minister on 20th July, that I.D.C. approvals should be tightened up even further in the congested regions during the period of application of these measures, but, at the same time, I.D.C.s will be given freely, as before, in the new and wider development areas, and other areas needing new employment.

Since the White Paper on the Industrial Development Bill was published on 17th January, there has been a marked further increase in applications for factory sites in the new and wider development areas, despite all the right hon. Gentleman's worries and anxieties. During the first six months of this year, 1966, I.D.C. approvals in Scotland, Wales, the Northern Region and on Merseyside, in terms of square feet, were 13 per cent. higher than in the corresponding six months of 1965, which, in turn, were higher than in those months of 1964. In Wales, there was actually an increase of over 100 per cent. in the first six months.

Mr. J. Bruce-Gardyne (South Angus)

Although the right hon. Gentleman is claiming for the success of Government policies the increase in I.D.C.s in the development areas, should he not recognise that in view of the level of unemployment prevailing in the non-development areas over the last few years there was no opportunity for manufacturers to expand and they had to go to development areas, but this is no longer true?

Mr. Jay

We have always said, and it is fairly obvious, that unless we maintain a reasonably high level of productivity in the country as a whole we cannot make the policy succeed.

The improvement in Wales has been particularly dramatic in the past year. Wales, and South Wales in particular, had been especially neglected by the previous Government's policy. Very large areas, even of industrial South Wales, including Swansea, Neath, Port Talbot and many even of the coal-mining valleys, had been left out of the old development districts altogether.

The four main Board of Trade industrial estates in South Wales—Tre-forest, Bridgend, Hirwaun and Fforest-fach, had—believe it or not—all been left out of the development districts by the Tory Government. This well-nigh extinguished the Board of Trade's power to develop these estates, which are the spearhead of the industrial development effort in this area. No wonder the fall in unemployment lagged in South Wales sadly behind other regions right into 1965.

Last year, however, we brought back the whole of industrial South Wales, including all the four estates, within the development districts and under the new Bill practically the whole of Wales, except Cardiff and Newport, has been included. This is the main reason for the spectactular recovery in new factory projects in the last year, which most happily coincides with the projected coalmining closures. I.D.C. approvals for Wales for the last month, of June, actually included new schemes in a single month which will provide for nearly 900 further jobs.

Mr. Ian MacArthur (Perth and East Perthshire)

Obviously, we welcome any improvement in employment prospects for development areas and are grateful to the right hon. Gentleman for giving these figures. Would he explain, however, how it comes about that, if this improvement is as dramatic as he says, the Government's forecast of new jobs in Scotland by 1970 is substantially lower than the number of jobs brought about between 1960 and 1964?

Mr. Jay

I do not know exactly to what figures the hon. Member is referring.

Mr. MacArthur

There were 157,000 new jobs created between 1960 and 1964. The White Paper, for the 1965–70 increase, shows an increase of 130,000 new jobs.

Mr. Jay

I am referring to much the most reliable existing employment figures which we know for a fact and the prospects of employment in known schemes which are going forward. These are sufficient for this speech, although my right hon. Friend the Secretary of State for Scotland may produce even further figures.

In Wales, the most promising enterprise of all is, of course, the Ford expansion in the large Board of Trade factory taken over on Jersey Marine between Swansea and Neath. This already employs 1,000 workers and it is intended by Ford's to develop over a period of 10 years to at least 6,000. This expansion alone should revivify a very large area which lies on the fringe of contracting coal mines.

The next biggest project in Wales is the Firestone Rubber factory, at Wrexham, also a declining coal-mining area, now being built on Board of Trade land, which will employ 1,000 and will be the largest tyre factory in Europe. Other major schemes going forward in Wales are London Transformer Products, at Bridgend, to employ over 700, and J. R. Freeman, at Port Talbot, to employ 600.

In Scotland, a large number of major projects have been started in the past 18 months, for instance, Plessey, at Dundee, to employ 1,900; A.E.I., at Glenrothes and Kirkcaldy, 3,250; Hoovers, at Cam-buslang 1,830; S. G. S. Fairchild, at Falkirk, 1,200; I.C.I., at Ardeer, 1,000; Hewlett Packard, at Queensferry, 1,250; and Yale and Towne, at Livingstone, 1,000. I could quote a number of others. These, of course, are major schemes. At the same time, at Irvine, in Ayrshire, several expansions are being carried out as part of the new town plan. Chem-strand and Skefco, as well as I.C.I. at Ardeer, are big employers in these areas and, altogether, Board of Trade financial assistance of £2,700,000 has been given to 55 projects in the Irvine district to employ an extra 4,700 people.

Mr. Noble

The right hon. Gentleman is quoting these firms and I entirely agree about their importance, but a good many of the projects he has quoted were discussed, planned and worked when I was Secretary of State for Scotland. The right hon. Gentleman is giving the impression that these all came as new projects since he took over his office.

Mr. Jay

Some of the estates I have mentioned were planned when I was previously doing this work at the end of the war. Of course, this is always true. These schemes take a long time to mature, but I thought that the right hon. Member would like to know what is happening now.

In the Northern Region, which I have just been asked about, Plessey is also developing a new plant at the new South Tees-side Board of Trade estate which will employ 2,000; Black and Decker, at Spennymoor over 1,000; Ever-Ready, at Stanley in County Durham, 1,500; and Foster Wheeler at West Hartlepool 1,000. Merseyside is now enjoying the biggest period of industrial expansion it has known for many years. For instance, Joseph Lucas, at Bromborough, is developing a scheme to employ 3,000, Wilmot Breedon, at Kirkby, 1,200, and Champion Sparking Plug, at Birkenhead, 1,300.

The Ford and Vauxhall motor plants at Halewood and Ellesmere Port are also growing steadily. Ford's now employ 12,000 and Vauxhall's 6,850. Further expansion is planned by both firms. It is not surprising that unemployment on Merseyside, which had proved so stubborn for many years, dropped from 3.4 per cent. in July, 1964 to 2.2 per cent. in July this year—much the lowest figure for a very long time.

I have mentioned these private industrial projects before telling the Committee of progress with the Government's own programme for building advance and other Government-owned factories in these areas because, of course, the Board of Trade's building programme is additional to that of private industry and other authorities such as new towns. Some people sometimes fall into the error of comparing it in magnitude with the total need for new employment in the area, but, of course, it is additional.

Mr. MacArthur

Before the right hon. Gentleman passes on to advance factories—we look forward with great interest to hearing what he has to say—in order to keep the matter in perspective, would he say how many of these important pronouncements are following the 1,600 important inquiries which were made in the first six months of 1964?

Mr. Jay

Practically none. All these are recent schemes, apart from those of Ford and Vauxhall, at Merseyside, which go back for some years.

I was about to answer the question about the advance factory programme. Being additional, one of the advantages of the Government's programme is that the factories can be located in just those districts which might otherwise miss new development. Since October, 1964, the Board of Trade has launched three new programmes of 73 advance factories altogether, of which 50 are in coalmining areas. Of these 73, 27 are in Scotland, 18 in Wales, 20 in the Northern Region and four on Merseyside. In answer to the right hon. Gentleman's question, in a good many cases in finding sites we have faced stubborn legal delays in getting possession of suitable land, but the present position is that of the 73 planned factories already 26 have started building, nine are completed, and 16 have already been allocated to firms. That is over a period of roughly 18 months.

Not merely, in addition to all this, have the old industrial estates in the development areas been more rapidly expanded in the last two years, but we have started a number of new ones. Among the most ambitious of these, Bellshill in the North Lanarkshire coalfield has three factories already building, which are expected to be complete in September and October, on this 100-acre site. A further new estate of 92 acres at Falkirk has been delayed by a public inquiry, and we await local authority clearance to go ahead.

The slowness of legal procedure and the public inquiry machinery is a major obstacle to the rate at which the Board of Trade can develop estates in these areas. For instance, at Kirkby, Mersey-side, where we have been ready to go right ahead since February, 1965, despite much help from the Liverpool Corporation, we have been held up for 18 months by a public inquiry and local negotiations. The inquiry in this case is now completed, I am glad to say, and was favourable, and we are pressing ahead as fast as the law allows.

On the new Tees-side estate, construction was started only this year. Two factories are already building and the Plessey scheme will follow.

In South Wales, in addition to the four existing major estates, we are proceeding with a new 70-acre project at Llantrisant, where two firms have already applied for factories, one for 200,000 sq. ft. This estate at Llantrisant, now that Treforest has no building space left, is designed as the most convenient piece of suitable land within easy daily travelling distance of the Rhondda and other districts where pits are bound to close. Further new estates are also being built or planned at Brandon in County Durham and Cum-nock in the Ayrshire coalfield.

It was the policy of the previous Government to seek, whether firms liked it or not, to sell off to private firms Government-owned factories in areas which had ceased to be development districts. We are not now doing this in any area. Our policy is for the Government normally to retain ownership of these valuable assets, except in cases where, for some special reason, a firm positively presses us to sell them. It is far better that these factories should re- main in public ownership, because, where an individual firm fails—this is bound to happen from time to time—the Board of Trade can then act to see that the factory is used to give the maximum employment.

Altogether in the development areas as a whole there are now over 260,000 people employed in Board of Trade factories which are worth over £60 million altogether. At present 99 per cent. of this Board of Trade-owned factory space is in occupation.

Not merely is the total of publicly-owned property rapidly rising in these areas, to the great benefit of those living and working there, but Government aid by loan and grant is also increasing. I hope that this will allay the right hon. Gentleman's fears of some icy hand which was to cut down the whole level of expenditure. The total financial assistance by loan and grant under the Local Employment Act averaged annually from 1960–64 some £30,216,000. That included the major motor car schemes that I have just mentioned. In 1964–65 the total rose to £40,609,000. In 1965–66 it rose to £42,314,000. I am even more glad to say that the total estimated extra employment to be given by such assisted schemes rose from 38,475 persons annual average in 1960–64 to 92,494 in 1965–66.

The right hon. Gentleman asked what was being done about training. I fully agree with him that the training effort in these areas is vital in order to ensure that those released from the declining trades really qualify for employment and, where possible, skilled employment, in other jobs—skilled shipbuilding workers, for instance. The Ministry of Labour is steadily improving these facilities. On 1st April this year the Ministry scheme for assistance towards the cost of training new labour for firms moving into or expanding in development districts was made more generous and more simple.

From 1st July direct training help is given to firms by lending them Ministry of Labour instructors to get training of semi-skilled operatives started on their own premises. Both these schemes will now apply throughout the wider development areas under the new Bill. The total number of places in Government training centres in the United Kingdom as a whole will rise from 6,050 now to 8,000 at the end of 1967. As the right hon. Gentleman knows, a worker from a development area is eligible to go to a training centre if necessary outside that area.

As a result of all these efforts and the policy we have pursued, unemployment—I do not think the right hon. Gentleman can deny this—has now fallen in all the areas to the lowest levels for many years. On Merseyside, as I have said, it has fallen from 3.4 per cent. in the summer of 1964 to 2.2 per cent. this year. In the Northern Region the drop is from 2.8 per cent. to 2 per cent. In Scotland the drop is from 3.4 per cent. to 2.4 per cent.

In Wales, because of the policy followed up to 1964, unemployment was still rising into 1965, but this year's July figure is lower than that for July of last year. So, despite the coal closures, of which so much has been heard, I believe that the tide has now turned in Wales.

In certain towns in these areas, indeed, unemployment has fallen to a gratifyingly low figure. In Dundee, which used to be such a problem, it is down to 1.6 per cent. In Aberdeen it is also down to 1.6 per cent. In Glasgow it is down to 2.6 per cent., compared with 4 per cent. two years ago. In Hartlepool it is down to 3 per cent., compared with 5 per cent. two years ago and nearly 10 per cent. at the peak in 1963. Even in Sunderland, which used to be such a problem, the figure is now down to 2.3 per cent.

The right hon. Gentleman tried to argue that there had been no improvement in the spread between the worst and the most fortunate areas. I cannot agree with the figures he produced. In February, 1963, when unemployment was at its peak, the spread between the highest and the lowest regional figure was 3.6 per cent. This July it was only 1.7 per cent. This is a remarkable drop in the figure and this is part of the answer to those who fear that the measures of restraint announced on 20th July will seriously reverse the tide of falling unemployment in the development areas. The fact is, I believe, that their position has been fundamentally improved relative to the rest of the country in the last two years.

No doubt we must expect a seasonal rise in unemployment between now and the winter peak in these areas. But those who fear that the total will be disastrously worsened by the recent measures are, I believe, unduly alarmed. Just the same fears were expressed after last year's July measures, but they turned out to be grossly exaggerated.

One fact which the right hon. Gentleman forgot is that there is a good prospect of increasing production for export over the next six months and that will operate against any other disinflationary forces at work. One reason for this is that both last year and this year these areas have been exempted from the new restraints on investment and this will give them in the coming months an even greater priority than before.

Mr. Noble indicated dissent.

Mr. Jay

It is no good the right hon. Gentleman shaking his head.

Mr. Noble rose——

Mr. Jay

I think I should go on.

Mr. Noble

It just is not true.

Mr. Jay

I am giving the right hon. Gentleman the facts. Building control is being tightened in the rest of the country, but the new and wider development areas under the Industrial Development Bill will be totally exempt. Office control is being extended to the East and South-East, but development area regions are totally exempt. Experience of office control in the last two years has shown that it tends to push development outside the controlled regions and this may now well spread to the North and West.

All new factory building, publicly and privately financed, is of course totally exempt—like houses, schools and hospitals—from the new restraints; and the Board of Trade will continue as I said, to grant I.D.Cs. equally freely in the development areas, while tightening the control in the Midlands and South-East. All this means that the development areas are in fact to get, because of the restraint elsewhere, a greater priority than ever before over the next 12 months.

So far, I have been speaking mainly of factory and office development, because they provide the bulk of employment nowadays and because employment is what these previously neglected areas most urgently require. But of course, the Board of Trade can and will assist many service industries also under the powers we have taken in the new Bill. For instance, we have considerable power to develop both hotels and tourism, as well as office building in these development areas. B.O.T.A.C. grants and loans are available for hotels as well as for industry, where they satisfy the usual tests. The development area building grants will also be available for hotels. Since the development areas have now been so greatly widened, particularly in Scotland and Wales, a very large number of hotels will now be able to benefit from these grants and loans which could not do so before.

In addition, hotels in development areas will also qualify for the new development loan scheme which I announced last week in cases where it can be shown that a hotel has a good prospect of earnings from overseas trade. The Government are also making a grant of £2 million a year to the British Travel Association to encourage the tourist trade. As the right hon. Gentleman rightly said, the Scottish Tourist Board has its own grant.

We shall, therefore, by no means confine our assistance to industrial or even office building. The new Bill, of course, also includes powers for special assistance to public services—roads, water, and so on—which are the basis of industrial life, where other powers are inadequate, for the purpose of the whole policy is not just to industrialise these areas, but eventually to equip them with all the services necessary to a thriving modern community.

Fortunately for these areas, we now have new legislation with wider aims, wider powers and much wider areas. The Bill will also be permanent and not temporary like its predecessors. It will give a straight 40 per cent. grant for new industrial plant in the very much wider new areas. The I.D.C. figures show that this has already proved a valuable incentive.

The right hon. Gentleman forgot several things in his calculations. He forgot that replacement by new plant is now eligible for the grant where it was not eligible before either for free depreciation or the old L.E.A. grants. He also forgot to make his calculations over the whole life of the plant; and that, as the areas are wider, many more people will qualify. I agree with him that this wider policy will bring some new problems. For instance, if we are to offer the 40 per cent. grant in these much wider areas, some of which have little unemployment, we shall have to be more selective in granting I.D.C.s within development areas so as to be sure that the bigger schemes go to areas which both need them and can support them.

The corollary of this is, of course, that we must use I.D.C. policy also in a discriminating way outside the development areas. It sometimes seems to be thought that the Board of Trade has only two I.D.C. policies: very easy in development areas and very tight everywhere else. This is entirely untrue. In fact, I.D.C. policy, can be, and is, conducted with every shade of flexibility as between the most congested and most under-employed areas, and is also of course varied as circumstances change.

The right hon. Gentleman mentioned the growth area concept. None of us needs be too doctrinaire about that. What we want to seek to do by all these policies is to spread new industrial schemes according to the needs and resources of each area, wherever the areas may be, and this can be done by I.D.C. policy as well as by the use of growth points.

In the case of overspill schemes for new and expanding towns drawing population from development area cities, we are extending assistance, even though the new and expanded towns may not be in the development areas. In Scotland there is no difficulty, because the new towns as well as Glasgow itself are in the development areas. In the case of Liverpool, however, Skelmersdale and Winsford are outside; but will qualify both for the benefits available under the Bill and for an easy I.D.C. policy because they will draw the bulk of their population from Liverpool. We cannot, however, extend these benefits to new and expanded towns not drawing most of their population from development areas; or the whole policy would be undermined.

The new Bill and new policy will have to be designed primarily in the months immediately ahead to ensure employment and revival in the declining coal areas, because there the need is most urgent, and in the remaining pockets—and there still are some—of acute unemployment. But after that we can turn our energies increasingly to checking depopulation, in particular in the rural and Highland areas of Scotland and in Wales, which in the future will need not merely forestry, agriculture and tourism—vital though these are—but modern industry as well. All the powers to achieve this are contained in the new legislation; the relevant criteria are laid down; and the foundations are already being laid—for instance, by the Highland Development Board—which exercises valuable supplementary powers.

Speaking as one who happens to represent a London constituency, I believe that all these powers will be as beneficial to those in the South-East as to those in the North and West and as crucial to the efficiency and productivity of the whole country, because, without control over the location of employment, the congestion of public services and ordinary living in the South-East will soon become completely intolerable. I am sure that the revival of development areas can be pushed through to a successful conclusion provided that we do not relax the effort too soon and so let the old forces gain the upper hand once again.

Mr. Gordon Campbell (Moray and Nairn)

Before the right hon. Gentleman sits down——

The Deputy Chairman (Mr. Sydney Irving)

Order. I think that the right hon. Gentleman has sat down.

5.39 p.m.

Mr. Rafton Pounder (Belfast, South)

During the course of this most important debate on regional development, the Committee has already travelled and no doubt will continue to travel extensively around the regions of the Kingdom. For the next few moments I want to direct attention to Northern Ireland, not only in the context of general regional development, but also in the context of the present squeeze. I say at the outset clearly and sincerely that I welcome the Prime Minister's expressed wish to protect the development areas from the full rigours of the Government's latest package of deflationary squeezing. I hope that he will be able to accomplish this aim because, if he does not, I dread to contemplate the level to which unemployment will rise in all development areas, including Northern Ireland, in the next few months.

Could we please, however, have more details than we have hitherto had from the Government about how precisely they intend to effect this shielding of development areas? I have listened carefully to the speeches of the President of the Board of Trade, both last Tuesday evening in the economic affairs debate and again this afternoon. He has detailed plans for advance factories and the granting of I.D.C.s, but, with respect, his projection of future plans has been in terms mostly of generalities. I do not wish to seem to be carping—nothing is further from my mind—but how do the Government intend to protect the development areas from the deflationary blasts?

Of course factories can be built, and this will help the construction industry. But how are tenants to be found? In the context of Northern Ireland I do not see how we can hope to escape many of the rigours of the general effects of the squeeze, despite the intended efforts of the Government to try to protect these areas as much as possible. Already in the last couple of years there have been heavy increases in taxation, striking hard at small companies—and Northern Ireland is predominantly a small company economy.

Then there is the Selective Employment Tax on the tourist trade, which will have an effect in Ulster, and thirdly there is the result of the present policy of deflation. I should, however, like to bring the Committee's attention to two very important points. While I am referring to them in a Northern Ireland context, I do not think that it is unreasonable to say that they would apply to all parts of the Kingdom.

Many of the Government factories set up in recent years, all around the United Kingdom, have been the branch factories of British parent companies. Furthermore, they have been rented, not owned. It is inevitable that if a company is forced, by Government action, to contract its activities, the place where it is going to contract first is where it has least to lose—in a rented Government factory. I fail to see how this damaging possibility can be avoided. It is all very well for the President of the Board of Trade to say, as he did only a few minutes ago, that the development areas will get greater priorities now than ever before. This is obvious if he is going to clamp down on congested areas such as the Midlands. But what real value is this priority going to be if the companies which would normally be setting up branches in development areas are so restricted by the general credit squeeze that they are unable to occupy the factories?

In Northern Ireland we will be similarly affected. We are hoping that firms already there are going to be able to stay, but perhaps newcomers are going to have to defer their plans until after the squeeze period. We in Ulster urgently need a steady flow of jobs to take account of our rapidly rising population. If we are not going to continue to attract jobs, as we have done hitherto, then there is bound to be a serious increase in unemployment.

The second illustration I wish to put to the Committee—and in this the Highlands of Scotland are most akin to Northern Ireland—is that, being at the end of a long and expensive transport link, increases in freight costs have always affected Northern Ireland severely. Now that the Government have increased the fuel duty by 10 per cent., this is bound to lead to further increases in transport costs, with the inevitable adverse effects upon the general economy of Northern Ireland.

Third, and again this is true of the Highlands of Scotland, Northern Ireland is not rich in raw materials. It has to bring in all raw materials which it requires for processing and so forth. And then export the finished article. Any increase in transport costs is bound to inflict a double dose upon the transport bill. I do not wish to maximise the barrier which the Irish Sea presents to transportation, but transport costs, over a long distance, whether by land or sea, present an expensive barrier. The psychological barrier which water traditionally presented has very largely gone. But, like the Highlands, Northern Ireland is separated from its major markets by quite a considerable distance.

There does not seem to be any way in which these two areas of the United Kingdom can circumvent or cushion themselves against the effects of the Government's increase in fuel duty. These are only three illustrations, but they are tremendously important. Couple these with the effect of S.E.T. on the expanding tourist trade of Northern Ireland and I reckon that a fairly lean time is in store.

If the package of restrictions lasts for six or nine months, it is quite fallacious for any hon. Member to imagine that the effects during this period will necessarily wear off either easily or quickly. I cite in support of this an instance, which hon. Members may not think important, but which was very important to Northern Ireland. Three years ago we had an unusually severe week of snow, something we seldom see. It occurred during a dreadful blizzard in February, 1963, and brought to a standstill all forms of outside work and resulted in considerable lay-off for all men. Although the blizzard lasted effectively a week to ten days, it was at least six months before the economy of Northern Ireland in terms of reabsorption of men laid off had fully recovered from the dislocation created by this unexpected weather.

It is perfectly fair to use this example as an analogy to the Government's measures. If they are going to last for another six or nine months, by the same token it is going to take at least another couple of years for us to recover from the ill-effects that we may suffer. No one, and this applies to any part of the United Kingdom, despite inducements given by the Government, is going to set up a factory in an area out of a sense of charity or sympathy. A Government cannot force an industry to a particular site. It can guide a firm and offer financial inducements. In the final analysis, however, it is up to the company to decide where it will be located. There is an old adage, that one can lead a horse to water but one cannot make it drink. It is exactly the same with industrialists. They can be brought to an area, but they cannot be compelled to set up on a particular site.

In my view, there are three positive ways in which the Government can help the development areas, and I sincerely hope that they will do so. One way, as the President of the Board of Trade has stressed this afternoon, is through the building of advance factories. The President of the Board of Trade has also emphasised, I think rightly, the provision of adequate training centres. Even in Northern Ireland, where we have a disproportionately large number of unemployed as compared with other regions of the Kingdom, we have a chronic shortage of skilled labour in certain trades. We have been trying our best with a training centre, and it has been very successful. I hope that there will be many more centres, not only in our province, but throughout the United Kingdom.

There is a third and very important way in which the Government can assist, and this is through their participation in industry. It must be remembered that the Government are one of the major customers of industry. I hope that the Government will regard the social consideration coupled with "best value for money" as the joint motivations for the granting of any contract. I am not advocating extravagance; rather, I am suggesting that where there is only a minimal financial difference between a contract in one area and one in another, it should be given to the area where the industrial fillip is most urgently required.

If I may use Northern Ireland as an illustration of this, the Government have thus far been singularly unhelpful. One can think in terms of "Sea Eagle", the joint anti-submarine school at Londonderry, which, despite the persistent and dedicated efforts of my hon. Friend the Member for Londonderry (Mr. Chichester-Clark), the Government have still not taken any positive action to assist. Likewise, in the case of my hon. Friend the Member for Belfast, East (Mr. McMaster), who has been most diligent in his espousing of the cause of the Belfast aircraft factory. The only action that appears to have been taken has been to create a measure of uncertainty. Northern Ireland is undergoing, in common with certain other parts of the United Kingdom, a form of industrial revolution, a transition from an essentially pastoral community to an industrial economy. This has presented us with enormous problems in recent years, particularly when allied to the run-down in the traditional heavy industries which have characterised the North-East of England, the Clyde and Northern Ireland.

We in Ulster are forging ahead economically and there are more people in employment than before, and the econo- my is growing and expanding impressively. It would be a tragedy of the greatest magnitude if the Government's credit restrictions were to reverse the encouraging trend which has been developing in recent years. We felt that at long last we were getting on top of our economic problems. It will be very serious for us if the present general squeeze sets us back.

There are some people who like to portray, and believe that it is helpful to portray, an area as a depressed and dispirited area. If anyone applies this to Northern Ireland, he is being grossly inaccurate and singularly unhelpful, because just as an atmosphere of confidence succeeds in breeding and expanding a sense of well being, so an atmosphere of bleating depression begets a deep and distressing gloom.

I am interested to see in the Chamber the hon. Member for Belfast, West (Mr. Fitt). On 31st July, there was an article in a widely read and responsible newspaper, the Sunday News, which informed those of us who read it—and there are many—that "he will catch your eye" today, Sir, when Westminster debates the development area". However, it goes on to say something which is a bit more serious: How is it that Fitt feels assured of catching the eye of the Speaker It has caused some of us some concern that anyone should be dogmatic and presumptuous in this way. If the hon. Gentleman would like to intervene, I will willingly give way so that he may explain the position. But it seems serious that someone should make a statement to the Press stating categorically that he will be called.

In conclusion, economic progress or failure is, in considerable measure, a question of confidence. Just as the sterling crisis which has caused such grave anxiety in the House and in the country has been a crisis of confidence, so the same token of confidence, or lack of it, must characterise regional development. I trust that the general outlines of ensuring that the development areas are protected from the full rigours of the squeeze will be carried out in detail, bearing in mind that it is much easier to shield an individual industry from the effects of a given measure than it is to protect and shield geographical areas which are widely spaced. I hope that the Government will be able to carry out their promise in this respect.

5.54 p.m.

Mr. James Griffiths (Llanelly)

I hope that the hon. Member for Belfast, South (Mr. Pounder) will forgive me if I do not comment on what he said. He put the case for his part of Northern Ireland very persuasively. Speaking for myself, and I hope for Members on both sides of the Committee, it will be very welcome to hear an Irish voice speaking from this side.

I have had the privilege and opportunity of taking part in many debates of this sort over many years, going back to the 1930s, when these areas were described as distressed areas, later when they were designated as special areas and then in 1945, when Hugh Dalton, with whom the President of the Board of Trade worked so hard—I pay tribute to him for that—introduced the new concept of development areas. The right hon. Member for Argyll (Mr. Noble) spoke about the philosophy behind all these schemes. Let me tell the Committee what my philosophy is.

In the 1940s, we had a report, which perhaps has been neglected, dealing with this problem from the standpoint, not of distressed, special or development areas, but of the whole Kingdom. It was the Barlow Commission on the geographical distribution of population in these islands. It raised this matter to a national level. It is still worth reading. At the beginning of a new decade and industrial revolution we already see one of the features of the old—the tendancy for population to be crowded into a few areas and the rest of the country neglected.

It would be wise for this country to adopt a sensible policy for the distribution of our population. This is a small island with a growing population. In the end the country will have to treat this matter not simply as one of helping areas like Wales, Scotland and Ireland, I will indicate later how I think, in the present economic situation, we have an opportunity of doing something about this matter. In a small country like ours, what a waste of our wonderful land it would be if we were to crowd all the population into two or three centres. Someone had an awful nightmare and described the Britain of the 1980s in which we would all live in one community called "Londbirm". In this context, I welcome very much the contribution which my right hon. Friend has made in his new Bill to depart from that old concept of the Local Employment Acts. That idea was wrongly conceived, and a failure. There were absurdities in it. My right hon. Friend referred to one of them, namely, that the Government spend public money on building a trading estate and put it outside the employment area. I welcome the new concept of a wider area because it fits in with what the country has to do if we are not to bring upon ourselves insoluble traffic congestion and housing problems, with all their social costs.

Can anyone reckon the social cost of concentrating so much of our population and industry in a few centres? The bill must be colossal, and it is time that the nation and the Committee, in making up the balance sheet, gave weight to the social costs imposed on the regions of this island. I therefore welcome wholeheartedly the decision—it was made when I was privileged to be a member of the Government—of my right hon. Friend in the Industrial Development Bill to designate these wider, areas and restore the concept first embodied in Hugh Dalton's Act of 1945 of thinking of this problem in terms of seeking to plan the industrial, economic and social life of a development area as an integrated whole. I am very pleased to have played some part in designating the area in Wales which is a development area.

I also welcome wholeheartedly the decision announced by my right hon. Friend last week, and referred to in his comprehensive, able and encouraging speech today, to exempt the wider development areas from some of the deferments involved in the recent measures announced by the Government to overcome our present difficulties. I am pleased that in implementing that my right hon. Friend will tighten up—and there is room to tighten up—the granting of industrial development certificates in the congested areas.

I am glad that my right hon. Friend is to extend the control over office building. We have allowed office building and office work to expand in the congested areas when there was no reason, economic or otherwise, why they should.

I was one of the first Ministers to make the break from London with office building. At the time, I was Minister of National Insurance, and we had to establish a central office which eventually would employ 8,000 men and women and involve the transfer of some highly-skilled established civil servants from London and other places. We decided eventually on Newcastle-upon-Tyne. The staff cooperated willingly. At first, some of them were afraid to go, but now they would not be dragged away.

At the time, many experts said that it could not be done and that a great service like National Insurance could not be carried on from Newcastle, because, as we were told, "Everything runs in and out of London." However, the Government of the day decided to go ahead, and it has been one of the wisest decisions ever made by a Government. The office in Newcastle-upon-Tyne has been an outstanding success. One has only to look at the paucity of complaints about that wonderful administration. National Insurance is perhaps one of the greatest services and one of the most important offices in the country, either public or private. If that can be run from Newcastle, why cannot others?

I am very glad, therefore, that my right hon. Friend is extending his office control and tightening up the issue of I.D.C.s. I urge strongly that he should use all the powers of persuasion that he has to move some of our great offices out of London. I see the face of this old City changing, and I do not like all that I see. But one thing which is wrong is the tremendous concentration in a great metropolis of clerical and other office work which can be done elsewhere. If the Ministry of National Insurance can do it, why cannot the insurance companies and other services of that kind do the same?

We are presented with a wonderful opportunity to bring more industry to the development areas at a time when the nation is seeking to overcome its economic difficulties—and overcome them we shall. This is a splendid opportunity, because it will not only help to solve the remaining problems of the development areas but those of the nation as well. Our biggest problem is how to increase production and productivity, and perhaps I might be permitted to give my views on the subject. I believe that the over-concentration of industry in some areas of the country is a bar to increased production and productivity. There are areas in which industry is so crowded that almost every factory is short of labour, and there is intense competition between firms for the labour which is available. I have before me a local newspaper from one borough in London. In it there are six pages of advertisements of vacancies. What the potential employers are doing is competing for the same labour force.

Mr. Dan Jones (Burnley)

And adding to costs.

Mr. Griffiths

Men and women are moving from one firm to another as the result of being offered inducements.

In this situation, if we can only persuade more and more of these industries to go to the development areas, that will make a big contribution to increased production and productivity. Over-congestion is one, but only one, of the contributory factors to our failure to get the rate of increase in production and productivity that we want.

The hon. Member for Belfast, South made a valid point when he referred to the fact that in Northern Ireland some of the developments have taken the form of branch factories of parent companies, and when there is redeployment those are the firms which feel the first draught. My right hon. Friend has said that the steps which he has taken will protect the development areas and, not only that, will give them advantages. I hope that he will discuss these matters with some of the firms in South Wales, because this will give them an opportunity to expand the scope of operations in their factories. Sometimes they have built factories to provide their parent companies with components, and that has been found to be a very wise development. But, with the help which my right hon. Friend can give, I believe that many of our large concerns, such as the motor car manufacturers and others, can be induced to expand their scope and diversify their products.

I want now to say a word about training and redeployment. When we talk about redeployment, it must be remembered that we are discussing human beings. We have had some experience of this in Wales. There has been redeployment resulting from changes which have come about in the coal mining industry due to automation. We are living in an age of continuous technical change. We have seen it in the new steel industries, particularly at Margham, where at present my compatriots are meeting for the National Eisteddfod.

It is vitally important that these matters are dealt with in co-operation between managements and trade unions, and here let me pay tribute to my old friends in the National Union of Mineworkers. They have a difficult job. I was President when there was one man on the dole for every man in work. Today, they are facing big problems in adjusting to a new fuel situation. I can understand their feelings, and I can understand their criticisms of the Government of the day. However, if every industry in the country and every body of workers in every industry had given us the same increase in productivity during the last five years that the miners have given, we should not be in the position that we are today. When people criticise nationalisation, they should think about that.

Two or three problems arise in redeployment. It is inevitable in changes of this kind that the most human problem and perhaps the most tragic one is that of the man of 45 or 50 who loses his work. I want to stress how vitally important it is not to write off people of 50 years of age and think that that is the end of them. They are still capable of making a great contribtuion to the life of the country.

I hope, therefore, that we shall speed up the provisions which we are making for retraining. I am glad that the Government are to establish a new rehabilitation centre at Port Talbot, where men will go first for rehabilitation before going on to more intense training in the training schools.

I hope, too, that the Government will take every step to reform the law relating to land acquisition. The laws surrounding land in this country go back to the feudal ages, and the time which it takes to acquire sites to build factories is one of the problems which are vitally important. I am glad that my right hon. Friend mentioned it.

I congratulate the Government. It is the first Government that we have had who in their legislation have regarded depopulation as a problem to be solved and not a fate to be endured. I very much welcome the fact that the Government are accepting this.

My right hon. Friend the Secretary of State for Scotland took a bold and imaginative step by establishing the Highlands Development Board. We are seeing a kind of silent revolution in the countryside. It just creeps along, and for the last 20 years the number of people employed in agriculture in Wales has been declining at the rate of about 1,000 a year. Not much fuss is made about this. There are no demonstrations. Everything just happens quietly. If 1,000 people were to become unemployed in Merthyr, in Wrexham, or in Llanelli, there would be a row, but what is happening means that we lose three villages a year. This is the first Government to recognise that depopulation is a real problem, and one to which the nation and Parliament must pay attention. I am therefore delighted to see that depopulation is now one of the criteria to be considered in giving help under the Industrial Development Bill.

When I became Secretary of State for Wales, one of my ambitions was to make an important contribution to my own country by helping to solve this problem of depopulation, and to do this I wanted to see a new town established. I appointed consultants to consider the matter. They have now reported, and I hope that during the Recess all hon. Members will read their report. My right hon. Friend the Secretary of State for Wales asked us all to think about it. I remember that when the Beveridge Report was published in 1942—and I had something to do with it in subsequent years—the country was divided into three classes—those who were for the report, those who were against it, and those who had read it. I notice that among my compatriots there are some who have condemned the report before they have seen it.

Speaking as a politician with half a century of experience behind me, I am interested in this united front of Tories, Nationalists and Liberals in Wales. If we mean what we say, that we intend to combat the problem of depopulation, the Government must take some dramatic, but at the same time realistic, step to deal with it, and I believe that the proposal to build this new town is just such a step. I have read the report. It is a new venture in town and country planning. By the year 2000 this country may well have a population of 70 million or 80 million. If we allow them to drift as they are drifting now, the conurbations will come to a dead stop. Motor cars will be on the road, bumper to bumper. Everything will come to an end. This concept of a new kind of urban growth is really attractive, and therefore I conclude by saying that one of my dreams is to see a real effort made and real imagination shown to bring in a plan to combat depopulation. This is one of my dreams, and I hope that I may be spared to see it come true.

6.14 p.m.

Mr. John Brewis (Galloway)

I am pleased to follow the right hon. Member for Llanelly (Mr. James Griffiths). I was most interested in what he said about depopulation, and I hope that later in my speech I shall be able to take up some of his remarks, though, of course, I cannot say what he did half as well as he did.

I do not think that the right hon. Gentleman was entirely right about the Barlow Report. One of the fallacies of the Report is that it worked on figures provided by the Registrar General, which showed that the population of Britain would not increase, but would decrease, and the Report was much more interested in spreading the population to avoid air raids, than it was in revitalising the rural areas.

I cannot agree with the right hon. Gentleman and with the President of the Board of Trade in the view that this is a fine opportunity for industrialists to expand in development areas. I am delighted that the unemployment figures are down, but where will they get the money for development when there is a squeeze on? All recent experience shows that when the country's economy is booming, factories go to the development areas, and that the reverse happens when there is a period of freeze like the present one. Indeed, one is already beginning to see an unseasonal rise in the unemployment figures, and I would be surprised if, in Scotland, they did not reach 80,000 by the end of the year, accompanied by the biggest emigration figures that we have ever had.

I want briefly to speak about the rural areas, because they cover 85 per cent. of the land area of Britain, while a similar proportion of the population is centred in the urban areas. Depopulation is making this disparity considerably worse. The right hon. Gentleman asked what the cost was of people moving from a rural area to the city. I have here a figure for France. For a family moving from the provinces to Paris, £3,000 must be added to the bill for such things as housing and the social infrastructure, and a similar figure would apply in Britain; of course, one of the difficulties is that it is very hard to get people to move back into the rural areas once they move out.

By way of example, I should like to give some figures for my county, Wigtownshire. In 1851, the population was 51,000. This year, it is down to 28,000. It has the highest figure of depopulation for any county in Scotland, except for Bute, and it is well up to that for Mid-Wales over the last few years. Wigtownshire has a higher revaluation figure—put on by the assessor in this year's revaluation—than any other district in Scotland. In addition, the rates would have raisen by 5s. in the £ but for this revaluation.

My last statistic is that only 18 per cent. of those employed there qualify for a premium under the Selective Employment Tax because they are in manufacturing industry. This is lower than the figure for the Highlands, and compares with about 38 per cent. for the rest of the country. How will the Government's measures help this county? It used to be a development district in the 'sixties before this Government came to power. There was then a noticeable increase in employment. Several firms expanded and took on more men. Two or three new factories came in, and things were beginning to move.

But now we have lost the inducements that we could offer, because Wigtownshire is dealt with on the same basis as the whole of Scotland and northern England down to a line between Lancaster and Scarborough. Is it likely that an industrialist will go to Wigtownshire when he can get the same inducements in Newcastle-upon-Tyne, or in the Tyne-side conurbation? It is essential that rural areas which were previously development districts should get some preference over areas like the Tyneside conurbation if they are to attract new industry and we are to prevent depopulation.

Why not restore free depreciation, which was so popular with existing firms and new industrialists coming to an area, for certain areas that I might call critical areas? This has been done in other countries, and I see no reason why we should not do it as well.

My second point is about transport, costs of which are always a bugbear in the somewhat remote areas. Since they have been in office, the Government have added about 10d. a gallon to the cost of petrol, and the cost of vehicle licences has also gone up, hitting everybody in the rural areas as a result. Is it true that we are now to see a cut in the road programme in Scotland of £1.4 million as a result of the Government's recent measures? Road improvements are vitally needed, particularly where a railway line is closed down. Surely there must be a very good case for giving priority to improving a road like the A75 between Dumfries and Stranraer.

The Government must be clear about their objectives in rural areas. First, a diversity of employment must be provided and the resources of under-employed labour in the rural areas must be tapped. That was pointed out by the "Neddy" reports under the last Government, and also in the National Plan. Secondly, we must anchor the rural population in an area, and thirdly, we should encourage tourism and recreational activities.

The development commissioners have recently asked for "trigger areas" to be prescribed, which are market towns where the population could expand and diversify. This would be a very good use of the consultative planning councils which the Secretary of State is in the process of setting up in Scotland. They could look over an area and see where a town could be expanded with the help of small advanced factories to anchor the population and give diversity of employment.

The right hon. Member for Llanelly spoke about the very imaginative new plan for Mid-Wales. I am not at all sure that this is the best way to proceed there. As I understand the conception, a new town of 70,000 people is to be put down in a purely rural area. What I think will happen—and to some extent the planning consultants also think this—is that it will drain people from all the surrounding districts, while not getting very many people to come from the Midlands and settle in the town.

The planning consultants say that there must not only be a new town, but that the surrounding towns must also be built up. Otherwise, the new town may well denude the population from an area of about 3,500 square miles. The conception of trigger areas put forward by the development commissioners is very much better. It follows very much more closely the ideas of the last Government, who had the growth point idea in the central Scotland plan, which the present Government have completely abandoned, I think entirely wrongly.

I also want to mention the question of hotels, which are very important in rural areas if we are to encourage tourism and recreational activities. Even the people who come to an area but stay in a tent, caravan or bed and breakfast house, all want to use the hotels as well, even when they are not staying in them. Discrimination against hotels since the Government have been in power has been ferocious. They have lost their investment allowances and now they are being attacked again with the Selective Employment Tax, which they must pay on all their employees.

The President of the Board of Trade said that they could still get B.O.T.A.C. grants and loans and building grants. He did not mention that this is purely dependent on providing extra employment, and that it is difficult to get these grants. Nor is the loan scheme recently announced likely to be very much use, because I understand that the minimum qualifying expenditure is about £20,000, and very few hotel keepers in my area have that sort of money.

There has also been a staggering increase in hotel valuations. Sometimes the valuation has been more than doubled, and the rates payable will be at least 50 per cent. up. This does not apply to households providing the bed and breakfast trade, because they are valued on the domestic rating system and they also get the benefit of domestic electric tariffs, although they are quite often in direct competition with the hotels in their area. If we are to establish and help the hotels, something much better must be done, and done quickly. I do not think that the answer is to make the bed and breakfast establishments pay more in rates and electricity. We should try to help the bona fide hotel which is providing accommodation for tourists and overnight visitors.

We can do this in several ways. One would be that they should be revalued, like bed and breakfast establishments, on the domestic system and that they should be allowed to get their electricity at the domestic tariff rate. Another way would be to treat them as industry is treated in Scotland and let them have a percentage devaluation. Hotels attract people to an area, and, therefore, add to its prosperity. It will be a very bad thing if they close down.

Perhaps the best commentary on the Government's actions for development areas has been set out in two remarks, one made by the Chairman of the Highland Development Board, who said that the withdrawal of the investment grants would make its task very much more difficult, and the other by the hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), who said in a recent debate that the Selective Employment Tax was the best thing he had heard of to help Birmingham. Let me say that is one of the worst things for rural areas in Scotland and the rest of the country.

6.28 p.m.

Mr. William Edwards (Merioneth)

The debate is very important for my constituency. When the Industrial Development Bill was first debated in the House a very large number of Welsh hon. Members spoke. As we are this week holding our nearest equivalent to a Royal Garden Party I was a little concerned that there would be a lack of Welsh hon. Members speaking in this debate. But whatever it has lacked in numbers in its contributions from Wales the debate has gained in quality in the tremendous contribution from my right hon. Friend the Member for Llanelly (Mr. James Griffiths).

On the first occasion that I addressed the House I criticised my own Government for the actions they were taking in relation to agriculture. I was loudly acclaimed by the Opposition, and I am still living that down in my constituency. On this occasion, I shall speak very briefly. A number of other speakers want to take part in the debate, which is, I think, essentially rather parochial; we all have our problems in our own areas. But I have a great deal to say in expression of gratitude to the Government for the work they have done in my constituency.

I represent a large land area in Mid-Wales, an area which has a very small population and has suffered from depopulation for very many years. The depopulation of Mid-Wales started at the beginning of the century, the days when the Liberal Government depended so heavily on Wales, and when the Government of Lloyd George had its sustenance from Wales but did nothing in return. All we are hearing today from that quarter of Mid-Wales, a very small quarter, represented by the Liberal Party, is condemnation of everything which is done to try to help Mid-Wales.

Ours has been an area which has suffered from depopulation. I have heard hon. Members opposite criticising some of the things done and saying how much better was their policy of growth points. I am sure that every hon. Member representing Mid-Wales will be asking where the growth point was in Mid-Wales when the Conservative Government were in power. There has been the criticism in Wales that, because of the extensions of development areas to cover areas of depopulation, others will suffer.

This is not true. During the last five years of the Conservative Government, five advance factories were allocated to the whole of Wales. During the first two years of this Government, since October, 1964, 21 advance factories have been allocated to Wales, and not one area which was already in a development district designated by the Conservative Government has suffered. In fact, all have done a great deal better than they did under the Conservatives.

In my constituency—this is why I am expressing gratitude—we have had the first two advance factories allocated since 1947, and this in a space of less than two years. Work on those advance factories has started. In Blaenau Ffestiniog, an old slate quarrying town, a town designated as a development district since 1956, but which did not receive any allocation of any kind of industry during all that time, within a month of the Labour Government being returned to power we had a new advance factory allocated. The industrialist who came to Blaenau Ffestiniog had far more faith and wanted to do a great deal more for Wales than the Conservative Government ever wanted to do, bringing work for 200 men to an area which had depended almost entirely on slate quarrying.

Mr. Brewis

Has not the hon. Gentleman had a nuclear power station at Trawsfynydd?

Mr. Edwards

Yes, but that was before 1956.

Mr. Brewis

Who arranged it?

Mr. Edwards

If the point is still being pursued, I remind the Committee that that nuclear power station was not an act of great generosity on the part of the Conservative Government. Nuclear power stations were being sent to outlying areas at that time the Government were not too happy about siting them near large centres of population. They would have sited it outside Birmingham—there were strong arguments for doing that—if they had not been concerned about the effect of a nuclear reactor outside Birmingham.

Mr. Brewis

Is the hon. Gentleman aware that the Secretary of State for Scotland's only claim to fame is getting such a reactor at Dounreay?

The Secretary of State for Scotland (Mr. William Ross)

But they wanted it elsewhere.

Mr. Edwards

The Scots are capable of answering for themselves in this Committee. I promised to be brief, and I intend to be.

I have said that we have had two advance factories. I am pleased to say that in my county we have had inquiries from another two industrialists who are prepared to come. This brings me to something which I must say about my county and the whole of Mid-Wales. There are many in Wales who are adopting a rather Poujadiste approach to politics in Wales, selling Wales short and bemoaning all the things that are wrong. There are complaints about transport in Wales, for example. People should not shout too much. There may well be things wrong with transport in nearly every constituency. It is not the fault of this Government. It is the fault of policy, or lack of policy, over a long time; it has been the fault of many Governments.

It does not help my constituency if we hear every politician of the other parties complaining about the lack of transport facilities. I can tell the Committee that the firm which is coming to Blaenau Ffestiniog will be producing car accessories, and that it has calculated that the additional transport cost of conveying its product, not a very expensive product, will be only 0.4 per cent. of the total cost of the product.

We are doing a great deal. The Mid-Wales Development Association has done a great deal. It did a great deal during the period of the Conservative Government, who did very little to help. The local authorities are doing a great deal, and we are very grateful to the Government also, for what they are doing.

In conclusion, I commend the new town proposal. As I have said before in the House, I am the son of a small farmer. Like many farmers in Wales, my father farms a holding of 20 acres. There are 20,000 holdings in Wales of less than 100 acres. Wales, North Wales in particular, is dependent on forestry, which is in decline, on slate quarrying, which also is in decline and will decline still further. Anyone who goes to see the working conditions in slate quarries in my constituency can only agree that it should decline and decline rapidly. There is also a decline in agriculture. We are losing our population, our young men, and we shall continue to lose our young men until we provide for Mid-Wales a focal point of growth.

The policy which the present Government are pursuing for Mid-Wales is only a policy of containment. Once the pockets of unemployment have gone, once the available labour resources have been used up, there can be no further development in that way. The young men who are now being educated in Wales will still go away to Birmingham. The provision of small points of growth and the provision of light industry will not retain the young men whom we want to keep in Wales, the young men whom we are educating to reach a high standard of attainment. If we are to keep a complete society in Wales, we must give the young people of Mid-Wales a focal point which will offer them the material amenities which young people in every Western European society are now demanding.

If we give them this opportunity, if we have this focal point of growth, Wales in the future will not have to come to the House of Commons or go to every industrial centre in England with a begging bowl, asking for excess industrial capacity to be sent there. We can generate our own growth in Wales, and the plan proposed offers an opportunity to build a new society there.

6.33 p.m.

Mr. Russell Johnston (Inverness)

I welcome the opportunity to say something from a Liberal point of view about the development areas and the question of regional development, important as that is. I hope that I shall be excused if I am drawn aside a little at the beginning to comment on some of the observations of the right hon. Member for Argyll (Mr. Noble), which were such that I cannot properly pass them by.

The right hon. Gentleman spoke of the philosophy of the development districts. I can only say, as I have said so often before, that I am amazed at his effrontery. Listening to him this afternoon, one would imagine that the Conservative Party in Scotland was flourishing like the green bay tree instead of being the withered stump that it is. It is a withered stump for many good reasons, and these reasons are very much associated with the problem of development districts and areas and the neglected regions of Scotland. Throughout the period when the right hon. Gentleman held sway, areas such as the Highlands suffered a serious decline in population and there was steady emigration from Scotland itself. That needs saying, because to listen to the right hon. Gentleman, one would imagine that everything was all right with Scotland when he was in power——

Mr. Mac Arthur

Surely the hon. Gentleman would agree, in fairness, that there is something else which ought to be said—that in his own constituency the Conservative Government produced a loan of £10 million for the pulp mill which is now reinvigorating the whole of the Western side of the constituency, with an effect which is felt throughout the Highlands. I am sure that he would want to say that, in fairness.

Mr. Johnston

I accept that the loan was produced at a higher rate of interest than would have been obtained otherwise. It was a special loan, but the pressure came from the Scottish Council for the Development of Industry rather than from the Government. However, I do not want to turn aside.

It must be admitted—I will make admissions about the Conservative Government for the benefit of the hon. Member for Perth and East Perthshire (Mr. MacArthur)—that it was the Conservative Government which took the first tentative steps towards giving some real legislative form to the growing belief that there ought to be preferential treatment for the regions, but I do not think that the right hon. Member for Argyll can in any way claim that this represented any sort of coherent pattern.

The Local Government Act was a patchwork solution. It took no account of depopulation, for example, and the Conservative Party was denying that depopulation existed in the Borders even as recently as a by-election there. The plan for the North-East of England and Central Scotland fitted into no national structure and had no unity. In Central Scotland, the plan was virtually no more than a new name for much that had been foreshadowed or already laid down.

Nor would I accept what the right hon. Gentleman said about this emerging from any sort of philosophy or Conservative ethos, if there is such a thing, because a party which permitted, if not actually encouraged, a massive build-up of population in the South-East of England and whose economic thinking was and is in the main laissez-faire—including some aggressive laissez-faire elements in the party—could hardly be described as a party which was in favour of decentralisation. That was necessary to say, before I turn to the Labour Government's approach to regionalism. I feel that the Conservative Party is in no position to criticise anyway what the Labour Government were doing——

Mr. Noble

Does the hon. Gentleman not recollect that, in his own constituency, there were about six major projects in the two years immediately before 1964 election? I know that he fought that election on the grounds that nothing had been done, but does he say that the pulp mills and Aviemore were no use to Inverness? Does he seriously believe that?

Mr. Johnston

Very strangely, every time private enterprise does anything the right hon. Gentleman attributes it directly to the activity of the Conservative Party. With great respect, this is not quite true. I would remind the right hon. Gentleman that the 1964 election, even more than the last, was certainly fought in the Highlands on the basis that that area had been long neglected. And it had: there had been a continuous flow of population out of the area. This is a fact—

Mr. Noble

Would the hon. Gentleman just ask Dr. Frankel at the pulp mills and the people who established the Aviemore project whether they got any direct help from the Conservative Government before he makes this sort of nonsensical statement?

Mr. Johnston

It is rather unfair for the right hon. Gentleman to drag in the name of the managing director of Scottish Pulp. I could quote a number of things which he has said, but in these circumstances it would be improper—

Mr. James Davidson (Aberdeenshire, West)

I should like to interpolate one fact. It happens that, in my constituency, which marches with that of my hon. Friend, there is a concern belonging to the same company which set up the pulp mill in Fort William. From conversations which I have had with the management there, I know that, for the five years or more prior to the 1964 election, no fewer than five paper companies were interested in setting up a pulp mill and that one by one they dropped out, due to lack of encouragement, until only Wiggins Teape was left.

Mr. Noble

Totally untrue.

Mr. Johnston

I am grateful to my hon. Friend, but I must get on with my speech. With respect to the right hon. Gentleman, he has had his fair share of interjections by now.

Confining myself to Scotland—[HON. MEMBERS: "Be reasonable."] I am essentially reasonable—I would say that probably the most fundamental difference between the approach of the Liberal Party and those of both the Conservative and Labour Parties is that only the Liberals recognise or assert the need to devolve real power and influence to Scotland. As hon. Members will know, we have long campaigned for a Scottish Parliament for Scottish affairs and we do not believe that we will get the necessary dynamics into the Scottish scene until we have some decision-making powers in Scotland.

We believe that although the advisory regional councils which the Secretary of State has set up create new and useful information channels to assist central Government in making the right regional decisions, they will never succeed in capitalising the potent forces of local pride and intellectual and commercial vigour until there is proper provision for democratic participation.

There are many criticisms of this kind. I would be critical of certain of the situations in Northern Ireland, but I would have thought that not only the hon. Member for Belfast, South (Mr. Pounder) would recognise that, restricted as the powers of the Northern Ireland Parliament are, they have been of great value in creating new jobs. In certain respects they have done better than in Scotland in shielding it from the worst effects of general financial policies.

I should like to ask some specific questions of the Secretary of State about the Highlands, which is the area which I know best. The Highlands and Islands Development Board has been mentioned and the Secretary of State will recognise that we in our party strongly supported its institution. It was a basic part of the campaign which we fought in that area. We had some criticisms, but generally we supported it. Certainly, we did not look upon it as a sort of Marxist exercise, which, if I remember correctly. was the expression used by the right hon. Member for Argyll. Whether or not he holds to it still I do not know. So far, the Board has proceeded with restraint and caution. There have been some small successes, some in my constituency.

However, generally speaking, we are waiting for something more dramatic and far-reaching. This means money and we know that the general economic situation is extremely difficult. I wonder whether the Selective Employment Tax will have the sort of effects which the Secretary of State claimed recently. I welcome the Government's attempt to shield the development areas from the general squeeze, but he will recollect that I and my right hon. Friend the Leader of the Liberal Party brought to his attention the fact: that the result of the S.E.T. on the Highlands would be to take out of the area about £2 million at the same time as the grant-in-aid figure for 1966–67 is £500,000.

I asked him whether he could announce any efforts to allow for regional development in the application of the tax. I hope that he will soon be able to announce a provision of this kind.

If he does not I honestly believe that, he is, in the words of my right hon. Friend, living in cloud-cuckoo-land. It is all very well arguing that one is penalising the service industries and benefiting the manufacturing industries, but in the Highland areas they have no manufacturing industries to go to. That is a fact.

I would draw the attention of the Secretary of State to the speech by my hon. Friend the Member for Cheadle (Dr Winstanley), on the Second Reading of the Selective Employment Tax Bill, in which he pointed out that A payroll tax could be introduced immediately in the following terms to raise the £240 million per year which the Chief Secretary is so anxious to acquire. First, the West Midlands and the South-East would pay 7s. per employee per week. Secondly, Yorkshire, Humber-side, the North-West, the East Midlands and East Anglia would pay 3s. per employee per week. Thirdly, the Northern region, in terms of the Department of Economic Affairs, the South-West, all Scotland and all Wales would pay no tax. The rates would be 7s., 3s., and no shillings, and it would realise precisely the £240 million which the Chancellor is so anxious to get with none of the troubles, arguments and special inquiries about who is to count because of these arrangements in industry, who does and who does not count, will it apply this side or the other side of the road, and so on."—[OFFICIAL REPORT, 23rd June, 1966; Vol. 730, c. 1012.] We in the Liberal Party have produced practical suggestions whereby a payroll tax could be introduced effectively and take account of the need for developing certain special areas from the country.

I would ask the Secretary of State whether he is in a position to make any announcements about the latent effects of the seamen's strike. This matter has been brought to his attention several times by my hon. Friend the Member for Orkney and Shetland (Mr. Grimond) and there was a parallel with what was said earlier by one of the hon. Members from Northern Ireland about the severe climatic situation in Northern Ireland two years ago and the severe effect on the general economy. There is no doubt that the effects of the seamen's strike on the North and Western Islands have been extremely severe. I wonder whether the Secretary of State has considered this matter and is in any position to announce any scheme or proposal to alleviate these effects

Transport is vital to the success of the development areas. I was sorry that the Secretary of State approved the recent McBrayne's increases. Last week, we had the Command Paper on Transport Policy, a very interesting document which, no doubt, the House will debate in due course. I am pleased to see in it recognition of social as well as economic need, but there is one part which I find very disturbing. Paragraph 27 says: The Government is considering the possibility that local communities might, as part of the long-term arrangements, assume some, at any rate, of the financial responsibility for passenger services whose retention is required for local reasons, if they should decide that the line ought to be preserved as part of the local transport system. This responsibility would devolve on any new transport authorities that might in future be established for the areas concerned. If, in the development areas, for example, in the Highlands, this meant that county councils had to contribute directly to maintain the Kyle line or the North Wick line this would be an extremely unsatisfactory arrangement. On the other hand, if it means that the Highlands and Islands Development Board would undertake responsibility, which means central finance, then this might well be reasonable. I see that the Secretary of State is smiling and I assume that the answer is a favourable one.

There is a great deal more I could say, but I know that many hon. Members wish to speak and I conclude, therefore, by saying that I believe we now have a chance to construct new and better conditions for people to live and work in the development areas than they previously had, and, in many cases, still have, in cities and urban sprawls. Very often it is extremely difficult to maintain a consistent policy of regional development where everything is so much subject to the general national economic situation. But I implore the Government to use every measure they can to safeguard steady growth in the regions and thus to safeguard this opportunity.

6.45 p.m.

Mr. David Watkins (Consett)

Right hon. and hon. Members on both sides of the House have taken us on a most interesting and very important tour of Scotland, Northern Ireland and Wales. Without in any way seeking to belittle the very grave problems existing in those areas, and certainly without any feelings of nationalism, I would like to call the attention of the House to some of the problems in the development areas of England and very particularly the North-East Region. I want to make the point, also, that even in relation to the development areas themselves a debate has taken place here about the very large extent of those areas and the wisdom, or, as some hon. Members feel, the unwisdom of making them so extensive.

There are certain places even within the development areas which require more development attention than others. I am speaking in general about the North-East, the counties of Northumberland and Durham, an area which is faced with the very severe problem of a declining and changing coal industry. While it is true that particularly on the East Coast of that area there is likely to be a continuation of mining activity, on the west side, on the inland part of the area and particularly in the north-west corner of County Durham, in which my consistuency is situated, there is a very special problem and a special need for new industries under the development proposals.

One end of my constituency, in the area of Stanley, to which my right hon. Friend the President of the Board of Trade made a brief reference in his opening remarks, is comparatively well situated. Though it is confronted with pit closures there is, nevertheless, a fair amount of new industry going there. The Karrimor factory producing light motor vehicles has already commenced production. This establishment went to the area as a direct result of the measures which were taken by the Government in the last Parliament; and I would emphasise that.

Also, as the President of the Board of Trade has said, the Ever Ready factory has now started being built there and in time this will provide 1,500 jobs. The Karrimor factory will provide 450 jobs. But at the other end of my constituency, in the town of Consett, from which my constituency takes its name, there is, I am afraid, not quite such a happy picture, because there is at that end a comparative dearth of new factories and new industries.

This arises from several factors one of which may well be the fact that this is part of the constituency which is comparatively remote from the main lines of communication and, also, is situated at an altitude approaching 1,000 ft. above sea level, which at times presents a somewhat bleak outlook. But this in no way alters the seriousness of the problem with which it is confronted. The President of the Board of Trade has already referred to the fact that in the North of England 20 advanced factories are to be situated in the region, but he has declined to build one at Consett.

I must make known the fact that this is a matter of very considerable disappointment amongst my own constituents of all shades of political opinion. Within the general context of the North-East, this is the kind of situation which exists. There are some parts, notably along the line of the main London-Edinburgh railway, the roads in the Newcastle, Darlington and Gateshead areas, and on Tees-side, where new industry has gone on a considerable scale, but in other parts the problem is much more severe and will not be so easily solved.

I want to refer to a problem which affects this area particularly, concerning the older people and those who are handicapped. My right hon. Friend the Member for Llanelly (Mr. James Griffiths) has already referred to this. In the coalmining areas, from the very nature of their employment many more people are disabled through injury or the contraction of pneumoconiosis. When I hold my regular "surgeries" in my constituency I am always struck by the high proportion of men of 55 years of age or more—who still have many years of work before them but who are in some way handicapped, and who literally cannot get work of any sort. It is common for me to see people who have been out of employment for two or three years because of their disability.

This situation arises directly because of the inadequacy of new industry in those areas. Such factories as have come to my constituency are taking more than the normal percentage of disabled people. The Ransome and Marles ball-bearing factory—the only large engineering establishment in that corner of North-West Durham—employs a considerably greater percentage of disabled people than it needs to do under the regulations, but there are limits to the number of such people who can be accommodated in any industrial concern. Of all the problems that arise in development areas—and especially in the North-East—the problem of the elderly and the disabled must at all times receive special attention.

I want to refer particularly to the steel industry. Consett is almost wholly dependent upon its steel works—an establishment which employees 7,000 people in a town with a population of less than 40,000. The workpeople there are drawn mainly from a limited radius around the works, although a small number come from the adjacent areas of Blaydon and North-West Durham. Consett, without its steel works, would be a ghost town.

I make that point because within the last week or so there has been a most startling development concerning the future of the steel works. This has caused considerable consternation among my constituents. I refer to the preliminary report of the Benson Committee, which was set up by the British Iron and Steel Federation to consider and report upon the future organisation of the steel industry. In the course of its very detailed report it makes a clear implication that the steel works at Consett should be phased out of existence during the next ten years. It is not surprising that this recommendation has caused much consternation and concern among my constituents.

I do not accept the assumptions upon which the report bases its findings, and they are not accepted in my constituency. The Consett Steel Works—perhaps rather surprisingly, since people tend to regard this as a remote area—is one of the most modern and best-equipped steel works in the country. It is one of those which pioneered the oxygen process at a time when the steel industry generally was not well advanced in that method of production but the Consett works are now wholly based on it.

The steel works has easy access to deep water for the importation of iron ore—a point made in the report—which is particularly important for the steel industry. For a capital expenditure of £40 million—which is a modest sum compared with the proposals for the £78 million plant on Tees-side—this plant could be converted so that it would have a productive capacity of between 3 million and 3.5 million tons, which the report rightly says is necessary for the future organisation of steel-producing establishments.

It is interesting to note that the Benson Report is anti-nationalisation, and specifically states that the nationalisation of the industry would hinder the putting into operation of its proposals. From the point of view of my constituents, this seems to be a good reason for the public ownership of the industry. Only under public ownership could there be a future for the Consett Steel Works and everything that goes with it.

These recommendations must be reexamined. We are talking basically not about the question of whose hands shall control the steel industry; whoever does so the recommendations for the future of the whole steel industry in the North-East of England must be re-examined in the light of the findings of the Benson Committee.

The point has already been made that when we talk about development, redevelopment, industrial corporations, and so on, we are really talking about people. We are thinking of those whose jobs in areas such as the North-East will disappear, or are likely to disappear, under the reorganisation of the coal industry. We are talking of elderly and disabled people of the kind to whom I have referred, and whose problem is a singularly distressing one not only to themselves but to all those who have to observe and handle it.

I am talking of the 7,000 steel workers in my constituency and the trade and commerce, together with the service industries—if that is not a dirty term—which have grown out of the products of their labours. What comes clearly out of a consideration of this question is that only planning and public ownership can solve these problems. Notwithstanding the efforts which have been made and which are being made to improve the situation in the development areas, those who represent those areas have a constant duty to press the Government on their behalf, and it has been encouraging to see Members representing all parts of these Islands doing that today.

Notwithstanding what has been done, however, we have not solved the problems of those development areas. They are difficult problems. I welcome this opportunity to take part in a debate which will help to focus attention on the development areas in general, and I am glad I have been able to refer particularly to the development area in the North-East of England.

7.10 p.m.

Mr. Ian MacArthur (Perth and East Perthshire)

The hon. Member for Con-sett (Mr. David Watkins) made an interesting speech about conditions in this constituency and pointed out that certain places in development areas needed more development than others. I will, if time permits, develop that theme later in my speech.

I begin by referring to the speech of my right hon. Friend the Member for Argyll (Mr. Noble), in which he called attention to the smokescreen which the Prime Minister appeared to be laying on 20th July over the effects which the measures then announced would have on development areas. Early in his statement the Prime Minister said: .…we have exempted, as the Tories never exempted, from the necessary steps which have had to be taken, all the development areas…. There follows in HANSARD in brackets the word "Interruption", which hardly surprises one. It was not until my right hon. Friend the Leader of the Opposition challenged the right hon. Gentleman on this point that the Prime Minister somewhat modified what he had previously said and stated: I was not suggesting that those who are living in development areas will be exempt from the increased postal charges or tourist control". —[OFFICIAL REPORT, 20th July, 1966; Vol. 732, c. 642–653.] I note that in the debate on the economic situation the Prime Minister again returned to his statement and referred to: the sheltering of the development areas".—[OFFICIAL REPORT, 27th July, 1966; Vol. 732, c. 1746.] I also note that this story about sheltering development areas has been taken up by other hon. Members. What does this sheltering involve? We must probe this in some depth. Is it the intention of the Government to shield the development areas completely from the measures announced by the Prime Minister? If not, why did the Prime Minister use the words he "did?

In his modification of what he had previously stated on 20th July, the Prime Minister referred to postal charges and the tourist allowance. However, the matter we are discussing goes far deeper than postal rates and tourist control. Every person living in the development areas will be affected by the measures announced on 20th July—the increased rates of Purchase Tax, petrol duty, and so on. These people will be hit as much as anyone in Britain, and probably more so because wage levels in the development areas are lower than in other parts of Britain. The burden of increased costs always hits people in the development areas much more harshly.

The increased petrol duty will have a particularly damaging effect on the development areas. The hon. Member for Inverness (Mr. Russell Johnston), the hon. Member for Aberdeenshire, West (Mr. James Davidson) and I are among those who represent distant constituencies. Any increase in transport costs hits our constituencies very badly. How, therefore, could the Prime Minister talk about sheltering the development areas? What justification did he have for making that statement?

In a Parliamentary Answer which I received yesterday the Chancellor of the Exchequer stated that if the present rate of consumption of petrol continues, the extra duty announced will cost Scotland alone £5.6 million in a full year, This comes on top of the £7 million cost to Scotland of the increase in petrol duty introduced by this Government in November, 1964. It is shameful for the Prime Minister now to pretend that the Government have a real concern for the welfare of the development areas. How could the right hon. Gentleman make such a statement when they have increased, in a double dose, the tax on petrol, a commodity which is most vital to the living costs and growth prospects of the devolpment areas?

What does the "sheltering" to which the Prime Minister referred amount to? I understand that it certainly refers to advance factories and industrial building, and that I welcome. It would be madness to cut industrial building in areas where more employment is required. I hope that when the Minister replies to the debate he will spell out the information given earlier today about advance factories. We were told that 73 have been planned in addition to those established by the Conservative Administration. I agree that this is a large and impressive figure, and I wish the Government every success in achieving their plan, but how far have they got?

As I understand the information given earlier, nine of these factories have been completed. It was then stated that 16 factories have been allocated. If, as I assume, nine of those 16 have been allocated, then it follows that seven are under construction and have been allocated but not yet completed. The sum of this appears to be that nine have been completed and allocated, that seven are under construction and have been allocated, that 19 others are under construction but have not yet been allocated and that 38 have not yet been started. I should be glad if the Minister would confirm or correct my assumption. Perhaps, at the same time, he would say how many of the nine factories which have been completed are in production and what employment that production provides.

That is one aspect of sheltering. The other is office building. Will the Minister say just what is the value of office building at present under construction in Scotland, and the development areas in general, so that we can assess the significance of this form of sheltering?

Apart from the heavy impact on the development areas of the measures announced by the Government—in terms of their impact on individuals, transport costs and so on—there is the impact on the development areas of the general rundown in the economy which we can now expect; a dampening down of consumer demand made necessary by the incompetence of the present Government to manage our economic affairs.

This cutting back is bound to affect the development areas first because the margin between progress and decline in these areas is narrow and sensitive. They will be the first to suffer and the last to recover when the condition of the economy improves. The President of the Board of Trade referred earlier—and we have heard a lot about I.D.C.s and their distribution—to the issue of I.D.C.s throughout the country and it was good to hear that progress has been made. However, I question the figures in relation to Scotland. I cannot speak for other development areas because I am not familiar with the statistics affecting them. I do not question the figures quoted by the right hon. Gentleman, but I question the relationship of those figures with the statements and forecasts made by the Government about employment prospects in Scotland.

In an intervention earlier I stated that if things were going so much better than under the Conservatives—which was the implication of the remarks of the President of the Board of Trade—how was it that the Government had lowered their employment sights. The position, according to Cmnd. 2864, the White Paper about so-called expansion in the Scottish economy which was published at the beginning of the year, is shown in Table B on page 9 of that document, in which it is stated that in the four years 1960–64 the job gains—that is, new jobs created—amounted to 157,000, an average of 39,000 a year. The projected figures for 1964–70—a six-year period-refer to the creation of 134,000 new jobs, an annual average of 22,000. So on the one hand we have the White Paper stating that the average number of jobs over these six years would be 22,000 a year, while, on the other, the actual achievement in the previous four years up to 1964 was the creation of 39,000 new jobs a year. I do not see how all those figures marry up.

Of course, I appreciate that there is the other side. I recognise that job losses will be the other way. They were very heavy in those four years—much heavier annually than in the six years. That does not surprise me, because it was the Conservatives who made this large, painful but necessary movement from the older industries towards the new—the decline in coalmining, ship building, and so on, and the creation of new jobs in new industries. I remember one authority declaring in 1964 that there had been a severe decline in the old industries, and that we could now expect the curve to flatten out. That is reflected in the right hon. Gentleman's figures.

I hope that he will explain what appears to be a discrepancy—one of many discrepancies—between the White Paper of January and what the President of the Board of Trade says today——

Mr. G. Campbell

Would not my hon. Friend also recognise that the estimate of 74,000 job losses in the six years to 1970 may well be affected by such things as the recently announced acceleration of pit closures, so that at the end of the period the job losses may well prove to have been much greater?

Mr. MacArthur

Yes. Not only have we the acceleration of pit closures, but there is the effect of Selective Employment Tax, and all sorts of other measures that have been sprung on the unfortunate Secretary of State for Scotland by his Government colleagues, apparently without his knowledge, concern or protest.

The prospect of improvement is pushed even further back by the Government's action in the last months. It is fair to say that one of the competitive advantages of the development areas over other districts has been that labour has been less scarce in them than in the more fully employed districts elsewhere—that must be so. What will be the position in a few months' time—in the winter of this year, for example, when the total economy has been affected by the Government's decision to increase unemployment?

The Prime Minister has worked hard to find euphemistic expressions which pretend that unemployment is something else, and which conceal from people the fact that he sees that unemployment must be created. We have such expressions as "redeployment" and "shake-out." These mean the deliberate creation of unemployment, and nothing else. I doubt whether the deflationary period into which we are entering will contain the unemployment figure within the 2 per cent. announced the other day. Whether the national figure is found in the end to be 1½ per cent., 2 per cent. or 3 per cent., the figure in the development areas will certainly be higher because the effect of deflation will be felt there soonest. Growing unemployment outside the development areas will lessen or remove the competitive advantage they had previously offered in terms of labour availability. I do not think that these factors have been taken account of in the Government's forecasts in the White Paper.

Yet another factor to consider is the effect of the new Prices and Incomes Bill—the wage freeze—on the distribution of skilled workers. Is it not likely that the skilled worker in Scotland, or in the North-East, or in any development area, will now look elsewhere for his future advancement? If he seeks a higher wage in his present job his employer will be prevented by Statute from granting it but, as I understand the Government's latest set of panic proposals, there is nothing in them to prevent his leaving his present job for one reason or another and moving south, should the opportunity occur, for the real purpose of taking up an equivalent job in an area where the wage rate is higher than it is in the development area. This will lead to further movement of population out of the development areas into the more crowded areas.

In other words, the Government are creating a situation in which their own actions will force people out of the very areas in which they promised to keep them. I am confining this argument to the skilled worker, because he is more ready to move than the unskilled man, and even in the miserable and discontented winter ahead he may have larger opportunities of employment than the unskilled worker. So another series of promises will have been thrown by the Government on to the slag heap of their broken pledges.

The Government have tried to build up an image of concern for the less prosperous parts of Britain. I remember how, when they were in Opposition, they denigrated my right hon. Friends who tried to elevate conditions in the development areas—work that produced a system of incentives and support unequalled in their scope in the Western world. It was shocking today to hear the President of the Board of Trade refer to those areas as "previously neglected".

Scotland was certainly not neglected. There, under the Local Employment Acts and free depreciation, some £60 million was invested in new factories; £50 million was provided for the strip mill and £10 million for the pulp mill; public investment in the Highlands was at a rate of £33 million a year. We had the greatest concentration of public investment in Scotland, in relation to population, we have ever seen. We saw the creation of tens of thousands of jobs, and in 1964, I think for the first time in the history of industrial Scotland, we had a total gain in jobs larger than that in England and Wales. This was an enormous break-through, and it is one for which hon. Members opposite have never given us credit and, through us, credit to the Scottish people, because it was their efforts that made all these things possible.

The right hon. Gentleman and his hon. Friends long ago sneered at the pipeline, but once they became the Government they started claiming credit for the new jobs that flowed from it. By the time of the 1964 election, 1,600 applications had come to the Board of Trade following the introduction of free depreciation in 1963. Of those applications, a large proportion had been accepted. Is the right hon. Gentleman pretending that at some time about midnight on polling day 1964, all those died, all the applications disappeared, and all the approvals were withdrawn? That, of course, is nonsense.

Many of the claims he put forward today as announcements must spring, as we know they do, directly from the flow, the momentum, which was created by Conservative Government policies during the 60s, and was gaining speed the whole time until 1964–65, and into this year, too. Instead of talking of past neglect, it would have been more appropriate for the President of the Board of Trade to have saluted my right hon. Friend the Member for Argyll and my right hon. Friend the Member for Barnet (Mr. Maudling) who, between them, did more for the Scottish economy than have any Government in our history.

In Government, hon. and right hon. Members opposite have scrapped free depreciation. They have scrapped the investment allowances and the benefits under the Local Employment Acts. Instead, they have introduced to the development areas a system of investment incentives which have a total lower cash value, spread so widely that the localities most in need will receive much less.

I do not want to flatter the Secretary of State for Scotland, but I believe that if one makes a careful study of him, if one undertakes a careful search into his make-up, one can detect certain qualities that distinguish him from other people. The most outstanding of these qualities—if one discounts incompetence—is obstinacy, and I want to remind him of some of his obstinacies in recent weeks. The right hon. Gentleman obstinately insists on adhering to the targets of his discredited White Paper. The very first page of the introduction to the White Paper states that it was drawn up within the framework of the National Plan. We know that the First Secretary now recognises that the National Plan has been made nonsense by the Government's own actions.

In a Written Answer the other day, the First Secretary himself said that he was reviewing urgently the targets set out in the National Plan. How then can the right hon. Gentleman adhere to the targets set in the Scottish plan which is so closely bound up with the targets of the National Plan? I urge him to look at the whole question again. The White Paper has been kicked into shreds by his right hon. Friends, by the scrapping of free depreciation, by the withdrawal of investment allowances, by the Selective Employment Tax and, most recently, by the measures of a few days ago. What faith can the right hon. Gentleman have left in any of the targets set in the White Paper?

The right hon. Gentleman also obstinately pretends that the Selective Employment Tax will not retard growth in Scotland. Let him go to the development areas. Let him talk to people there who are struggling with reality. They will tell him just what the tax will do in retarding development in those districts which his White Paper praised so much. He will get a very different answer there from the complacent picture he is trying to put before the House of Commons. When one listens to what the right hon. Gentleman says in the House and compares that with the reality of things in Scotland I wonder what the right hon. Gentleman does with his time. He is a member of the Cabinet. Does he never speak up for Scotland? How can he silently accept this long list of reversals of the things proposed in the White Paper in which he took such pride in January this year? We wish that he would speak up for Scotland more and recognise that his targets have been knocked sideways by his right hon. Friends.

Now we find that the Government appear to be paving the way for changes in the incidence of the Selective Employment Tax. They talk about improving it. If they now recognise the defects to which attention has been drawn for months, why did they not make these improvements during the Committee stage of the Bill instead of by their vicious timetable, gagging debate and cutting off at every stage the opportunity to improve it? I was interested to read in a letter I had from the Chancellor of the Exchequer on 15th July: As you know, the Selective Employment Tax is new both in conception and coverage for this country. Accordingly, time must be allowed for it to be launched in its present broad form before it is further refined. What on earth does the Chancellor mean by that one? What is he going to do to refine this tax? If it needs refining why not do it now before it starts to operate so that he could try to save the Highlands and other parts of Britain which will be so monstrously hit by the tax in its present form? To talk about refining in future is much the same as the Treasury hang- man saying to an innocent victim, "Take comfort; next time I hang you it will be with a silken rope."

The Chancellor goes on to say: However, we believe that, in due course, it could if necessary be adapted in a flexible manner so as to regulate the levels of revenue, demand and activity in the regions. This is what should have been done now. The tax if properly used would have provided an instrument to give protection to the development areas, protection which they need in present circumstances to protect them from a proposal which is totally irrelevant to them and their needs. There is room for urgent adjustment of the tax to provide the sheltering which the Prime Minister said he wants to be applied.

I put forward another point which I hope the right hon. Gentleman will regard as constructive. It concerns the size of the development area and was in a sense the point touched on by the hon. Member for Consett. As the right hon. Gentleman knows, we on this side of the Committee are concerned about the fact that by spreading the development area concept too widely the amount of money available to places in need becomes that much less. The jam is spread thinner and there is less jam to spread. It follows that places most in need will get less than they did before.

Earlier today the right hon. Gentleman said that I.D.C.s would, of course, be used to direct—if I may use that word in this context—large employing agencies to those areas best able to serve them. Of course that makes sense, but I ask the Secretary of State to consider this. It is a point I put to him in July last year in Scottish Grand Committee. I hope he will recall and think about it again because it is a point of substance which needs serious thought today. We have moved from a system of development districts to one of much wider development areas. The criticism of development districts was that money poured into them was based purely on a criterion of unemployment.

Mr. Ross

Employment.

Mr. MacArthur

The selection of the district rested on the amount of unemployment there. We came to see that there should be the introduction of another criterion, the level of depopulation, and this figured in our election manifesto. This was to be the next step forward in Conservative achievement.

Mr. Elystan Morgan (Cardigan)

Will the hon. Member give way?

Mr. MacArthur

No, I must finish this point and then I will gladly give way. The purpose I have in mind is that, instead of spreading the funds available for industrial development so widely as they are to be spread, the policy of concentration in growth areas would continue. I use as an example the announcement made by the First Secretary of State and Secretary of State for Economic Affairs about the development of the Dundee area. He said that the Dundee area was being studied as one of the possible areas of development to accommodate the enormous growth of population which is expected.

I wonder what the right hon. Gentleman meant by that. Is it the intention that Dundee should be the centre of development? Is it the intention that development should be spread more or less equally over the whole area? If so, is there not a risk that the surrounding burghs of Forfar, Perth and others may find themselves being turned into mere satellites of Dundee, which is not their rôle in the economy? Does it not follow that there is a strong case for identifying these burghs, the Blairgowrie complex of burghs, and others, as development districts in their own right because they are capable of growth and they exist in the economy as catchment areas for the population of the rural districts round about?

I believe this designation of small trigger points in our economy in addition to development districts would make more sense than the development area principle and would lead to a more profitable investment of public funds. I was about to conclude my speech but the hon. Member for Cardigan (Mr. Elystan Morgan) wished to interrupt and I will give him the opportunity now.

Mr. Elystan Morgan

The hon. Member described how this idea of extending aid to cover the problem of depopulation lay like a cocoon in the subconscious of the Tory Party for some time. Can he explain why it was left out of the Local Employment Acts of 1960 and 1963?

Mr. MacArthur

The hon. Member makes his point with great vigour but if he reads my speech in HANSARD he will see that I said this was the next stage of development. It was put forward by us in our election manifesto and would have been carried through by us. Depopulation was to be a criterion for the designation of a development district. The hon Member should not laugh at the Local Employment Acts of 1960 and 1963 nor about free depreciation which between them transformed the whole of the development districts and provided the momentum forward for which this Government are claiming credit, a momentum which will be put sharply into reverse when the damaging policies of the present Government take full effect.

7.40 p.m.

Mrs. Gwyneth Dunwoody (Exeter)

I am grateful for the opportunity of speaking in this important debate. I hope that the Committee will forgive me if I do not follow the hon. Member for Perth and East Perthshire (Mr. MacArthur) too closely into the wilds of Scotland. This is a chance for me to speak about the problems of the South-West. I say deliberately "of the South-West". I hope that I shall be forgiven for saying that we sometimes think that the rest of England forgets that we are there, except during the summer holiday season, when they pour approbrium upon the head of my unfortunate by-pass.

We in the South-West have many of the problems which affect the other regions. We have the problems of unemployment, consistently low wages, and depopulation. In a sense, we suffer because we are unable to present this in a dramatic form. We have constant depopulation, but this is contrasted with an influx of retired people who come to live in the pleasant counties of Devon and Cornwall. Therefore, overall our population figures do not show a great change.

We have the constant difficulty of unemployment, but particularly in Devon we resent the fact that for statistical purposes we are counted with the City of Bristol, which is becoming increasingly part of the Midlands group and is sharing in the affluence and development of that area. This means that we do not always get the sympathy which we think we deserve.

This Government, during the last 18 months, have done a great deal more than any other Government have done, certainly for 13 years previous to that. We have heard much today about spreading the jam a little thinly. What we in the South-West want is a little more bread and never mind the jam. We have, to use the ghastly phrase, all the potentials for being a very great growth area. We have cities which already contain a nucleus of skilled men. In Plymouth, there is a dockyard that produces skilled engineers, who to a great extent tend to look for work elsewhere. Exeter has a railway workshop with skilled, trained engineers, many of whom within the next few years will have to find alternative employment.

We already have a university, which would provide the ideal basis for a new science-based industry. We have an airport. We have in the South-West the facilities which would enable us to build new homes to help our cities to grow. We could provide better conditions for people to work in and a far higher standard of living for those who are already there. When talking about development areas it must be remembered that the area all round must also benefit from a higher standard of living which is brought in by new industries.

We in the South-West were hoping that before long we would get greatly improved transport facilities. If private enterprise cannot provide the air transport that is needed in the South-West, we hope that the Government will give us sympathetic consideration when they are thinking of extending air services. We sometimes feel a little bleak on Friday mornings to be told that Scottish Members must get away because they have so far to go. We know that those of us who are from the South-West and who travel either by train or by motor car will take considerably longer than Scottish Members to get home.

When new forms of transport are being considered, I plead with the Government to think of us in terms of a motorway and of air development. The South-West is the logical way for the Government to go. Those of us who return to London after an absence of some years are not concerned with what will happen to our large cities in 10 years' time. We think that London has already reached the point where it is so snarled up that the Government should move the people and offices outside.

We should like to have a few of the Ministerial buildings moved to the South-West. After a few weeks of dealing with the Gothic inadequacies of this building, I must tell the President of the Board of Trade that, if he wants to make a reputation for himself, we should be delighted if he would move the Mother of Parliaments to Exeter, where probably we could find him a better site for a new building.

Because many other hon. Members wish to speak I shall not go as deeply into the problems of the South-West as I should have liked to have done. The Government has started to give us back our hope. We must have new industrial development. In a modern age, we are perfectly capable of combining the advantages of new industries with the advantages of an amenity area. I appeal to the Government to set an example and to stop thinking of the South-West purely as a place to visit at the weekends or to spend holidays in. Permanent visitors will always be welcome. We can always maintain the best of our national beauty. Nevertheless, those who live in the area, who consistently face the problems of seasonal unemployment, and who depend to a large extent on service industries, need the type of investment that the Government can give us, not just in the development areas, but in the surrounding areas.

Our voice is not always heard in Parliament on these matters. We have, for far too long, been dependent on agriculture, on tourism and on industries which do not provide openings for skilled, trained men. We are grateful to the Government and do not want to sound ungracious, but we plead with the Government to help us to develop our cities so that we can all enjoy a higher standard of living.

7.47 p.m.

Mr. Hector Monro (Dumfries)

The hon. Lady the Member for Exeter (Mrs. Gwyneth Dunwoody) spoke of the South-West and touched on the very important question of transport. I, in company with others on both sides of the Committee, have always said that one of the keys to solving Scotland's problems is transport. The supreme snarl-up the hon. Lady has in Exeter in the summer is now duplicated at Carlisle. One of the greatest difficulties of getting industry, goods and tourists into Scotland is that of getting round Carlisle. Going through it is impossible.

The Government are dragging their feet over the Carlisle by-pass. I should like to be told that the Minister is doing something about this and that development in Scotland will not be hindered. The sooner the Carlisle by-pass is joined up at the southern end of the A74, which is progressing slowly southwards to the Border, the better, and then on to the M.6. The South of Scotland will then be within weekend travelling distance for tourists, which we shall welcome.

I want to speak about the effect of the Government's policies, coupled with the effect of the Selective Employment Tax, on Scotland's economy, and particularly on development areas far from the central belt. These remoter areas lean heavily on service industries. We know how hard hit they will be by the tax. The Minister of State may be thinking that he has heard all this before, but the fact that Scottish Conservative Members have attended and spoken in numbers today is an indication of how important this matter is to Scotland. We are becoming infuriated at the fact that the Scottish Office takes no notice of our protest on matters which are vital to Scotland's future.

The Secretary of State was in Fife ten days ago. He said that he could see a silver lining for Scotland in the measures announced by the Prime Minister. He must be about the only gentleman in Scotland with such devastatingly perceptive eyesight, because nobody else can see it.

It is accepted that the unemployment rate in Scotland is above the national average, and I certainly welcome the fact that it has been falling because of Conservative measures under the Local Employment Acts. Hon. Members opposite have been unfair and wrong to criticise the Acts, which have done a great deal of good in Scotland. There is now a tendency for the unemployment rate to rise.

It would be interesting to know how many of the advance factories announced by the present Government in Scotland have been built and occupied and provided employment since 1964. There was some doubt earlier about whether the President of the Board of Trade was talking about Scotland, or Scotland, England and Wales. I am glad that the Government are to continue our policy of advance factories, including the two new ones announced for my constituency. It still seems that some months will elapse before the first sod is cut. I pay tribute to the officers of the Board of Trade who have been working hard to find a site, but the factories have not yet been built.

This is an area, I am talking of the Sanquhar and Kirkconnel development district, which should certainly have priority and which, with most of Scotland, is to be a development area. Its unemployment rate is still about 10 per cent., a relatively small pocket, but still a high rate of unemployment. It is an area threatened with pit closures and not just the closure of one of several pits, but the closure of the only pit. That is what makes the position so desperately serious, because about 1,000 men will be affected, 60 per cent. of all the men employed in the area. Not only is employment now needed, but if the pit closes, alternative employment for the men concerned will be essential. I hope that the Government will say that there is to be no reduction in the money available to the National Coal Board for the development of pits and no accelerated pit closures resulting from the measures recently announced by the Prime Minister.

But advance factories are not of the slightest use without a tenant. How can we encourage industry to expand into these factories in the middle of a continuing economic crisis? I know that the Scottish Council and the Board of Trade are doing their best to attract tenants to these factories, but if they are to come the climate of expansion must be right. Nobody imagines that starting business in a new factory is anything but expensive, and this is certainly not the time to borrow money for working capital. There is also the natural reserve about the new grants, because the old allowances and free depreciation discounted over seven years were more attractive than the grants.

I am also concerned about the Government's move away from the concept of development districts to that of development areas which will bring in the whole of Scotland, excluding Edinburgh and Leith. I am surprised that we have not had more vociferous attacks on the Government by hon. Members opposite about the exclusion of Leith and Edinburgh.

Mr. Donald Dewar (Aberdeen, South)

Possibly one reason is that in a truncated debate, ending at 9.30, the right hon. Member for Argyll (Mr. Noble) spoke for 54 minutes and the hon. Member for Perth and East Perthshire (Mr. Mac-Arthur) spoke for 33 minutes, seriously reducing our chances of making those vociferous protests.

Mr. Monro

The hon. Member for Aberdeen, South (Mr. Dewar) is wrong, as usual. These comments have been made ever since the Bill was introduced, but in that period we have not heard much noise from hon. Members opposite. I shall not take many more minutes, so perhaps the hon. Gentleman will have his opportunity.

The Minister of State, Scottish Office (Mr. George Willis)

The exclusion of Edinburgh was one of the issues raised during the election, when the Conservative Party did very badly in Edinburgh.

Mr. Monro

That is a matter of opinion. If the Minister of State were to stand for an agricultural constituency, he would be out on his neck.

It is very much more important to maintain growth points and the development districts, because there is now far less incentive for industry to come to remoter areas which do not have very much to offer in the way of amenities. When firms can go to the North of England, or to the South-West, or to Wales, it will be much more difficult to bring firms to areas like Sanquhar and Kirkconnel development district, where the unemployment rate is 10 per cent.

I should like to hear about the money which is to be made available to the nationalised industries following the Prime Minister's statement. I am think- ing particularly of the United Kingdom Atomic Energy Authority. Will there be any hold-up in the development of the fast reactor at Dounreay? Will there be any development for the long-required development at Chaplecross? Will there be any hold-up in the plans for the Sol-way barrage? I have been getting answers to Questions which have caused me to believe that this will be delayed further and further. Will the South of Scotland Electricity Board carry on with its second power station at Hunterston? We want to know that there will be no hold-up in Scotland because of the measures announced by the Prime Minister.

We know only too well that because of the Guillotine there has been singularly little time to discuss the effects of the Selective Employment Tax on Scotland, but they will be extremely serious. Figures have been produced to show that there is a preponderance of service industries in the North, the Highlands, the North-East, the Borders and the South-West. The employment advantage of the Selective Employment Tax will be very much the creation of new jobs at Cumbernauld for those who are to administer the scheme.

According to an Answer to a Question of mine in May, in Dumfries-shire there are 29,700 people employed and premiums will be received in respect of only 7,300, while 5,000 will get repayment after a loan to the Government, and no fewer than 15,300, or more than 50 per cent., will attract the tax. This is the tremendously deflationary effect on one county and I am sure that it is similar to the effect on all the other Scottish rural counties. The Secretary of State and the Cabinet should urgently consider the effect of this tax.

At the same time, most of Scotland is being hammered by the new local authority rates with new valuations up 35 per cent. on average and expenditure up by about 15 per cent. How can we attract new industry to Scotland when it will have to face rates of that kind? Nothing in the Local Government (Scotland) Bill, now before the House, will reassure industry. The Bank Rate is up, and the cost of overdrafts is up by 9 per cent. adding £700,000 to the farmers' bills so that money will be denied to farmers for essential purposes because they will not be able to pay such a rate of interest. Suppliers and merchants will be hit by the Selective Employment Tax and we all know that there is still no farm improvement grant from the present Government. The Minister of Agriculture is as blind as the Secretary of State for Scotland about the economic plight of agriculture.

We know that this is a crisis of confidence and of the Prime Minister's failure to convince the world that he means what he says and to take action at the earliest moment. We know that the National Plan is in ruins. How can we get expansion of the service industries, particularly in the North-East, the Borders, the Highlands and the South-West, when we have this new tax? The loans to hotels are entirely bogus and will not help the small rural hotel. As we know, petrol is vital to Scotland and this will add £5½ million to Scotland's share of the petrol tax.

I heard of one transport firm in the Highlands which will have to pay £4,900 a year extra in petrol tax and S.E.T. If this is not penal to a small firm, I wonder what is. It is no use the Secretary of State sheltering behind the Highland Development Board, the regional economic groups, and the National Plan, because they no longer make sense. If 2 per cent. unemployed is acceptable to the Prime Minister, it is not acceptable to Scotland. We well know that a 2 per cent. unemployment rate in England is very likely to mean 5 per cent. in Scotland. This is far beyond the 3.6 per cent. mentioned by the Prime Minister before the election as being intolerable.

It is not too late for the Secretary of State for Scotland to redeem his reputation in Scotland. He should stand up and join Conservative Members in fighting for the country he should represent.

8.0 p.m.

Mr. Elystan Morgan (Cardigan)

I respectfully submit that the ideal concept of regional development draws its sustenance from three quite distinct but related considerations. First, it involves the decentralisation of authority; secondly, it means that decisions and policies are made and propounded by those who have the greatest knowledge of them and the most deep and intimate interest in them, and thirdly, it entails redressing the tremendous imbalance in fortunes that grew in the last 20 to 30 years between one region and another in the whole of Britain.

It is pertinent for us to remember that, during the long tenure of the party opposite, three out of every four new jobs created went either to the West Midlands or to the South-West Regions. Regional development, however well planned, cannot have any real success without the people of the area concerned feeling that they are intimately and actively concerned in the whole process of resuscitation of that area. The greater the regional consciousness, the higher the level of inspired participation by the people of that region in their own development.

Because Wales is a country and the homeland of a nation, it is advantageously situated to show this cohesion and consciousness of purpose. The establishment of the Welsh Office in October, 1964, has been denigrated by some as being inadequate recognition of the national status of Wales. In the constitutional sphere we should never forget the tremendous significance to Wales of the creation of this new Office. In the Act of Union of 1536, the "Dominion country and Principality of Wales" was "incorporated, annexed, united, subject to and under" the greater realm of England.

Whatever one can say about Tudor draftsmanship, it was certainly thorough and complete. For those long years, for four centuries, Wales was completely obliterated from the Constitution of the United Kingdom. This was until October, 1964, when it emerged once again with distinctiveness and entity of its own. I feel sure that the Welsh people now have an institution that can be the focal point for their inspirations, their hopes, and their loyalties.

I, like many others, feel that this is not the ultimate goal for a nation. Parnell said that "no boundaries should be set to the march of a nation". I do not think that the Welsh Office in its present form should be regarded as the ultimate boundary. It can, and must, grow and develop into a fuller and more complete institution, including a Parliament, coincident with the existence of Wales as a nation. There are many others better qualified than myself to speak on industrial Wales, on heavy industry in particular. I am well aware of the grave and weighty problems still existing in the coal, steel and tinplate industries. I am conscious of the great need that there is for further processing in Welsh industry. In the main, it has been the tradition in Wales that the rough, primary product should be produced there and sent beyond the boundaries of Wales for processing, yet it is the act of processing which produces the higher dividends and the richer profits.

The point has already been made that many of the industries established in development areas are subsidiary branches of firms which have their headquarters elsewhere. In the same way as when blight attacks a tree and first shows in its outer branches and leaves, so it is that the very regions which are in need of help are the first to feel any economic blight through these subsidiary factories.

It is appropriate to point out that there is a general tendency, and an understandable one, for many of these firms which have settled in peripheral areas to produce luxury goods. Again, these are the industries which suffer when an economic draught blows. The level of unemployment in Wales is 2.2 per cent.—remarkably low. It is well to remember however, that for 30 or 40 years the level of unemployment in Wales has stubbornly remained at two or three times the level of that in England. It is true that there is probably no case for complacency, but when Wales looks back to her industrial past and remembers all the bitterness and waste that existed in the 'twenties and 'thirties, then we can, with pride, note a few of the facts pertaining to the present situation.

There is a better balance than ever before in the industrial pattern of Wales. Before the Second World War, two out of every five insured workers in Wales were engaged in the traditional heavy industries of coal, steel or tinplate. By now that figure has been reduced to one-quarter. There is also greater diversification. At the end of 1965, of the 109 different industries in the Standard Industrial Classification in Britain, 106 were represented in Wales. Those which did not appear in Wales were sugar, jute and lace.

In terms of factory space, the growth of this in Wales can be seen clearly by comparing the totality of square footage of factory space allowed by industrial development certificates each year. In 1963 it was 1½ million sq. ft.; in 1964 it was 3 million sq. ft.; in 1965, 4.3 million sq. ft.; and in the first six months of 1966, it was fewer than 5 million sq. ft. There are some who castigate and denigrate the Welsh Office for failing to have achieved in the short span of 21 months all the goals that the Welsh people could properly set themselves; for failing to have redressed all the anomalies existing in the Welsh industrial pattern. I feel sure that every fair-thinking man, and certainly every Welshman, will acknowledge that the Welsh Office has manfully and purposefully set about tackling the great task which is ahead of it.

I should like to say a few words about rural Wales, which represents the great land mass of most of the country. It is here that we find the gravest and most frustrating problems in the Welsh economy. Here is the clearest and most damning evidence of the difficulties of that economy. Let us consider the population of some of our rural counties. Between 1957 and 1962, nine out of 13 Welsh counties lost population. The loss of Radnorshire was 3.7 per cent.; of Brecon 3.3 per cent.; and of Montgomery 2.8 per cent.

It is proper and fair to compare this with certain English counties. England has 48 administrative counties. During that period, only two of them lost population. The Isle of Wight, for some inexplicable reason, lost .08 per cent. of its population. Middlesex, due to people moving out of the centre of London, had a drop in population of .04 per cent. The gains of some English counties were as follows: Bedfordshire, 18 per cent; Buckinghamshire, 17.2 per cent.; Berkshire, 17.1 per cent.; Hertfordshire, 15.9 per cent.

The basic ills of the Welsh rural economy are a small ageing, declining population living in scattered hamlets; a lack of capital for investment; a low income level; a high incidence of outward migration, usually of the young and more talented people; and an unhealthily high dependence on Exchequer subsidies. The basic services in rural Wales are still, in the main, well below the recognised standards. Communications are poor. A report produced two years ago shows that in my constituency of Cardigan no fewer than 15,000 people live more than 1½ miles from a recognised bus route. In other words, more than 15,000 people, with the exception of a very few who are served by a rail service, have no public transport service.

In the five counties of Mid-Wales 30 per cent. of properties have no piped water supply compared with 13 per cent. for the whole of England and Wales. In Montgomeryshire, 47 per cent. of properties were without a bath and 42 per cent. without water toilet facilities. Montgomery receives 88 per cent. of its local government finance from the central Exchequer.

These factors constitute a massive problem. I would argue that only the most deliberate, drastic and adventurous action can bring about a desirable solution. In the end it is largely a question of how much industry can be introduced in the next few years to reinvigorate the countryside. Advance factories have a large part to play, and I am glad that the Labour Government have designated one advance factory for Aberystwyth, in my constituency. The Welsh Office has done splendid work in this connection. The policy of industrial development certificates has been implemented to channel as much industry as could reasonably be expected to move into these areas.

The Mid-Wales Industrial Development Association has done yeoman work. This body was set up in 1957. Since then, it has been responsible for the establishment of no fewer than 30 factories in 22 localities and which were responsible for over 3,000 new jobs. The scheduling of almost the whole of rural Wales as a development area is the latest stage in this process.

When I say that all these things are inadequate, it is not a condemnation of the policies which have been pursued. It is rather an endorsement of the terrible magnitude of the problem of depopulation with which we are faced in Mid-Wales and indeed the whole of rural Wales. A great opportunity has been missed in connection with the Selective Employment Tax about which we hear so much from right hon. and hon. Members opposite. I appreciate that this tax has great possibilities. I appreciate that some day it can be used to channel resources back into the these areas. But in its crude primitive state it may well cause damage to certain of those localities. The chance could have been taken this year, rather than perhaps next year, to have laid down a different rate of payment for different regions. I was one of a number of hon. Members on this side of the Committee who tabled an Amendment to that effect.

In considering this very great problem of depopulation, we should bear in mind three matters. First, the House of Commons should consider at an early date the possibility of introducing more sweeping and radical measures to attract industry to such areas. It is the experience of many countries that certain tax incentives—central taxation and local rates—have to be given to drag in industry.

Secondly, we heard today from my right hon. Friend the Member for Llanelly (Mr. James Griffiths) of his brainchild—the establishment of a new town in Central Wales. I have not yet read that massive report, and therefore, I will abide by his strictures and pass no final judgment on it. However, when I first heard of that project, I had an initial and understandable prejudice against it. I am a Welsh-speaking Welshman. I was brought up in a rural village. The idea of a massive town of tens of thousands of people being established on the plains of Montgomeryshire was not a wholesome proposition.

But what we have to consider is not only the dangers which such a new town could bring, but the dangers which might arise if it does not come. The possibility of three, four or five new towns of comparable size being established just over the English border, acting as suction pumps drawing the little remaining sustenance there is in the villages and hamlets of Mid-Wales, is a factor which we must always bear in mind.

In discussing depopulation, hon. Members have tended to stress outward migration. There is another type of depopulation—the depopulation which is found in my constituency and in the adjoining constituency of my hon. Friend the Member for Merioneth (Mr. William Edwards)—where there is a death rate higher than the birthrate—where there is a natural decrease of the population, where we have an ageing community which has not the capacity and the power to reproduce itself. If we say to such communities, "You shall not have an injection of new blood from outside", we are saying that they shall never be resuscitated.

In conclusion, I would make this plea. I ask hon. Members to consider whether in regions such as the country and nation of Wales and perhaps comparable peripheral areas in other parts of Britain there is not a case for planning the area comprehensively as one entity. Is it not proper for us to consider the precedents of the Highland and Islands Development Act in Scotland and of the Tennessee Valley Authority in America?

These are useful precedents and I am sure that I am accurate in saying that in Wales there is a wide acceptance of such an idea. It was put forward to the House in 1953 by the Welsh Advisory Council, with the prospect of creating a development corporation which could develop the whole of rural Wales comprehensively, be responsible for the purchase of land and undertakings to be developed for the greatest possible benefit of the area, for the provision of much needed services, for the development of roads, the network upon which all development hangs, for the development of water enterprises and, again, for tourism.

I submit that the time has now come for us to consider the establishment of such a corporation for Wales with its own independent finances. It would amply repay the capital involved in such a project. Even by the terms of the most narrow accountancy. It would grant a handsome profit. Judged by any consideration of the highest public interest, I am certain that it would be responsible for reviving the Welsh nation.

8.20 p.m.

Mr. John Nott (St. Ives)

This opportunity of discussing the problems of the development areas is a most welcome one, particularly having regard to the curtailment of our time on the Selective Employment Payments Bill and the Finance Bill.

In broad terms, development areas cover two rather different types of com- munity. First, there is the area or region where the principal industry, whether it be coal mining, textiles or shipbuilding, has declined. Secondly, there is the other area where the principal industry has done the opposite and grown and concurrently its productivity increased. I cite agriculture as an example where, as a result of the increase in productivity manpower has been released from the principal industry and under-employment has resulted.

The South-West, which I represent, suffers from the latter problem. To that extent, it is what I call a rural rather than an urban development area, because its problems derive out of the success of its principal industry and not out of the fact that its principal industry has declined.

I wish to draw the Minister's attention to one or two points, and I only have a few minutes left, so this is an emasculated speech. It is the sort of speech which I am getting used to delivering in the House as a result of the length of speeches from both these benches and the benches opposite.

On the general question of regional development, first, we need far more information. I cannot understand how the party of planning opposite can be conducting supposed regional policies without adequate statistics. The first point to which I want to refer is the complete absence of income statistics based on regions. I am sure that the Minister will agree that such figures simply do not exist. However, in planning our regional policies, it is just as vital and important that we should know whether incomes are 30 per cent. or 40 per cent. under the national average as it is to know whether unemployment varies this way or that from the national average. So the first plea which I make to the party of planning opposite is that it should institute and have sufficient information on which to plan its regional policies.

The second point is that we have heard the most enormous hullabaloo from the Chancellor and from successive Ministers about the regional planning councils. Very often, no consultation is carried out on the most important points with the regional planning councils, and in that connection I want to draw the Government's attention to a statement made by Professor Tress, who is Chairman of the South-West Regional Development Council. In a statement made only a few days ago, he said: My complaint is that no one, so far as my Council is concerned, has seen the basis of the calculations in the White Paper. He was referring there to the White Paper on Transport Policy. We are not willing to accept conclusions without seeing the arguments leading up to them. How is it that the party of planning can talk so much about its economic development councils when it is clear that on the most vital and fundamental points affecting the prosperity and employment in the regions it does not even consult those councils? Its planning is a complete and utter sham; otherwise, it would consult the people who are most concerned with the development of the areas that they are meant to represent.

I want next to discuss one or two aspects of the South-West and its problems. Last Friday, in spite of everything that we have heard in the House, the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food told us, with only a few days' warning, that the subsidies for our fishing industry, which is one of the principal industries in Cornwall, were to be cut by as much as 50 per cent. How is it possible to talk about regional development when, only a few days before, the Parliamentary Secretary announced without any warning at all that our fishing subsidies are in many respects to be cut by 50 per cent., when the Fleck Report promised that they would not be cut by more than 10 per cent.? I protest at the double-talk which comes from the Government about their regional policies.

In a letter which I received only an hour ago from the Board of Trade, I was given figures which show that, from the point of view of investment incentives for our existing industries, we are better off now than we were under the Conservative Administration. That is absolute nonsense. In a Written Answer to my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin), the President of the Board of Trade made it clear that if one takes the old basis of Income Tax and Profits Tax and applies to that the old system of investment allowances and free depreciation, and if one takes comparably the new system of cash grants under 40 per cent. Corporation Tax and applies a discounted cash flow basis, the existing companies in development areas are far worse off than they were under the Conservative Administration.

It is no use the Board of Trade sending out letters which compare the difference under Corporation Tax, with investment allowances and free depreciation, and the system under Corporation Tax with cash grants. It was the Government sitting on the benches opposite who introduced the Corporation Tax, and not our party. We operated under the system of Income Tax and Profits Tax. Under that basis, we were far better off in the regions than we are now.

Finally, may I protest about the Selective Employment Tax? This has been mentioned on many occasions. Our Regional Council, which we hear so much about from the Chancellor, has not been consulted on it. In my County of Cornwall, we know that we will be up to 50 per cent. worse off as a result of the Selective Employment Tax than the country generally. How can the party opposite talk about regional planning and development, and then impose a tax which discriminates extremely hardly against the very areas which they are pretending to help?

Rather than listen to the hon. Member for Cardigan (Mr. Elystan Morgan), I prefer to listen to the hon. Member for Carmarthen (Mr. Gwynfor Evans), who took his seat in the House only a few days ago. He made clear what the people of Wales and the South-West think about the Government's regional policies, and in due course, when the next election comes, they will show just what they think about the policies which the Government are pursuing in the regions.

8.29 p.m.

Mr. F. V. Corfield (Gloucestershire, South)

Whatever the differences of view as to the implementation of policies designed to bring new life——

Mr. Buchan

On a point of order. May an explanation be given, Mr. Irving, for the curtailing of the debate to 9.30, in view of the fact that this affects so many Members on both sides of the House? I understand that this is not entirely the responsibility of the Chair. I know that a great deal of time was taken up by two Scottish Members opposite, which has not helped, but it has meant that not one Scottish Labour back bencher, nor my hon. Friend the Member for Belfast, West (Mr. Fitt), has been able to get into the debate. This is not a point directed at yourself. It is a point about the time taken at the beginning and end of the debate on a matter of such importance to so many Members.

The Deputy Chairman

I regret that more Members have not been able to get into the debate, owing to the fact that one or two Members took perhaps longer than was proper. The length of the debate is governed by Standing Order No. 18(6), which requires that Outstanding Votes shall be put at 9.30.

Mr. Corfield

As I was saying, whatever differences of view there may be as to the implementation of these policies, which are designed to bring new life to the development areas—and it matters not in this connection whether they are called development districts, or anything else—there is some general agreement that the economic justification for the policies lies in the proposition that there will be a national as well as a local economic gain in harnessing to productive effort the unused resources of the less prosperous areas.

I have read with some interest the reprint of a lecture by the President of the Board of Trade to the Royal Economic Society. I am summarising it, but he said that we are more likely to make maximum use of our resources by trying to steer new and expanding enterprises to areas with under-used resources than we are by adopting the alternative course of allowing industrialists to set up or expand where they will, and then incurring the vast and ever-increasing expense of providing afresh, and possibly in duplicate, the requisite houses, shops, roads, schools, transport, and so on. That was the theme of his address.

That much has been done in the past has, I think, been shown by the figures which have been quoted of the improvement in the numbers of unemployed, and the relationship between those numbers in the development areas and in the rest of the United Kingdom. But, as my right hon. Friend the Member for Argyll (Mr. Noble) pointed out, the proportion of unemployed expressed as a percentage in the development areas compared with the rest of the United Kingdom remains less favourable than it was some years ago.

I think that it is right to bear in mind, in this connection, a matter which I think is generally accepted, and which, again, was drawn attention to by the President of the Board of Trade in the lecture to which I have referred, that where there are marginally high rates of unemployment there is concealed a higher rate still, for the simple reason that many people, particularly women, who are not registered as unemployed do not come forward if the employment is not available.

I do not doubt the good intentions of the right hon. Gentleman the President of the Board of Trade, or the Minister of State, or even the Secretary of State for Scotland. I say "even", because I have not quite the experience of the intentions of the Secretary of State for Scotland that I have of the other right hon. Gentleman whom I have mentioned. But, however good their intentions, I doubt their ability to see through the savage deflation announced by the Prime Minister the other day without a wholly disproportionate effect on the development areas.

As my right hon. Friend pointed out, this is, after all, a much more drastic squeeze, or freeze, or both, than that introduced by my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd). He was criticised at the time by the party opposite, mainly on principle—it seems to have altered in the meanwhile—and by people outside who took a rather more objective view. They admitted that a freeze was necessary, but they criticised it on the ground that it was exerted at a time when the economy was already on the down-turn, although I think that most of those critics would admit that this is a very difficult thing to see at the time. But it is not difficult to see this time. It is abundantly clear that the economy is on the down-turn, and for that reason this squeeze and freeze will do infinitely more damage than has been done in the past, and will also do more damage, being infinitely more severe.

I doubt the Government's ability to ride this deflation without serious damage to the development areas for another reason, that they have already taken decisions and introduced measures which wholly inhibit their success. I do not think that in these debates we give enough attention to the corollary to the development areas, which is the problem of the pressure areas, such as London and the South-East, the Midlands; and, to a slightly less extent perhaps, my own part of the country, Bristol and the lower reaches of the Severn. The plain fact is that, if industrialists were left to themselves, these are the areas in which they would choose to expand. This is a phenomenon that is common throughout the whole Western industrial world.

Right across Europe, from Birmingham to Milan, right across the United States and Canada, and in Japan and Australasia as well, large cities attract immigrants and grow far faster than the natural increase in their population, and smaller cities grow less fast, stagnate or even decline. Some of the reasons for this can probably be identified, but we are still lamentably ignorant as to why this happens. As my hon. Friend the Member for St. Ives (Mr. Nott) said, the party opposite is the party of planning and we hope that it is investigating this problem and trying to produce some data from which useful conclusions can be drawn.

Not only do we not know the true benefit in economic terms of trying to attract industry to the development areas, but we do not know the effect on the economy as a whole of refusing I.D.C.s in the pressure areas. I hope that the Secretary of State will be able to give us some information on this point, if only to say what studies are being undertaken. The net economic gain of moving industry towards the areas which have a surplus of manpower but which otherwise are adequately serviced by what the President of the Board of Trade referred to in his lecture to the Royal Economic Society as the infrastructure of society, the transport, roads, hospitals, houses, and so on, may be self-evident, but it is nothing like so self-evident when one comes to build this infrastructure for a wholly new population resulting from the natural increase in population, because we do not know how much we lose by inhibiting expansion in the growth areas.

I suppose that nearly every hon. Member has at one time or another come across a case in which a firm has been refused an I.D.C. to expand where it wants and as a result has not expanded at all. Although these may be isolated cases, it is important that we should have some information as to the extent of this, so that we may quantify the effect on the economy as a whole.

The right hon. Member for Llanelly (Mr. James Griffiths), with his usual eloquence, put as perhaps the most important arguement for the development area policy the need to reduce the congestion, and the social cost of that congestion, as he put it, in the pressure areas. I have some sympathy with that argument. Nevertheless, I think that it is right that we should bear in mind some of the facts, and one of the facts which has not been referred to is that in the South-East of England, outside the conurbation, the density of population is rather lower than it is in Durham.

Again, if one looks abroad—and the Prime Minister is very fond of quoting us the economic league tables—this is not how the French, the Germans, the Americans or the Japanese see the way to make the most of their resources. One of the factors that is almost certainly of great importance in attracting manufacturers to the pressure areas, particularly manufacturers of consumer goods, is the proximity of the market, and a very prosperous market at that.

No doubt, the President of the Board of Trade was right in saying in his lecture—I am sorry he was not here when I first referred to it—that the force of this argument, which, of course, is only another way of saying that the limiting factor can be the cost of transport, varies enormously as between the light and compact product of high value and the heavier or bulkier product of relatively low value. But not only are there infinite variations and gradations between the extremes. What is significant is that this is an argument which accepts the supreme importance in any policy for the redistribution or distribution of industry in favour of the development areas of adequate transport at a cost which will at least not offset the financial advantages, whether they be inherent or induced by Government action, of manufacturing further afield in the development areas.

It cannot make any sense to propound that argument while, at the same time, denying to transport the benefit of investment grants and drawing a wholly artificial distinction between manufacturing and transport for the purposes of the Selective Employment Tax. It makes even less sense if, on top of that, one adds the burden of further taxation on fuel oil to which my hon. Friend the Member for Belfast, South (Mr. Pounder) referred.

This is not merely a question of communications within the United Kingdom or the domestic market. One of the outstanding features of our trade figures over recent years has been the increasing importance of Europe as a market for our exports. It follows, therefore, that there is increasing importance for our communications with the South-East and the South-East ports. Very few things would do more in this field to restore the confidence of our foreign creditors than clear evidence of the Government's determination to give to communications a priority at least ahead of free medicines, at least on a par with free school meals on a blanket basis, and at least on a par with manufacturing industry. But far from that, in the list of items of Government expenditure to be spared the cuts announced in the Prime Minister's speech on 20th July, roads and communications generally were noticeable only for their absence, and we know that the cuts in Scotland alone amount to about £2 million.

If internal communications are of the utmost importance nationally, they are the absolute lifeblood of the development areas, and they are as vital within those areas as between them and other parts of the country. As industry becomes more and more specialised—we see this very much in the motor industry—to which my right hon. Friend the Member for Argyll (Mr. Noble) referred—the more does the final product become an assembly of parts which are made in separate establishments in separate districts, depending for their economic assembly on specialised, cheap, easy and rapid transport.

There is a great deal more to the attraction of the pressure areas to which I have referred than mere proximity to large markets. There are, in particular, the social amenities which only great cities can provide, amenities which in any form of broad classification as between manufacturing, transport and services can be classified only as services, and have been so classified, being made the subject of almost pathological discrimination by the present Government.

This is particularly true of hotels. As my right hon. Friend said, we have had so many debates about the hotel trade that one need not repeat the arguments now. I merely remind the Committee that the loss of investment allowance is expected to cost the hotel industry about £320,000 and that the S.E.T. will cost it about £20 million. It is hardly surprising that the Government's counter-offer of loans up to £5 million at the Government interest rate is not regarded by the hotel industry, let alone those with the interests of the development areas at heart, as anything but the proverbial mouldy turnip.

The President of the Board of Trade was at some pains to express the exclusion of Government cuts to fall on housing, hospitals, and so on. With all due respect to him, he was misleading, although no doubt unintentionally. What the Prime Minister said was: Housing, schools, hospitals, Government-financed factories built in development areas, including advance factories, will not be affected. It is clear from the punctuation of that statement that the only buildings specifically referred to in development areas were the Government-financed factories, including advance factories. These other building operations, in theory at least, will not be affected throughout the country as a whole.

Later, this was made plain, when the Prime Minister, in answer to the final question on the same date, said: I was not suggesting that those who are living in development areas will be exempt from the increased postal charges or tourist control. I was referring to the restrictions on capital investment—office building, for example, and the building licencing restrictions."—[OFFICIAL REPORT, 20th July, 1966, Vol. 732, c. 632 and 653.] All of these are extremely marginal matters in their likely effect on the prosperity of the development areas.

It is true, of course, that building grants and allowances are to be retained, but people do not build for the sake of building. They build to house an enterprise which they expect to be profitable. The development areas face an inevitable dilemma. Until these service industries are provided, their absence undoubtedly adds to the unattractiveness of the areas to the potential industrialists who are likely to move in.

If, on the other hand, their provision is to precede the industrial expansion and the increasing population and prosperity which that implies, we are asking the service industries to accept a wholly disproportionate risk compared with development in pressure areas, where there are already potential customers and clientele, who are prosperous.

It is a risk not merely of delayed profitability pending this expansion, but, also, that that expansion may never take place at all, or, if it does, that it will not take place as fast as anticipated or to the degree originally intended. Let us be frank. There is nothing in the record of the present Government to encourage anyone to rely on their economic forecasts.

This is a risk, of course, which is enormously increased in periods of deflation, such as that on which the Government, through their own folly, have been forced to embark. It is a risk which the Government's economic measures—investment grants, S.E.T., increases in Purchase Tax—have not reduced, but have actually increased.

All experience shows that, during periods of deflation, it is the development areas which suffer most, and disproportionately to the rest of the country. All the evidence is that, on this occasion, that experience will be repeated and is likely to be exaggerated. We cannot deflect industries to development areas or anywhere else if industry as a whole is not expanding and has lost the confidence to expand. Yet that is precisely the atmosphere which the Government have been busy creating.

Industrial investment is already falling and the Prime Minister's threat of unemployment is bound to give the trade unions the maximum incentive to retrench against redundancy and to reinforce overmanning. To try to appease them, the Government continue also to undermine the very incentives on which enterprise so particularly vital to the development areas depends. As well as the wage freeze, we are to have a price freeze and a dividend freeze.

This is on top of heavy increases in direct taxation, which include a wholly irrelevant, retrospective swipe at the Surtax payer, all of which penalises and inevitably undermines the confidence of those very people whose confidence and encouragement is so essential if they are to make decisions which result in the setting-up of new industries or the expansion of existing ones, without which there can be no enterprise to move to the development areas.

It is absolute nonsense for the Government to pretend that development areas can be insulated from deflationary measures. It is even more nonsensical under a system of taxation on employment that is to be discretionary, not as between areas but on the basis of this wholly artificial distinction in favour of manufacturing industries irrespective of the value of what they manufacture; and as the hon. Member for St. Ives has pointed out, having devastating effects on many industries within development areas which depend on the tourist industry.

Development areas, like other parts of the country, sink or swim with the rest of the economy and every burden on industry undermines confidence and, therefore, reduces expansion and reduces the industries available to be steered into development areas; and the effect is bound to be exaggerated in those areas for the very good reason that they are the people who depend on this industry being steered towards them.

The Government have gone out of their way over and over again to add to the burdens on industry. Apart from the absurdities of the Selective Employment Tax and a system of investment grants which is wholly discretionary and, therefore, uncertain, we have a Corporation Tax and a Capital Gains Tax which are so complicated that even the foremost accountants are finding themselves increasingly unable to advise their clients with any degree of confidence, let alone certainty.

We have, too, a betterment levy which, in its application, is even more difficult of comprehension and inevitably will mean delays and uncertainties in making decisions to acquire land or premises necessary for any expansion of industry. The right hon. Member for Llanelly has referred to the complexities of the present land law. I recommend him to read the Land Commission Bill, when he will realise that the present system is child's play in comparison.

Once again, in devising this betterment levy, the Government's passion for an apparent uniformity, although, in fact, it is riddled with anomalies, has denied them the opportunity to do something really helpful to the development areas by varying the incidence of the levy from one part of the country to another. The President of the Board of Trade, in defence of his much larger development areas and the abandonment of the growth point concept, has said he intends to use the I.D.C. not merely to stop growth in pressure areas and deflect it to development areas but to deflect it to particular parts of development areas and this, again, removes the virtual certainty that existed in the past, in that an industrialist who was prepared to move to a development area could be almost certain of getting an I.D.C. Now that certainty is removed, because it may not suit the policy of the President of the Board of Trade that the industrialist should go to that particular part of a development area.

There is strong evidence for supposing that one of the reasons why the pressure areas are so much more attractive to industrialists is the fact, pointed out by the right hon. Gentleman, that it is very difficult to assess the true cost of the services that the congestion requires. Here, again, we have very little information, but, in so far as the true costs of these services are disguised, they are disguised in favour of the pressure areas and against the development areas, because they are disguising the true cost of servicing the pressure areas and, therefore, keeping down wages and the differential there should be between wages in the central area and in the development areas. A realistic differential would in itself afford an attraction to industrialists which probably would be much more effective than anything the President of the Board of Trade or anyone else could do.

This we cannot do, but we can at least try to find out more about this. We can at least look at the Selective Employment Tax—if selective it is to be—on the basis of selection as between areas rather than on the absurd basis of a collection of classifications of industry which has no relevance to the economy or anything else. We believe that it is quite impossible for the Government, as they allege, to attempt to isolate the development areas from the effect of the deflation that is upon us.

I do not doubt the good intentions of the right hon. Gentleman, but our charge against the Government is that, as in so many other spheres, they appear to be working wholly in watertight compartments, effectively succeeding—if they succeed in nothing else—in concealing from the right hand what is happening in the left. The result is that whatever their good intentions their their policies are being hopelessly undermined, and, indeed, threatened with reversal, by almost every act of commission and omission that the Government have applied to the economy as a whole—policies on which the special interests of development areas so particularly depend.

In particular, they have utterly failed to excite the ambition—indeed, the passion for success—of either workers or management, on whom our economy depends. In the last resort it does not depend on the Government and, by the grace of God, it does not depend on the First Secretary. It depends on the success of ordinary men and women, and that it is the duty of the Government to encourage, and to provide the framework in which they can succeed. In both these spheres the Government have utterly failed.

8.57 p.m.

The Secretary of State for Scotland (Mr. William Ross)

We can all agree with the second last sentence of the speech of the hon. Member for Gloucestershire, South (Mr. Corfield)—and I apologise for not being present when he started—in which he referred to the fact that the success or failure of the Government's plans depends not on the legislation that we pass but rather upon the response we evoke from the people. But he is wrong in saying that people in the development areas have been unresponsive in the past to the failures of the party opposite in this respect, and have been ungrateful for the achievements and the speed with which we have set about the task in the development areas since October, 1964. They have heard that sort of speech before.

One would think that the world started for the Tories in 1963, with free depreciation. We went through all this in 1952, 1954, 1958 and 1961. Why is it that only the poor right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) is mentioned? I can understand the anxieties of hon. Members opposite about what happens to development areas in times of economic crisis, because we had that experience in every one of the years to which I have referred. Today, hon. Members opposite are freed from their slavish silence. Are they making today the sort of speeches they should have made in 1952, 1954, 1958 and 1961? Today we have heard again the speeches they made about a year ago.

They cry "Wolf" so often. The Scottish Tories have almost populated the political Highlands with wolves. If anyone should beware of crying "Wolf", it should surely be the sheep farmer. [Interruption.] Hon. Gentlemen opposite need not worry. I will deal with all the important points and they will not put me off. In fact, we have in the last 18 months seen a speedup in interest in the development areas, not only in the number of inquiries but of firm commitments. These have enabled my right hon. Friend the President of the Board of Trade to announce the figures which he gave to the Committee earlier. He spoke of 14½ million sq. ft. of factory space having been committed in the last 18 months, as against 9½ million sq. ft. in the previous 18 months. I should have thought that hon. Gentlemen opposite would welcome that improvement. But no. They continue to cry woe and all we get from them is a catalogue of carping criticism.

Are hon. Gentlemen opposite not pleased that my right hon. Friend was able to announce his decision that, within this short period since October, 1964, there will be built in Scotland alone 23 advance factories, remembering that in the whole of the 13 years of Tory rule we got only 27 factories, and that for about 10 years we got none at all? It took my hon. Friends and myself 10 years to convince the Conservatives of the efficacy of building advance factories.

It having taken us so long to convince them of this need, all hon. Gentlemen opposite now want advance factories. The same hon. Members who criticised us because we wanted to spread the benefits of the development areas—they said we wanted to spread them far too wide—are the very hon. Members who now say, "Yes, but attend to my area now and never mind the rest". Indeed, the hon. Member for Perth and East Perthshire (Mr. MacArthur) wants them to be extended right to his garden stile. To be frank with the hon. Gentleman, I am rather worried for him and his hon. Friends because of the apoplectic outpourings we are getting from them. The hon. Member for Perth and East Perthshire said, in effect, that we should forget what he said previously and spread these benefits to Perth and that area.

I do not recall the hon. Member for Ayr (Mr. Younger) telling the people of his constituency during the General Election—in which he narrowly got home, I believe by only a few hundred votes—that if the Tories were returned they would take the benefits of the development area incentives away from Ayr. Nor did he and hon. Gentlemen opposite say that they would be taken away from Kilmarnock, the Borders and other parts of Scotland. Instead, they found a new one; depopulation was the thing that really counted.

The right hon. Member for Argyll (Mr. Noble) has not been in the House of Commons for all that long. In fact, he did not make very many speeches on this subject before he became Secretary of State in the former Conservative Administration. He and his hon. Friends would not face up to what was happening in the wider areas of Scotland, Wales and the North-East in relation to depopulation. They did not make depopulation one of the criteria for giving help under the Local Government Act. It was the right hon. Member for Barnet (Mr. Maudling) who said, in effect, "We cannot do this. It would be like Canute asking the waters to roll back". The right hon. Gentleman said that it was inevitable and that people would leave anyway. Then, with the General Election coming along, the Conservative Party suddenly discovered that it was an ideal matter to raise, and then they could not keep quiet about it.

It is worth remarking that none of the hon. Gentlemen opposite who represent Edinburgh has spoken today. I wonder for what they would have been asking had they taken part in our discussion? Would they have wanted us to spread these benefits even further—into the most prosperous parts of Scotland? They really must justify their claims in relation to natural growth, jobs, unemployment and so on. I do not think that they could justify such claims.

I would not call the hon. Member for Gloucestershire, South an enthusiastic supporter of the development area concept. At one point I almost asked the hon. Gentleman to say which side he was on because his speech reminded me of the sort of speeches that prevented the Tory Party from taking action that should have been taken. Hon. Gentlemen opposite have failed to appreciate that before the end of this century Britain will have to cater for a greatly increased population. Where would he put them? In the South-East? Round London? Or would he use the available space? One would think that Britain was thousands of miles long and broad, but it is not all that long distance from London to Inverness. One can get there by aeroplane quite readily.

We have to make the point, and we have to continue to make the point, that if we want these areas to be available we must maintain and build up population there, and to do that we must start with retaining the existing population. We must take powers to give the people there the opportunity to help themselves. Until this year, with the passing of this Act, the people in the Borders have not had the opportunity of doing anything even to help themselves with industrial development and retaining population there.

That is why we decided to return to the development area point of view rather than have development districts. Let us remember that every one of the growth points—which was the new policy suddenly stumbled on and brought forth by the Tory Party—related to central Scotland and the North-East—the policy had nothing to do with Wales or any other part of the United Kingdom.

It is said that in 1963 these places were already in and covered by the Local Employment Acts—but what about Dundee? We are told by the other side that we should concentrate on favourable and naturally growing areas. Is not Dundee a favourable and naturally growing area? Everything shows that it is—that nothing succeeds like success. Was not Kilmarnock itself a favourable and a naturally growing area in the Southwest? It was left out entirely from the development districts. Then, suddenly, we get the new Central Scotland Plan, which, in the middle of 1963—not in the middle, but in November, 1963—plus free depreciation, was to cure all our ills.

Judging from speeches from hon. Members opposite, one would imagine that the industrialists of Britain fell over themselves for free depreciation, but that is not true. The present Leader of the Opposition, when President of the Board of Trade, answering one of my hon. Friends, on, I think, 6th February, 1964, admitted that industry had not realised the benefits of free depreciation; that free depreciation had not proved to be the inducement it was intended to be.

But hon. Members opposite started condemning us before even the ink was dry on the Scottish Plan, before our incentive policy had been properly read and digested, much less understood. I believe that it was the hon. Member for Ayr who, seven days after the Plan was issued, announced, "Now it has failed". The hon. Gentleman might at least have waited until the Scotland Magazine was published. It might not be their bible, but it is the publication of an organisation that hon. Members opposite are very fond of quoting—the Scottish Council (Development and Industry)—[An HON. MEMBER: "That the Government have ignored."]—no, we have not ignored it. It statesd: Initial reaction to the incentives has been favourable from those who are in the industrial attraction business. The Scottish Council were quite sure that the new cash grant with their 20 per cent. advantage over non-development areas, would make Scotland an even easier location to sell. And they liked the revamping of the whole of Scotland as an area offering special inducements. It did not finish there. It went on: What seems to be good for a large section of Scottish industry is that the whole point of the incentives is to encourage investment in new plant and machinery. It should mean an upswing in demand for capital goods. This has been proved true by the inquiries made of the Board of Trade and by the new firms coming to Scotland at present. That will continue.

I do not accept the gloomy forecasts about the economy made by hon. Members opposite. They never once offered help to Scotland at times of economic stress. On the same page of this report we read: Increases which took place in production during the last year have come in the face of ever toughening Government restrictions. In contrast the 7 per cent. Bank rate in 1961 brought Scottish industrial output to a two-year period of stagnation… The report describes what we did last year. It shows how we were able to override this and get increased production and reduce unemployment. It describes this as even tougher than what it calls the "Selwyn Lloyd Squeeze". The right hon. Gentleman may rest assured that we do not take our sheltering of the development areas in the same way as they sheltered those areas by complete neglect. [An HON. MEMBER: "Nonsense."] Yes, complete neglect.

When the hon. Member talked about the trends being the same as in 1962 or 1963 he was speaking of a time, not when hon. Members opposite had the lowest unemployment for 10 years but the highest unemployment for 10 years. One of their great achievements was that after 12 years of "powerful regard" for development areas unemployment reached a figure of nearly 140,000 in Scotland in the spring. For the whole of that year the monthly average was over 100,000. I can assure the House that the figure today is 54,000.

I do not accept the gloomy forecast of hon. Members opposite about the tourist industry. We have heard all the set speeches and will hear them again. Hon. Members opposite have to appreciate that if there had not been the Budget and S.E.T., in another form taxation would have taken money from the pockets of the people. What the Chancellor did was to spread the base of taxation. What has gone to determine the success of the tourist industry? The success of the tourist industry will depend on the extent to which there is a demand. It is not like shifting an industry up to the High- lands with all the difficulties attached thereto, the difficulties of getting people to go from one area to another. An hotel is in an area where there is a demand for it. If the demand for holidays remains, surely private enterprise will be able to meet that demand. Does anyone suggest that people will stop taking their holidays in Scotland or anywhere else? I was surprised that hon. Members opposite did not raise this in view of the 50 per cent. limitation on foreign holidays. It may mean that we can get half as many more people to go to the Highlands.

Mr. David Gibson-Watt (Hereford) rose——

Mr. Ross

No, I will not give way. The hon. Member should have organised his Welsh forces.

The hotels in Scotland have had their most properous year ever. [Interruption.] The hon. Member should have been here during the debate. I am satisfied that the hotels in Scotland will be able to continue to answer the need. Hotels in Scotland, to a far greater extent than ever before since we extended the area, benefit by the Local Employment Act, by the building grants and loans and by the Highlands and Islands Development Board—which was jeered at and scoffed at by right hon. Members opposite when we set it up—has already been providing additional help to the smaller hotels in the Highland areas and will continue so to do.

The right hon. Member for Argyll took me to task rather querulously about my obstinacy. He said that I had refused to answer a Question which he had tabled about the opinions of the Highlands and Islands Development Board. The right hon. Gentleman asked me what representations I have received. I have received no representations, but from time to time I or my hon. Friend the Minister of State have discussions with the Chairman and Secretary of the Board to consider what next steps should be taken about the Highland area. The right hon. Gentleman was not very keen on the establishment of the Board, but now that it has been established he is prepared to drag it into politics.

Mr. Noble

This is absolutely monstrous and the Secretary of State is at his most ridiculous. He knows full well what the views of the Board are. The Board has expressed them off the cuff, but the right hon. Gentleman has always refused to admit it. He was asked a straightforward question and, as usual, he dodged it, as he is dodging every question which has been asked in the debate.

Mr. Ross

If I have discussions with the Board, I regard these as confidential. The Board considers that it is its task to get on with the job. It is taking action at present in relation to the Highlands. The hon. Member for Perth and East Perthshire wanted to be annexed to the Highlands area; that is what he thought might happen under the Tory Local Employment Act. The Board will continue to take action and will present for my consideration creative schemes for assisting the Highland area.

I am not nearly so gloomy about the effects of the Selective Employment Tax in the Highland areas as hon. Members opposite are. Mention has been made of the fact that my right hon. Friend the Chancellor of the Exchequer has gone over the possibilities for this tax in the future. There is no doubt that there are boundless possibilities for developing the tax so as to assist the development area policy. I hope that the hon. Member for Perth and East Perthshire will join the rest of us in seeking to have that done at the right moment.

I want to answer some of the questions the right hon. Gentleman put to me about the Scottish Plan. Last week it was suggested that we should scrap the Plan and write a new one. I resisted that. I continue to resist it, because the targets for Scotland remain the same, and must do so if we are to bring prosperity to Scotland. There may well be changes in relation to timing and as to action we must take from time to time. I said this last week. I continue to say it.

There is one aspect of this which is and which must be unchanging. This will equally apply to Wales and the North-East. We must continue with the drive to improve the amenities of Scotland and the housing of Scotland. The road programme must go on. There will be no slashing cuts which would completely undermine everything we intend to do.

Of course Scotland and its people will feel the effects of the current cuts. I would be foolish if I stood here and said otherwise. We can weather this, sheltered as we have been from the main force of the public investment cuts which have been announced.

Mr. MacArthur

What is the value of office building?

Mr. Ross

I have not got the figure before me now. Stopping office building in London—that should have been done 10 years before it was done—and other parts of the crowded South-East will more than encourage people to build houses or to shift offices to Perth or other parts of Scotland, the North-East and Wales. It also takes away the pressure on the construction industry, and I can tell the right hon. Gentleman that last year because of that we were able to get far lower tenders for some of our public contracts than we had expected. To that extent, there has been further benefit to what we are trying to achieve in Scotland. The figure for roads has already been given and the Scottish road programme will continue to the tune of at least between 96 and 97 per cent., so that the cut will not undermine road progress and development.

The right hon. Gentleman spoke about valuations. I am surprised that a former Secretary of State for Scotland should ask a Secretary of State to do something about valuations. He knows quite well that in Scotland valuation is related to a formula provided in the 1956 legislation and that assessors must take account of rents which Lord Fraser or anyone else is prepared to pay. The right hon. Gentleman spoke rather criticially and seeking sympathy for himself, but he more than anyone else is probably to blame for the high rents charged for commercial properties in many High Streets in Scotland. The assessor cannot ignore that consideration, although there is a right of appeal.

The hon. Member, the Batman of Battlefield, raced in to try to get some attention paid to this and for years he has been telling us about the effect on equalisation grants of raising local authority incomes. It follows that if Glasgow's income from valuation rises, it automatically loses it from the equalisation grant.

Mr. Edward M. Taylor (Glasgow, Cathcart) rose——

Mr. Ross

It is automatic. It is related to the principles of equalisation grant legislated by the hon. Gentleman's right hon. Friends when he was not here.

Mr. Taylor

I have been here all day, which is more than the right hon. Gentleman has.

Dame Irene Ward (Tynemouth)

On a point of order. Is it not usual for Ministers as well as hon. Members to give an hon. Member his proper title and constituency? Why does the right hon. Gentleman contravene our rules in this way?

Mr. Ross

May I suggest to the hon. Lady that she comes here sometimes to hear a Scots debate.

Dame Irene Ward

I am a Sassenach.

Mr. Ross

I have——

Dame Irene Ward

On a point of order. Can I have an answer to my point of order?

The Chairman

It was not a point of order and therefore it did not require an answer.

Sir Douglas Glover (Ormskirk)

On a point of order. Although you said that it was not a point of order, Sir Eric, the right hon. Gentleman referred to my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) as the Member for Battleaxe. Would you rule where that constituency is?

The Chairman

I did not hear the right hon. Gentleman refer to anybody as the Member for Battleaxe.

Mr. Ross

One of the parts of Glasgow which the hon. Member represents is called Battlefield.

I was asked about Glasgow rents. I expect to be consulted by Glasgow under the terms of paragraph 12 of the White Paper and in the course of our consultations we shall naturally examine all these implications. It is not possible for me at the moment to prejudge the outcome of those consultations.

The right hon. Gentleman spoke about computers and suggested that it was desirable that we should look into the subject of training system analysts. There are few courses at present specifically aimed at these key people, but the Working Party on Computer Education, set up by the Scottish Council for Commercial Education, has recently decided to recommend the setting up of a full-time course in system analysis and design lasting about 20 weeks, plus a period of practical experience. This course will lead to a diploma award by the Council and will be among the most advanced and comprehensive of its kind in Britain. The Council will shortly be announcing full details of the course which is a considerable advance and highly desirable.

The right hon. Gentleman asked about the progress made in establishing training centres. He will be pleased to know that the present plan provides for eight centres with a capacity of nearly 2,000 people. This compares with 1963, when there was one centre and 182 places. My right hon. Friend the Minister of Labour, about a month ago, made an announcement about assistance to industry for in-factory training. I can assure the Committee that this is going very well. The amount of grants for training courses in Scotland amounts to about £216,000.

If we want to get Scottish industry going and make it efficient, if we want the efficient use of manpower, then the onus must not only be upon the worker but also upon management. A lot has been said about training workers to accept responsibilities, but management must also be bang up to date. Hon. Gentlemen will be glad to know that diploma courses in management studies are available at Dundee College of Technology, the Robert Gordon Institute of Technology Aberdeen, and there is still some spare capacity. We are certainly trying to publicise the availability of these courses. There are comparable courses at Strathclyde, Glasgow, Heriot-Watt and Edinburgh Universities.

The right hon. Gentleman was slightly jaundiced in his outlook about the future of Scotland. He must accept that Scotland is in a far better position today than it has ever been. I would pay full credit to him and previous Secretaries of State. There has been the argument about the pulp mill. One of the interesting things about this, if one wants some history of the area, is to be read in the pamphlet put out by Wiggins Teape. There was no word of thanks to the Tory Government in that. The pulp mill story goes back about 10 years, long before we had the Bill. There would have been no pulp mill if there had been no Forestry Commission, if there had been no trees. The right hon. Gentleman did not help there. [Interruption.] One can hardly have a pulp mill in the middle of London.

We are giving credit where it is due and we are also giving £10 million worth of money. The future of Scotland, like that of Britain, depends on the response of the people to the call put forth by the Government. There is more than

just party advantage in this kind of thing. The future of our country is at stake and I sincerely hope that, although we are sheltering the development areas, the people will respond to the call made upon them.

Mr. Corfield

I beg to move, That Item, Class VI, Vote 2, Scottish Development Department be reduced by £1,000.

Question put:

The Committee divided: Ayes 146, Noes 207.

Division No. 155.]	AYES	[9.29 p.m.
Allason, James (Hemel Hempstead)	Hamilton, Michael (Salisbury)	Noble, Rt. Hn. Michael
Astor, John	Harris, Frederic (Croydon, N. W.)	Orr-Ewing, Sir Ian
Awdry, Daniel	Harvey, Sir Arthur Vere	Osborn, John (Hallam)
Baker, W. H. K.	Harvie Anderson, Miss	Osborne, Sir Cyril (Louth)
Balniel, Lord	Hawkins, Paul	Pearson, Sir Frank (Clitheroe)
Batsford, Brian	Heald, Rt. Hn. Sir Lionel	Peel, John
Berry, Hn. Anthony	Heseltine, Michael	Percival, Ian
Biffen, John	Higgins, Terence L.	Pink, R. Bonner
Birch, Rt. Hn. Nigel	Hobson, Rt. Hn. Sir John	Pounder, Rafton
Black, Sir Cyril	Hogg, Rt. Hn. Quintin	Price, David (Eastleigh)
Blaker, Peter	Holland, Philip	Prior, J. M. L.
Body, Richard	Hordern, Peter	Ramsden, Rt. Hn. James
Bossom, Sir Clive	Hornby, Richard	Rawlinson, Rt. Hn. Sir Peter
Boyd-Carpenter, Rt. Hn. John	Howell, David (Guildford)	Renton, Rt. Hn. Sir David
Boyle, Rt. Hn. Sir Edward	Hutchison, Michael Clark	Rodgers, Sir John (Sevenoaks)
Brinton, Sir Tatton	Irvine, Bryant Godman (Rye)	Russell, Sir Ronald
Bromley-Davenport, Lt. Col. SirWalter	Jenkin, Patrick (Woodford)	St. John-stevas, Norman
Brown, Sir Edward (Bath)	Jennings, J. C. (Burton)	Sharples, Richard
Bruce-Gardyne, J.	Jopling, Michael	Shaw, Michael (Sc'b'gh & Whitby)
Buchanan-Smith, Alick (Angus, N&M)	Joseph, Rt. Hn. Sir Keith	Sinclair, Sir George
Bullus, Sir Eric	Kaberry, Sir Donald	Stainton, Keith
Campbell, Gordon	Kimball, Marcus	Stodart, Anthony
Carlisle, Mark	King, Evelyn (Dorset, S.)	Summers, Sir Spencer
Chichester-Clark, R.	Kirk, Peter	Tapsell, Peter
Clegg, Walter	Knight, Mrs. Jill	Taylor, Sir Charles (Eastbourne)
Corfield, F. V.	Lancaster, Col. C. G.	Taylor, Edward M. (G'gow, Cathcart)
Craddock, Sir Beresford (Spelthorne)	Langford-Holt, Sir John	Taylor, Frank (Moss Side)
Crouch, David	Lewis, Kenneth (Rutland)	Teeling, Sir William
Cunningham, Sir Knox	Langford-Holt, Sir John	Temple, John M.
Currie, G. B. H.	Lloyd, Rt. Hn. Selwyn (Wirral)	Thatcher, Mrs. Margaret
Dance, James	Longden, Gilbert	Turton, Rt. Hn. R. H.
Dean, Paul (Somerset, N.)	Loveys, W. H.	van Straubenzee, W. R.
Deedes, Rt. Hn. W. F. (Ashford)	McAdden, Sir Stephen	Vaughan-Morgan, Rt. Hn. Sir John
Dodds-Parker, Douglas	MacArthur, Ian	Vickers, Dame Joan
Doughty, Charles	McMaster, Stanley	Walker-Smith, Rt. Hn. Sir Derek
du Cann, Rt. Hn. Edward	Mathew, Robert	Wall, Patrick
Eden, Sir John	Maude, Angus	Ward, Dame Irene
Eyre, Reginald	Mawby, Ray	Weatherill, Bernard
Fletcher-Cooke, Charles	Maxwell-Hyslop, R. J.	Webster, David
Fortescue, Tim	Maydon, Lt.-Cmdr. S. L. C.	Wells, John (Maidstone)
Galbraith, Hn. T. G.	Mills, Peter (Torrington)	Whitelaw, William
Gilmour, Sir John (Fife, E.)	Mitchell, David (Basingstoke)	Wills, Sir Gerald (Bridgwater)
Glover, Sir Douglas	Monro, Hector	Wilson, Geoffrey (Truro)
Goodhart, Philip	More, Jasper	Wolrige-Gordon, Patrick
Goodhew, Victor	Morgan, W. G. (Denbigh)	Worsley, Marcus
Grant, Anthony	Morrison, Charles (Devizes)	Wylie, N. R.
Gresham Cooke, R.	Mott-Radclyffe, Sir Charles	Younger, Hn. George
Gurden, Harold	Murton, Oscar
Hall, John (Wycombe)	Nabarro, Sir Gerald	TELLERS FOR THE AYES:
Hall-Davis, A. G. F.	Neave, Airey	Mr. Pym and Mr. R. W. Elliott.
NOES
Abse, Leo	Atkins, Ronald (Preston, N.)	Bishop, E. S.
Allaun, Frank (Salford, E.)	Bagier, Gordon A. T.	Blackburn, F.
Alldritt, Walter	Barnett, Joel	Blenkinsop, Arthur
Allen, Scholefield	Baxter, William	Boardman, H.
Archer, Peter	Beaney, Alan	Booth, Albert
Armstrong, Ernest	Bennett, James (G'gow, Bridgeton)	Bowden, Rt. Hn. Herbert
Ashley, Jack	Bessell, Peter	Braddock, Mrs. E. M.
Bradley, Tom	Hazell, Bert	Page, Derek (King's Lynn)
Broughton, Dr. A. D. D.	Henig, Stanley	Palmer, Arthur
Brown, Rt. Hn. George (Belper)	Hooley, Frank	Pannell, Rt. Hn. Charles
Brown, Hugh D. (G'gow, Provan)	Hooson, Emlyn	Pardoe, John
Brown, Bob (N'c'tle-upon-Tyne, W.)	Horner, John	Parker, John (Dagenham)
Brown, R. W. (Shoreditch & F'bury)	Houghton, Rt. Hn. Douglas	Parkyn, Brian (Bedford)
Buchan, Norman	Howarth, Harry (Wellingborough)	Perry, George H. (Nottingham, S.)
Cant, R. B.	Howarth, Robert (Bolton, E.)	Price, Christopher (Perry Barr)
Carmichael, Neil	Howell, Denis (Small Heath)	Price, Thomas (Westhoughton)
Castle, Rt. Hn. Barbara	Howie, W.	Price, William (Rugby)
Chapman, Donald	Hoy, James	Probert, Arthur
Coe, Denis	Hughes, Emrys (Ayrshire, S.)	Pursey, Cmdr. Harry
Coleman, Donald	Hughes, Hector (Aberdeen, N.)	Rankin, John
Conlan, Bernard	Hunter, Adam	Redhead, Edward
Cousins, Rt. Hn. Frank	Jackson, Peter M. (High Peak)	Rhodes, Geoffrey
Craddock, George (Bradford, S.)	Jay, Rt. Hn. Douglas	Roberts, Albert (Normanton)
Crawshaw, Richard	Jeger, George (Goole)	Roberts, Goronwy (Caernarvon)
Crossman, Rt. Hn. Richard	Jeger, Mrs. Lena (H'b'n&St. P'cras, S.)	Rodgers, William (Stockton)
Cullen, Mrs. Alice	Jenkins, Rt. Hn. Roy (Stechford)	Roebuck, Roy
Dalyell, Tam	Johnson, James (K'ston-on-Hull, W.)	Rose, Paul
Davidson, Arthur (Accrington)	Johnston, Russell (Inverness)	Ross, Rt. Hn. William
Davidson, James (Aberdeenshire, W.)	Jones, Dan (Burnley)	Rowland, Christopher (Meriden)
Davies, G. Elfed (Rhondda, E.)	Jones, J. Idwal (Wrexham)	Rowlands, E. (Cardiff, N.)
Davies, Harold (Leek)	Kelley, Richard	Ryan, John
Davies, S. O. (Merthyr)	Kerr, Russell (Feltham)	Sheldon, Robert
Delargy, Hugh	Lawson, George	Short, Rt. Hn. Edward (N'c'tle-u-Tyne)
Dewar, Donald	Lestor, Miss Joan	Short, Mrs. Renée (W'hampton, N. E.)
Dickens, James	Lewis, Ron (Carlisle)	Silkin, Rt. Hn. John (Deptford)
Dobson, Ray	Lomas, Kenneth	Silkin, S. C. (Dulwich)
Doig, Peter	Lubbock, Eric	Silverman, Julius (Aston)
Donnelly, Desmond	Lyon, Alexander W. (York)	Skeffington, Arthur
Driberg, Tom	Mabon, Dr. J. Dickson	Small, William
Dunn, James A.	McCann, John	Spriggs, Leslie
Dunwoody, Mrs. Gwyneth (Exeter)	MacDermot, Niall	Steel, David (Roxburgh)
Eadie, Alex	McGuire, Michael	Steele, Thomas (Dunbartonshire, W.)
Edwards, William (Merioneth)	Mackenzie, Gregor (Rutherglen)	Swingler, Stephen
Ellis, John	Mackie, John	Symonds, J. B.
Ennals, David	Mackintosh, John P.	Taverne, Dick
Evans, Albert (Islington, S. W.)	Maclennan, Robert	Thornton, Ernest
Faulds, Andrew	McMillan, Tom (Glasgow, C.)	Thorpe, Jeremy
Fernyhough, E.	McNamara, J. Kevin	Tinn, James
Fitch, Alan (Wigan)	MacPherson, Malcolm	Tomney, Frank
Fitt, Gerard (Belfast, W.)	Mahon, Peter (Preston, S.)	Urwin, T. W.
Fletcher, Raymond (Ilkeston)	Manuel, Archie	Varley, Eric G.
Foley, Maurice	Mapp, Charles	Wainwright, Edwin (Dearne Valley)
Ford, Ben	Marquand, David	Wainwright, Richard (Colne Valley)
Fowler, Gerry	Mason, Roy	Walker, Harold (Doncaster)
Fraser, John (Norwood)	Mendelson, J. J.	Wallace, George
Freeson, Reglnald	Millan, Bruce	watkins, David (Consett)
Garrow, Alex	Miller, Dr. M. S.	Weitzman, David
Gray, Dr. Hugh (Yarmouth)	Mitchell, R. C. (S'th'pton, Test)	Wellbeloved, James
Gregory, Arnold	Morgan, Elystan (Cardiganshire)	Wells, William (Walsall, N.)
Grey, Charles (Durham)	Morris, Charles R. (Openshaw)	Whitaker, Ben
Griffiths, David (Rother Valley)	Moyle, Roland	Whitlock, William
Griffiths, Rt. Hn. James (Llanelly)	Murray, Albert	Williams, Alan Lee (Hornchurch)
Grimond, Rt. Hn. J.	Neal, Harold	Williams, Clifford (Abertillery)
Hamilton, James (Bothwell)	Newens, Stan	Williams, W. T. (Warrington)
Hamling, William	Norwood, Christopher	Willis, George (Edinburgh, E.)
Hannan, William	Oakes, Gordon	Winstanley, Dr. M. P.
Harper, Joseph	Ogden, Eric	Woodburn, Rt. Hn. A.
Harrison, Walter (Wakefield)	O'Malley, Brian
Haseldine, Norman	Orme, Stanley	TELLERS FOR THE NOES:
Hattereley, Roy	Owen, Will (Morpeth)	Mr. Gourlay and Mr. Ioan L. Evans.

Original Question again proposed:—

It being after half-past Nine o'clock, The CHAIRMAN proceeded, pursuant to Standing Order No. 18 (Business of Supply), to put forthwith the Question necessary to dispose of the Vote under consideration.

Question put and agreed to.

The CHAIRMAN then proceeded forthwith to put severally the Questions, That the total amounts of the Votes outstanding in the several Classes of the Civil Estimates, including Revised Estimates and Supplementary Estimates, and the total amounts of the Votes outstanding in the Defence (Central) Estimate, the Defence (Navy) Estimates, the Defence (Army) Estimates and the Defence (Air) Estimates, including a Supplementary Estimate for Navy Services, be granted for the Services defined in those Classes and Estimates; and that sanction be given to the application of the sums temporarily authorised in respect of the Navy, Army, and Air Services [Expenditure].