LOCAL EMPLOYMENT

HC Deb 01 February 1967 vol 740 cc602-28

Mr. Deputy Speaker (Mr. Sydney Irvine)

It may be for the guidance of the House if, because some hon. and right hon. Members have had difficulty in determining what is in order, I say that the next debate is very limited. It is limited entirely to the reasons for the increase in this Vote.

8.9 p.m.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

I shall endeavour to keep within the narrowness of your Ruling, Mr. Deputy Speaker, but there are one or two questions which must be asked about this Supplementary Estimate. I start by questioning how much success we have hitherto had in providing local employment. The undoubted aim of hon. Members in all parts of the House is to remove all regional differentials in employment levels. I am sure that no Estimate or Supplementary Estimate would be required in the ideal State, because the level of employment would be the same throughout the country.

This is not by any means so. There are still some very big disparities between the levels of employment in the various regions. The percentages of unemployment which have been reached are almost identical with the percentages of unemployment reached in the different regions in the peaks of 1959 and 1963. At present there are 339,000 people unemployed in the development districts, whereas in the peak of 1963 there were 366,000 and in the peak of 1959 there were 319,000. So there is nothing to choose between the figures.

Moreover, the position may be a little worse because of the migration which is taking place. The total number of jobs in the development districts is much less than it was three or four years ago. The total net amount of migration from Scotland, Northern Ireland, the North-West and the Northern region in the last three years has been running at the rate of 66,000 a year. There has been migration into the South-West and Wales amounting in total to 22,000 a year. Thus the net migration from development districts is now running at 44,000 a year. Thus the loss of population in the last four years from the development districts might amount to about 176,000. If those are taken to represent about 70,000 jobs, on the ratio that 2½ people represent one wage earner, it can be said that there has been a decrease in the total number of people in jobs in development districts of 43,000 since 1963.

In considering this Supplementary Estimate, it is highly relevant to point out that, despite the very large amount of money being spent, there are at present 43,000 fewer jobs in the six development areas than there were four years ago. It is a very sobering thought which the House should take very much to heart that, after all this time and after all the money we have spent on promoting local employment policies, we end up with a net decrease in the number in employment at a similar period in the inflation/deflation cycle to what we were in four years ago.

This finding is confirmed by the National Institute Economic Review, which said in August, 1966: The chart indicates the strength of the forces which have served to neutralise the effect of the policies which, during the last decade, have had as their aim the reduction of these unemployment differentials. The downward trend in Northern Ireland, and the temporary dips in the relative figures for the Northern Region and for Wales, show that unemployment disparities can be reduced, but that the reductions tend not to he long-lasting.

Mr. Deputy Speaker

Order. I have endeavoured to allow the hon. Gentleman some latitude in developing his case in order to come to the Supplementary Estimates. I am afraid that he has not come quickly enough to the point. He must relate what he is saying to the Supplementary Estimates.

Mr. Ridley

I accept that, and I have finished making the case that the result of these policies has been a reduction in the total number of jobs in the places where they are expected to help.

We very much want to know the reason for the increase. To the extent that the Supplementary Estimate gives any help, it says Construction proceeding more rapidly than expected under land and buildings, and New loans have been offered on a larger scale than expected". Other such reasons are given.

I do not think that the amounts in these Supplementary Estimates are nearly large enough to counteract the mistakes which the Government have made. Replacing free depreciation by the investment grants was a very serious mistake and one which has hit the development districts. The Selective Employment Tax has hit the service industries and, in particular, has accentuated the problem in the North of Scotland and in the South West. We had a debate on the South West earlier today.

There can be no difference between us that these measures have not made the Government's policy any easier and I should have thought that it was necessary to increase the supplementary grants in this Estimate to a much greater extent to counteract the effect of the measures I have mentioned. The 10 per cent. drop in investment will severely hit the capital industries—steel, coal and shipbuilding. Both steel and coal expect a drop of 100,000 in employment. This will hit the regions first. It will hit Tyneside, the North-West, Scotland and probably Wales, and will make the problem much more serious. I do not think that there can be any hope of this very small amount can money making up for the extreme pressure which will come on the regions in addition to the serious deterioration I have mentioned.

The Selective Employment Tax is bad enough for all industry, but in a development district such as the South West or the north of Scotland, where the main industries are tourism and servicing industries, tries, harm that it is likely to continue to do is incalculable. This is unquestionably the main reason for the decline in employment prospects in the South-West.

One can have a much more resolute mobility of labour policy, but I should be quite wrong to develop that subject. I wonder why, after all this time and after spending money amounting to about £40½ million as set out in this Estimate, there has been no progress. Indeed, there are 43,000 fewer jobs in the development districts. This makes a mockery of the Prime Minister's words on 20th July: the difference today … is that we 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 and causing a deep gap between the more prosperous parts of the country and the areas of unemployment. What we have done is to bring the unemployment figures of the two parts of the country much closer together and our policies will ensure that the policies which we have been following for the development areas will continue."—[OFFICIAL REPORT, 20th July, 1966; Vol. 732, c. 642.] That has just not been proved to be so.

The figures I have given show the need for an overhaul of our whole develop- ment of industry policy. The Supplementary Estimate of about £3 million is nothing like sufficient to move the great obstacle which remains in the way of getting the employment pattern evenly distributed over the whole country. We are working against natural forces of a considerable scale. The President of the Board of Trade will agree that the harder we work to promote local employment, the harder we have to work, because the drift goes on: there is still the attraction of the higher wages or better conditions or better jobs in the South and the East. Therefore, we have continually to intensify our efforts to make the development of industry policy work. The President of the Board of Trade will also agree from the figures I have given that so far it has not worked.

I therefore ask the right hon. Gentleman to tell us what this £3 millions expected to achieve, what the prospects are for the future, and how he intends to accelerate the provision of jobs in the development district which are now 43,000 down on the level reached in 1963.

8.20 p.m.

Mr. Ted Leadbitter (The Hartlepools)

Earlier today, there was an interesting discussion on this Vote as it applied to the West Country, and I was surprised to hear the opinions so strongly expressed by tile right hon. Member for Taunton (Mr. du Cann) about the situation in the West Country in recent years. The right hon. Gentleman said that he viewed the present situation with deep concern, adding that he was arriving at the point of anger. This was to exaggerate the situation greatly in the light of the facts, and the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) has similarly exaggerated the situation in this debate.

The hon. Gentleman tells us that, in his opinion, there is no hope of a small amount of money making up for the effects of other measures affecting the regions and he says that there is insufficient in the Estimates. Without hoping or attempting to get out of order, perhaps I may bluntly answer that with two facts. In 1962, expenditure under the Estimates for this kind of development, covering grants for factory building, general purpose loans and grants, and also building, plant and machinery grants was £16,074,000. The Estimates for 1965–66, which can be said to be the first full year under a Labour Government, were raised to £42,314,000. There is a considerable difference there between the performance of the previous Tory Government and the present Government.

I am concerned primarily with an analysis of the effect of this kind of expenditure, and I want to test so far as I can the extent to which the Supplementary Estimates can lead us to reasonable conclusions about what is being done. I take it that it is in order to try to analyse the effect of the exercise of assisting the designated areas and, at the same time, to ask the President of the Board of Trade to define more precisely what the effects are for the regions, particularly the region in which my constituency lies.

Earlier, in connection with the Vote for the promotion of employment, we had from hon. Members opposite some rather unfortunate statements about unemployment. The figures for mid-January this year show an unemployment level of 1.9 per cent. nationally. The figure for the Northern Region is 3.3 per cent., considerably more than for the West Country to which the right hon. Member for Taunton referred, and in my constituency it is approximately 5 per cent.

I have two observations to make on that last figure. First, I express a deep sense of appreciation that, during the last two years, under a Labour Government, the level of unemployment in my constituency has dropped from 12½ per cent. to 5 per cent. My second comment is that 5 per cent. is considerably higher than the national average and, therefore, the greater reason to analyse the provision in these Supplementary Estimates.

Such analysis is exceptionally difficult because, although we talk in the language of Estimates, we sometimes forget that Estimates become expenditure in some form, and it is on the expenditure side that one finds great difficulty. For example, sums are to be expended in the relevant period, that is to say, up to the end of March, 1967, but if we take the period of a year, which one can understand much better, the sum expended in any one financial year is not necessarily the same as was estimated for it. Analysis, therefore, becomes difficult. We may talk about what we expect or hope to see put into practice in terms of assessed expenditure, but discussion of Estimate and expenditure becomes confusing when we have to narrow the argument down to Supplementary Estimates.

A second cause of confusion is that the expenditure itself cannot be considered from one point in a year to another point a year hence. It is a continuing flow, and one cannot talk of expenditure to help designated areas in terms of annual packages. Third, the allocation of any one amount estimated is not fixed rigidly in advance; it is governed more or less by the success or failure of applications received as the year progresses.

The House is always in some difficulty, therefore, and the problem is especially great for a back bencher who has to rely, as it were, on his own researches in assessing precisely what either Estimates in the whole or, as in this case, Supplementary Estimates will do.

I have noted the three subheads under which the Supplementary Estimates have been settled, and I find here, strangely enough, a fourth source of confusion. During the past two or three years, the arrangements for regional designation have been altered. For example, not long ago we could talk about the North-Eastern Region, whereas we have now to talk of the Northern Region. It is exceptionally difficult either to assimilate figures or to make an assessment of what Estimates mean for a geographical area which has been altered in terms of designation as a special area.

I have attempted to keep within the rules of order by bringing the figures under the three subheads of the Supplementary Estimates so far as I can. I wish to confine myself to three subheads which concern the division of the Estimates for the purpose of helping industrial resuscitation in the regions.

Under the north-eastern designated heading is a subhead of grants for factories and buildings. In 1962–63 the Estimate was £2,417,000; by 1965–66 it had been raised to £6,317,000. I understand that the £900,000 in the present Estimates is more or less related to that kind of subhead. Perhaps my right hon. Friend will be able to say whether the general trend of allocation under that subhead is progressive or has been adversely affected by the national economic situation. I find that during the past two years about £11 million has been estimated for the north-eastern region, as against only £5½ million for the two years before the Labour Government came to office. Is that rate of allocation being kept up within the Supplementary Estimates?

I must confess to a general vagueness about general purpose loans and grants, found under the second subhead. One cannot be precise about what general purpose loans and grants are, unless they are for purposes of clearing derelict sites, the provision of ancillary services, or the buying of land for a developer. But I am rather disturbed about what I find under that subhead, because whereas the estimate for the North Eastern region in 1962–63 was £3,153,000, that figure fell in 1965–66. I am looking for a kind of regulator of trend, as I did under the first subhead.

The figure fell to £1,345,000. Can my right hon. Friend tell us if he has experience of, or has information to lead him to believe that there is, some difficulty under that subhead? I believe that to provide Estimates for industrial development the three subheads must be interlinked. They must be able to progress together, and, if there is any lagging on one, that creates a problem for the other two.

To put the matter in blunter language, it seems to me that during the past two years just over £5 million has been estimated for general purpose loans and grants, compared with £10 million in the two years before the Labour Government came to office. Because he does not have the precise information, the backbencher must ask, "What is the significance of this? Is that significance in some way reflected in the Estimate under that subhead?"

A similar question arises under the third heading of buildings, plant and machinery. I am pleased to say that whereas in 1963 there was an Estimate of £1,711,000 under that heading, the Estimate has increased to £6,046,000 during the past year. That could be described as a boost, but a backbencher might come to the conclusion that under one subhead there is a boost, under another there is a kind of retraction, and under the third there is a progressive increase. If he is answerable to his area and his constituency, he must ask whether those three related steps to industrial development are in step or getting out of step.

It will have been noticed that I have had, as I said earlier, to confine myself to the language of the north-eastern Region. This was only possible because of the difficulty of getting the figures and trying to relate them to the Supplementary Estimates. But during the last two years we have had to talk in terms of the language of the Northern Region and, of course, the general regional divisions have altered elsewhere.

I am rather disturbed that, in spite of the considerable increase in moneys made available in the region and the tremendous improvement in factory provision, certain other factors have militated against the kind of improvement in terms of jobs which most of us could reasonably well have expected.

In 1963, in the Northern Region, 2,384,000 sq. ft. of factory space was provided, making available 6,100 new jobs. In 1965–66, a total of 5,574,000 sq. ft. of factory space was made available, producing 18,200 new jobs. If one were a little careless and attempted to confine the examination to two figures like that, possibly to take the opportunity of, say, party advantage, one would come to the obvious conclusion that there had been a tremendous improvement. But in 1964–65 the provisions through the general Estimates and the Supplementary Estimates for factory space was 7,424,000 sq. ft.

Mr. Deputy Speaker (Mr. Sydney Irving)

Order. The hon. Gentleman is going too wide. He is generalising his contribution and not confining it to the reasons for the increase in the Supplementary Estimates.

Mr. Leadbitter

I accept your Ruling, Mr. Deputy Speaker, but perhaps, with respect, I might try to explain the point I was attempting to make. When my right hon. Friend replies, he will have to try to explain why there has been reduction of employment as compared to what a cursory examination of the figures might have led us otherwise to believe. In considering Supplementary Estimates, a pertinent factor in the calculation is the increased provision of factory space and the number of new jobs related to it. One must find and use the known data.

Perhaps I might, with brevity, return to the 1964–65 figure. I was saying that 7,424,000 sq. ft. of factory space was provided, producing 26,200 new jobs. To go back to your Ruling, Mr. Deputy Speaker, the real question is why was it that, within one year, the provision was reduced by 2 million sq. ft. with a reduction in new jobs of 6,000.

Mr. Deputy Speaker

Order. I must insist. The hon. Gentleman is going far too wide. He is not really concerned with the reason for this particular increase but with differences in the figures for various years. He must come back to the point or I must ask him to resume his seat.

Mr. Leadbitter

The patience of back benchers, Mr. Speaker and Mr. Deputy Speaker during discussion of Supplementary Estimates is one of the most commendable things about this debate, because it is only when one slides beyond the boundaries of discretion that one gets a rest in order to recapitulate and attempt to get back to the Supplementary Estimates.

The reasons for these estimates are in the Civil Estimates for 1966–67, and obviously it would be easier to question them. It is also better to be able to question them if one is in a position to analyse the effect of previous Estimates. That is what I have done. Are the reasons for these Estimates those given by the President of the Board of Trade in the Supplementary Estimates? Are they, in point of fact, correct? Under the subheading "Land and Buildings" the reason for the £750,000 increase is that construction is proceeding more rapidly than is expected.

I cannot see how an hon. Member opposite or an hon. Member on this side of the House can argue about that. Indeed, a man would be a fool if he attempted to do so. What I am concerned about—and what I am sure the President of the Board of Trade is concerned about—is whether it is the right rate of increase. Is it the right type of increase? Is it the right distribution of the increase?

These are the kinds, of questions which unfortunately are bedevilling the Northern Region. To give an example, if I were to reflect upon the present position in the Northern Region compared with that in 1962–63 and did not have a critical mind I would have to say that there had been a transformation in the Northern Region. There has been a remarkable injection of new factories, but, unfortunately, the ball has not been kicked in such a way as to achieve the right kind of goal. It seems rather odd—and I am sure the President of the Board of Trade will agree that this is a matter which is taxing his mind—that between 1960 and 1964, the number of employed men dropped from 878,300 to 853,600. This was against the likely result of the injection of new factories which could be forecast by any reasonable yardstick. The change in employment—

Mr. Deputy Speaker

Order. I am sorry, but the hon. Gentleman will have to resume his seat if he cannot relate his remarks more to the increase. He is talking about the whole of the general policy of the Government in relation to local employment, and that is out of order. I hope that, on reflection, he will come back to the point, or I must insist that he resumes his seat.

Mr. Leadbitter

Thank you, Mr. Deputy Speaker. As a matter of fact, I had just arrived at a comma, and four words will get me to a full stop. Why, in spite of the injection, has employment in those areas dropped by 2.8 per cent when the national figure has been a plus?

I thank you, Mr. Deputy Speaker, for the patience which you have shown. It would be ill-fitting and improper to pursue a larger analysis of the employment question. Taking the Supplementary and the original Estimates together, the Government can claim to have provided the maximum possible, within the terms of the economic crisis, to correct the tremendous imbalance which existed between the poverty-stricken regions of this country and the more fortunate. The steps have been bold and imaginative, but they have been taken, as it were, to turn the tide of depression in the Northern and other regions. They were immediate steps, but at best only short-term measures.

Estimates themselves cannot tell us much. I refer to their vagueness and to the difficulties of arranging a clear connection between Estimates and expenditure. Therefore, the only test must be our experience in our own regions. Acknowledgment of the obvious gaps between planning and achievement can only lead us to look ahead and urge my right hon. Friend to heed the warning signs that injections of new factories into an area by themselves do not produce the proper answers to our problems. He must encourage more balanced and more integrated and qualitative development if he is to meet the needs of populations of regions such as mine.

8.46p.m.

Mr. J. B. Symonds (Whitehaven)

I hope that I shall be able to keep within the terms of the Supplementary Estimate, although those terms are very narrow. We have heard complaints about the amount of money which is to be spent, through the Supplementary Estimate, on the South-West where the unemployment rate was said to be 1.4 per cent. My hon. Friend the Member for The Hartlepools (Mr. Leadbitter) asked whether the North-East was having a sufficient share. Various hon. Members have mentioned various places, but the County of Cumberland, which I represent, seems to have been forgotten, to have been put on one side, stuck in a little corner and regarded only as part of the Northern Region whenever someone has thought that perhaps it should be considered.

The Supplementary Estimate refers to the promotion of local employment. How much is to be spent in Cumberland under this heading? The rate of unemployment in Cumberland is 4.5 per cent. and earlier today there was a furore about an unemployment of 1.4 per cent. Hon. Members will be alarmed to hear that in Cleator Moor alone the rate is 10 per cent. A factory has been built there, but I do not know whether provision for it comes under this Supplementary Estimate or under the original Estimate. I have a question about another factory provided for by the Supplementary Estimate. Why has the first factory, which is ready for occupation, not been occupied? I have been informed that manufacturers have been asked to go there but have refused.

A man or woman who refused a job would find the full weight of the Minister of Labour coming down upon them. They would have their benefit disallowed for a period of six weeks. If I tell my people in West Cumberland that almost £3 million has been spent in Supplementary Estimates and that Cumberland must have had part of it, they will ask me: where are the jobs? They will tell me that they still have to sign on at the labour exchange. The average earnings in Cumberland are £11 4s. to £11 10s. a week, not the £18 to £20 a week about which one hears in some parts of the country.

Will my right hon. Friend tell me when he expects the new Government factories at Cleator Moor to be occupied? It is vitally important that this should take place because we are a development district. Has he made any provision for our people at Millom? He must know that unemployment in Millom has gone up within a month by the percentage of unemployment mentioned for the whole of the South-West. It has now risen to 3.7 per cent.

I was present at a meeting last Friday night when there were ructions because the 3.7 per cent. will rise to 4.4 per cent. and men will be displaced from the Hematite Iron Ore Company because the steel industry will not receive the grant for the steel spray process. The President of the Board of Trade must have known that this would occur. Did he make any provision in the Estimate for Millom? He must have had something in mind to make provision for local employment. I hope that my people will have the opportunity to discuss the steel spray question at some later date. The President of the Board of Trade will have this matter before him in the next five or six weeks.

I appeal to the President of the Board of Trade to keep the Northern Region in mind. I come from the North East, but many of my hon. Friends seem to forget that Cumberland exists—an area of which this nation can be proud. When its people were asked to serve this country, they did not say, "No". They said, "We are prepared to volunteer". We appeal to my right hon. Friend to give us work. I hope that in his Supplementary Estimate he has made provision to let these factories at Cleator Moor and to arrange for further employment in Millom. He has been there and he knows the people of Cumberland, because I believe that he has walked a few miles over it. The people look to him for employment, and I hope that they will get it from this Supplementary Estimate.

8.57 p.m.

Mr. Robert Woof (Blaydon)

I shall try to adhere to your Ruling, Mr. Deputy Speaker, but if I have any qualification for participating in this debate, which is on the Supplementary Estimate of the Board of Trade and which deals with the promotion of local employment, it is that I live with this problem in a real sense every day.

What draws my special attention is the sum of £3,150,000 for this operation. How much of it will be invested in my constituency? I have a special reason for asking. In December, 1965, the Government proposed to provide special funds to accelerate the provision of alternative industrial development in areas mainly affected by the acceleration of the closure of uneconomic pits and to help in meeting the social and human costs rising therefrom.

It is enlightening to see the extra provision proposed for promoting local employment. The Estimate for land and buildings has risen by £750,000 to £10,250,990. The Estimate for loans to undertakings has risen by ¢1½ million to £11,500,000. The Estimate for building grants to undertakings has risen by £900,000 to £13 million. I should like to know how much of the sum for building grants and loans to undertakings will go to concerns which are prepared to move to constituencies like mine which are designated as development areas.

As the amount required is for the promotion of local employment, it would defy common sense to deny the problems of local employment. I recognise that the basic difficulties are vast. It is not easy to give a correct diagnosis or to prescribe a ready-made remedy when the wheels of industrial life are under the shadow of depression. The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) introduced into this debate—

Mr. Deputy Speaker

Order. I had to draw the attention of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) to the fact that he was going too wide of the subject for debate. The hon. Member is now guilty of the same offence. The debate is related only to the increases in these particular Supplementary Estimates and the reasons thereof.

Mr. Woof

I must bow to your Ruling, Mr. Deputy Speaker. I was about to explain why I support the extra provisions of the Supplementary Estimates and why I think there are valid reasons for the Government undertaking to introduce these supplements to tackle the question of unemployment.

Even though we have a habit nowadays of developing some new catchphrase—the one used in all modern senses is "redeployment"—I think it much more appropriate to coin a phrase used by the man buried in Highgate Cemetery—"the industrial reserve army". But that actually represents those who are discharged from skilled, semi-skilled and unskilled work. This is what local employment is about, and the Supplementary Estimate helps to retrieve the position of unemployment.

I would like also to explain why more money should be allocated for this purpose, because the problems that arise are of several kinds. While the laying off of workers can be effective and expected to produce some kind of redundancy, it cannot automatically be assumed that the unemployment will be only a short spell. As a consequence, social problems are generated by redundancy and no cosy comfort is provided by overall unemployment statistics.

While I can gain some consolation from the financial implications embodied in the Estimates that we are discussing, we have seen plenty of the fruits produced by the industrial working civilisation and we have learned to think of economic relations as being as much the subject of change and evolution as any biological organism. But when we have to come to deal with a situation in which these Estimates are actually to promote local employment, it means facing up to those workers who are concerned with difficulties that are encountered in securing alternative employment which is also a valid reason for enlisting my support for these Estimates.

It is in such circumstances that it is not curious that the times are pregnant of great changes in which the least observant must be convinced. That is why I also understand that the Government have added these additional financial provisions. They are highly welcome, because even a superficial acquaintance with the means and method of changing things can hardly fail to leave the impression that no limit is set to the submerging of many of the old landmarks in the old industrial areas. It is encouraging to note that the Supplementary Estimates will go some way to develop new industries in development areas and areas that are affected.

There is sufficient to be seen to give us a clear view of the variety of problems with which we have to deal and the startling contrasts that those problems involve. It behoves us to learn what we cm, so that we may be able at least to remedy so much of the consequences as are capable of human treatment.

The posture of affairs in an atmosphere that is breathing for Government financial assistance is crucial to combat local redundancy.

Mr. Deputy Speaker

I am sorry to interrupt the hon. Gentleman again, but he is adducing general considerations that are applicable to the whole Estimates, when we are considering only the Winter Supplementary Estimates, which are very limited.

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

Mr. Deputy Speaker, could we have your guidance? When one comes to look at the figures, it is clear that one cannot identify the money that is being expended on any particular project. As I understand the figures, they represent merely an increase in the cost of the previously decided programme. It would seem to me, though far be it from me to set myself up as an expert on procedure, that it is quite impossible to discuss purely the £3,150,000 increase without reviewing the whole programme under which it arises. The £3,150,000 is not allocated to any specified project. It is merely an increase of the cost of the whole programme. With respect, I should have thought that we were entitled to range over the whole field of this branch of the policy for which the right hon. Gentleman is responsible and for which he would require this extra money.

Mr. Deputy Speaker

The hon. Gentleman's difficulties are shared by the Chair. The Chair has allowed some latitude in the preparation of the case to deal with the Supplementary Estimates. But it is quite clear that we can only discuss the reasons for the increase. Unless remarks on the main Estimates are related to the reasons for the increase, I am afraid that they are out of order.

Mr. Woof

With respect, Mr. Deputy Speaker. You will appreciate that it is very difficult to try to strike a match on a bar of soap. I must submit to you that I would expect that the Supplementary Estimate under discussion will go some way towards helping to build factories where alternative employment is not at present available. After all, in the Civil Estimates one finds the phrase "promotion of local employment." If there is no unemployment, there is no need to appropriate moneys in order to create employment. That is how I see the Estimates.

I say that because a great many of my constituents have been victims of this kind of redundancy. It has not been sprung upon them on account of the July measures. It has been going on for years. The constituency has most certainly seen an almost complete upsetting through the contraction of the mining industry, accompanied by the closing of pit after pit—

Mr. Deputy Speaker

Order. I do not want to bring the bar of soap out again, but the hon. Gentleman is out of order. Unless he can relate his remarks to the increase, I am afraid that I must ask him to resume his seat.

Mr. Woof

I must admit that it may be difficult to estimate expenditure with any precision to improve the efficiency of local employment. I am obliged to say that, because the driving impulse of my personal interest, however concentrated or prolonged, is not mere web-spinning to entangle or confuse such an issue which coincides with the welter of economic and social problems.

Therefore, in the midst of all, we are told repeatedly that the standard of living, like the possible level of material comfort, can only be determined by raising production, raising exports and increasing efficiency. This, as I understand the appropriation of these Estimates, is to enable factories to be built and developed in the development areas. I hope it will be understood why my constituents think that they are entitled to a fair share of the money which Parliament is being asked to vote in these Estimates.

9.10 p.m.

Mr. William Baxter (West Stirlingshire)

I seek to intervene in this debate for two reasons; first, to congratulate the Board of Trade, and in particular my right hon. Friend the President of the Board of Trade, on the excellent work which has been done over the last two years. There is no doubt that my right hon. Friend's policy has led to a great deal of satisfaction, hope, and indeed inspiration throughout the country, and it would be remiss of the House to begrudge him this Supplementary Estimate, especially if he seeks to develop a factory in West Stirlingshire. Being the Member for that part of the country, I would be the last person to object to these Estimates on the grounds that he was proposing to do so.

My right hon. Friend is a man of great calibre and ability, and he has sought to be reasonable to all parts of the country, but he must have had a bad attack of near-sightedness when visiting Scotland, because he failed to recognise the needs of one particular part of my constituency. I am thinking of the villages of Cowie, Plean, Fallin and Bannockburn. All the pits in these areas have closed over the last two or three years, and there is no alternative employment there.

I would not like to think that an Englishman was so opposed to giving a little credit where credit was due that he would say that because Bannockburn was involved he would not put a factory there. I would not like to think that my right hon. Friend was that way inclined. There must be some reason, though I have never been given a valid one why no consideration has been given to building an advance factory in that part of my constituency, and it is on this simple basis that I intervene in the debate.

The County Council of Stirlingshire has spent a considerable amount of money on providing new schools, new houses, clinics, and so on, in those villages, but all that expenditure will count for nought if my right hon. Friend does not recognise the need to establish one or two factories there.

It is true that a certain amount of work is available in the adjacent areas, but this necessitates the provision of a great deal of transport, and transport is a very costly thing these days, not only for the nation, but for the individual, and greater consideration should be given to siting factories in such a way that we can save the country money.

I only make that claim. I could mention other parts of my constituency—

Mr. Deputy Speaker

Order. I hope that the hon. Member will not do that. He is still not addressing himself to the reasons for these Supplementary Estimates, and the increases.

Mr. Baxter

I beg your pardon, Mr. Deputy Speaker, but I thought that I had given a very valid reason for doing so, and, having looked through these Estimates, I can see no place which is more deserving of factories than is my constituency. There is nothing here to show whether my eyes are deceiving me, and I think that I am right to raise this point.

Mr. Deputy Speaker

I think that the hon. Member is in order if, interrogatively, he poses the question whether these Estimates include work in his constituency, but he would be out of order if he went round all the districts in his constituency and asked the same question.

Mr. Baxter

I bow to your Ruling, Mr. Deputy Speaker, and as the hour is growing late, and many other hon. Members wish to take part in this debate, I shall conclude my speech.

I ask my right hon. Friend not to take my plea lightly. I ask him to give serious consideration to the issues that I have raised. If he does not, he will go down not only in my estimation but in the estimation of many people in Scotland. I invite him to look round that part of Scotland. I shall be happy to treat him as hospitably as I can. That hospitality will not be included in the Estimates. Nevertheless, it will be very generous and helpful in assisting him to make up his mind to give reasonable consideration to the claims of the areas that I have indicated.

9.15 p.m.

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

I rise with limited optimism as to my ability to keep in order, but I take it that as the heading in the Supplementary Estimates is concerned with the promotion of local employment it is in order to ask the right hon. Gentleman to interpret the increases for which he is asking in terms of an increase in the number of jobs available.

Looking at the detail—if such it can be called—of Subhead A, we have an increase of £750,000 because the construction of the buildings is proceeding more rapidly than expected. Presumably these buildings are being completed more rapidly and are therefore available at an earlier date for the provision of employment. The same argument is valid under Subhead D, where new loans have been offered on a larger scale than expected. Presumably this means that there has been a bigger influx of industrialists willing to take advantage of the special financial provisions available in development areas and that, again, this indicates a widening of employment opportunities.

If that is so, I take it that the right hon. Gentleman will be able to give some indication what this speeding-up of construction and loan granting represents in terms of increased employment. It seemed to me that my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) put his finger on the crux of the problem, namely, the extent to which the policies in respect of which this money is being contributed are increasing the number of jobs available and preventing or slowing up the drift from development areas to other areas.

We would all agree that since the war this has been one of the biggest problems in the management of the economy. We have what hat; come to be known as over-full employment in certain prosperous areas of the West Midlands and the South East, but we also have an unacceptable degree of unemployment in the development areas.

It was to this fact that my hon. Friend referred when he recalled a statement made by the Prime Minister on 20th July, to the effect that the fairly severe restrictions announced on that date would not affect development areas. My hon. Friend gave fairly strong evidence to show that this undertaking is not materialising, and that there continues to be a falling-off in the number of jobs in relation to the working population available in development areas, as compared with the past, with the result that there is either more unemployment or more emigration from development areas to other areas.

This must be regarded as a criticism of the policy for which the right hon. Gentleman is responsible and on behalf of which he is asking for more money, on the ground that he is doing rather better than he expected. This speeding-up must be very much to his advantage. I hope that he can dispel the fears and the convincing arguments of my hon. Friend that far from curing the disease he is not even managing to hold the position steady, and that there is a continuing drift and a lowering of the rate of employment in relation to the working population in these areas.

Despite the various congratulatory remarks made by some of his hon. Friends—made more in their attempts to keep in order than to be genuinely congratulatory, I think—the right hon. Gentleman should not be complacent by merely asking for more money and by imagining that that represents success. We want to know what it represents in terms of increased jobs being provided in these areas and in terms of the success of the Government's policy, in accordance with the Prime Minister's undertaking. We want to be assured that, to some degree at least, the development areas are being insulated from the severe restrictions which have been imposed on the economy generally and which, in the past as well as at the present, always affect the development areas more severely than the rest of the country.

9.21 p.m.

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

I thank my hon. Friend the Member for West Stirling-shire (Mr. W. Baxter) for his remarks and I assure him and the House that I am far from becoming complacent, least of all about West Stirlingshire and not even about Bannockburn.

The main reason why we are asking for an extra Winter Supplementary of £3,150,000—and I should tell the House that in the Spring Supplementary I shall probably be seeking a further £5 million—is that new industrial projects in development areas are expanding faster, I am glad to say, and payments are growing faster, than we estimated some months ago. The original net vote for £37,342,000, which is now likely to be exceeded by some £8 million over the whole year, itself compares with £29,867,000 actually spent in the previous year.

The hon. Member for St. Ives (Mr. Nott) earlier quoted the then Tory Government's Estimate of £41 million for 1962–63 as evidence that more was being spent then than now. He did not say, and I believe that he did not know, that the actual sum spent in 1962–63 was not £41 million but only £24 million. This year we expect to spend more than £41 million, and it is really more than that because the investment grant element in the development area grants are not included in these Estimates.

Under the individual subheads, provision of land and buildings—subhead A—shows an increase of £750,000 over and above the £9,500,990 originally sought. It is now the policy of the Board of Trade, not merely to build advance factories in the under-employed areas on a generous scale, but also to buy land in advance of the decision to build more factories because this enables us to cut out the long and laborious legal delays which have faced us in acquiring land in recent years. Expenditure here depends not only on the size and number of the projects, but on other things, such as the effect of weather on building work, the speed of construction and deliveries of materials and so on. The increase in expenditure over estimates in the first half of 1966–67 has been due to quicker expansion in all these respects.

Subhead D, loans to undertakings, originally estimated at £10 million now needs a further £1,500,000 for the year. The amount here depends partly on the number of new cases and partly on the rate of progress of large and fast-moving projects, which vary widely from year to year. New cases this year have been greater than the Board assumed. I think, therefore, that we can all welcome the additional estimate needed here, since it means faster capital expenditure in development areas.

So with building grants to undertakings. The estimate of £12,100,000 is to be increased by £900,000 for the half year. Payments here have been rising quarter by quarter, but in no quarter previously have they reached an annual rate of £10 million. This year payments in the very large cases have built up more rapidly than we assumed that they would, and in the first half of the year they approached £6 million, one-third of which was for very large projects.

My hon. Friend the Member for The Hartlepools (Mr. Leadbitter) asked whether this measured the rate of progress. It may not for these reasons exactly measure the trend, but I assure him that the trend is upwards. The total of all assistance offered by the Board of Trade on industrial expansion in the development areas has risen from £40.5 million in 1964–65 to £43 million in April-December, 1966, which is an annual rate of £57 million. We have, of course, been continually cutting down delays in procedure. That is one reason for the speeding up of expenditure.

It is encouraging for the future of employment in the development areas—this is one example of why these estimates are increasing—that the number of projects coming forward to take advantage of these loans and grants, despite the general restraints on the economy in recent months have not fallen as seriously as some feared in this period. In 1966 as a whole, to measure the demand for extra loans and grants in this way, total industrial development certificate approvals exceeded those of 1965 by 12 per cent. What is more encouraging and more directly relevant to these figures is that the share of industrial development going to development areas grew still further in 1966. That is one reason for the Supplementaries. The share going to the South-East fell further.

The development area share has risen from 24 per cent. in 1962 to 39 per cent. in 1965 and 41 per cent. in 1966. The share going to London and the South-East—the converse of this as a result of the tough I.D.C. policy which I have always promised to follow—fell from 32 per cent. in 1962 to 15 per cent. in 1966.

Mr. Corfield

I take it that those percentages are based on floor area?

Mr. Jay

Yes, they are in terms of square feet. That is a very substantial swing in the proportions. It is bound, I think, to improve very greatly the employment prospects in the development areas in future but it must, of course, mean higher expenditure and, therefore, Supplementaries meanwhile. In 1966 there was a very welcome increase in new projects in Wales which, in terms of square feet, were actually double those of 1965, which were in turn 50 per cent. up on the five years 1960 to 1964. In the Northern Region, including West Cumberland, there was a sharp increase in 1966, which was 62 per cent. above the 1960–64 average.

In passing, perhaps I should be in order in saying that this, of course, includes West Cumberland where a number of projects are going forward, an area which I shall never forget or neglect, as I think my hon. Friend knows. In Scotland the 1966 figure was below the 1965 record, but the average of the two years, 1965–66 was 78 per cent. above the previous five years average.

Mr. W. Baxter

Is there any valid reason for this reduction in expenditure in Scotland as against the previous years? Will this be made up in the following year?

Mr. Jay

It was not a reduction in expenditure, but a reduction in I.D.C. approvals because there was an exceptional increase to a record figure in 1965, but the total last year was still very high. At the other end of the country, in the South-East, approvals in 1966 were below the earlier five years and this was the only region where that was true. I believe that these figures show that it is possible by I.D.C. policy to influence substantially the spread of industrial development between regions and that in the last two years we have certainly succeeded in doing so.

The House would probably like to know the progress we have made in the four advance factory programmes which have been launched in development areas in the last two years, which are financed by these Estimates, and the rate of increase in which is one reason for the Supplementaries. Altogether these programmes included 94 factories, the last 21 of which were announced as late as November, 1966. Of the 94, 36 will be in Scotland, 24 in Wales, and 36 in the North East, Cumberland, Merseyside and the South-West. So far, of the total of 94, 24 are already completed, 35 others are building, and 24 have been allocated to tenants.

We have had reasonable success so far in finding tenants, and over the whole of the Board of Trade factory space financed in this way rather more than 98 per cent. is occupied at present. I assure my hon. Friend the Member for West Stirlingshire that we shall find tenants for the factories he is concerned with as quickly as we can. We are indeed pushing on with the whole of these programmes as fast as we can, despite the previous legal delays which are sometimes exasperatingly prolonged.

Industrial estates in the development areas are also being expanded and new ones constructed. That is one reason why we need provision for land as well as buildings in this area. At the new 330-acre estate on Tees-side the first phase of site development at a cost of some £1 million has been completed. One advance factory has also been completed and a second will be finished in a few weeks. We have given approval for two other Government-financed projects for individual firms on this estate. At Knowsley—or Kirkby, as it is sometimes called—on the outskirts of Liverpool, where we have been held up by extremely protracted legal processes, I am glad to say that I shall sign the necessary contract with Liverpool Corporation within the next few days.

In Scotland, where this expenditure is also mounting, Bellshill—not, I am afraid, in the area of my hon. Friend the Member for West Stirlingshire, but not so far away—is developing rapidly and two factories have been taken there by Honey-wells, who are already at Newhouse. At Falkirk, which is nearer to my hon. Friend, we are acquiring 95 acres for a new estate. I hope this is good news to my hon. Friend.

In Wales the chief new venture for which this expenditure will partly be needed is at Llantrisant, which is within easy daily travelling distance of the Rhondda, and where 72 acres of suitable land are being acquired. Suitable industrial land in that area, because of subsidence and other problems, is not easy to find. Legal formalities here should, we hope, be completed this month. Approval has already been given for two Government-built factories here, one of 200,000 sq. ft., and both of which we hope to start building in the early part of this year. Another 86 acres of land are being taken over from the Ministry of Defence for another estate at Kenfigg, and work has begun.

New estates are also under way in Dundee and Glasgow.

In so far as we successfully attempt to speed up processes, it accelerates expenditure and therefore gives rise to the need for these estimates.

The unemployment figures, I believe, show very strikingly that all these efforts, both by way of Board of Trade loans and grants and development of factories and estates, have begun to lay a much stronger foundation in these areas and to shield them from the general increases in unemployment over the past year. That, indeed, is the justification for these Estimates.

If it is in order to answer the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), I will answer him. It could not have been expected that the development areas and regions would not feel at all the temporary rise in unemployment which followed the measures of last July, but the significant fact is that unemployment has risen markedly less in these regions than in the country as a whole.

Taking the period January, 1966 to January, 1967, the rise in Great Britain was 72 per cent., in Scotland only 26 per cent., in the Northern Region 43 per cent., and in Wales 40 per cent. Wales has previously lagged behind, mainly, I think, because such a large part of it was descheduled almost entirely by the previous Government.

Mr. Speaker

Order. I hope that the right hon. Gentleman will not broaden his reply too much.

Mr. Jay

I am trying to tread a careful path between answering the questions put to me and keeping within order, Mr. Speaker. I shall content myself with saying that the figures show that the measures taken and the expenditure made under these headings have succeeded in shielding these areas against the rise in unemployment which would otherwise have occurred.

My hon. Friend the Member for The Hartlepools rightly said that there must be some other force militating against us. There is. This force is the decline in the coal industry in all these areas. This has meant a large decline in employment, against which we have been fighting by these methods, which was not occurring in earlier years. This is precisely one of the reasons for the expenditure, and, if we had not carried out these policies, the decline in the coal industry of between 150,000 and 200,000 men over recent years would have led to much higher unemployment in these areas than prevails at present.

Mr. Thomas Swain (Derbyshire, North-East)

I realise that the coal industry has been run down considerably in what we call the depressed areas, but what does the Board of Trade intend to do for areas such as North Derbyshire where the coal industry has been run down equally severely? Nothing has been done, and the local authorities are having great difficulty in getting the Board of Trade to grant us industrial development certificates. The population of North Derbyshire is having to migrate to other counties—

Mr. Speaker

Order. With respect, we cannot discuss general policy on this Vote. Question and answer must be linked to the Supplementary Estimates.

Mr. Jay

I think that all I can say in reply to my hon. Friend and remain in order is that I should not be able to expend any of these moneys in North Derbyshire because it is not a development area, but the main remedy for the problem that he raises is the freer grant of industrial development certificates in those areas. However, I pursue that no further now.

For all the reasons I have given, I believe that the money covered by this Vote is being wisely invested—it is investment rather than expenditure—and I hope that the House will approve the Estimates.