WEST COUNTRY (ECONOMIC PROBLEMS)

HC Deb 01 February 1967 vol 740 cc521-75

3.39 p.m.

Mr. Paul Dean (Somerset, North)

The proceedings of the last half hour have shown that hon. Members sometimes find it difficult to say what they want to within our rules of order, and to understand the rules under which we operate. I realise that I must tread rather carefully this afternoon to keep my remarks within order.

I am very grateful to have this opportunity of raising the economic problems of the West Country under the Supplementary Estimate Class IV, Vote 3. I am glad to see, as I am sure the whole House is, the President of the Board of Trade here to listen to the debate, and I am sure also that the House will want to extend a welcome to the new Joint Under-Secretary of State for Economic Affairs and wish him well in his job. But I must also commiserate with him in view of the tremendous problems of regional employment which he has inherited.

The West Country is an area of great beauty but precarious economy. Within the region, which stretches 200 miles from Bristol and Severn-side in the north to Cornwall in the south, there are great variations and differences in the economic problems, and, as is well known, the further south one gets the greater are the local employment problems. Indeed, they are getting more acute month by month. They are going from bad to worse and the outlook is getting bleaker and bleaker. The problem is now so serious that we are bound to ask the reasons for this Supplementary Estimate, which is designed to promote local employment. We are bound also to ask what it is intended to achieve.

This Vote asks for an additional £3,150,000 for …the promotion of local employment. This is on top of the original estimate of about £37 million. I have no doubt that my hon. Friends, particularly those who sit for development districts, will want to ask the Minister detailed questions on this Supplementary Estimate. I shall confine myself to some general questions directly related to it and the money we are asked to vote.

I ask the President of the Board of Trade whether he can tell us how much of this £3.1 million is to be allocated to the West Country. In particular, can he say, in relation to the Written Answer he gave on 3rd November—when he announced a further programme of advanced factories, with one project in the West Country—whether the Estimate relates specially to the 20,000 sq. ft. that he mentioned in November for the Camborne-Redruth area, or whether it provides for additional factory space in the West Country over and above that provision.

Secondly, how much additional employment does the right hon. Gentleman expect the additional money allocated to the West Country to produce and at what time will it produce it? Further, do any of these provisions for land and buildings, etc. in the Estimate refer to grants for houses for key workers? There appears to be no specific reference to this and I would be grateful if the matter could be cleared up. It is an important point in getting the pump primed in Devon and Cornwall.

The right hon. Gentleman will appreciate that it is important to us to have answers to these general questions as well as to the specific ones in order that we can judge whether this additional money is really to have an impact on the local employment situation in the West Country. I am doubtful as to whether what I imagine will be a small fraction of this £3.1 million would be sufficient to make any noticable difference to the local employment picture.

What is the dimension of this problem? The unemployment figures in the West Country are now worse for this time of year than in almost any year since the war. They have grown from 2.4 per cent, for the region as a whole in October last year to 3.1 per cent, last month. But, far worse than the figures for the region as a whole—which, of course, consists partly of the prosperous area in the north of the region—are the actual figures for the development areas in the West Country.

Mr. Speaker

Order. The hon. Gentleman cannot discuss the economic problems of the West Country as a whole or the unemployment problems of the West Country. He was right in the beginning in what he said, in that he must link up what he has to say with the £750,000 increase for the provision of land and buildings because construction has proceeded more rapidly than expected, the £1½ million for loans to undertakings which have been larger than expected, and the £900,000 increase in the building grants to undertakings. What the hon. Gentleman says must arise within these Estimates.

Mr. Robert Cooke (Bristol, West)

On a point of order, Mr. Speaker. I had hoped to raise this point at the beginning, but perhaps I may be permitted to do so now. You have given notice of this subject being raised within the terms of the Votes within these Estimates. Class VI, Vote 14, relates to the National Health Service and regional hospital boards, providing for a substantial increase of £23 million. Subjects such as that apply very much to the South-West. Would we be in order should we wish to raise them? Although I would not trespass outside the subjects of any of these Votes, if a vote applies to the West Country are we not entitled to raise that subject in the course of this debate?

Mr. Speaker

If the hon. Gentleman were to raise anything which was outside the Supplementary Estimates he would be out of order. If he were to raise anything inside these Estimates he would be within the rules of order, whether in the West Country or not.

Mr. Geoffrey Wilson (Truro)

Further to that point of order, Mr. Speaker. In the notice of the subjects to be taken under Class IV, you referred to Vote 3, but there is also Vote 17, which deals with the British Railways Board. Would it be in order to deal with that subject?

Mr. Speaker

Anything is in order which arises on the Supplementary Estismates. The hon. Member for Somerset, North (Mr. Dean) sought to raise general questions of the West Country. I had to find in the Estimates, and he had to justify to me, references to certain items. That does not prevent another hon. Member raising a matter on another item, always providing that it is within the Supplementary Estimates.

Mr. Dean

Thank you for your Ruling, Mr. Speaker. What I am seeking to do is to find out how much of this £3.1 million for local employment is to be devoted to development in the West Country. I was hoping that you would allow me to make a case for a substantial part of this money being allocated to the West Country in view of the rise in unemployment in its development areas compared with the figures in other parts of the country. I can do this extremely briefly if you will allow me.

Mr. Speaker

The hon. Gentleman can proceed as long as Mr. Speaker does not intervene.

Mr. Dean

Thank you. The unemployment position in the development areas of the West Country makes a very strong case for a substantial allocation from this £3.1 million to them. The unemployment figure in the West Country development areas is 6 per cent. whereas the figure in the Merseyside development area is 3.1 per cent., in the Northern development area 3.8 per cent., in the Scottish development areas, 4.1 per cent., and in the Welsh development areas 4.6 per cent. In other words, the problem of unemployment in the West Country development areas is considerably greater than in the development areas of other parts of the country. If one looks at the rise in the level of unemployment since June and studies the latest available figures, one finds exactly the same picture—that the percentage increase in the development areas in the South West is 160 per cent. That is substantially greater than that in the development areas in other parts of the country. Therefore, I hope that the right hon. Gentleman will feel that these figures in themselves make an exceedingly strong case for a substantial allocation of this additional money to the development areas in the West Country, and that he will be able to give us assurances on that.

These figures make a mockery of the promotion of local employment in the West Country, and in other regions, which the Government are always professing. This is not promoting local employment —it is promoting local unemployment. No wonder that people in the West Country have lost confidence in the ability of the Government to promote local employment in the area. No wonder that the Government's own nominee, the Chairman of Our Economic Development Council, very nearly resigned for this and other issues—because of lack of confidence in the economic policy.

There is another reason why I ask for detailed explanations of this Estimate. It relates to factors which are pulling in the opposite direction. What good can a fraction of £3 million do to local unemployment in the West Country, when we are paying out £16 million net in Selective Employment Tax?

Mr. Speaker

Order. Now the hon. Gentleman is tempting himself. He must come back to the Estimates.

Mr. Dean

The point I was seeking to make was for a substantial allocation, in order to offset what is being taken out in Selective Employment Tax. But in view of your Ruling, Mr. Speaker, may I pass on to say that we are being given a tiny blood transfusion in this supplementary Estimate, but it has to be set against the very much bigger blood-letting through the Selective Employment Tax which we are paying.

I pass now to the final point which I wish to raise. Does this Supplementary Estimate provide for improved communications? I have looked carefully through this, but it is not clear whether it does.

Mr. Speaker

Order. The hon. Gentleman must real his Supplementary Estimate. There is no word here about improved communications. He knows very well by now, because he has read this as closely as I have, that there is no mention of communications in this Supplementary Estimate.

Mr. Edward du Cann (Taunton)

On a point of order, Mr. Speaker. We realise that we are all in difficulty in this matter. I am sure that I speak not only for myself but also for my hon. Friend, and, indeed, for hon. Members on both sides of the House. One must understand, and we do understand, that the area of discussion here is bound to be circumscribed, and we are very sympathetic to the difficulty with which you, Sir, are faced. However, having said that, we are discussing the provision of money designed to alleviate unemployment in particular districts. Is it not, therefore, in order to discuss, if shortly, the economic situation in general in so far as it relates to this particular action on the part of the Government? Is it not in order, for example, to ask the Government, if I may give you an illustration, "How can it be right to spend money in this way, or are we doing the right thing in voting this money if these factories are to be under-used or unused?

My hon. Friend the Member for Somerset, North (Mr. Dean), as I understand it, is arguing that other Government policies—which presumably the right hon. Gentleman decides in liaison with his colleagues— are accentuating the position. For that reason there is very great difficulty, presumably, in getting these factories used. In other words, we are talking around the question as to whether this expenditure is justified.

If these factories are to alleviate unemployment, is it not then right to discuss, even if shortly and incidentally, factors which are leading to unemployment in this area.

Mr. Speaker

I am quite sympathetic to the right hon. Gentleman. But this is not a new point. This procedure has been happening for many years. When we discuss Supplementary Estimates and the Consolidated Fund Bill on the Supplementary Estimates, we cannot discuss the policy behind the whole Estimates. We are discussing the Supplementary Estimates. We are not debating at the present moment the Board of Trade promotion of local employment in general. We are discussing three specific increases, which, as I have quoted already, are given for three specific reasons. The first is—and I quote— "provision of land and buildings because construction is proceeding more rapidly than expected". The second is: "An increase of £1,500,000 in loans to undertakings, because new loans are on a larger scale than expected". The third is" Building grants to undertakings— grants toward the difference between the market value and cost of buildings". What the hon. Member and the right hon. Gentleman must do is to pin their arguments on these. It is a limited debate. It always has been.

Mr. Dean

In view of that Ruling, Mr. Speaker, I will, of course, try to keep within the bounds which you have laid down. May I now ask the President why some of the advance factories which have been built are not yet occupied? Is he satisfied that the additional money which will be made available for the provision of land and buildings for these two undertakings, for building grants to undertakers—and I hope he will tell us how much will be available for the West Country—will produce results, that people will be prepared to take up this money, and that we shall not find ourselves in the position of spending public money to assist in dealing with this problem when some vital aspects of it are missing?

My right hon. Friend the Member for Taunton (Mr. du Cann)—whom we are all delighted to see on the Opposition Front Bench—was instrumental in setting in hand in 1963 an inquiry into the economic problems of the West Country, which resulted, in due course, in the report which was produced in 1965. I hope the President of the Board of Trade has read the report, because it produced some extremely valuable information about local employment problems. It also dealt with the question of underemployment and of activity rates, which is very relevant to the effective use of this money which we are voting. On this point the Report states: The low Activity Rates of the Region are the most striking evidence of surplus manpower. They indicate that…17 per cent, of the working population…could be working if the region had the same Activity Rate as the country. This figure, qualified by 'concealed' employment in agriculture and the Holiday industry and by early retirement, constitutes a measure of unutilised resources which ought to be of major value to the country as a whole. That is what we are asking for in this debate. We are not asking for permanent crutches for the West Country. We are asking for a fair chance to make our full contribution to the prosperity of the country as a whole.

4.19 p.m.

Dr. David Owen (Plymouth, Sutton)

I am very glad that we have the opportunity to discuss these Estimates, because they show an increase, and this is something for which we on this side of the House are extremely grateful. It shows that the Government are conscious of the problems of the development areas and of those parts of the regions which have suffered considerably for many years.

The Government have taken a courageous stand in tackling the very severe problems in those regions of the country where unemployment tends to be very high, particularly at periods of deflation. Therefore, I welcome the Supplementary Estimates and the expenditure which they will allow, and I welcome the direction in which they are being aimed, that of improving local employment prospects and facilities in those areas which have been hardest hit. I hope that hon. Members opposite who wish to discuss this subject will not do so in any spirit of quibbling. We should be grateful that the Government are approaching the problem with the courage and determination which they have already shown and which is to be continued despite a period when credit facilities and money are very tight.

I want to ask my right hon. Friend the President of the Board of Trade to consider a little more closely where these Supplementary Estimates are to be spent.

Mr. R. J. Maxwell-Hyslop (Tiverton)

Before the hon. Member for Plymouth, Sutton (Dr. David Owen) leaves his invitation to gratitude, will he say whether he thinks that a patient who is poisoned by a doctor should be grateful if the doctor then thinks of applying an antidote?

Dr. Owen

This patient, the regions, has been hard hit on numerous occasions before. For some time the Government have been asked to pursue policies which are aimed at the long-term, and I believe that that is what they are doing. We have had enough of the stop and go of the economy in general, particularly when that stop and go has hit the regions. What we are asking the Government to do and what these policies are largely directed towards is sheltering the regions as far as possible.

Mr. Deputy Speaker (Sir Eric Fletcher)

I am sorry to interrupt the hon. Gentleman, but we cannot on a Supplementary Estimate discuss the stop-go policy. All we can discuss is this proposal to vote a Supplementary Estimate for specific purposes.

Dr. Owen

I must apologise, You will realise, Mr. Deputy Speaker, that I was rather taken off the course of what I was saying by the hon. Member's rather irrelevant interruption.

I return to the subject of how these Estimates are to be spent. Are they to be spent as in the past, or is there to be a specfic and special emphasis on how they are spent? I gather that to discuss that will be in order. I understand that a large part of the Supplementary Estimate will be going to the West Country, and we are extremely grateful for that. However, will the President of the Board of Trade look at the overall policy which has lain behind the spending of this money in the past? Will he specifically consider the problems of growth areas? We accept that this money should be spent in the development areas and in regions which have suffered a previous imbalance, but we urge on my right hon. Friend that he should retain the concept of growth centres. In particular, we draw his attention to the fact that in the past this kind of pending by the Board of Trade has tended to be concentrated on growth centres, and the predominant growth centre in the far south-west is Plymouth.

I am extremely perturbed by the exclusion of Plymouth from the development areas, because, whereas in the past this sort of money tended to be spent in Plymouth and similar growth centres, it is now to be largely withdrawn from them and spent on a larger development area. I welcome the increase in the size of the area, which involves most of Cornwall and parts of North Devon, but I ask my right hon. Friend to consider whether in the long-term it is dangerous to exclude Plymouth, as that inevitably results in many factories—and we are to spend money on land and buildings and loans for undertakings and building grants—being scattered unevenly over the areas so that it is difficult to attract new population. Continuing depopulation, with a shift of skilled workers to the Midlands and elsewhere, is one of the problems of the West Country. In the scattered areas of the far south-west some of the development area policy is working against what the Government wish to achieve.

In a growth centre, as well as attracting industry and new factories, one needs growth of population and encouraging skilled workers to move into the area. While I welcome all that my right hon. Friend has done for the development areas, I ask him to consider Plymouth. The population of Plymouth has remained remarkably stagnant for many years. The city council has warmly welcomed attracting overspill population to Plymouth which has previously been regarded as a natural growth centre.

What we need in the West Country is to be able to attract population and, with it, industry. We need new industry with skilled workers, coming from the Midlands or London, able to keep the workers we already have in the West Country in full employment and to train our workers and, most important in Plymouth, to diversify Plymouth's economy. This city is very dependent on one major industry, the dockyard. The President of the Board of Trade has a special responsibility to ensure that Plymouth's economy—

Mr. Deputy Speaker

I am sorry to interrupt the hon. Gentleman again, but on this Supplementary Estimate we cannot discuss the general policy on which the main Estimate was approved. Therefore, if Plymouth is not covered in the Supplementary Estimate, the hon. Gentleman is not entitled now to argue that money should be diverted to Plymouth.

Mr. W. A. Wilkins (Bristol, South)

On a point of order. Obviously it will be difficult to raise any matters on these Supplementary Estimates as they stand. I wonder whether you can give us some guidance, Mr. Deputy Speaker. If the President of the Board of Trade told us the location of the land and buildings the purchase of which has accelerated expenditure to such an extent that we require an increase of £750,000 and to which undertakings the proposed loans are to be made or are being made, we should be able to keep in order by debating matters which arise under the Supplementary Estimate.

Mr. Deputy Speaker

I cannot require the President of the Board of Trade to speak, except when he wishes to rise. I repeat the Ruling which Mr. Speaker gave yesterday when he said in connection with the Supplementary Estimates that where they represented, as in this case, only a limited increase in the original grant, then the debate must be limited to the reasons for the increase and not extended to questions of policy for which the original grant was sought. Hon. Members are therefore entitled to ask the President of the Board of Trade to indicate the reasons for which the additional £3 million is required. If they are not satisfied with those reasons, they can put questions, but they cannot debate the general policy on which the original Estimate was voted.

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

rose—

Mr. John Nott (St. Ives)

Further to that point of order. If at this stage the President of the Board of Trade gives us a specific list of where the increases will fall, the debate on this Supplementary Estimate will degenerate into a discussion of how much factory space should be allowed in Nether Wallop, or wherever it is where the increase has occurred. That will limit the scope of discussion and confine it far more narrowly than was the case with Mr. Speaker's Ruling yesterday.

Mr. Deputy-Speaker

I cannot accept that. Mr. Speaker made it quite clear yesterday that debate on Supplementary Estimates was necessarily narrow. The debates are confined to the specific purposes for which the Supplementary Estimates are required.

Mr. Maxwell-Hyslop

Further to that point of order. Am I right in thinking that it is perfectly in order to argue that a given entry in a Supplementary Estimate ought to be larger than it is so as to make provision for whatever it is which one is advocating to be covered under that heading?

Mr. Deputy Speaker

No. That would not be in order.

Mr. Robert Cooke

I would like clarification on another matter, relating to that raised by my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop). You said that Mr. Speaker's Ruling stated that the debate would naturally be limited if there was a limited increase in the estimate. I am looking at Class VI Vote 14, and I see an increase in the nature of £23 million to the moneys to be advanced to the regional hospital boards and boards of governors. I take it that in the case of such a very large sum of money a fairly wide debate would be allowable on the subject?

Mr. Deputy Speaker

We had better leave Class VI until we come to it. We are now on Class IV.

Dr. Owen

I understand your Ruling Sir, and will do my best to keep within its limits. As I understand it, we must not make special references to future policy, and although I have expressed the wish that the President of the Board of Trade will look at Plymouth as a growth centre and include it in some form of development area, it is not in order to continue along those lines.

I conclude by saying that I consider that the Government, by presenting Supplementary Estimates at this stage, have kept their election pledges to the West Country, that they were prepared to look after development areas, and those areas of the country which, for many years now, have been allowed to develop with this degree of economic imbalance to which I referred. We welcome the fact that the President has come to the House to ask for increased Estimates, and we hope that this will insure a long-term steady growth in the potential of the West Country and particularly the far South West.

Mr. Maxwell-Hyslop

It will not.

4.33 p.m.

Mr. Wingfield Digby (Dorset, West)

There are few enough opportunities when we can talk about our special problems in the South-West. The Scots have their Grand Committee and so have the Welsh, and it is becoming increasingly evident that the South-West has special problems of its own, and is not just a geographical expression. It is, therefore, very disappointing to know that our debate this afternoon is to be so circumscribed. I shall make every effort to keep in order, but I do not think that it will be very easy. In the circumstances it is a pity that we could not have been confronted with rather fuller notes than we have received in the Supplementary Estimates.

Perhaps, when the President of the Board of Trade replies, he can tell us why these Supplementary Estimates are couched in such very vague language? The first two are simply approximately 50 per cent. increases on what he proposed in his original Estimates. Why is this so vague? Why has the right hon. Gentleman not a better idea of exactly what he has in mind? All of us interested in the South-West want to know how much of this increase relates to our own problems. We take a special interest in them and would like to know how much of the increase has arisen in our region.

Is it entirely related to unemployment? There was a time when the Board of Trade took the view that development districts were only made development districts on the grounds of unemployment. We are now told that this goes further. My case is that there is a serious imbalance in the economy of the South-West, and in considering the distribution of a Supplementary Estimate such as this, the President should take this into account. There are many areas in the South-West where there is not sufficient diversity in the economy. There is too much dependence upon agriculture. There are other areas, already special areas, where there is serious unemployment.

In deciding to come to Parliament and ask for this extra money, how much has the President taken into account the special problems of the South-West? Another point which I hope he has had in mind before he laid the Supplementary Estimate before Parliament is the amount of earnings a man can take home in the South-West. We know from figures that we have been given that these fall sadly below those in other parts of the country. How much of these Supplementary Estimates really relate to the plans for the future of the South-West? Does the right hon. Gentleman recognise that this is now a real problem? Does he recognise that the economy has to be better balanced? There is this rather round figure of an extra 50 per cent., simply unrelated to our problems and related only to some very vague mathematical calculation which has been made in his Department.

The hub of the Supplementary Estimate is the promotion of local employment. When we consider the promotion of local employment in the South West we are not only thinking of unemployed, we are thinking of providing better opportunities, particularly for school-leavers in our part of the world who suffer a serious disadvantage as compared with other school-leavers.

I hope that the promotion of local employment means the promotion of good jobs and not just the promotion of any jobs and I hope that we shall have an explanation along these lines from the President of the Board of Trade, relating this to our problems in the South West.

4.35 p.m.

Mrs. Gwyneth Dunwoody (Exeter)

I welcome this Supplementary Estimate because one of the essential problems in the South-West is the question of investment and the amount of money going into the region. This is one of our most vital problems. It is not a new problem. It is of great interest to me to discover that some hon. Members opposite have just realised that we are desperately in need of more money in the region, since it is a problem which has existed for a considerable time. While hon. Members opposite were in government they chose not to do anything about the problem.

Mr. du Cann

rose

Mrs. Dunwoody

The then Government chose not to do anything about the problem.

Mr. du Cann

The hon. Lady really must give way.

Mr. Deputy Speaker

Order. Mrs. Dunwoody.

Mrs. Dunwoody

May I also say that it gives me great pleasure to see my hon. Friend the Joint Under-Secretary of State for Economic Affairs on the Front Bench, answering this debate. I am particularly pleased that we now have in the debate on economic affairs someone who is so well versed in the problems of the West Country, who has fought a constituency there and who is deeply concerned about immediate problems.

One of the reasons why hon. Members opposite are able this afternoon to criticise the choice of the Chairman of our Regional Council is that the Government have been prepared to set on foot a regional policy. We have a particular need of new factories and new job opportunities. We need more investment in all our cities, and this is what we welcome in the Supplementary Estimates. I realise that I may not go beyond the bounds of discussing where the sort of development will go, but I hope that when these new factories are built the cities in the region will be considered. I do not mean only the developing areas, although we have very great sympathy for the continuing problems of employment there. They are areas which have been consistently ignored by previous Governments and they have high levels of unemployment.

One of our problems is that our overall figures do not represent the amount of leakage of employable people from the region. We are concerned about our young people who are consistently leaving the South-West and looking for jobs elsewhere. What we desperately need is not just new factories but a complete diversification of the industry brought into the region. If this can be linked with an increase in the number of employable people in the population, as opposed to those who come to retire, then we shall be very pleased.

We feel that the Supplementary Estimate is a step in the right direction, but what we hope for is that the percentage spent in the West Country will increase, not just for this year, but in the years to come. We shall make it our business to see, as the right hon. Gentleman realises, that the cities and towns of the South West are given an increasing amount of assistance. This is a step in the right direction.

4.40 p.m.

Dame Joan Vickers (Plymouth, Devonport)

I am pleased to have the opportunity of following the hon. Lady the Member for Exeter (Mrs. Gwyneth Dun-woody). I should like to say to her that a great deal of work has been done in the South-West both by the Joint Committee for the Economy of the South West and the various chambers of commerce. In 1959, unemployment in my area fell from 4.9 per cent. to below the national average. Now it has gone up again to 3.7 per cent. A great deal was done when the Conservative Party was in office, and I should like to make this point particularly in the presence of my right hon. Friend the Member for Taunton (Mr. du Cann) who was at the Board of Trade and kept an eye firmly on the West Country. Excellent reports were made to the Chancellor of the Exchequer who, I am glad to say, acted on them when he was Chancellor and when he was at the Board of Trade.

It was said in one of the Reports of the National Economic Development Council that the solution to the area's problem would contribute to the solution of the national problem of economic growth and congestion in certain regions. I am sure that the President of the Board of Trade is interested in this point. My only reason for not voting against the Estimate is that none of it is coming to Plymouth. I ask the right hon. Gentleman to what percentage unemployment must rise before he can think of promotion on these lines. I gather that he has no particular percentage in mind. Therefore, when he has some money left over, perhaps he will consider including other areas. I am not sure whether his Department is responsible for building the rehabilitation centres—in other words, for industrial training.

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

No. That is the concern of the Ministry of Labour.

Dame Joan Vickers

The Ministry of Labour builds its own buildings, does it? [An HON. MEMBER: "The Ministry of Public Building and Works."] But it does not come under this Estimate. The Estimate is very vague when it refers to the "promotion of local employment".

I should like to follow up a point made by the hon. Member for Plymouth, Sutton (Dr. David Owen) on the question of growth areas. I should like the right hon. Gentleman to consider not taking up too much agricultural land but using land available near cities. I could give him, although I should be out of order—

Mr. Deputy Speaker

I entirely agree with the hon. Lady: she probably would be out of order.

Dame Joan Vickers

I should like to help the right hon. Gentleman to save some money, because I notice that in the Estimate there is provision for office buildings.

Mr. Robert Cooke

Surely some of these will be productive buildings and not jus: a lot of offices?

Dame Joan Vickers

If the right hon. Gentleman is looking for offices, he could consider areas other than development areas. For example, I could easily find for him 50,000 sq. ft. in one office alone which could be occupied at once, and this would probably save him a considerable sum on his Estimate. I hope that this point will be helpful to the right hon. Gentleman.

I should like to mention the question of the Plymouth railway station. This arises under the Vote concerning the extra money required for the Railways Board.

Mr. Deputy Speaker

I do not think that would be very convenient. That does not arise on this Vote because it is a matter for the Minister of Transport.

Dame Joan Vickers

Would it be out of order to mention it?

Mr. Geoffrey Wilson

On a point of order. This matter arises under the same Estimate, Class IV, Vote 17 where it is proposed to increase the British Railways Board's expenditure by £15 million. Earlier I raised with Mr. Speaker the question of whether one could mention Class IV, Vote 17 in connection with Class IV, Vote 3, which both concern West Country matters and which both relate to increases affecting that area.

Mr. Deputy Speaker

I did not say that it would be out of order. I said that it was not very convenient. It is perfectly in order for an hon. Member to raise those points, particularly because no hon. Member can speak more than once during this Second Reading debate. This debate has been so arranged that the President of the Board of Trade is to answer this section of it. If the hon. Lady and the hon. Member choose to raise transport matters, they may find that a representative of the Ministry of Transport is not present to deal with them. Subject to that, I cannot exclude references to the Railways Board.

Mr. Michael Heseltine (Tavistock)

Further to that point of order. The Ministry of Transport has been informed that this matter might be raised at this time.

Mr. Deputy Speaker

I thank the hon. Gentleman.

Dame Joan Vickers

I note that the grant to the British Railways Board is to be increased. This seems to be very extraordinary since the Ministry is closing so much of the transport system in the West Country. I wish to raise particularly the question of what will happen to the enormous station which was built at Plymouth at a cost of millions of pounds and which has been hardly used. A manager was appointed only a year ago with great éclat. It was reported in the newspapers that Plymouth would be the centre for Devon and Cornwall. Now the manager has been taken away and we are to have only an assistant manager whose duties will be split between Plymouth and Bristol.

We are extremely worried that the West Country is to have more railway cuts, which create more unemployment. This has already involved the moving of a great number of key workers from the Plymouth area to other parts of England—some to Bristol and some to Newton Abbot. Although the President of the Board of Trade may not be able to answer this point today, I hope that it will be noted and that we shall have an explanation of the recent cuts in the West Country. In particular, we should like to know what will be the Railway Board's centre for Devon and Cornwall.

We depend on the railways because we have no air transport system. Further-more, this is a tourist area. If we are to have not only cuts in the railway services but also the demotion of the headquarters, this will lead to endless difficulties and troubles in the area where we need an excellent manager on the spot to deal with day-to-day problems.

I am grateful for the opportunity of saying a few words in the debate. I hope that the President of the Board of Trade will be kind enough to keep an eye on what is happening in the West Country, particularly in the City of Plymouth. If matters get any worse, I trust that he will consider letting us have industrial development certificates more easily, which would help to solve the unemployment problem.

4.49 p.m.

Mr. Geoffrey Wilson (Truro)

I should like to endorse what my hon. Friends the Members for Somerset, North (Mr. Dean) and Dorset, West (Mr. Wingfield Digby) have said about unemployment in the South-West. We are certainly suffering from a great deal of unemployment. The position is worse than it has been for a number of years. A short time ago we had the highest rate of unemployment, not since the last Tory Government, but since the war. Anything which can be done to alleviate the problem will be much appreciated. I hope that the measures mentioned in the Supplementary Estimate will do something in that direction.

We are not allowed to discuss policy in this debate, otherwise one might make some suggestions about alterations in policy which would at least not cause unemployment which has been the result of certain recent policies.

As I have intimated Mr. Deputy Speaker, I wish to refer to an item which appears in the same Class but not under the came heading—that is, Class IV, Vote 17, Grant to British Railways Board of an extra £15 million. I would like to know what that £15 million is and whether any possible benefit will come to us in the West Country, because our railway services have not been improving but have been decreasing. A number of branch lines have been cut off and although the main line services have to some extent been speeded up, a number of stations have been closed and our services are less. If we are to pay more money for less, we would like to know what it is all about and whether we will get the benefit of any of it.

I would particularly like to know whether a provision in the Transport Act, 1962, has been operated. At that time, when the Beeching proposals had been made for the closure of a number of lines, we were given an undertaking by my right hon. Friend the then Minister of Transport that a branch line would not be closed until there was an alternative service by road and that there would be adequate roads to deal with the transport. A provision was included in the Act that the Railways Board could come to an arrangement with the bus company and provide funds for the bus company to run a service if the bus company found it economic to do so. What is more, the railway service was empowered to run its own bus service. Those rights, which have existed for many years, were specifically preserved in that Act but, as far as I know, nothing has been done about either of these provisions.

I would like to know whether any part of the extra £15 million is to be used for services of that sort. As far as I know, it is not. Our communications in the West Country are not what people would like. We want an improvement in communications, not only in roads, but in the railway services also and in the connections therewith. I hope that part of this £15 million will be devoted to this end.

A number of points have been raised on the general question of unemployment and there are others which could be raised but which might be out of order. The President of the Board of Trade will, I am sure, bear in mind the exceptional circumstances of the West Country. He will know that we are a peninsula sticking out into the sea. We have communications in only one direction, and everything that we buy and sell has to go in one direction. We therefore have rather special problems which, I hope the right hon. Gentleman will bear in mind.

4.53 p m.

Mr. Michael Heseltine (Tavistock)

There are many hon. Members on this side who will sympathise with hon. Members opposite in explaining how much they welcome the Supplementary Estimates which we were discussing earlier this afternoon. We will, I think, be forgiven if we suggest that it is too little and too late. It certainly will not help the large and increasing numbers of unemployed in the South-West now to be told that there is to be increased help in the outlying and economically less viable areas when the central focal points are ignored and unemployment is rising.

Following my hon. Friend the Member for Truro (Mr. Geoffrey Wilson), I wish to refer specifically to the increase of £15 million to the Transport Board to finance the increased deficit on British Railways. We are entitled to ask precisely where this money will go and precisely which lines will receive how much of the £15 million. I have taken the opportunity of informing the Ministry of Transport that I would raise this matter this afternoon because I have in my constituency a case which is of the greatest concern to my constituents and I believe that help could come from the Minister.

We are faced with the closure of an uneconomic line running from Okehampton to Bere Alston. We have been exerting every pressure we could to find out precisely how much money is involved in the loss that British Railways have to face every year on this line. It may be that when we are satisfied about the money that is being lost, there will be nothing that the local people will feel able to do to help to keep the line going. The point has, however, been put to the local authority, without any commitment on its part, that it might wish to have the opportunity of subsidising the line instead of letting it close. The local authority and myself have been trying to extract from either the Ministry of Transport or British Railways the figures involved in keeping the line open.

I do not need to draw the attention of the House to the problems that exist in the South-West when a line of this sort closes. The economic arguments for a town such as Tavistock of its only rail communication being cut off are obvious to everybody. The social arguments and the hardship which is caused when a line closes without adequate replacement by bus services being provided are bound to be obvious to hon. Members on all sides.

What seems to me to be unforgivable is that we are not given the opportunity to carry through the thinking which is implicit in the Government White Paper on Transport and to try to help to save from our local resources the money which must go to make up this extra £15 million.

I would like briefly to explain to the House the efforts that we have made to do this. We have asked British Railways to provide us with the figure that they would require to keep open this line, not in total, but from Tavistock to Bere Alston. British Railways have explained that they are not prepared to provide this information unless the local authority gives an assurance in advance that it has the power to use the rates for this sort of subsidy. The local authority, quite rightly, says that it cannot get involved in airy discussions of principle until it knows the sums of money involved.

We are, therefore, left with the local authority passing the ball back to British Railways and the Ministry of Transport sitting tight in the middle saying, "We hope to change the situation by providing legislation which will enable local authorities to pay subsidies of this kind, but we are not prepared to do it yet".

The difficulty with which I am faced is that by the time the Ministry of Transport has introduced legislation into Parliament, there will not be a railway line left to subsidise, because this line is already under sentence of death and is likely to close, if not in October, in November or December. By the time that the Ministry of Transport gets round to providing us with figures, let alone legislation, it will be far too late for any local authority to make a decision about whether it feels able to contribute towards keeping the line open.

It is a remarkable state of affairs that as in so many other cases, the Ministry of Transport should be putting out a dreary set of platitudes about its intentions but that when it comes to hard facts about what it intends to do to help the people in the South-West, those platitudes are exposed for what they are—mere words with no substance—to the people whom I am elected to represent.

In reverting to the important item in the Supplementary Estimate to provide £3,150,000 towards the Board of Trade's promotion of local employment, I appreciate that in this debate one is not entitled to raise the principle under which this money is spent. I am, however, appalled when I hear hon. Members opposite welcome this assistance with smug complacency as though it will do something to help the economic and unemployment situation in the South-West.

The fact is that it will not do anything to help, because despite all the words that we hear from the Government about concentrating the nation's financial resources upon growth points—the National Plan went on about this at great length—we are witnessing rising unemployment in these growth points and the Government, with their policy of too little and too late, are trying to mop up the excess pockets of unemployment in the outlying regions. Instead of trying to mop up those outside areas of unemployment, the Government would be far better employed in giving stimulus to the points where we can expect growth to continue with its own momentum when encouragement is given.

We on this side, for example, consider that the West Country would be far better served if we were given an opportunity to spend this sort of money, not in the way which is now suggested, but on a decent road to the West Country. That is the way—

Mr. Deputy Speaker

The hon. Gentleman is now getting on to questions of policy which are outside this Supplementary Estimate.

Mr. Heseltine

I apologise, Mr. Deputy Speaker. I was seeking merely to say that we in the West Country could have looked forward to a much better future if the delays in the road programme had not taken place. However, I appreciate now that that is out of order, and I apologise.

May I conclude by saying that we in the West Country are greatly disturbed that this sum of money is to be spent in a last-minute effort to try and cure unemployment, which has developed to a very serious level in the outlying areas—

Mr. Deputy Speaker

Order. This sort of subject is out of order. Mr. Peter Mills.

5.0 p.m.

Mr. Peter Mills (Torrington)

There is no doubt that those of us who live in the South West and in the remoter areas know the real problems which exist as a result of rising unemployment. Frankly, I was amazed at the lack of knowledge of the area displayed by the hon. Member for Plymouth, Sutton (Dr. David Owen) and the hon. Member for Exeter (Mrs. Gwyneth Dunwoody). I am amazed to think that they could come to this House and say that nothing had been done in the past. When one thinks that it was a Tory Government which set up the development areas, particularly in North Devon, that it was a Tory Government which gave aid to resurrect the shipyard and other industries which had fallen by the wayside and that it was a Tory Government which brought the level of unemployment down—and now we are seeing it rising faster than ever—literally, it amazes one.

It is not true and it is dishonest to say that nothing was done in the past. Frankly, I do not think that those two hon. Members would have made such statements—

Mrs. Gwyneth Dunwoody

On a point of order, Mr. Deputy Speaker. Is it in order for the hon. Member for Torrington (Mr. Peter Mills) to accuse me and the hon. Member for Plymouth, Sutton (Dr. David Owen) of being dishonest?

Mr. Deputy Speaker

I must say that I did not understand it to be an accusation of dishonesty. I understood the hon. Member for Torrington (Mr. Peter Mills) to be disagreeing with something which the hon. Lady had said. In any event, I think that this discussion is out of order and that it would be much better to confine remarks to the Supplementary Estimates.

Mr. Mills

Thank you, Mr. Deputy Speaker. I am sorry that I was out of order, but I felt that it was right to correct something which was wrong. Surely that is what any hon. Member is allowed to do.

There is no question about it. We need further help in these development areas, and that is what the allocation of this sum of money is all about. We welcome this limited increase, but I would point out to the President of the Board of Trade that it is a good job that we have the increase in this allocation of funds. After all, there has been a continuation of the rise in the cost of advance factories and all the other facilities which one can provide in a development area. Therefore, it is vitally important that we should have had this increase, otherwise there would have been a cut-back in the aid and facilities within the development areas.

The provision of money for these areas must continue. If one asks oneself whether this allocation is enough, I do not think that it is. It is not enough to deal with the very pressing problems which we have. Many small towns in the development areas are feeling the squeeze as a result of the various problems and difficulties which we are experiencing. Unemployment is rising fast, in spite of what has been done. I suggest to the House that it is very difficult for the people in those areas to understand why, in spite of the money that has been spent and in spite of this further allocation, unemployment should still be rising.

In my opinion, Supplementary Estimates are not enough. Other factors should be remedied as well. I find it strange when I think of all the money being spent while, on the other hand, there are problems and difficulties over which the Government could help and, in a sense, save the business of spending this money. The effects of the Selective Employment Tax, taxation generally and the lack of incentives all come into it.

I should like to ask the President of the Board of Trade why this further supplementary amount should be confined to one area for ever. Some of my hon. Friends may disagree with what I say, but I believe that there should be far more flexibility in the development areas. After one area has been helped with money in this way, I believe that it is right to move on to another area which is in dire need. A good example is in my own constituency, in Okehampton and Whitleigh, both of which need help quickly. Why is it that one has to be SO static in these boundaries? Why can- not there be more flexibility in the allocation and spending of this money? The time may come when certain areas have overcome their basic problems. Why not then move on to deal with another area?

It is obvious that, in certain districts which are not within development areas, it is impossible to attract new industry and help overcome the unemployment problem. In my constituency, I.D.Cs have been granted to Okehampton, which is not in a development area and does not get any of the allocation of this money—

Mr. Deputy Speaker

I am sorry. We cannot reverse the policy by which certain funds have been allocated to certain development areas. We can only discuss whether extra money should be voted to those areas.

Mr. Mills

Thank you, Mr. Deputy Speaker. Then perhaps I may conclude this part of my speech by saying that the fact of being in or out of a development area is vitally important to the problem of unemployment.

I hope that my next point will be in order. I have torn up my speech once and had to start again, and I may be out of order, but I know that you will quickly draw it to my attention, Mr. Deputy Speaker.

It concerns the line of the development areas; in other words, where the boundary lies, where the money is spent and not spent. I find it extraordinary to see how the boundaries have been drawn. Why is it that the Ministry of Labour and its officers decide what the area should be, where the money should be spent and where the catchment area should be? That seems to be all wrong. There is no real thought given to where the need lies. It is just a line drawn on a map according to whether the area comes within the sphere of operations of the Ministry of Labour office for the district.

In my constituency there is the village and parish of Winkleigh. Part of it is in the development area where this money will be spent. The rest is outside it. That is absolute nonsense, and we cannot go on in that way. I ask the President of the Board of Trade to look into this question of boundaries and who decides which is to be a development area and which is not. At present, there are some curious anomalies. Some villages are out and some are in. I can assure hon. Members that, if one is working in the area, it is most confusing.

Apparently I was not out of order in saying that, and now perhaps I can proceed to my next point, which is the problem of loans for advance factories. I have had a good deal of experience of trying to attract industry into my constituency and into a development area. I believe that there is an awful lot of red tape involved in arranging loans. One Ministry does not know what the other Ministry is doing. One finds the Board of Trade encouraging industrialists to come, and I give full credit to its officers, many of whom have been most helpful. On the other hand, one finds the Ministry of Housing and Local Government being most difficult and making interest rates so high that it is impossible for industrialists to take advantage of these loans. This is a very real problem, and I believe that there should be far more co-operation between the various Ministries concerned with the allocation and spending of this money in the development areas.

It could be argued that the spending of this money is really not necessary. It could be argued that there are other ways of overcoming these problems, and my hon. Friend the Member for Tavistock (Mr. Michael Heseltine) hit it on the head when he said that if we had better communications we would not need to spend this money. I do not know whether I would be considered very rash if I said that if we had a first-class motorway or road system in the South West that would be true.

Mr. Deputy Speaker

Order. That is strictly out of order.

Mr. Mills

Mr. Deputy Speaker, did you say that I was completely out of order?

Mr. Deputy Speaker

Yes, in talking about motorways.

Mr. Mills

I can see now that I am out of order, and I shall wind up my speech. I ask the President of the Board of Trade to look into the matters which I have raised, particularly this question of co-operation between the various Ministries so that there need not be any delay and confusion as there has been in the past over many of these projects.

5.11 p.m.

Mr. Robert Cooke (Bristol, West)

This debate is about money, about more money. It surely cannot, by any stretch of the imagination, be out of order to make a remark of that kind, even of a general nature. I shall relate everything that I have to say to money, and more money, and I hope more money for the West Country, but before I get on to each individual Class of Estimate which I want to discuss I would make the point that the spreading around of money without proper thought and understanding does us very little good.

I would be out of order if I were to discuss policy other than that closely related to these increases which we are being asked to vote, so I shall go no further than to say that we in the South West still feel that we are a neglected area, that the Government have little interest in our future. Looking at these Estimates, we are very doubtful about how much of this money will come to us, and what we need as well as money is thought, understanding, and interest.

It is strange that one of the noisiest of West Country Members from the Liberal Bench has not been here this afternoon. Indeed, some of our more noisy colleagues from the Liberal Party in the West Country seem to be boycotting this debate. I cannot understand why this is so, but there it is, and no doubt it will be noticed outside.

I want to deal with a number of Supplementary Estimates which I have before me, beginning with Class IV, Vote 3, the Board of Trade subject, promotion of local employment. I see that we are to get £750,000 in addition to the £10,250,990 already voted, and that this is to go on capital projects, land and buildings. I should like an assurance from the President of the Board of Trade that this money will be spent on productive building, that is on factories of one kind and another to help with employment and production, and that this money is not concerned with the capital expense of setting up Government offices and things of that sort. I am glad to see the President of the Board of Trade shaking his head. I hope that he will give us a little more detail about it.

Further down the page I see that the increase in loans to undertakings is only £1,500,000. It is perhaps unfortunate that there should be this considerable disparity, and that the loans should be smaller than the capital sums involved. If the Government, in their economic policies, did not meddle with industry, they would not have to go on with this business of setting up factories and starting industries on their own. If they must interfere, it might be better for them to create the economic climate for industry to flourish, and perhaps do more to provide capital for private enterprise to flourish, rather than build all these factories, some of which turn out to be in the wrong place. There is a limit to the benefits which can be conferred by State interference in economic matters, as I am sure even the right hon. Gentleman would agree.

Mr. Jay

I do not know what the hon. Gentleman means by saying that loans are small in relation to the capital expenditure.

Mr. Cooke

I am taking my figure from page 8, Class IV, Vote 3. It occurred to me that the increase over the present provision was not a large one. I hope that the right hon. Gentleman has got my point.

Mr. Jay

The hon. Gentleman quoted the other figure for the provision of land and buildings. If one compares the increase in the two cases, which is presumably the right comparison, one sees that it is £1½ million for loans to undertakings, and £750,000 for the other item. I do not know why the hon. Gentleman claims that the loans are too small.

Mr. Cooke

In saying that they were too small, I was not seeking just to make comparison. I was pointing out that there was this substantial sum for both, but that it was better, in the long run, to provide the capital for private enterprise to flourish, to help private enterprise to get the capital which it some-times cannot get in the present economic climate created by the Government rather than to dot about the place buildings which sometimes prove to be less than satisfactory or successful.

I now turn over the page to where we see that substantial sums are to be provided for export credits, and simply say that I doubt very much whether this money will come to the West Country, in view of the difficulties that we have in exporting because of our poor communications, which are due to the Government's neglect. I shall not mention roads at this point, as I am sure that this would not be in order, but the matter of railways is in order under Class IV, Vote 17, where we see this substantial increase for the Railways Board, to which reference was made by my hon. Friend the Member for Truro (Mr. Geoffrey Wilson), who has special knowledge of this matter, and also by my hon. Friend the Member for Tavistock.

According to the Estimate, this sum of money is to make good a deficit. To my hon. Friends and myself this is a depressing reason for this Supplementary Estimate of £15 million. It would not appear that this money which we are being asked to vote today will improve services, far from it. This is merely to make up a deficit, and the future for our region in particular seems to be pretty bleak.

I come now to Class VI, Vote 7, which deals with the general grant to local authorities. Nearly £18 million is to be granted in increases to be voted today. This, too, is depressing, because of the reasons given for it. It appears that the greater part of this money will be swallowed up in paying for increases of one kind or another, in costs, salaries, and so on, and that there will be very little expansion of services. We in the West Country would like to feel that we were going to see expanded local services of one kind or another. Our people have great difficulty in moving about the area, and the local authorities have their part to play in this, because of the curtailment of transport facilities, and so on. Local authorities are doing their best to help, but one sees that the purpose of this increase of nearly £18 million is to take account of additional local authority relevant expenditure arising from changes in the levels of prices, costs and remuneration since the General Grant (Increase) Order,1965…". It is also depressing to see that all this great increase will be swallowed up in bolstering the existing services and not in providing anything better for the future. Turning the page we see that nearly £7 million is being given for this purpose in Scotland. Scotland no doubt has its special problems, but it is interesting to reflect that as a substantial sum is going to Scotland the sum for England may not be big enough. The figures for England and Scotland do not seem to produce a very fair apportionment of the money, and I should like to know how much the West Country will get out of it all.

One of the last estimates that I want to discuss is Class VI, Vote 14, concerning regional hospital boards and boards of governors. We see that we are to get £23 million more. It would be most helpful if we were able to discover just how much more is going to the South West, and to see whether, like so many other Supplementary Estimates, it is merely a case of bolstering up the existing state of affairs and taking account of the savage increases in prices and costs—because all along the line we are being asked to vote more money either for the same services or for inferior services, as in the case of some transport undertakings.

Class VI, Vote 20, concerns the Ministry of Social Security. There is a substantial item for salaries, amounting to £19,168,000. It would seem that a a good deal of this is unproductive expenditure, brought about by the Government's own actions. There is a glorious sentence at the bottom of page 28, which refers to Selective Employment Tax for staff and staff for Selective Employment repayments. There is no punctuation. What that means I am not sure, except that it is bound to be a waste of public money. Perhaps we could have some elucidation. The House is entitled to be told, because the large sum of £19 million is involved. The West Country is as fed up with S.E.T. as any other part of the country.

I must have been in order in covering all these aspects of our problems in respect of different classes of the Estimates. The Government must have been aware that in dealing with the needs of the West Country they should have had Ministers to answer questions on all these classes and should not have confined themselves to the narrow subject of the Board of Trade. All the other Ministers of the Crown must be concerned with the needs of the West Country. If nothing is going to the West Country under the various classes they have mentioned I shall find it very difficult to support the Government.

I should be out of order in mentioning certain forbidden words, but it is surely in order to say that for the South-West communications have long been agreed to be the key to the future of the area.

Mr. Deputy Speaker

The hon. Member has done very well so far. I hope that he will not spoil his speech by going out of order at the end.

Mr. Cooke

I have no intention of straying further than saying that by general agreement on both sides—it has been mentioned in connection with the British Railways deficit—communications are the key to all our problems. It might be said that in this debate the subject of roads is out of order. I leave the House with this thought: under this Government improved roads for the south-west would appear to be out of the question.

5.26 p.m.

Mr. John Nott (St. Ives)

The hon. Member for Exeter (Mrs. Gwyneth Dunwoody) and the hon. Member for Plymouth, Sutton (Dr. David Owen) congratulated the Government on their excellent efforts in respect of regional employment, and commented on the increase in the Estimates in respect of the Local Employment Acts, implying that this increase was another example of the gritty, purposive way in which the Government goes about its business. I suggest that the hon. Member for Exeter—the hon. Member for Sutton is not now with us—looks at the Sixth Annual Report by the Board of Trade on the Local Employment Acts, for the year ending 31st March, 1966, in which she will see that the total amount of assistance given under the Local Employment Acts last year was £42,314,000. Even after the proposed increase of £3,150,000 we still only come up to the figure of £40,492,000 for 1966–67. If I read these documents correctly, even after the Supplementary Estimates, the development areas, including those in the South-West, will get less this year than in the year ended 31st March, 1966.

In spite of this, as the hon. Member for Exeter is quite aware, the level of unemployment, at any rate in the West Country, is far higher than it was during that previous period, and more assistance rather than less is required. The figure of £3,150,000 is utterly inadequate in present circumstances. In Cornwall there are several employment areas where the rate of unemployment is in excess of 11 per cent. of the working population, yet the Supplementary Estimates include an increase of only £3,150,000, bringing the total to less than was granted under the Local Employment Acts in 1966.

Secondly, in 1962–63—during those 13 wasted years of Tory rule—the Estimates were £41 million. In other words, in 1962–63, under our Administration, they were over £1 million more than is proposed for the coming year. How can the hon. Lady say, four years later, that this is an example of the Labour Government fulfilling their election undertakings to boost employment in the development districts?

Going more carefully into the increases for each specific category, I note that in 1962–63 the amount granted for the provision of land and buildings was £11 million, against the £10 million proposed for this year. So the £750,000 increase does not even bring that category up to its 1962–63 level.

In respect of loans to undertakings there is an increase of £1,500,000, bringing the total up to £11.5 million, whereas in 1962–63—during the 13 wasted Tory years when, according to the hon. Lady, we neglected regional development—loans to undertakings amounted to £25 million. How can the hon. Lady claim that the Government are interested in regional development when she looks at these figures? I hope that I have interpreted them correctly. If I have not, the President of the Board of Trade will no doubt correct me.

These increases, overall, do not even bring assistance under the Local Employment Acts to the level at which they stood when the Conservative Government was in office in 1962–63.

The Minister of State, Board of Trade, wrote to me in some detail when I asked him about the amount of assistance which we in the West Country were receiving under the Local Employment Acts. He said that the South-West had been receiving about 1.4 per cent. of the total amount granted to development districts in 1966—although we in the South-West have 1.9 per cent. of the insured population of the country.

When we in the West Country complain of the paucity of the increase of £3,150,000, we are conscious of the fact that in 1966 the South-West received 1.4 per cent., amounting to £600,000 in all, of the total amount granted in 1966 of £42 million—whereas we have 1.9 per cent. of the insured population. These figures were given to me by the Minister of State in two letters, dated 11th November and 12th December. There had to be two letters because the Board of Trade had done its first calculations incorrectly.

What do these figures mean? If one takes 1.4 per cent. as the figure which applied in 1966 to the South-West and one applies that to the total number of extra jobs created under the Local Employment Acts in 1966, one finds that, according to the Board of Trade Report dated 31st March, 1966, there were 92,494 additional jobs created in the employment areas in that year. Applying 1.4 per cent. to that figure, I work it out that the South-West benefited by an additional 1,295 extra jobs in 1966—that is, 1.4 per cent. of the total number of extra jobs created in the development areas as a whole.

Having said that, I should point out that I have with me an interesting survey from the Chambers of Commerce of the South-West which shows completely conclusively that as a result of S.E.T.—as a result specifically of S.E.T., excluding the credit squeeze and so on—2,655 people lost their jobs. This means, in effect, that not only has the South-West been doing worse but that S.E.T. has created double the number of redundancies than the Local Employment Acts have created new jobs in the South-West in 1966. This is the measure of the problem we are discussing.

This £3,150,000 increase in the Estimates is a pure flea-bite compared with the harm being done by S.E.T. and other Government measures. I am prepared to have my figures disputed. I have worked them out myself and I am sure that the President of the Board of Trade, who is in his place, would correct me if they are not substantially correct.

Another figure must be borne in mind. If one takes this £3,150,000 to bring the total estimate up to the figure of £40,492,000, which is what is proposed for this year, and if one applies the 1.4 per cent. again, it would appear that the South-West will receive £570,000 in the current year as against £600,000 last year. These are general figures. Yet the Chancellor of the Exchequer at Question Time yesterday, answering a Question from my hon. Friend the Member for Dorset, West (Mr. Wingfield Digby), said that the S.E.T. payments—the amount going in S.E.T. from the South-West and not being recovered in refunds—amounted to £16 million. This means that we are paying out in the South-West in S.E.T. nearly £16 million more than we are receiving under the Local Employment Acts, which are attempting to encourage employment in the area. These figures are conclusive evidence that the proposed increase is minimal. The whole thing is a complete and utter farce and makes nonsense of the Government's promises at the last General Election to expand regional development. Suffice it to say that we know that unemployment is higher now than it has been for years.

I have shown that in 1962–63 the overall amounts paid under the Local Employment Acts were more than are now being given—this four years later. The whole question of investment grants, to which I shall come, must be considered in this light. I come now to the category described as "loans to undertakings" and I will give one example of the problems which are faced by industrialists who are foolish enough to get themselves within the clutches of the Board of Trade in an effort to get these loans. I am not referring to the rate of interest. Personally, I am rather against rates of interest being subsidised by the Board of Trade. Once one starts doing that one never knows where to stop. The I.R.C. will be granting cheap loans to this person and the Board of Trade granting cheap loans to that person. In the end one's monetary policy is in a turmoil. I am, therefore, referring to the pure bureaucracy which goes on in the Board of Trade—but not to individuals in the Department who I know do their best in an effort to perform a useful role.

Having made it clear that I am referring to the machinery through which people must go to obtain these loans and qualify for the increase in the loans which we are discussing—the increase of £1,500,000—I give the example of one company to show what these poor industrialists must go through when applying to the Board of Trade for loans under the provisions we are discussing. I have with me a letter dated 17th February, 1965. It was written to a firm called M.E. Products (Windsor) Ltd. I know that the owners of the firm are happy for the name of their company to be given. The firm was encouraged to go to Cornwall because of the availability of labour there. The letter from the Board of Trade relating to the Local Employment Acts asked the firm to provide a number of facts. It stated: …it will be essential for you to make forecasts of your trading results for the current year and for the ensuing three years i.e. years ending 30th April 1965, 1966, 1967 and 1968. These forecasts should be in reasonable detail and are best expressed in columnar form showing Sales, etc., Direct Materials, Direct Wages, Gross Profit, Factory & General Overhead Expenses (detailed), Interest and Other Financial Charges, and finally Net Profit (subject to taxation). How can any small industrialists seeking loans from the Board of Trade give accurate detailed overhead expenses and details of direct materials, wages, gross profit, factory and general expenses for the year 1968, particularly with the present Government in power? The whole thing is a complete and utter farce and is evidence of the fact that the gentlemen in the Board of Trade who are responsible for this sort of thing have not the slightest idea of how business works or the problems which it faces in this lurching economy.

Mr. Deputy Speaker

Order. I am inclined to think, listening to the hon. Member's remarks, that he is generalising and that his argument would be appropriate to the whole of Government policy in this connection. I do not think that it would be appropriate to raise such matters on what is a narrow issue and which Mr. Speaker has ruled to be a narrow issue. The hon. Member must, therefore, relate his argument specifically to the increases in question.

Mr. Nott

I will try to keep in order, Mr. Deputy Speaker, and will refer specifically to the £1,500,000—the increase in loans to undertakings contained in the Supplementary Estimates. In doing so, I point out that even if the President of the Board of Trade and the Government were to treble this figure, the problems of administration—of submitting invoices under the new cash grants system and so on—make this figure pale into insignificance beside the bureaucracy and lack of understanding on the part of the Government about how business works. Having quoted that letter from the Board of Trade to an industrialist, I trust that the President of the Board of Trade will look into this type of situation.

I seek your guidance, Mr. Deputy Speaker, on the question of whether or not investment grants come within the matter under discussion. I believe that they do. I will, therefore, comment on this issue until you correct me and say that my impression is wrong.

The investment grants are most interesting because every time we raise a question about employment in the South-West and every time we raise points on these Supplementary Estimates and claim that the increases are inadequate, someone on the Government Front Bench says, "Ah, yes, but we have increased the investment grants to 45 per cent.", as if it were justification for producing the Supplementary Estimates which show that there will be a decline in the amount given daring the current year compared with the year before, and even less than in 1962–63.

In July last year the President of the Board of Trade gave an Answer to a Question asked by my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) about investment grants. The right hon. Gentleman will remember the Question well. The Question showed that in spite of the 40 per cent. investment grant, on a cash flow basis a company was receiving less now than it would have received under the old development district procedure and the system of Income Tax, Profits Tax and free depreciation of our Administration.

Mr. Jay

The hon. Member forgets that the investment grant in a development area is available for replacement of plant whereas the old grant was not.

Mr. Nott

I am fully aware that there are certain matters concerning the investment grant which differ slightly from the old grant under our Administration and that there have been one or two minor improvements made on the lines that they can be given not merely for increasing the number of people employed. These are improvements, but on a cash flow basis the 40 per cent. grant benefits industries less than the old system of free depreciation. The President of the Board of Trade shakes his head; I will go and find the actual reference from the Written Answer.

Mr. Jay

That was on assumptions in the Question asked by the hon. Member's hon. Friend which were misleading.

Mr. Nott

They may have appeared misleading to the President of the Board of Trade, but to everyone to whom I showed them, accountants and bankers, they were quite clear. The calculation was taken on a £100 investment and I cannot see that it was misleading. Investment grants have been increased to 45 per cent. and all that it has done is that it has probably brought the position back on a discounted cash flow basis to what it was before the present Government took over.

I wrote to the Prime Minister on this subject and he replied, very courteously as he always does, saying that of course one cannot just take these things on a discounted cash flow basis; there are many other criteria. We are well aware of that, but I thought it interesting that he should say this in his Answer when this system is recommended for use in the nationalised industries and the public sector. In this respect it seems strange that the Prime Minister should sweep it aside as a method of assessing grants under the Local Employment Act. I hope that I am not going on for too long, but, since I had to tear up three of the speeches I had prepared because all would have been out of order, may I please complete what I want to say by referring very briefly to one or two matters which appear in the Supplementary Estimates and come within the province of the President of the Board of Trade and of the Parliamentary Secretary to the Department of Economic Affairs?

The first is the concern of the President of the Board of Trade and is about export credits. This is not partisan and I hope it is entirely non-political. Is it not possible to give more help under E.C.G.D. to professional services? Is it not possible for there to be better cover for professional services overseas? I constantly come across professional architects and town planners who are advising foreign governments about new towns and matters of that sort who find great difficulty in covering their professional fees with E.C.G.D. Since architects and town planners through their professional services are getting first place into potential export markets and often through their advice we obtain export orders for capital goods, the Board of Trade should look into this question. There was a debate on this matter the other day. It is a most important point. I do not know also whether the increase in the export credit estimates would involve any help for the leasing of capital goods abroad. I was once the director of a company set up specifically to lease British capital goods to overseas countries We believed that it had a great future and I have found that the overseas customer would often prefer to lease goods rather than buy them on extended credit. The company folded up because we were quite unable to get from the E.C.G.D. a banker's policy to cover this. If we can earn more foreign exchange for this country by means of leasing capital goods abroad rather than selling them, perhaps the right hon. Gentleman would look into the question of granting banker's policies for this purpose.

There is another matter on which I wrote to the President of the Board of Trade the other day. There is an airport at St. Just in my constituency. It was an old R.A.F. airport and was in the hands of the Ministry of Aviation and now, I understand, it has become a responsibility of the Board of Trade. It is all very confusing. I am glad to see the right hon. Gentleman the Member for Leyton (Mr. Gordon Walker), who co-ordinates the Government's chaos, now sitting on the Government Front Bench. Perhaps he can sort out some of these problems.

With great trouble we managed to arrange for the airport to be used to fly over to France an important export. It is important although it may sound strange. It was Cornish shell-fish which could be flown to Paris to be eaten fresh in addition with snails and frogs' legs and other delicacies. It was a marvellous development and the export figures are quite substantial, running into hundreds of thousands. The Ministry of Aviation, now the Board of Trade, decided to sell the airfield but it could not sell it to anyone other than a local authority. The bureaucracy, the trouble and time taken on this matter was quite inconceivable. As a result, the gentleman who runs this business, and whom we encouraged, nearly found that he had to close the whole business down.

Finally, I refer to the Industrial Reorganisation Corporation. According to the Ruling of Mr. Speaker yesterday, where a new estimate is made we are entitled to discuss the policy underlying it. I shall not do that but only say that the whole set-up of the I.R.C. has now been proved to be utterly bogus. On Second Reading and in Committee on the I.R.C. Bill we were led to believe that the organisation would be working on commercial criteria, yet the first transaction it has handled was clearly contrary to the wishes of its Board. The First Secretary of State and Secretary of State for Economic Affairs had to make a direction that it would invest money in Rootes, which was clearly contrary to the wishes of the Board of I.R.C. I mention that because I understand it is in order to refer to policy.

This was one of the most interesting and farcical episodes in our commercial life of the last few years. It was said that this investment had to be made in order to retain a British holding. I have never heard anything like it. Clearly there was to be a continuing British investment in it all along. It was not made on a commercial basis. It was made because the I.R.C. has become the creature of the Government and the very first transaction has been used contrary to what the Government claimed would be the basis upon which it would operate.

The question of the regional hospital board was mentioned earlier. I noted when it was mentioned that at the bottom of page 24, where it refers to the increase in the amount going to regional hospital boards, it says: Selective Employment Tax and increased rates of pay. This presumably refers to one reason why there is an increase in the Estimate for the regional hospital boards.

I referred earlier to the Selective Employment Tax and to all the people who have been made redundant and discharged in the private sector because some of their employers no doubt followed what the Government asked them to do, namely, took this out of their profit margins and costs rather than merely passing it on in the form of increased prices. However part of the increase given to regional hospital boards, which come under the Government, is explained away by the operation of the Selective Employment Tax. What goes for the private sector is quite different from what goes for the public sector.

Right the way through the Supplementary Estimates, despite what the Treasury Bench may say, particularly in relation to Selective Employment Tax, we are having the wool pulled over our eyes. The position is worse now—in terms of the amount of unemployment, in terms of the amount of money available, and in terms of the system operated as compared with when we were in power. Yet it is suggested by Government supporters that these increases are an example of purposeful, gritty government, and are evidence of the fact that the Government are working in conformity with all those merry election promises made at the 1964 and 1966 General Elections.

5.52 p.m.

Mr. Edward du Cann (Taunton)

The number and quality of the speeches made by my hon. Friends, in circumstances which we all know are somewhat difficult because of the narrowness of the debate, indicate clearly the strength of the genuine concern which all of us who are associated with the West Country feel at present.

Problems in the West Country are real; they are important in human terms; and the awful tragedy is that they appear to be getting worse. Hence we are delighted to have this opportunity to discuss narrow matters relating to these Estimates. I want particularly to congratulate my hon. Friend the Member for Somerset, North (Mr. Dean) on his initiative in raising the matter.

I am sorry that we have not had a contribution from the new Leader of the Liberal Party, who always says so much about the West Country and who always does so little. However, I am glad to see the hon. Member for Bodmin (Mr. Bessell) here late in the proceedings.

We are very glad that the hon. Lady the Member for Exeter (Mrs. Gwyneth Dunwoody) should be participating in these West Country debates for the first time. One of my hon. Friends dealt severely with her on the matter of history, for her historical knowledge is plainly non-existent. This is a pity. All of us on this side of the House will always make common cause with any hon. Member opposite who wishes genuinely to advance the interests of the West Country. That has been the custom for a very long time. However, to distort the situation unnecessarily is foolish and benefits no one.

To suggest, for instance, as the hon. Lady did, that one of my hon. Friends objected to the appointment of Dr. Tress as Chairman of the Regional Economic Planning Council is utter nonsense. All of us on this side have every faith in Dr. Tress and in his colleagues. The disappointment is that the Council appears, for reasons of which I am unaware, both to have got itself into a difficulty in the matter of policy and to have produced very little in the way of action hitherto. However, we have hopes for the future. It is right that I should put the record straight on that matter especially.

We last debated West Country problems on 4th November, 1964. I wish to refer to that debate, I raised the matter on the Adjournment, with the support of my colleagues, deliberately—first, to put certain facts on the record and, secondly, to endeavour to elicit the Government's intentions for the West Country. I, for one, am satisfied—I am happy to say this in the presence of the President of the Board of Trade—that the Government's intentions are honourable enough, but we complain about their execution, which is hopeless in the extreme.

In replying to that debate, the then Joint Under-Secretry of State for Economic Affairs said this: I invite the hon. Member for Taunton to come back in two, three or four years' time and to see what we have achieved during that period. The answer is—precisely nothing. Indeed, if anything, as my hon. Friend the Member for St. Ives (Mr. Nott) clearly indicated, the situation appears to have deteriorated. I thought that the Under-Secretary's reply to that debate was remarkable for two other sentences he uttered. The first was this: …in general a demand for continuity in the policies of that Government certainly cannot be met. He was referring to the previous Conservative Administration. We were certainly warned. The other utterance of which I wish to remind the House was this—a Freudian slip, it may be thought: It is easy to forget the South-West." — [OFFICIAL REPORT, 4th November, 1964; Vol. 701, cc. 357–361.] I believe this to be true. These few remarks were largely by way of introduction. So I must move on, and at once do so.

We are entitled to debate the reasons for the increase in these Estimates. I say at once that we support increases of this sort. There is no doubt about that. "No quibble" was the expression the hon. Member who temporarily represents Plymouth, Sutton (Dr. David Owen) used. So we support these increases.

Our question is: how necessary are they? Should they be necessary? My hon. Friend the Member for St. Ives, in a most eloquent speech, referred to the words "gritty" and "purposive" which we have heard from time to time from the other side of the Chamber. The truth is that the reason we have Supplementary Estimates now, apart, perhaps, from the increase in costs, is that the President of the Board of Trade has been obliged to embark upon almost a panic programme of increases is the advance factory plans, largely because of the general difficulties of the economic situation. "Gritty" is the word. Sand in the works of the economy from his colleagues is the truth.

I draw the attention of the House to the real position. At the time of the debate in November, 1964, the general level of unemployment in the South West was 1.3 per cent. Today it is 3.1 per cent. Such is progress under Socialism. More important than that, bad though that position is, unemployment in the development areas—a number of my hon. Friends have referred to this—where presumably the Estimate and its ramifications especially apply, has more than doubled since as recently as August, 1966—in other words, since the Prime Minister's 20th July statement. In August there were 3,270 or 2.4 per cent. of registered employees unemployed. In January, 1967, there were 7,900, or 5.9 per cent. infiltration and advice.

These statistics alone give the contradiction—I will not use an even stronger word—to the Government's claim that the squeeze would never hurt the development districts. The reason why the Government, and the right hon. Gentleman in particular, have had to try to do more for the development districts is that the Government's unsatisfactory—some would say disastrous—economic policies have hit the development districts worse than any other part of the United Kingdom. This is the tragedy of today's situation.

We do not as yet know the extent to which this Supplementary Estimate bears upon the West Country. No doubt, the right hon. Gentleman will be kind enough to tell us in a few minutes. Incidentally, perhaps I may echo what one of my hon. Friends said. We appreciate the right hon. Gentleman's courtesy in coming personally to reply to the debate rather than instructing a junior Minister to do so. When he replies we hope to be told exactly how much this Estimate bears upon the West Country. But for his two hon. Friends, who have now left the Chamber completely—a remarkable circumstance—to try to pretend that this Supplementary Estimate presages more help to the West is the veriest nonsense. To take into account the Selective Employment Tax, referred to in another Supplementary Estimate, the truth is that the new fiscal burden which the West is bearing must outweigh by 10 or 20 times any increase in Government support covered by these Estimates or otherwise. Those are the simple facts of the matter.

Will the right hon. Gentleman tell us the rate of inquiries for factory space in the West Country in particular? We should all be very interested to know, for the natural assumption, if he is building advance factories more quickly, is that there is an increased demand. I fancy that the reverse is the case. To quote from the newspaper, the West Briton, the issue of 12th January, The seven inquiries during the last quarter of 1966 from firms seeking to bring new industry to Cornwall was the lowest number since the Cornwall Industrial Development Committee began to stimulate interest in the county's economy ten years ago". A thoroughly unsatisfactory state of affairs. The chief planning officer for Cornwall, whom many in the House know and whom all respect, as we do the many devoted public servants of the West Country, said this: At the moment my department is dealing with only ten active inquiries. There has been a marked reluctance on the part of industrialists to consider either moving or setting up new undertakings". The public relations officer was more forthright. He said that this was the most discouraging situation for the past heaven knows how long.

One can quote from any local newspaper. In the Somerset County Gazette for 6th January there was the headline, New houses stay empty and unsold". The Cornish Guardian spoke of, "Pad-stow a dying town". My hon. Friends know from their own experience that one can go into the Barnstaples and the smaller Cornish towns in their constituencies and find rates of 3, 5 or 11 per cent. unemployment.

Mr. Deputy Speaker (Mr. Sydney Irving)

Order. The right hon. Gentleman is moving on to too wide a range of general policy rather than the Supplementary Estimates before the House.

Mr. Peter Mills

Before my hon. Friend continues, I must point out that he has made a mistake. In Ilfracombe unemployment is 13 per cent.

Mr. Nott

In my continuency it is 8 and 11 per cent.

Mr. du Cann

I was coming on to the thirteens. My hon. Friend intervened when I had only reached a reference to 11 per cent. If I trespass beyond the bounds of order, Mr. Deputy Speaker, I am sure that you will understand the strong feelings which we have.

What is the present rate of inquiry generally for the several factories in the West Country? The right hon. Gentleman will know the list and I need not detail them. As my hon. Friend the Member for Bristol, West (Mr. Robert Cooke) said, we are talking about money. What is the point of building these factories if we cannot put anyone in them? The factory which my right hon. Friend the then Secretary of State, now Leader of the Opposition, and I authorised in Falmouth and got built is still empty now.

This brings me to my next question: are the Government sure that they have their priorities right? Railways are being closed at a faster rate than ever before, never mind what the "Mistress of Transport" says when she comes down to Honiton and tries to mislead people in the West Country. What is the point of building factories and providing grants and loans—a policy which I strongly support—if the communications do not exist to get the people to and fro and the goods and services to and fro?

I should be out of order in discussing roads in general, but it is reasonable to ask the right hon. Gentleman, if he is to reply for all his absent colleagues, what is being done by the Government to make certain that roads are built to the factories? In my opinion, nothing is being done. When I was at the Board of Trade, as the hon. Gentleman knows, for he supported the policy, my right hon. Friend the Leader of the Opposition and I got an extra £2 million for the A38 going on down to Cornwall. Not only that, we had a survey done for the new motorway down from East Brent to Exeter. So far as I am aware, all the money available to bring firms to new factories in the development districts and to build the roads to enable them to do so has now been cut. Furthermore, it is clear that we cannot have the new motorway, the best link of all, until 1973 at the earliest.

We shall support the President of the Board of Trade in his building of advance factories, and we shall support him in implementing what is done under the Local Employment Acts of 1960 and 1963, passed by a Tory Government, with his support and that of all right hon. and hon. Member of the then Opposition. But will he use his influence to see that we have before us Supplementary Estimates next year to restore the cuts in the road programme imposed by his Government? If he does, we shall have pleasure in giving those Estimates our warmest support. Will he ask his right hon. Friend the "Mistress of Transport" to reverse her policy of accelerating the cuts on the railways? Moreover, in regard to airports, an extremely important matter when we are thinking in terms of—

Mr. Deputy Speaker

Order. The right hon. Gentleman is going very wide of the Supplementary Estimates. He can refer only to the reasons for the increases there provided. He is in an entirely different field now.

Mr. du Cann

Then I shall leave the subject of airports, Mr. Deputy Speaker, only to return to it on another occasion, for of all forms of communication, air communications are among the most important.

I come now to the second leg of the Supplementary Estimate, the question of grants and loans. What is the rate of inquiry here? The right hon. Gentleman will know that, over the period of the passage of these Acts, about £2½ million was made available which assisted 58 new projects and produced 4,400 new jobs, with, at the time of the General Election in 1964, a further 2,000 in the pipeline.

Dr. David Owen

On a point of order, Mr. Deputy Speaker. I have only just returned to the debate, having been in a Select Committee, but I did experience earlier Rulings from the Chair on this question and felt myself very limited in what I could introduce during the debate. I am not seeking to question the Chair, but I would wish the same strictness to be applied to the right hon. Gentleman as was applied previously.

Mr. Deputy Speaker

Order. If the hon. Gentleman had been present about two minutes ago, he would have heard me drawing the right hon. Gentleman's attention to that very point. It is a difficult matter to rule upon, and the Chair is endeavouring as much as is humanly possible to keep the debate to the precise terms of the Supplementary Estimates. I am sure that the right hon. Gentleman will proceed with that in mind.

Mr. du Cann

I shall, Mr. Deputy Speaker. I have been delighted to be pulled up twice because, although some of my hon. Friends have said that they had to put together more than one speech, I have found during the course of the afternoon that I was putting together four. If my speech is a little disjointed, that is the reason.

I was referring to the second part of the Supplementary Estimates in which it is proposed that additional money be voted for loans to undertakings, for building grants and so on. I had asked what the rate of inquiry was for these grants and loans. I am sure I speak for all my right hon. and hon. Friends when I say that we should be very ready to vote more money at any time for this purpose, but what worries us is the likelihood that of the amount of money here covered, very little will be available for the South West because the rate of inquiry is, in fact, down. We should very much like to know the facts.

Last under this heading, and pursuing the reasons for the Supplementary Estimate, will the right hon. Gentleman tell us whether there has been any change of policy in relation to growth zones? Is he taking the view that money will be lent under these heads to people who are moving away from the development districts or anything of that sort? A little geographical information would be useful.

To sum up the general views which my right hon. and hon. Friends maintain, we regard the present situation with deep concern. This concern is in certain respects turning to anger, for we suspected that this Administration might prove themselves to be neglectful of the South West. I hope with all my heart that this is not so. I warn the right hon. Gentleman that if that should prove to be the fact—and there is still time for judgment on it—we shall never let him or any of his colleagues forget it, and shall do our damnedest to see that they are reminded of it.

The present situation is thoroughly unhappy. We shall always support him and his colleagues in wise measures directed to help the West Country, but we shall never tolerate anything but the best for that part of England which we represent and love.

6.10 p.m.

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

If the subject of Cornish shellfish is in order in the debate, I hope that I shall be fully in order in saying that the purpose of these Supplementary Estimates is to intensify the efforts to promote employment in the development areas, including the South Western development area. I undertake to the right hon. Gentleman that I shall certainly never forget the West Country, which I have probably known for some years longer than he has, and I undertake to keep a very careful watch on the progress of those efforts.

I wish to tell the hon. Member for St. Ives (Mr. Nott) straight away that his figures were based on a fallacy, because he forgot that whereas local employment grants are included in the Estimate the investment grants are not. The investment grants are additional to what is provided in the Estimates, and therefore his comparisons of the total over the years were, to put it mildly, somewhat misleading.

However, I fully agree with the statements that some parts of the South West have a serious unemployment problem, and indeed I know it from my own knowledge. A major effort must be made to overcome it. I do not regard the unemployment figures quoted by the right hon. Member who temporarily represents Taunton (Mr. du Cann), as being very serious. For the South West as a whole, the figure was 1.2 per cent. as lately as last June, and it had risen, taking into account both the seasonal rise and the inevitable effects of the measures of restraint of last July, to 3.1 per cent. in January When giving those figures, the right hon. Gentleman omitted to mention that, as he knows, there has always been a substantial seasonal rise in unemployment, particularly in the South West, between June and January. However, between November and January there was only a very slight further increase, and the seasonal movement should now be downwards.

None the less, I fully agree that it is in the most severely affected parts of Cornwall and North Devon that the problem is most serious, and the figures for the new development area, again during the seasonal period, rose from 2.3 per cent. in June, 1966, to 6.1 per cent. in January, which is much higher than any of us would wish to see.

Mr. Nott

I am sorry to interrupt the right hon. Gentleman. He corrected my statement, and I will, of course, stand corrected if what he said is accurate. But is it not right to say that the advantages we gave when in power were predominantly free deprecia- tion? This would not show up in the Estimates, because free depreciation simply meant that less taxation was paid than would otherwise have been the case. Therefore, when the right hon. Gentleman says that the investment grants are not included in the Estimates this year, is not his own comparison unfair, in the sense that neither would free depreciation, which was our equivalent, show up in the Estimates to which I referred?

Mr. Jay

That is not so, because for plant in development areas the previous provision was the plant grant under the Local Employment Act. The present provision is the extra 20 per cent. for development areas, under the investment allowances the latter does not appear in these Estimates whereas the former did.

Mr. Nott

The most substantial benefit of all under the old system was free depreciation, to which I referred. I am saying that free depreciation would not show up in the 1962–63 Estimates, and that therefore the right hon. Gentleman's correction of my comment is not correct.

Mr. Jay

What is clear is that the hon. Gentleman's comparison was not strictly correct, but I must not pursue that point any further.

I agree that the unemployment figures measure the problem that faces us. Nearly the whole of Cornwall and North Devon has been scheduled as the South West Development Area, a far larger area than was scheduled under right hon. and hon. Members opposite. Within that area the whole range of grants, loans and assistance offered by the Board of Trade under the Industrial Development Act and the Local Employment Act, including the new 45 per cent. investment grant, is available for industrial expansion.

This Supplementary Estimate will increase the finance available for those purposes, though I cannot tell the right hon. Gentleman the precise proportion of the increase which will apply to the South West Development Area. It is reasonable to assume that it will be proportionate to their share of the insured population in development areas as a whole. When one measures the proportion, I think that the number of I.D.C. approvals which represent new industrial expansion, are relevant. We are at present using the whole Board of Trade machine for I.D.C.s and the steering of expansion schemes to get them located in the South West Development Area just as energetically as in the other development areas in Wales, Scotland and the North.

Mr. du Cann

Would the right hon. Gentleman be kind enough to reply to my question whether he could break the figures down for the South-West? I understand that he now says that he cannot. Does that therefore mean that Parliament is being asked to vote money for the Board of Trade and the Board of Trade does not even know what it wants to do with the money when it has it?

Mr. Jay

As the right hon. Gentleman should know, the figures are an estimate for development areas as a whole. That has been found the most accurate way of doing it. Although Estimates can be made for individual areas, it would be misleading in advance of the development of schemes to try to give precise figures. What I can give the right hon. Gentleman is the I.D.C. figures which is a fair measure. They show that the policy is succeeding in fact and not just in theory.

The total of I.D.C. approvals for industrial expansion in the South West region, as an annual average, rose from 2,498,000 sq. ft. in 1961–63 to 3,666,000 in 1964–66. That is an increase of 46.8 per cent. in the industrial expansion going to the South West Development Area since the present Government became responsible.

In the new South West Development Area, which we agree is the most seriously affected part of the whole region, the rise in I.D.C. approvals has been from 287,000 sq. ft. in 1961–63 to 660,000 sq. ft. in 1964–66. That is a rise of 130 per cent. since the present Government took over responsibility. That clearly means far more employment and industrial diversification in the future as those schemes take effect. I have every intention of seeing that that good work goes on, and if it does the industrial strength of the South-West should be transformed in time.

The right hon. Gentleman asked me in particular about advance factories, which are, of course, financed under this Vote. We have introduced four advance programmes in development areas as a whole since 1964. We have sited five of them in the South West Development Area; four have been completed and two have already been allocated. I think that the latter figure of allocations is the best answer I can give to the right hon. Gentleman's question about the rate of inquiries. The rate of inquiries for new factory space is naturally not as great as it was at the peak last summer, but it has not fallen off as much as many people feared.

The hon. Member for St. Ives made a great protest about the time taken, and procedure followed, in applying for B.O.T.A.C. loans. The time taken has been greatly reduced, and the procedure and questionnaires have been simplified since this Government took over from right hon. and hon. Members opposite. On examination, a good deal of the time taken turns out to be due to the slowness with which some firms—not all—answer the questions asked. But if he is suggesting that no question should be asked about future prospects of firms, we certainly cannot lend public money on that sort of basis. B.O.T.A.C. examined an application from Cadco a few years ago and turned it down. That is good evidence that we have to examine these things very carefully.

I well realise that industry alone is not all that the South-West needs and that tourism, transport and many other activities—though these are not all strictly my responsibility—are vital to the South-West. Since the right hon. Member for Taunton mentioned the Selective Employment Tax, and therefore I assume that it is in order, I am bound to say that I do not think that it is fully realised how much the Government are offering by way of grants, loans and general assistance to the tourist industry as well as to manufacturing industry in the South-West.

First, we have increased the grant, since we took office, to the British Travel Association from £1,785,000 in 1964–65 to £2,175,000 in the present year. This expenditure benefits the whole tourist industry and the South-West has a very large share in the publicity promoted by B.T.A. Secondly, all hotels in the South-West Development Area can be considered for the 25 per cent. building grant under the Local Employment Act, provided that a contribution is made to employment in the area.

Mr. Nott

Again, these figures give a wrong impression. The Government took away the investment allowances of the tourist industry which, in terms of value, far exceeded any increase given in the fields that he has just mentioned.

Mr. Jay

The hon. Gentleman interrupted too soon. I was going on to say the other things that we have done for the tourist industry in addition to the B.T.A. grant—

Mr. Robert Cooke

rose—

Mr. Jay

I think that I am bound to go on now. I was saying that hotels in the South-West Development Area can be considered for the 25 per cent. building grant under the Industrial Development Act. This is a major form of assistance, and it is far more generous now for the South-West than it ever was previously because the area has been so greatly widened. It applies, of course, only to buildings but, for plant and equipment for hotels, a 30 per cent. initial allowance is available—the hon. Member for St. Ives did not mention this—and that applies over the whole of the south-west region and not just in the development area.

In addition to all this, we have launched in recent months the Board of Trade scheme for development loans of up to £5 million for major expenditure on construction work by hotels, which should certainly assist hotels in the South-West, as elsewhere, to attract more visitors. This scheme is now in force to encourage hotel building projects that will yield significant new or increased earnings from overseas guests staying at the hotels. We are making up to £5 million development loan finance available at Exchequer lending rate for the present year. The 30 per cent. initial allowance and the 25 per cent. building grant under the Local Employment Act are, of course, also available for all the service industries and not just hotels.

Mr. Robert Cooke

I am grateful to the right hon. Gentleman for giving way again. We are interested in what he is saying but are far from convinced that we are better off. Surely he has just given us our argument. The point of the increased grant to the B.T.A. is to encourage more people to come to the West Country. But how are they to get there if the railway is cut down and the road programme is lagging?

Mr. Jay

I preseume from that that the road programme is in order in the debate, so I shall say what I was intending to say when I was interrupted. As I expect the right hon. Member for Taunton knows, for he mentioned the Selective Employment Tax, the Government have decided that extractive industries should have S.E.T. refunded and this, of course, applies to china clay as well as to tin mining, amongst the important extractive industries in the South-West. The high investment grants under the Industrial Development Act are also available for all existing industry in the development area and not just for new projects. As I was trying to explain to the hon. Member for Truro (Mr. Geoffrey Wilson), they apply to replacement and not just to the original installation of new machinery, as was the case under the Local Employment Act of the last Government. This will also be of great help to the established industries of the South-West like china clay.

Mr. Geoffrey Wilson

The right hon. Gentleman says that china clay and tin mining will get this money back. But, from what I understood during the passage of the Selective Employment Payments Act, they were going to get the premium.

Mr. Jay

I assure the hon. Gentleman that they get the refund.

In view of the question asked by the hon. Member for Bristol, West (Mr. Robert Cooke) about the road programme and transport, which I understand to be in order, at any rate to some extent—

Mr. Speaker

Order. I am not aware that the road programme is in order in this debate.

Mr. Jay

But a great deal has been said about roads in the last half hour. I was going on to say that road expenditure has greatly increased under the present Government and in addition to this—and it is all I shall say on the subject, Mr. Speaker—the Honiton by-pass has been completed. I am sure that that is most welcome to all the people travelling by road to the South-West. In view of your Ruling, however, I will leave the matter now. In spite of what has been said in the last half hour, I will say no more about transport or rail closures or some of the other points raised.

Dr. David Owen

In touching on the question of road services and special grants for hotels, will my right hon. Friend remember that the only place in the South-West that wants to build a large new hotel is Plymouth, which is now excluded from the development area?

Mr. Jay

Plymouth would benefit from the loan schemes I have described. Although Plymouth is not in the development area, it is possible for us—and it is our policy—to grant industrial development certificates far more freely in Plymouth and other areas of that kind than in a region of high employment. That is well recognised.

Perhaps I should be in order to say just one thing about transport. By far the best way of maintaining rail services would be to promote industrial expansion and thereby the general prosperity of the region, which will make it economic to continue these services. This, I believe, is perfectly possible. I do not think that the industrial future of the region and the development area in particular is gloomy, because it has many great attractions for light industry and the actual volume of employment needed in central Cornwall and in North Cornwall and North Devon is not very large.

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1. ROYAL ASSENT 25 words