UNEMPLOYMENT, SOUTH-WEST

HC Deb 10 March 1967 vol 742 cc1907-2000

11.31 a.m.

Mr. Geoffrey Wilson (Truro)

I beg to move, That this House bearing in mind that the rate of unemployment in the South-West has recently reached the highest level since the war, and in many places remains far in excess of the national average, urges Her Majesty's Government forthwith in take all necessary measures, fiscal and otherwise, to encourage the development in this region of agriculture, horticulture, tin mining, production of china clay, manufacturing industry and tourism, and in particular to improve the transport facilities of the region by road, railway, sea and air. I have been seeking for some months an opportunity to discuss this matter, and I consider I am fortunate, through the luck of the Ballot, to be able to move this Motion this morning. But there is a curious coincidence, that ever since notice of this Motion appeared on the Order Paper there have been in the South-West a number of local Press announcements about the various activities of the Government.

I have a whole bunch of such announcements here which have appeared since I put the Motion down. There has been a Press announcement that a survey—at last—is being made for the site of an airport halfway between Exeter and Plymouth. The President of the Board of Trade told the right hon. Gentleman the Member for Devon, North (Mr. Thorpe) that he was making further efforts to encourage new industry at Ilfracombe—which seems a rather unlikely place to put new industry.

The Joint Under-Secretary of State for Economic Affairs has told a group of hon. Members opposite that the West is a growth area and that there will be a Ministerial study tour soon, and we have been told that the South-West is being prospected as a possible site for the new Royal Mint. We have also been told that British Railways representatives and the representatives of the china clay industry have come near"— whatever that may mean— to a solution as to what is required for the modernisation of a specialised port at Fowey. All these statements are welcome so far as they go, but they are all in the realms of hopes and future promises. The plain fact is that the South-West has been harder hit than most areas by Government policy—by the credit squeeze, by the Selective Employment Tax, and the rest—and that unemployment—in the South-West is higher than the national average and at some times and in places it is the highest since the war, and, despite the fluctuations which take place from time to time, it remains above the national average. This is so particularly in Cornwall which is the farthest part of the region.

Cornwall, and the rest of the region to a lesser extent, depends to a large extent on the tourist industry, and so is always subject to seasonal unemployment. There is always a considerable difference in the unemployment rate between January and July. If we look at the figures we see that in January, 1949, the unemployment rate in Cornwall was 3.2 per cent., and in July, 1949, 1.6 per cent. In January, 1966, it was 5.5 per cent. and in July 2.3 per cent., although the national average was only 2 per cent. in January and 1.2 per cent. in July. It was at least double the national average.

In January, 1967, it was higher still, 6.9 per cent., when the national average was only 3.1 per cent. That is much more than twice. The January figure was the highest since 1949 except for a brief period in 1959 when, owing to the disastrous dock strike at Falmouth, the rate reached 7.3 per cent.

One can do almost anything one likes with figures, depending what particular figures one takes and which figure one compares with which. The hon. Member for Falmouth and Camborne (Dr. John Dunwoody) has asked a number of Questions in recent months, and the answers to them have all been in the same trend of the figures I have just cited; the figures given to the hon. Member for Falmouth and Camborne have not been exactly the same as the figures I have mentioned, but the figures in the answers he received also indicate that unemployment figures are higher in the South-West than elsewhere.

We on this side of the House do not believe that it is the Government's duty to create jobs, but we do believe that it is the Government's duty to create the conditions in which enterprise can flourish. This is just what is not happening. Particularly it is not happening in the South-West, and, more particularly, not in Cornwall. We hear from the Government a great deal about purposeful planning, but for the South-West, and more particularly Cornwall, it seems to be that there is no clearly defined Government purpose at all. If the whole of a region is suffering from unemployment considerably above the national average—and, parts of it like Cornwall, twice the national average—it is clear that one of the chief, if not the chief, purpose of planning for that region ought to be to seek more opportunities for jobs for the people.

In theory, of course, the Government could direct the unemployed to places where work is available, or they could direct industry to places where the unemployed live. The Government have, most wisely, not attempted either such expedient, which would meet the strongest resistance, but if they do not direct, then there is only one other policy, and that is the third alternative which I have defined as Conservative policy, namely, to create the conditions in which enterprise can flourish in that region.

If one does not direct, one must encourage those enterprises which are most likely to flourish in the region. It is not a bit of good penalising the distributive trades or the tourist industry by making them pay Selective Employment Tax in order to drive people into other trades when there are no other trades, and it is very little use declaring an area a development area and offering incentives to industry to go to the area, as has been done in large parts of the South-West, including Cornwall, when the South-West is at a geographical disadvantage as an industrial site, and when, to make matters worse, the transport communications arc very poor.

Obviously, the first thing to do is to consider what advantages the region does possess, and what enterprise may be expected to flourish in the region.

It is here that I wish to talk largely about Cornwall, because I have been a Member of Parliament for Cornwall for 17 years, and for 20 years before that I was professionally engaged in Cornwall on railway business, so I know Cornwall pretty well. I shall leave it to my hon. Friends to develop details about other parts of the region, although I shall, of course, mention the region as a whole as well.

Except, perhaps, the Bristol area, the South-West, and particularly Cornwall, is at a disadvantage industrially, because any factory site in Cornwall is bound to be far from retailers and customers in the big conurbations. It is bound to be far from the large ports, so that imports of raw material and exports of finished goods are more difficult and more expensive than elsewhere.

In addition, the transport facilities are poor; but I will have a little more to say about transport in a moment. Even with containers, liner trains and motorways, the South-West and particularly Cornwall will remain at a disadvantage as an industrial site compared with places which are nearer to ports and conurbations.

For historical reasons, we have one or two industrial areas in the South-West. Mining machinery is manufactured at Camborne, ship repairing is carried out at Falmouth, and there are various industries at such places as Yeovil. However, ideally, the South-West is not an industrial area, although favourable grants to industry may establish a few light industries here and there. It is rather like rolling stones uphill. It is a possible, but not a profitable or easy operation.

On the other hand, the whole of the South-West has two advantages which are unique in Britain. We have an exceptionally mild climate, which gives considerable advantages to agriculture and horticulture. For instance, it has been found possible to grow bamboo commercially in Cornwall, although I do not suggest that it is an industry which is likely to develop in the South-West. However, the fact that bamboos can be grown commercially is an indication of the sort of climate with which we are dealing.

Lieut.-Commander S. L. C. Maydon (Wells)

I hesitate to prevent my hon. Friend from developing this point, but surely he will remember the efforts of a former Labour Government with a groundnuts scheme. We do not want to emulate that.

Mr. Wilson

I am not suggesting that. I merely say that it has been done successfully by a number of growers, but 1 do not suggest that there is a great future for the growing of bamboo in the South-West.

We do not take enough advantage of our mild climate. Some years ago, broccoli was introduced from France. It was found that it grew better in the South-West than elsewhere in Great Britain, and a considerable trade developed. However, if broccoli is graded and packed properly, it travels well, and the Cornish trade has suffered considerable competition from Italy and elsewhere.

I have always felt that there must be a commercially worth-while crop which would grow better in the South-West than elsewhere in Great Britain but which, at the same time, did not travel well and would not be subject to the same degree of competition from the Mediterranean area. I have wondered about squash, which is a popular breakfast dish in the United States, but quite unknown here. Has the Ministry of Agriculture considered whether there are crops which would grow better in the South-West than elsewhere in the country?

If the South-West is to get specially favoured treatment as a development area for industry for which it is not particularly suited, why does it not get similar treatment for agriculture, for which it is suited? The industrial development grant for the development area in the South-West is 45 per cent. The agricultural improvement grant for the whole country is only 25 per cent., although I understand that it is likely to be increased by 5 per cent. in the new Agriculture Bill. But why does the South-West not become an agricultural development area with a differentially increased incentive for agriculture by way of an improvement grant of, say, 45 per cent. to put it on a par with industrial development? That would be purposeful planning in that it would encourage an industry which already does well in the area.

Then, what about tourism? I have mentioned the mild climate. In addition, large parts of the South-West are scheduled already as areas of exceptional scenic beauty, and tourism is an important industry in the South-West. The Cornish County Council estimates that tourism earns Cornwall as much as agriculture, each industry bringing in about £40 million a year. Two million visitors come to Cornwall every year. Unfortunately, most of them come during a short season of four months in the summer. It could be much longer. Only last Monday, I was sitting on a beach in Cornwall without an overcoat, and I should not have expected to do that in Scarborough or Blackpool.

Cornwall receives only a small fraction of overseas visitors compared with the numbers who go to Brittany, although its geographical features, its climate and its amenities are very similar and in some ways better. Certainly, we have a better quality of oyster in Cornwall than here is in Britanny.

What is being done to increase the seasonal period of the holiday trade in the South-West? I believe that it could be increased substantially if a bigger grant was given to the British Travel Association to advertise overseas. I know of an hotelier in St. Mawes who is an American. He has a much longer season than most people because he advertises in America.

Very little has been done for the tourist trade. It is subject to the Selective Employment Tax and gets no return on it. It has lost its depreciation allowances, and all that it gets in return is a modest grant for improvements if it can be shown that overseas visitors are attracted. It reminds me of the Biblical text: …for whosoever bath, to him shall be given. One has to show that one has overseas visitors before one can get a grant to attract more, and that seems to be the wrong way round.

In addition to the two main advantages of the South-West to which I have referred, Cornwall has a third which is almost unique, and that is non-ferrous metal mining and the winning of china clay. The position of the tin mining industry is ridiculous in the extreme. The Cornish tin mines went out of production not because they were worked out but because it was found cheaper years ago to produce tin in Malaya and South America than in Cornwall. However, with the growing world shortage of tin and the increase in price, Cornish tin is again becoming a worthwhile proposition. There is a good deal of prospecting going on at present, but in most cases it gets no further than prospecting, not because the tin is not there, but because the financial risks are too great.

There is nothing to prevent a revival of tin mining in Cornwall except our tax laws. A tin mine is not only a wasting asset. There is an unusually high risk factor because of the geological occurrence of the mineral. Whatever prospect can be seen in advance, once a shaft is sunk at great expense one is more likely to lose one's money in a tin mine than in any other type of mine, because of the uncertainty which is bound to exist as to the quantity of metal present.

Our current tax laws will not induce anyone to take that risk. Investment allowances for production industries and free depreciation in development areas are not enough. Other countries have taken different measures, particularly Southern Ireland, where they have something like a tax holiday during the first years of development and production.

For years Sir Douglas Marshall, a former Member for Bodmin, and I, as well as other Cornish Members, used to put down Amendments to successive Finance Bills asking for a tax concession for the tin industry. Our Amendments were never accepted, on the ground that they would create a precedent for other industries, an argument which I did not accept. In 1961, the present Prime Minister himself moved an Amendment on very similar lines, and made a speech pressing for this Amendment to the law. His Amendment, also, was not accepted.

I would suggest that this matter be looked at again, because it is becoming more urgent and the shortage of nonferrous metals is increasing. However, the price is still very high. There are opportunities for development in Cornwall if there is an alteration in the law. That is strongly felt by anyone who knows anything about tin in that area. I commend to the Government that they should reread the speech of the right hon. Gentleman, the present Prime Minister, which he gave on 21st June, 1961, when he himself put forward arguments in favour of an alteration in the law as it affects tin mining.

The china clay industry, which is mostly situated in my constituency, is also capable of development. It is a much larger industry than most people imagine, and it is much more varied in the customers to whom it sells its products than is sometimes supposed. Surprisingly enough, the china clay industry is, at the moment, quite contented. Considering the way in which it has been messed about by the Selective Employment Tax, I find that rather surprising. When the tax was first imposed, quite absurdly china clay was classified as an extractive industry, which meant that it would have had to pay tax without getting its money back. Then it was agreed that the industry should get its money back. Finally, when I moved an Amendment in the Bill dealing with the Selective Employment Tax, it was pointed out that as the process was an extremely complicated one, quite a number of employees would be entitled to the premium as they were engaged in a manufacturing industry.

That is all very well, but apart from the sale of china clay—it has a very large distributive sale to 81 different industries, not merely to the makers of china itself—not enough use has been made of the by-products. During the course of the production of china clay very large quantities of coarse grade sand is produced. This is used locally for making concrete, for the production of the Cornish unit-houses, a prefabricated semi-permanent type of house, and for making a very attractive synthetic stone called reformite. But these use only a small part of the sand.

However, there is another use for china clay sand which has not been developed, namely, for motorways. I am told by road contracting engineers that untreated china clay sand is an ideal foundation for motorways, making a lean concrete as a foundation for motorways. It is not being used for this purpose.

It seems rather extraordinary that in London we are digging up the green belt to get more sand because there is a shortage of building sand for concrete. There are 10 million tons of sand going to waste in St. Austell every year. That is the surplus capacity, over and above the small quantity that is being used.

It is largely a question of transport charges. I have tried to help the industry by putting them in touch with the railways and the coastal shipping, and also with road hauliers, but they cannot quote a low enough charge, although the price difference is not very much. It is difficult to get the sand to London at a price which would be economical. With the development of motorways towards the South-West, if sand is suitable for motorways, as I am told it is, I hope that the Ministry of Transport will look at the matter to see whether china clay sand can be used for this purpose.

My final point concerns transport. The South-West is a peninsula which sticks out into the Atlantic. It is obvious that it is particularly in need of a good transport system, because everything that we sell or buy has to travel to or from one direction, namely, eastward. Instead of being dispersed at all points of the compass, in practice it is concentrated on one railway line and two roads, on the old Great Western main line and on the A30 and A38.

I will not enter into any controversy about the old Great Western main line. The present hon. Member for Bodmin (Mr. Bessell) says that he was told by Dr. Beeching that they were going to close it. That is different from what Dr. Beeching told me. He told me that it would last for as long as I was likely to live, anyway. Be that as it may, one main line is not enough, especially when the branch lines have, to a large extent, been removed.

No doubt my hon. Friends will want to say something about transport in the South-West, and will deal with most of the points. I want to make three observations which would otherwise escape notice. The Minister of Transport, on the advice which she has received, is concentrating development on the A38, which is the southern road into Cornwall. That is a mistake. I do not want to say anything which would lead to the disadvantage of Plymouth or South Devon, but the greater part of the commercial traffic in Cornwall never use the A38. All our fish, agricultural and horticultural produce from West Cornwall goes via the A30 and not the A38. By far the greater quantity of china clay goes via the A30. The A30 is used commercially very substantially.

If we develop the A38, a great deal of the china clay could be transported on it, but transport operators would have to pay the toll across the Tamar Bridge and traffic would have to pass through the outskirts of Plymouth. That might not be satisfactory to Plymouth, but it could be done. However, the bulk of the Cornish traffic would have to go on using the A30.

With the absence of branch lines leading into North Cornwall, all the agricultural produce of North Cornwall would have to travel on the A30. It is, therefore not right that all development should be concentrated on the A38.

There is the point about carriage charges on the railways. I was a member of the Standing Committee that dealt with the Transport Act of 1962. To satisfy some hon. Members from the North-East, we included a Clause in that Bill, which is now Section 53 of the Act, for the protection of coastal shipping. That Section provides that where carriage by rail is in competition with carriage by coastal shipping those in charge of coastal shipping can complain to the Minister of Transport if the railway charges are inadequate to meet the full charge of affording a railway service. In accepting that Clause we thought we were doing something for the benefit of coastal shipping, but the effect in Cornwall has been most unfortunate and has not helped coastal shipping at all.

Some of the domestic coal which comes to Cornwall arrives by sea. Some comes by rail, and, absurdly, some comes by road. Similarly, a little of the china clay that leaves Cornwall for home consumption goes by sea. Most of the seaborne china clay is for export, particularly across the Channel, but some goes by sea. A good deal goes by rail, and much goes by road.

Mr. Fiennes, who was then General Manager of the Western Region, told me some time ago that he had spare capacity, that he had empty trucks going in and out of Cornwall which he would be glad to fill with either domestic coal or china clay at a cheap rate so that they could be used, but that he was prevented from reducing the carriage charges for these commodities by Section 53 which we had put into the Act for the protection of coastal shipping, because he would not be meeting the full charge of affording the railway service.

The absurd thing about this situation is that not only were the railways not getting the traffic, but the shipping people were not either, because, as a result of the railways not being able to reduce their charges, the hauliers were taking this traffic at a charge which was less than had to be charged by the railways, but still undercut the ships.

1 know that since that remark was made to me there has been some development of liner trains for carrying china clay, and particularly for carrying slurry, and so on, but I think that the question of Section 53 of the Act ought to be considered again to see whether there is any way of helping the railways without doing any serious damage to coastal shipping.

My third point in connection with transport concerns bus passenger transport services. There is a point which was not mentioned during the debate on the White Paper on Transport. I think that it is important to the whole of the South-West, but it is not generally appreciated.

The big bus companies, whether they are wholly-owned by a holding company like the Western National Omnibus Company, or 50 per cent. owned by a holding company like the Devon General Omnibus Company, all have a considerable number of uneconomic local rural services which they cross subsidise from the profits they make in their services in the towns. The bus companies do this by a sort of gentlemen's agreement with the traffic commissioners. If the right hon. Lady the Minister of Transport takes away from the holding companies the profitable routes in the towns and places them under the control of conurbation traffic authorities, it seems clear that there will not be the profits available to cross-subsidise rural bus services, and the number of unprofitable rural bus services will be much higher than people at present suppose.

During the debate on the White Paper the Parliamentary Secretary to the Ministry of Transport stated that it was Government policy that uneconomic rural bus services should be subsidised as to 50 per cent. by the local authority. If the number of uneconomic bus services proves to be much larger than people think, quite a heavy burden will be placed on the local authorities, particularly in the poorer areas where the services are worst.

A little earlier I mentioned the biblical quotation: To him that hath shall be given. This seems to be the rest of the text— From him that hath not shall be taken away even the little that he hath", because the rural communities and their local authorities will not be able to afford to pay large sums of money for the subsidising of rural bus services, and the services will deteriorate instead of improving.

I have mentioned those three points in connection with transport but there are, of course, many others which could be made.

I hope that I have said enough to establish that there is an exceptionally high rate of unemployment in the South-West, that these problems are extremely complex, and that there is not a simple answer. I hope that it will be accepted that the best way to tackle the problem is by introducing special measures to encourage those enterprises in the South-West which are most likely to flourish.

12.5 p.m.

Mrs. Gwyneth Dunwoody (Exeter)

I think that both sides of the House are delighted to see the hon. Member for Truro (Mr. Geoffrey Wilson) in his place today. I congratulate him on moving this Motion, because there is a great deal in it with which we agree. I hope that we see the hon. Gentleman fully recovered. We are delighted to have him with us.

For obvious reasons, I would like to concentrate on the part of this Motion which deals with transport. One of the difficult problems which we have to face in the South-West is that we have a great deal of leeway to make up due to the fact that in the past, when we should have had a certain amount of money poured into the region to develop our employment opportunities, it was not forthcoming.

We have an almost intractable employment situation in the region. I say "in the region", because I am in a somewhat difficult situation, since in Exeter this winter the unemployment figures have not been as dreadful as one might perhaps have expected. We are, of course, delighted about this. Nevertheless, we want new kinds of industrial development, because one thing that must be understood about the South-West is that it is an amenity area. It is extremely beautiful. It has some small industries, but if it is to develop it must not be along the traditional lines of agriculture, horticulture and tourism.

If this country is to develop, we must spread our people into areas like the South-West. For many years there has been a constant bleeding of young trained people out of the South-West into the larger urban areas. They leave the villages and go into the small country towns. They leave the country towns and go into the larger urban areas, with the result that all the time we are losing our young, trained people, our most useful citizens, to the larger conurbations, and what I hope we will see is an industrial policy which will mean that we will begin to plan for new towns, for more expansion of our factory facilities, and for an increase in our population, but more particularly our working population, because, if we are to have the sort of development that we need, we must provide more jobs for skilled workers. The lack of a high number of skilled jobs depresses our overall wage rates.

I come now to a more immediate problem in my constituency, that of the ever-present battle about our transport facilities. Today is a very sad one for me, because in Exeter we are seeing today the closure of one of our motive power depots. I make no apology for returning to this theme. In the South-West we have a number of skilled men on the railways. We have vital lines of communication, and there is no doubt in my mind that one of the most iniquitous pieces of legislation ever passed by this House was the 1962 Transport Act as a result of which the South-West was particularly hard hit because it put transport purely on the basis of a financial operation. Transport in the South-West, particularly the railways, will never be a paying proposition.

We on this side of the House feel that we have a right to demand that our transport facilities are not only maintained but in some cases developed, be- cause, if we are ever to have jobs and opportunities, we must have the means of transporting people and goods into and out of the region.

There is no doubt that until the 1962 Act is amended we shall never get anywhere in the South-West. The Railways Board is still having to look at each closure and each problem simply and solely in terms of pounds, shillings and pence. It is not possible to draw the sort of debit and credit account that includes the social needs of the region.

If railwaymen lose their jobs they are hard put to find other employment in the area. If branch railway lines are closed down the traffic on the main lines is automatically cut back. Even if we have freight liner depots—as the Railways Board intends to provide them—there will nevertheless be a cut-back in the amount of traffic because it is more difficult for goods to be carried into the liner depots than it has been in the past.

The thing that worries me is the fact that the whole of transport is planned in terms of rail and road only, and not air. The South-West is an ideal area for the development of swift air services. We have been told that a feasibility study is going on in the south-west region as to the advisability of building an airport to serve the whole of the region outside Exeter, and between Exeter and Plymouth —some miles from the Torbay area.

It is difficult for me to talk about this problem without appearing simply to be defending my own airport, but discussions have gone on for many years about the need for an airport in the Plymouth area, although Exeter already has excellent facilities. We are told that there is to be a rapid development of the road system and that there will be high-class roads between Exeter and Plymouth and other parts of the region. Yet there is still pressure for an airport, not outside Exeter where one already exists and can be developed, but between the two cities.

It would seem far more logical to put the money into an existing airport which already has land around it capable of development—with a subsidiary picking up point somewhere in Cornwall, available if necessary for helicopters—than to build a completely new airport between the two large cities. In the long run these decisions will make all the difference to the development of the entire area.

Since I live between the two cities of Exeter and Plymouth, I can say that the site chosen will be totally unsuitable even with road development. I hope that serious consideration will be given to this problem before a decision is taken, although I realise that the Regional Council felt that this was a way out of a difficult problem.

We hear a great deal about tourism in the South-West, and I want to make a few remarks to illustrate the difficulties which I believe to exist. Tourism is one of our most important industries, and that is as it should be, but the area has not developed the facilities that it should. One has only to go to Western Europe to discover how much money is poured into the tourist industry by local authorities in providing specific facilities. I was a member of a local council for many years. In Totnes we had eternal battles to get a municipal site for campers and caravanners outside an ideal tourist site. I want to see local authorities asking for specific grants from central Government not to develop other facilities for the tourist industry but for the provision of specific sites.

The tourist industry is changing. People no longer come to Devon and Cornwall and ensconce themselves in a seaside town with mum and dad and the entire family. They bring their cars, and this makes it essential that facilities should be provided for them. Having reached their touring area, they go around it without returning to a specific centre. If Cornwall could develop the necessary facilities it would get many more visitors.

Even the figures produced by the tourist industry itself show that we do not attract the amount of foreign visitors that we should in the South-West. This is partly a question of not advertising enough but also that we do not go out and look for business as we should. Much more imagination should be put into the policy of the British Holiday and Travel Association. Other countries are anxious to advertise those regions inside their tourist industry.

Mr. Peter Bessell (Bodmin)

In America I discovered on several occasions that the New York office of the British Holiday and Travel Association could give me no information about holiday and travel facilities in Cornwall.

Mrs. Dunwoody

I accept that, but the hotel industry itself also falls down very badly in this respect. We should not always expect central Government to provide these facilities. It is up to us to get on with it. The hotel industry does not do enough for itself. It is not fashionable to say that the standard of our hotels is remarkably poor, but in many cases this is the case, and that goes for the South-West as well.

Anyone who has taken three children into a British restaurant has quickly discovered the attitude of the British hotelier to anyone wanting to spend money in the hotel. He regards everyone as having the equivalent of two heads.

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

If that is so, why do the Government limit grants to those hotels which already have facilities for attracting visitors from overseas, instead of making them available to hotels which do not have these facilities?

Mrs. Dunwoody

We are always told by hon. Members opposite that private enterprise is capable of doing the job. This is a good instance where it should be getting on with it; but it is not. It is about time it did something to provide its own facilities.

A person can go into any small town in France, Italy or anywhere else on the Continent and be welcomed as a visitor who helps to provide the town with employment. The same thing cannot be said for the South-West on every occasion—and I say that as one whose affection for the South-West is well known. More could be done by extending the season and doing something very drastic about the academic year. It is often difficult for a family, limited by school terms, to go on holiday as a unit. This point should be considered by the Ministry of Education in its replanning.

Transport is the be-all and end-all of our existence, in the long run. I was disturbed about the paragraph in the White Paper on transport concerning bus services and the maintenance of transport services in local authority areas. If it is to be left to local authorities to subsidise their transport facilities bus and train services will be cut down enormously. There is not the capital available to spend on subsidising rail services. I therefore hope that this problem will be reconsidered by the Ministry.

If needs be, let us develop the interesting experiment that is being carried out by the Post Office with mini-buses. I see no reason why a postal bus service should not serve rural areas. In many cases only small numbers of people require transport, and the provision of such a service would make a great deal of difference.

Mr. Geoffrey Wilson

Has the hon. Lady thought of the difficulty which would arise because people want their mail before breakfast and want to travel after breakfast? A postal bus could not do both jobs.

Mrs. Dunwoody

I accept that that may be a valid point, but I hope that we are not to have only one postal service a day. If Switzerland and Austria can run an efficient bus postal service, we ought to be able to do so also. Thought should be given to this passage in the White Paper, because it could make an enormous difference to rural areas.

A great many hon. Members from the South-West wish to take part in the debate and I do not intend to detain the House much longer. I firmly believe that the South-West is a growth area. When the Under-Secretary of State for Economic Affairs addressed us, he put into words what we all feel is essential. The South-West can no longer be regarded as a holiday area pure and simple. We must have jobs provided all through the year and a higher standard of living. Certainly the Government's plans are going in the right direction. That is not to say that my hon. Friend will not hear forcibly from hon. Members, certainly those on these benches, that he is not going far enough. I hope that we shall have a debate today which will cover all our problems. We need assistance in the South-West even more than other regions need it.

12.21 p.m.

Mr. Evelyn King (Dorset, South)

We are all grateful to my hon. Friend the Member for Truro (Mr. Geoffrey Wilson) who, at some personal cost, has introduced the Motion. We are also grateful to the hon. Lady the Member for Exeter (Mrs. Gwyneth Dunwoody) for her charming speech.

Both the speeches have concentrated on transport, but I wish to take up the point made by the hon. Lady. I do not know hotels in Exeter as well as she does, but if she was referring to hotels generally, I think she was unfair to them. In my part of the South-West we have most efficient hotels. Her criticism was particularly hard coming from the mouth of a Labour Member of Parliament because she must realise that her Government have imposed on hotels the greatest taxation drawback ever imposed in this country. Therefore, it scarcely lies in the mouths of hon. Members opposite to criticise the services which hotels provide.

I am naturally glad that this Motion has been introduced. It also coincides —I think this is a fortunate coincidence —with the by-election results of Rhondda and Pollok. At first sight this may not seem relevant, but it is. I seek to make no party point or to say which party is disappointed or triumphant, but the first evidence of those by-elections is that there is a growing mistrust or irritation in the periphery constituencies against Government from London and the centre. We have more sense in the South-West than to have a self-government candidate, although I do not know about Cornwall.

Mr. Geoffrey Wilson

We have one.

Mr. King

I want the Government to take this matter seriously. A few days ago The Times pointed out in the leader the growing resentment in the regions. It is obviously intensified in Wales and Scotland, but it is by no means confined to Wales and Scotland. There is concrete evidence of anger about what appears to be the growing wealth of London and the big cities which does not correspond to the situation in rural districts. This is of significance to any party, and to the House of Commons itself. The results in Rhondda and Pollok have pointed that as few other things could have done.

Much has been said about transport. I wish to show from my constituency, and no doubt from wider spheres, the character of this problem. I am distressed because Weymouth and Portland now have the highest unemployment figures since the war. That applies to many areas in the south-west of England. What bothers me still more—I am sure it will bother the Under Secretary, who is listening to this debate —is that juvenile unemployment has doubled in the last two years. There are few areas which do not feel distress when their young find themselves in places in which their living cannot be earned and they have little choice but to go elsewhere. For juvenile unemployment to double in two years is a charge against this Government to which they should pay great attention.

I turn to the question of taxation. Always in the history of the Treasury there has been some tax which at the time when it was introduced seemed sensible but which after experience proved ineffective and also distasteful. I quote the window tax, which became a tax on health. The newspaper tax became in fact a tax on knowledge. Both were ultimately seen to be silly and were removed. I suggest that Selective Employment Tax comes much into the same category, not only because it must be distasteful to any hon Member because it imposes a tax which has as part of its purpose to create unemployment. That was part of the purpose of that tax.

The window tax and the newspaper tax were general in their incidence, but Selective Employment Tax is not. It penalises some and rewards others. What is worse, it penalises the poor and rewards the rich. I should have thought that distasteful to almost every hon. Member. Let me support that with figures. If we turn to the Inland Revenue Report—

Mr. Speaker

Order. The hon. Member is coming to the Motion, I hope.

Mr. King

I was endeavouring to show that part of regional unemployment which we are debating is caused by discriminating taxation. Poverty, in contrast to the situation in cities, exists in the area we are discussing. I think it relevant to point out that according to the totals in the Report in London the average income is £931 a year whereas in Dorset the average is £741. In other words, the average man in Dorset is 70s. a week poorer than if he lived in London. This tax hits rural England and rewards London, Manchester and Liverpool.

If we take the effect of the Tax as a whole we find that south-west England pays to the Treasury £3.6 million whereas the West Midlands and the richer regions receive £15.2 million. That justifies to the hilt my charge that the Tax is causing unemployment and removing such little money as we have from the impoverished South-West and giving it to wealthier areas. I concede that the tax may have been imposed in a hurry, but its effect is now well known. I hope that the Under-Secretary will bring to bear whatever influence he has with Treasury Ministers and repeat to them the point I have made.

Dorset has been hard hit. We had in Weymouth just one factory of any size—Vickers—and it employed 1,000 men. It closed two years ago and, although another firm has taken its place, the employment figures have not come up to what they were when Vickers had the factory. I do not want to enlarge on the speeches made by my hon. Friend and by the hon. Lady, but I have little doubt that one of the reasons for this was the poor transport facilities which existed.lb/> I turn to other hardships which are suffered. Speeches so far have been directed to asking the Government to improve facilities in the South-West. I should like the Government to improve those facilities, but I should be content if they did not make them worse, and in the last couple of years they have made them worse. I represent a constituency with a higher proportion of old people than the average. We have a higher proportion of retired officers, retired N.C.O.s and petty officers, navy men and civil servants, many of whom retired many years ago, persons to whom this country and this House owe a particular obligation which they ought to fulfil. They are increasingly hard-hit by rates.

I hope that the hon. Gentleman will take particular note of the additional hardship imposed in the last year through the Rating (Interim Relief) Act, 1964. Mr. Norman Sage pointed out in a speech about this Act that, in areas where the number of persons over 65 exceeded one-tenth of the population—that includes the area which I represent—the Exchequer had been paying respectively an annual grant of £5 per head, and that, under the new grant settlement, this grant had been halved for 1967–68, to be discontinued entirely in the years ahead.

This is another burden upon the old, and particularly upon the old in places where they form a high proportion of the population, which is true of my area and, I think, of a substantial part of the South-West—

Mr. R. F. H. Dobson (Bristol, North-East)

Would the hon. Gentleman not also mention the relief given to old-age pensioners and those on low incomes by the Rating Relief Act, 1966?

Mr. King

It may give some relief, but 1 have pointed out the way in which people have also suffered. Those who were living on pensions of £700 or £800 a year, because of the decline in the value of the £, and even allowing for the increase in the old-age pension, are worse off financially than they were two years ago.

The South-West Council of Chambers of Trade took a sample recently of the effects of the Selective Employment Tax and got returns from all the shops in the area, which showed that, as a direct result, 2.5 per cent. of male full-time employees had lost their jobs and 21.4 per cent. of male part-time employees had lost their jobs. These were sackings or dismissals which these returns showed as directly attributable to the Selective Employment Tax. I do not say even that the Government can easily make matters better, but at best they should not make matters worse, which I fear has happened.

On profits, 37 per cent. of returns showed a loss of over 20 per cent. of profits, which means less money in the area. I accept at once that such statistics may be loose, but they are borne out by the Ministry of Labour figures which show that from November, 1965, to January, 1967, unemployment in Weymouth and Devon went up from 430 to 668.

From these things, it is clear beyond reasonable doubt that the Selective Employment Tax, as it was designed to do, has unfairly created unemployment in the area which we represent as opposed to other areas. It has taken money out of the district which I represent, which is poor, and has given it to wealthy areas. Attention ought to be drawn to this matter.

I now turn to what may be done. Weymouth, as I have said, is hard hit and Portland is even harder hit. An application is about to come before the Board of Trade for an Industrial Development Certificate for at least one new industry, which I understand will employ about 100 people, in Weymouth, which, in the past, has not always been lucky over I.D.C.s. I beg the Government and both Ministries to have regard not only to the level of employment when comparing a development area with a non-development area, but also to the wage level and the way in which unemployment is growing in this area. If we do not get a satisfactory and encouraging response when we have a chance of attracting industry to the area, we shall indeed feel hard done by.

Mr. Aneurin Bevan used to refer to private wealth and public squalor. This is an illusion—

Mr. John Pardoe (Cornwall, North)

The hon. Gentleman seems to have the quotation wrong. It was in fact said by Professor Galbraith.

Mr. King

Professor Galbraith—I attributed to one what the other said.

These two things go together. If there is private property there will also be public squalor. In Weymouth, we want to build a swimming pool but have not the money, and within a decade the whole town will shortly have to spend an enormous amount on the drains. If we cannot raise the wealth of the area in which we live, these things cannot be done.

There is a growing discrepancy between the growing wealth of the cities and the growing poverty of rural and coastal England and the outlying areas. I do not proclaim this to be wholly a party problem—it may well have been going on for years—but however long it has been going on it is now the Government's responsibility to set it right.

I have the honour to represent Dorset and I believe that its scenery—Wareham, Corfe Castle, the coast and the stone-built villages—are among the loveliest in the country; and I believe that something of that beauty has rubbed off on the population. Much of the strength and spirit of England dwells in those who live in rural and coastal areas. They are the salt of the earth, the essence of our national strength. They are generally becoming increasingly disappointed—I will not say embittered—because they feel that, relative to other parts of England, they are not getting the fair deal to which they are entitled.

Another point which is not without significance is that rural and coastal England is not well represented on benches opposite and is much better represented on these benches. Hon. Gentlemen opposite must put their townsmen's prejudices behind them. In hon. Gentlemen's own interests, and in the interests of England, I should have thought that it would be much more healthy if such party divisions as exist were not based on geography. For that reason again, I plead with hon. Gentlemen opposite, while they have the chance, to do what they can for a part of the country which they have neglected in the past.

12.38 p.m.

Mr. John Ellis (Bristol, North-West)

I add my congratulations to the hon. Member for Truro (Mr. Geoffrey Wilson) for having given us the opportunity to debate this subject. I too, would like to deal with agriculture and tourism. Although new products could be brought into certain parts of the region and different crops grown, it is important to remember that labour is always leaving agriculture and the industry will, therefore, not in itself solve the problem of employment in the South-West.

An important thing about tourism is that people cannot readily get into and out of the region. This part of the country is a peninsula which poses its own transport problems. Something which South-West Members must constantly impress on the Under-Secretary and the planners of Whitehall is that when one reaches Bristol, one is still only a third of the way to Land's End. This is a huge region with its own problems, which differ from area to area.

There are certain transport problems in Bristol, where a common line must be followed. Perhaps the key to the South-West is the M5, because it will bring tourists to the region. Proposals have been made to push the M5 as far as Edithmead, and it appears that in my constituency the M5 will extend to Avon by 1970. It will, therefore, take three years to build three miles of motorway, from Cribs Causeway to the Avon. It is vital, for tourism and everything else, to have proper communications in the area and I hope that the importance of an adequate roads system will be borne in mind.

In my part of the country we have the largest port, the Port of Bristol, and it is obvious that any region like this must have an adequate port to serve its hinterland. But I must sound a note of warning. An article appeared in The Times on 7th March about the Port of Bristol struggling to keep its trade. I have devoted a considerable amount of time to making a study of the docks in my constituency and I have been working out what can be done to solve their problems. If new industries are to be brought into areas of under-employment, viable port facilities must be provided.

In 1964, which was a record year for the Port of Bristol, we handled 8,875,754 tons of goods. We were then discussing the proposition for Portbury. We in Bristol have always believed the Portbury scheme to be a viable concept. The Minister has not turned the project down entirely, and I hope that we will hear something today about Severnside because we are preparing an analysis to prove once again why we should be allowed to go ahead with the Portbury project.

I hope that the Minister will supply information about the developments at Severnside and the employment opportunities that will be provided there. A modern port with adequate facilities must have a considerable impact on the future of the area. Last year, the Port of Bristol handled 8,612,625 tons of goods, 200,000 tons less than the previous year.

The White Paper stated that favourable consideration would be given to improving the existing facilities at Avonmouth and plans are in preparation in Bristol for proposals to be made to the Minister concerning Avonmouth. We need, for example, the provision of another lock gate, a really big one, so that we can handle the container traffic which we hope to bring to the area. This is vital because we have built a £250,000 depot at Chittening. We can handle the goods and there is ample land in the area on which to build marshalling yards, freight facilities, and so on. With the M4 to London and the M5 to the industrial Midlands, to be extended later to the South-West, employment opportunities can be provided. This is, therefore, a worth-while project, particularly since we can make out a good case to satisfy the Minister to allow us to go ahead with the Portbury scheme. I trust that my right hon. Friend will agree to our proposals for improving the existing facilities at Avonmouth. In February of last year we lost the trade of Elder and Fyffe, and that means that 50,000 tons of bananas each year are going elsewhere.

We want to be able to say to prospective importers and exporters that Avonmouth has schemes envisaging a new lock gate and other facilities which will allow it to handle larger ships and container vessels. It is vital that we are able to provide this service, otherwise people will look elsewhere. I hope that when we present our Bristol schemes the Minister will give a quick decision.

I appreciate that many hon. Members wish to contribute to the debate and I have, therefore, been brief. We in the South-West have many problems and they vary from region to region. The provision of adequate communications facilities for trade is the key to solving the unemployment problem. Bristol, meanwhile, is the key to the South-West. It is vital that the transportation facilities for trade are brought up to scratch and I hope that I will receive answers to the questions I have asked about Severnside and the propositions I have made.

12.45 p.m.

Lieut.-Commander S. L. C. Maydon (Wells)

I was pleased to hear the hon. Member for Bristol, North-West (Mr. Ellis) refer to Portbury. The refusal of this scheme—and it was nothing more or less than a refusal; the negative was absolutely implicit in the Minister's decision last year—has been a disappointment to Bristol and to those who live and work in the area.

Mr. Ellis

The hon. Gentleman must be fair to my right hon. Friend. There was a comprehensive argument for looking at the viability of another major liner terminal. While it was said that there was not sufficient evidence to justify going ahead with Portbury, my right hon. Friend said that she would consider any further evidence for the scheme and that the door was not closed.

Lieut.-Commander Maydon

I am aware that the Minister wrapped up her negative words very skilfully. We deplore that just as much as we deplore the negative. The fact remains that only last Wednesday, obviously with electoral considerations in view, the right hon. Lady made her announcement about port developments, particularly for container traffic further north. We who live in and represent the area not far from Bristol resent this sort of thing.

In answering Questions the right hon. Lady perhaps gave signs of weakening. She suggested that she did not say "No" to Portbury. We have our view about how she said "No". Nevertheless, if she is willing to accede that her words did not actually mean "No", then perhaps she is having second thoughts about the scheme and will accept the invitation which has been tendered to her to come to the area and see it for herself. I hope that she will reconsider the Portbury scheme on its merits and not on its merits as an electoral inducement.

We do not need much endorsement of the criticism of the Government contained in the Motion. The results from Pollok, Nuneaton and Rhondda endorse what has been said today, not just by my hon. Friends but by all hon. Members. The Labour Government have produced a steady rise in unemployment in the South-West. In November, 1964, the unemployment rate was 1.3 per cent. In October, 1966, it was 2.4 per cent. Last month it was 2.9 per cent. It reached the peak figure of 3.1 per cent. in January of this year.

All this stems from deliberate measures taken by the Labour Government to cause unemployment, although they are pleased to call them "shake-out measures". I ask hon. Gentlemen opposite how they would feel, if they were visiting labour exchanges and seeking work by every possible means, when told that they were merely being "shaken out". The real truth of the matter is that this is deliberate Government-imposed unemployment.

Dr. John Dunwoody (Falmouth and Camborne)

Just as a matter of fact, would not the hon. and gallant Member agree that during the past month there has been a fall in unemployment in the South-West?

Lieut.-Commander Maydon

That is precisely what I said. The peak was in January, 1967—nearly two months ago. It was then 3.1 per cent. But that is nothing to crow about. It is far too high as it is.

The development areas in the South-West are, as my hon. Friend the Member for Truro (Mr. Geoffrey Wilson) said in his very able speech, the worst hit of any. They are infinitely worse off than those in South Wales, Scotland or Merseyside. The growth rate of unemployment in our development areas since June, 1966, is 160 per cent.

This increase in unemployment must be seen against the census figures for population. It will be argued that if the population is going up in the area it will tend inevitably to increase unemployment, but it must equally be said that if the population in this area is going up, even greater measures should be taken by the Government to prevent unemployment. The growth rate of population is higher in the South-West than it is in the rest of England and Wales. This is a consideration which the Government should most certainly bear in mind—and I am glad to see the Joint Under-Secretary of State for Economic Affairs nodding his agreement with that remark.

We in the Wells division are fortunate compared with some, but we have grave anxieties. Our principal industries are light engineering, leather, and boots and shoes—and there are a number of others as well as agriculture. So far we have not been hit too badly but, as I say, there is very grave anxiety. The Bath and District Employment Committee discussed this matter only last January, and stated that the present level of unemployment …was only equalled in January—February, 1959, and beaten in the bad weather of January—February, 1963. It was also said—and I now read a passage from the report in the Somerset Standard of 27th January, 1967: The squeeze has thrown on to the unemployment registers numbers of unskilled and semi-skilled workers, but not the skilled men so very much needed in the engineering industries. The Shepton Mallet Journal of the same date wrote of an impending visit to the town by the hon. Member for Birmingham, Small Heath (Mr. Denis Howell) in these terms: Officials in the town are already seriously alarmed at the increase in unemployment and it is expected that Mr. Denis Howell, M.P., Joint Under-Secretary of State, Department of Education and Science, will be taxed on this question when he arrives in Shepton Mallet tomorrow (Saturday). The report states, a little later, referring to the hon. Gentleman: He will, however, be addressing party members later on the 'Policies of the Labour Party' behind closed doors. Nevertheless, it is known that he will be forcibly reminded that there is grave concern over the rise in unemployment in the Shepton Mallet area. A party member said this week: 'We don't want platitudes or promises. We want to see a cut in the dole queues, not only in Shepton but nationally. The 1930s were bad enough and it took this town a long time to get over that mess'. It will be seen that there is very serious concern in the area over the level of unemployment.

The Motion speaks of …necessary measures, fiscal and otherwise.… to meet the situation. It is plain from what has already been said that the Government's hope that the Selective Employment Tax would provide a useful lever to redeploy scarce skilled labour is yet another of the Labour Party's myths—the sort of myths that are exploded all over the country today, not only at Pollok but at Nuneaton and Rhondda, West.

It has been calculated that the S.E.T. is taking £16 million from the South-West. The chairman of the National Farmers' Union Somerset branch said the other day that the union had estimated that the actual cost of collecting the S.E.T. from farmers and then paying it back to them—this ridiculous and uneconomic process by which the money is collected, held for six months and then returned to the original payers—is costing farmer taxpayers alone £100,000 a year. This robbing of Peter to pay Paul is an old favourite of Labour policy, but the Labour Party always forget that in the change-over from the left to the right pocket several coins get dropped on the way and lost. This is inevitably the cost of the administration of a stupid, pointless, uneconomic tax of this sort.

If further evidence is needed, one has only to read the report of the Radstock Co-operative Society, at its general meeting held a few weeks ago, not very far from my constituency. It then had to announce a cut in dividend from ls. to 10d. The chairman said that the S.E.T.

… discriminated crudely against the distributive trades. The South-West, being very largely a tourist area, is very much dependent on its distributive trades—

Mr. Maxwell-Hyslop

The House would be intrigued to know whether the Radstock Co-operative Society is affiliated to the Labour Party.

Lieut.-Commander Maydon

Offhand, I cannot enlighten my hon. Friend, but I have no doubt that his suspicion that the society is, indeed, so affiliated is as strong as mine.

Nevertheless, the members were honest enough to say: We cannot see that the application of S.E.T. will release many workers from our kind of retail distribution, if, indeed, this was ever the intention. Does the Minister wish to intervene?

The Joint Under-Secretary of State for Economic Affairs (Mr. Peter Shore)

I simply wanted to help in answering the question asked by the hon. Member for Tiverton (Mr. Maxwell-Hyslop). If I were asked, my answer would be that if the Radstock Co-operative Society were affiliated to the Labour Party, all one would need to do to find out about it, and how much it contributed, would be to look at the published annual accounts of the Labour Party.

Mr. Speaker

Order. I think that we can now leave the Radstock Co-operative Society.

Lieut.-Commander Maydon

I agree, Mr. Speaker. We have heard quite enough about it.

The sort of fiscal measures mentioned in the Motion could well be taken to improve our situation, but the abolition of the S.E.T. would probably go further in south-west England than any other single measure in improving the situation and reducing unemployment there. Other than that, schemes such as the Portbury Dock, the extension of the motorway from East Brent to Exeter—which will not be completed until 1973—are the sort of work that we need in the South-West. Such work will go a long way towards preventing this scourge of unemployment afflicting us.

1.0 p.m.

Dr. David Owen (Plymouth, Sutton)

We are all grateful to the hon. Member for Truro (Mr. Geoffrey Wilson) for giving us this opportunity to debate such an important subject, particularly when the West Country is in the process of going to the polls. Coming from the rather shrill polemics of the Honiton by-election, it is worth remarking that this debate has been conducted in a much more level-headed fashion. All hon. Members know that the problems we are facing are not new, but have been there for generations.

What is interesting to me, looking back through old copies of HANSARD, for the period when I was not here, is to see, over the last two years, the very real interest which is being taken by this House in the West Country. Many of us have been saying these things on the hustings for many years. Now we are seeing a lobby in Parliament, generating considerable force, similar in some respects to the lobby established by Labour Members for the North-East during the mid-1950s and early 1960s. What is important now is, if we establish the proper regional machinery, the unemployment and the rather depressing circumstances which we are debating now will not occur again. My concern is not so much for the winter just passed, but for the winter to come and beyond that.

I will confine my remarks to the broad aspects of regional and location policy. I believe that the Government's general policies about regional policies are to be welcomed. We have spent many years trying to get regional machinery and now we have it. We are critical of it and rightly so. I believe that we should move towards elected regional councils. There is a united view among all hon. Members of political parties representing South-West constituencies, that Bristol is not the site for a regional centre and that we want to see a separate region for the far South-West.

What is interesting is that we have regional machinery, and we have pressure from the Government backbenchers to change the long term regional structure. I will address myself to the need for considerable structural reform in our regional, location and development policies. It is my contention that the far South-West has very specific and unique problems, quite distinct from, probably, any other development area in England, Wales or Scotland.

We have heard a lot about transport— I will not go further into this. There is the isolation and distance difficulties. There is the very difficult terrain. Large sections of Devon, and parts of Cornwall, are open parkland and moorland, which are not able to be developed. There is a long history of hamlets and small communities. There are great difficulties in North Devon with hill farming and we have the declining industries of tin and other mining in Cornwall.

We have to realise that a major remedy for our short term unemployment is generalised reflation. This is what is so important in an economy like ours— we must move towards growth. The West Country should not spend all of its time adopting what I believe the Chairman of the Regional Council has called "the begging bowl approach". We have positive advantages to offer. There are grave dangers in location policy, and planning for industry, in concentrating solely on the unemployment index.

This is of great importance and concern, particularly for those who have constituencies with localised pockets of unemployment of 7 per cent. or 8 per cent. I understand this very well, but we must accept that when we locate factories the vital thing is that they should stay there. One of the depressing tendencies over recent years, since we have adopted development districts or development area policy, is that there have been a considerable number of closures of factories in these areas. I am worried that the Government have no statistics or knowledge of this.

I urge them, for time is not on our side, to bear in mind that in introducing any new policy, one should at the same time be conducting continuing research and prospective studies to assess the adequacy of one's policies. We should have the answer to how many factories which have moved to development areas have remained there and how many have been affected by redundancies during recent months. These are the sort of statistics that we must have in order to ensure a coherent regional and location of industry policy.

The Industrial Development Bill and the new designation of development areas is a very significant advance, and I welcomed them. It is right to have wider areas and not to have the policy of development districts, which tended to fluctuate and change, almost from month to month and certainly from year to year. There is also a case for adopting a selective approach within these larger development areas and this is one of my major criticisms of Government policy. They have rightly given up specific and rather small development districts and gone for a wider area. Yet they have deliberately in many parts of the country, particularly the far South-West, excluded certain centres which are the natural growth centres, from the development of the region. This is wrong, and the President of the Board of Trade has never justified this, nor has he even attempted to do so. I criticise him very heavily on this.

Mr. Bessell

The hon. Gentleman has raised an important point. He represents a constituency in Plymouth. Would he not agree that it is utterly illogical that two natural growth areas like Tor Point and Saltash and to a lesser extent Gunnislake should be excluded when they are so close to his own constituency, a major centre of industry and population?

Dr. Owen

I agree with this. My maiden speech in this House was on this very subject, and I feel strongly about it. It is difficult to be certain that one is not just speaking from the narrow interest of one's own constituency. I hope, and I can only express the hope, that I am speaking for the whole of the South-West when I say that to exclude a growth area like Plymouth can only be detrimental to the long-term interests of the South-West. In Plymouth we are finding that industrialists who wish to come there will not consider any other site in the South-West and are therefore not coming to the area. The Board of Trade has given us its stock answer, that ever since 1962 it has never refused an I.D.C. for Plymouth.

What it has failed to say is that if industrialists wish to go to Plymouth they are told they will not receive an I.D.C. Every barrier and obstacle is put in the way, and it is only those who are really determined to go to Plymouth —which shows its real attraction—and who pursue the matter who are eventually granted an I.D.C. I can furnish evidence of this; the city council has done so. The South-West cannot afford to lose a single factory. I would prefer them to go to Plymouth, because this is in the interests of the South-West. We are finding ourselves in a situation when we are turning away factories which will only come to Plymouth. This we cannot afford to do. I urge the President of the Board of Trade to look again at his policy. We need to enlarge the development areas, to include the growth centre of Plymouth and for other reasons. I know that the hon. Member for Torrington (Mr. Peter Mills), if he catches your eye, Mr. Deputy Speaker, will wish to press the case of Okehampton. I shall give him my full support. This is an area which should be designated. It is a town which has been hard hit, and just one factory would make a significant improvement in that small township. I would extend the development area, if necessary, to include the whole of Devon, but certainly it should go quite a long way up the peninsula from where it is at present.

The President of the Board of Trade should approach Government Departments. Plymouth is dependent upon the Ministry of Defence. This dependence has been with us historically for many years and generations. Broadly, we welcome it. But Plymouth has sacrificed much for the commitment to the Ministry of Defence. It is not too much to ask the Government to ensure that when defence contracts are being allocated they use their influence to get industrialists to move into the Plymouth area.

One thinks immediately of an industry to which we could offer facilities, the electronics industry, which is very much related to the defence programme and whose products predominantly are ordered by the Ministry of Defence. Plymouth has the necessary skills. It also has the climate and clean air which is so necessary for the industry. It also has a positive wish to attract skilled electronic engineers and technicians from other parts of the country. Plymouth has said definitely that it wants more population. It is prepared to accept London overspill, and there is a pilot scheme in existence for that purpose.

I would remind the President of the Board of Trade that during the Second Reading debate on the Industrial Development Bill he said: We propose that the 40 per cent. investment grant and other kinds of development area help shall be available for such overspill towns if their population is being substantially increased and the new inhabitants are coming from a development area."—[OFFICIAL REPORT, 16th May, 1966; Vol. 728, c. 946.] If Plymouth is a growth centre it will attract population, not only from London, but from those areas of the far South-West where we cannot locate factories and where it would be madness to do so. A factory in every village in the far South-West would be a crazy economic policy. We should concentrate on selected areas.

One of the worries about depopulation is that when people go from the far South-West they leave us completely. It is difficult for somebody to uproot himself from a village in far Cornwall, but it is much less difficult if he moves to Plymouth than it is if he moves to the Midlands and completely breaks his family ties.

I ask the Minister to consider this matter again. Since Plymouth is prepared to welcome overspill population and already has a pilot scheme, I ask the Minister to offer development areas facilities for increased population. This is the only way to diversify our economy. We should consider again the locational planning of industry, because this is longterm. Not only should factories stay there—there is, I suspect, dangerous evidence that some factories are not staying there, particularly at times of depression, but the basic fundamental of our regional planning as I have always understood it —it is behind a number of the plans coming out of the regional economic planning councils—is that these areas in which there is unemployment have a real contribution to make to the national income.

This is the positive approach, not the old negative dole approach in which districts were designated entirely on the basis of the unemployment index. The far South-West is a most attractive place in which to live. We have spent too much time in thinking of it just as a retreat for retired people or for hunting, shooting and fishing. Active industry in certain selective areas would add to the growth potential of this country. The far South-West is an attractive area, and I cannot say that too strongly.

The President of the Board of Trade talks about helping the creation of new hotels. There is one city in the far South-West which urgently needs a new hotel, Plymouth. Such a hotel would serve the development area as it is now designated. People coming off the train want a hotel in which to stay. Plymouth is trying to attract conferences and to set itself up as a large conference centre. It will have a polytechnic. If my right hon. Friend will not make it a development area, I ask him at least to make a concession and to offer development area facilities for hotel building to Plymouth.

These are all points which my right hon. Friend could well consider. I am sorry that the Parliamentary Secretary has had to go and have his lunch. I should like a reply to some of these points. We have raised them in debates before and we have not even had a reply.

The Minister of Social Security (Miss Margaret Herbison)

I have been making notes for the Minister concerned.

Dr. Owen

I am very grateful to my right hon. Friend. We all know how capable and efficient she is. I am sure that the Minister will be given all the questions which I am asking. I know that he is very sympathetic because I believe that he thinks that the regions have a great potential and are able to add to the country's growth potential. It is at times like this that we should be considering growth and using every possible means of achieving the growth targets, despite the upsets and relapse which have occurred following the 20th July measures.

I wish to say a few words about the Selective Employment Tax. The Chancellor of the Exchequer was warned from these benches and from the benches opposite that this tax, as applied to the far South-West, would have adverse effects. It was quite clear from economic evidence first published in The Guardian by Rawstron and subsequently confirmed, I am sure, by the economists in the Department of Economic Affairs that the tax would hit this region probably harder than any other region. The fears have been borne out. The evidence is now quite clear.

I welcome the Selective Employment Tax. I think that in broad outline it is a good tax. It is a courageous tax We wanted a selective approach. What I urge is that we increase the selection and apply the selective principle in the regions. It could be a most positive and progressive step in encouraging regional development and planning. I know that we shall not have a reply on this point today, but I ask the Chancellor of the Exchequer, while he is in his period of relative purdah, seriously to consider it and to remember that a large proportion of the pressure on him has come from back-bench Members on this side of the House. When the tax was introduced, my right hon. Friend said, for good reasons, "Let us see how it works out". We have seen how it has worked out. Now is the time for a change, and I hope that it will come in the forthcoming Budget.

Lest right hon. and hon. Members opposite think that this speech is entirely an attack on the Government, may I point out that it is a criticism of the Government. We on this side feel that this is a most important part of the dialogue between Government and back benchers. I am proud of these differences. Half the reason for their emergence is the apathetic opposition of hon. and right hon. Members opposite who have been weeping crocodile tears for the West Country for far too long. They had many years in which to do something about it, and they did nothing.

I cannot understand why it is that members of the Conservative Party, which time after time returns more Members in the South-West than either of the two other major parties, when they were in power and had an opportunity to do something about the matter did nothing but cynically disregarded the South-West. Now that they have been rejected at the polls—in 1964 and again in 1966—they are beginning to realise that they have to take notice of it.

Also, when the Conservative Party selects candidates for the South-West, it should remember that the South-West and West Country people are very proud of their own distinctive character. We have unique and individual problems. We welcome having on these benches fellow West Countrymen who are prepared to fight for the good of the West Country and not people who have been drafted into safe constituencies from outside.

I say to the Government that we are critical, but that we are pleased with what they have done. They have set up the regional machinery. We are beginning to feel that they are concerned about the far South-West and its problems. We believe that in the long term there is a real prospect of the far South-West and the South-West as a whole contributing to the growth of industry and the economy of this country.

1.20 p.m.

Sir Frederic Bennett (Torquay)

It was a pity that the hon. Member for Plymouth, Sutton (Dr. David Owen) felt it necessary to wave his rather tattered party flag towards the end of an otherwise excellent speech; but I liked his condemnation of Parliamentary candidates by the use of drafting. I am not sure how the Labour Party chooses its candidates; I think that it has an ultimate sanction. As far as I know, all Conservative candidates—and this may apply to the Liberals, too—are chosen by the local selection committees. Certainly, I have noticed no drafting in the Conservative Party.

It is a pity that the hon. Lady the Member for Exeter (Mrs. Gwyneth Dun-woody) said what she did about the hotels in the West Country, because it was entirely unjustified. If I may sing the only purely constituency note which I propose to make during these remarks —because I want to talk in a wider West country vein—in Torbay not only have we the only five-star hotel outside London apart from Gleneagles, but we have more four-star, three-star and two-star hotels than many other towns which are five times our size.

Mr. Pardoe

I am grateful for the hon. Member's remarks about hotels. I did not like the remarks of the hon. Lady the Member for Exeter (Mrs. Gwyneth Dunwoody), either. I remind the hon. Member, however, that a recent report by the western area Young Conservatives has been far more critical of West Country hotels than anything that the hon. Lady said.

Sir F. Bennett

When it comes to a Liberal deploring freedom of speech, in view of what has happened in the case of Young Liberals, this is an even stranger departure. I thought that more fresh air was wanted to blow through the corridors. Now, apparently, the Liberals deplore this freedom of thought by our Young Conservatives. Personally, I wish them well.

There may obviously be room for improvement elsewhere, but it does no good to the West Country to pretend that we have no reasonable hotels, as did the hon. Lady the Member for Exeter. My view would, I think, be supported from all benches.

I would like to follow the hon. Member for Plymouth, Sutton in another line. All methods of too concentrated, artificially stimulated employment or industry on far too narrow a basis are wrong in any event, not only in the direction mentioned by the hon. Member, but in a much wider field. If by artificial methods we try to drive industry to an area to cope with what may be a fleeting situation, we will not do any good to the area as a whole.

That brings me to the Selective Employment Tax. The only other remark by the hon. Member for Sutton which I criticise is his last-minute support in his speech of the S.E.T. in principle; but I realize that he did have to renew his licence at some point. It does us no good in this House, if we think that this tax is bad, to say that it is bad only for us and that everybody else can pay it, because every Member of Parliament would then say that he did not mind other areas paying the tax provided that his own did not. If we disapprove of the Selective Employment Tax as a bad tax, we ought to disapprove of it lock, stock and barrel and not try to deal with it merely on a selective regional basis. If we were to do this, we would fall into the very trap he condemned of adopting artificial measures to encourage economic growth.

Dr. David Owen

I supported the Selective Employment Tax in principle on Second Reading in June.

Sir F. Bennett

I am well aware that the hon. Member's sin is not new. I said that it was a pity that what he said today was that he supports this tax, but not if the West Country has to pay it. That is a fair criticism of his remarks. On these benches at least, we deplore it lock, stock and barrel, for various reasons. I agree with the hon. Member for Sutton, if it is any comfort to him, that the S.E.T. is particularly bad when applied to an area like the West Country, but that is no reason for saying that it is a good tax elsewhere.

I agree with my hon. Friend the Member for Truro (Mr. Geoffrey Wilson), who so courageously moved the Motion, that we should think much more in the West Country in terms of expanding the existing means and foundations of employment rather than concentrating too much on trying to bring in new ones. We have a solid basis for a prosperous West Country on which we can build without too much messing around with new ideas. I refer particularly to tourism, and I will come presently to agriculture.

All that we need to do in the case of tourism is, not to think of new gimmicks or techniques, but to remove some of the obstacles which have been deliberately put in the way recently by the Government. I have to refer here again to the Selective Employment Tax. I know that it has been said that the purpose of this tax is to create redeployment and not unemployment, but that is nonsense in the West Country because we cannot redeploy people into something which does not exist. It is precisely for that reason that unemployment figures have been mounting.

This attack on the tourist service industry does not stop simply at the hotels and their employees but runs right through to the distributive trades and the shops, so that the whole prosperity of an area is seriously affected by the tax. Not only are people thrown out of work, but their purchasing power is reduced. This again has its repercussions in other service and distributive industries. It also badly affects the building industry.

As regards agriculture, one of my hon. Friends made a good point in saying that admittedly, in the long run, the farmer gets back what he pays in the tax although quite a few pounds are lost on the way between the two transactions; but that is not the only evil which arises. Farmers already have enough of a job in filling up forms and the like. I happen to have a farm. I do not know whether all hon. Members realise that what happens in the case of the Selective Employment Tax is that farmers have to pay this money first as an enforced loan which the Government take from them. In these days of high interest rates, this is an expensive item. We hear glib talk about the farmer getting it back afterwards, but the Government expropriate the farmer's money for a period of months and use it to pay interest on their own money meanwhile.

Mr. Bessell

Would the hon. Member agree that this hits small farms in particular? I imagine that he has experience of this in areas in his constituency, around Galmpton, for example.

Sir F. Bennett

It is true that the smaller the unit, the harder the farmer finds it, not only to get the money, but to finance it at the current high interest rates. The suggestion that a farmer can set the interest ultimately against his profits also presumes that in his early, struggling days a small farmer is making a profit against which to set the tax. The whole tax is riddled with anomalies and contradictions.

The best contribution that the Government could make to the West Country is not to worry too much about grants which have to be claimed, but to consider an easing of the general tax position and the replacement of some of the allowances which formerly existed rather than thinking always of bureaucratically administered grants. If the Government let the West Country develop itself without putting obstacles in its way, many of the problems which we have been discussing will fade away over the years. I am deliberately curtailing my remarks, because this should be an occasion when every West Country Member should be able to contribute to the debate and show what solidarity there is in these matters.

I come now to communications. I hope that the Minister's answer to this debate and to our request for an improved road system will not be to say that the Conservative Party did nothing about it while it was in office. All Governments, including the present one, have failed to realise just how necessary it is to expand our road programme. If there had been one item, and one alone, which I would not have the Government include in their recent cuts, it would be road communications.

Mrs. Gwyneth Dunwoody

Would the hon. Member accept that one of the difficulties in the West Country is not the amount of money allocated by the Government to the road programme, but the fact that a great many counties will have difficulty in acting as agents? I would like to see the South-West higher up the list of road construction units. Our difficulty will be to find the skilled people to get on with the work of building roads of the standard that we need.

Sir F. Bennett

I ought here to declare an interest as a director of one of the largest road construction companies. Judging by the number of tenders submitted for every road which it is proposed to build, I do not think that there is any lack of people to get on with the job provided that sanction is given for the roads to go ahead.

I do assure the hon. Lady that I know just a little about this, and perhaps far more than she knew about hotels when, a little earlier, she was criticising them and left the Chamber shortly afterwards so that I had to remonstrate with her in her absence.

I plead with the Government to realise two things. First, if they want to help the South-West let them not make a lot of speeches about the technical measures they are trying to take. Let them just take away some of the obstacles which they have put in our way. Secondly—and here I go some way with the hon. Lady —for goodness' sake let them do anything possible to take off the South-West the brakes such as there are in the taxation system, and improve the road programme. This would do more than anything else to achieve the prosperity which we all want.

1.30 p.m.

Dr. John Dunwoody (Falmouth and Camborne)

I shall be brief because I agree that we should be when there are other hon. Members who want to speak and when there are other Motions on the Paper. The hon. Member for Torquay (Sir F. Bennett) will forgive me if I do not take up all the points he raised—even to defend the hon. Member for Exeter (Mrs. Gwyneth Dunwoody) from him—though I will briefly defend my hon. Friend the Member for Plymouth, Sutton (Dr. David Owen) from what the hon. Member said. I think that what my hon. Friend was trying to say was that the Conservative line to the South-West appeared to go through Reading at the moment.

The hon. Member for Truro (Mr. Geoffrey Wilson), whom we are all very pleased to see back in his place today, has moved a very important Motion indeed, and I, too, congratulate him on his good fortune in the Ballot and also on his choice of subject. He has chosen the problems of the South-West, a region which is the problem child of all the regions in this country. The South-West is almost the lame leg of Great Britain at the moment.

The hon. Member, quite unknowingly at the time, chose a subject which is exceedingly topical, because I believe that one of the reasons for last night's political events is that many electors, particularly in the peripheral areas of the United Kingdom, are showing real concern about regional affairs. I think the other lesson of the election results is that there is to a varying extent in different parts of the country a rejection of each of the three main political parties because of the failure to convince the electors that they have reached a solution of these very difficult regional problems.

I do not think it is particularly fruitful to talk about what has happened in years gone by. I merely say that many of the problems we are talking about this afternoon are problems which are of very long standing. It is quite pointless to talk about what happened two and a half years ago, and it is equally pointless to talk about what happened in the previous thirteen years and in the five years before that. It is the present and the future which are very much more important.

The Motion is directly concerned with unemployment in our region. Unemployment in the South-West is too high. My concern is not so much with the overall level of unemployment as with its variation within the region. We have an unemployment gradient in the region; the farther west one goes, the higher the unemployment becomes. We have had this unemployment gradient for many years. The part of the region which I have the honour to represent is one of the most hard hit parts of the whole South-West. One of the problems of the area, in Cornwall and North Devon particularly, is that there has been consistently a generally higher unemployment figure than that for the rest of the country.

What is of particular concern in some parts of the development area is that there is a significant proportion of the population who are out of work for very long periods, and there are very serious social consequences in the communities when in a town or rural area there are large numbers of wage earners who are consistently out of work.

So, despite the dubious record over the years of the colleagues of the hon. Member for Truro, I should like to support the Motion which he has moved.

The hon. Member talked about the necessary measures which should be taken. Much has already been done, and I should like to welcome many of the measures which the Government have introduced in recent years, beginning with the regional development and the setting up of economic planning councils. I should like to say to my hon. Friend the Joint Under-Secretary of State, who, I know, is very interested indeed in our region and has personal links with the far South-West, how important it is that the report which the regional council is producing should be published as soon as possible.

We have to ask ourselves whether the measures which have been taken have been sufficient. Frankly, I believe that some of the unemployment figures We have month by month show that they have not been sufficient. We have to ask ourselves whether enough has been done and whether we have reached the time when some sort of differentiation should be made between different development areas, because at the moment it appears that the measures which the Government have introduced over the last year or two to encourage investment and development are paying off in certain development areas to a greater extent than in others, and it seems that the South-Western development area is being left behind to a greater extent than others.

The hon. Member mentioned the question of fiscal incentives in his Motion. I feel we could do more in the way of publicity for the region. Hon. Members on both sides have said that we do not blow our own trumpet sufficiently loudly in the South-West, and we are inclined to talk a little too much about the snags to development and to reiterate the problems and do not do enough to emphasise our advantages.

In some ways the South-West is the most attractive part of the United Kingdom. In the South-West we have the best climate, and in the South-West we have a labour force which is readily available to go into industry, a labour force which, by and large, has a very good record indeed in industrial relations. These are important factors, and I believe that for many industrialists the value of these factors greatly outweighs the disadvantages in geographical terms of the South-West, and that in certain industries they very often to a great extent outweigh other considerations.

The Selective Employment Tax has been mentioned. I would say to hon. Members opposite that they weaken the case for the region when they exaggerate the effect of Selective Employment Tax. I have been critical of this tax. I believe, like my hon. Friend the Member for Sutton, that some additional form of differential ought to be introduced into this tax, and I hope that the Chancellor of the Exchequer in just over a month, presenting his Budget, will do precisely this. I should like to see some sort of differential favouring the development areas. This would, perhaps, be the easiest and most effective measure, to introduce a bonus refund, as it were. Possibly one could go further and tie it to unemployment levels, having it flexible. These are difficult matters, but I hope that these are being considered by the Treasury at the moment.

The hon. Member for Truro mentioned a number of industries in the far South-West and I should like to touch briefly on agriculture and horticulture, which of course, are the most important of our industries. When I use the word "industry" I do not merely concern myself with what happens in workshops and factories. We have big and small farmers, and we have a considerable dependence on horticulture, which has special problems. The problems of agriculture are most marked in the most difficult parts of the South-West. In other words, the farther south one goes the greater the problem in agriculture in regard to small farms and in regard to horticulture. There are doubts and anxieties and worries in agriculture in the South-West at the moment, and it is no use denying it.—[An HON. MEMBER: "Bankruptcy."] We are discussing many of these problems in the next week or two, I have no doubt.

I want to touch briefly on the question of Britain's possible entry into Europe. The Common Market is a problem which the farmers in the South-West regard as a challenge, but what they are concerned about are the transitional arrangements which may be possible, if we are to negotiate entry, the transitional arrangements which will be negotiated before our full membership is achieved. We consider protection of a certain part of agriculture in the South-West as vital.

The mild climate of the region has been mentioned. The hon. Member for Torquay talked rather exotically of bamboo production. I would like to suggest that in the far South-West we might be thinking even more about milk production, because here is something which is dependent to a very considerable extent on climate, and here is a commodity which, even if we go into Europe, need not be imported in great quantity. Fresh milk production, which is already very important in the South-West, could become even more important in years to come.

Sir F. Bennett

May I point out to the hon. Gentleman that I did not mention bamboo production during the course of my remarks?

Dr. Dunwoody

I am sorry if I said "Torquay". I meant to refer to the hon. Member for Truro who made a compelling case for the production of bamboo, though somewhat lightly, I admit.

The other concern of the South-West, if we manage to enter Europe, is that there is a risk that the geographical isolation of our area might be exaggerated, because not only should we be on the periphery of Great Britain but on the periphery of the larger area of Europe. So many of our difficulties result from our isolation, and another factor which should be mentioned at this stage is the discovery of North Sea gas, because I hope that, when it is effectively utilised, its benefits will be spread evenly and fairly throughout the country and not confined to those parts of the United Kingdom nearer to the point of discovery.

Reference has been made to tin mining, which has been performed for many thousands of years in my constituency. It was perhaps the first ever exporting industry in the country. It is difficult to talk about tin mining in Cornwall without becoming emotionally involved because of its tragic history over the last 40 or 50 years, when unemployment figures in my constituency were catastrophically high as a result of the collapse of the industry.

I do not take up the interesting topic of tax reliefs except to say that the hon. Gentleman's suggestion of a tax holiday would be a precedent. Certainly when we are considering negotiating entry into Europe, it is not realistic to expect any Government to introduce such a protection for one industry in the far South-West.

China clay has been mentioned, which is another extractive industry with a very fine record. It is the largest industry in Cornwall, with a considerable amount of exports. At the present time it is thriving, not only because of pottery and china production, but because of the increasing use of high quality paper. Among the interesting by-products is the production of prefabricated building units which will be used increasingly in years to come, and that kind of manufacture could be carried out in the area where china clay is produced at the moment.

In the sphere of manufacturing, we need more industries. I do not accept the argument that we have only to develop our existing industries. We have to offer the right inducements and spell out the economic advantages of coming to the South-West. We have to tell business men in the Midlands and the South-East that economically it is worth while and more profitable to come to the South-West because of the advantages which our region can offer them. I have already mentioned the availability of labour, and there are many other advantages.

Tourism is a subject which has come up again and again. It is vital to our area. However, at the moment it is highly seasonal. In the last year or two, the industry has woken up and started to look at itself as an industry, whereas before it was regarded rather as a part-time occupation. It should be doing even more to try and extend the holiday season by encouraging second holidays. Many people who go abroad have a second and shorter holiday in this country out of the orthodox holiday season. We must realise that people now take regional holidays rather than resort holidays, and we should encourage more overseas visitors to come to the country.

Sir F. Bennett

The hon. Gentleman suggests that the hoteliers are to blame for not doing more to lengthen the season. Does he not appreciate that one of the main reasons why hoteliers cannot do as he suggests is the imposition of the Selective Employment Tax at a time when they are not sufficiently busy to make it profitable?

Dr. Dunwoody

The industry should be doing more in the fields of activity which I have mentioned. I should like to see the industry exerting much more pressure on the Department of Education and Science to stagger school holidays in order to produce a break at Whitsun. After all, hon. Members have a fortnight's break, but school children do not get a break of that magnitude. If we can do that sort of thing, we shall encourage holiday makers into the area out of season, when they will have a chance to see our beautiful countryside with more ease and pleasure and, incidentally, will help us commercially.

I believe that Government assistance to the tourist industry must be part and parcel of any overall assistance to indus- try in the region. I am not happy with the suggestion of aiding one industry as opposed to another, because my concern it with industry as a whole.

Transport has reared its ugly head again, and many hon. Members have spoken at length about the transport problems of the South-West. Our communications are the lifelines upon which our economy and social progress in years to come depend. I welcome the idea enthusiastically of post-buses, because they could solve the problems of rural bus services. I hope, too, that we shall see the plan for British Railways in our region in the not too distant future. In addition, I believe that sea communications can play a bigger part in the far South-West in moving heavy freight.

I do not wish to enter into the controversy which exists about the siting of an airport for the South-West. Let us not concern ourselves quite so much with where the airport is to be as with getting an airport in the South-West which is capable of handling international traffic. If we can have it, where it is to be is of secondary importance.

All our discussions today have been concerned with regional development. For a Government like ours who believe in socialist planning and who are attempting to achieve equality, regional development is an important and vital part of our programme. In the last few years, we have concerned ourselves greatly with the inequalities which exist in our society between different groups. I believe that we have not concerned ourselves sufficiently with the increasing inequalities between different regions, and I hope that some of our doubts and queries will be answered by my hon. Friend when he comes to reply to the debate.

1.46 p.m.

Mr. John Pardoe (Cornwall, North)

I am very glad to be able to speak on this Motion, and even more glad to see the hon. Member for Truro (Mr. Geoffrey Wilson) back in the House after his illness. I had put another Motion on the Order Paper which gave a slightly different emphasis to the problems mentioned in the hon. Gentleman's Motion.

The main point which I want to stress is that the South-West as a whole, and certain parts of it in particular, have been suffering from a long period of neglect. It is easy to say that we have reached the highest level of unemployment which we have experienced since the war, but it is much more important to look at the problems underlying the short-term questions and to realise, for example, that the population of Cornwall, according to the 1851 census, was precisely the same as that revealed by the 1951 census. These problems have been with us for a long time.

My second major point is that it is not so much a problem of the region as a whole. If one looks at the figures of unemployment, incomes, and industrial development for the region, they tend to obscure the real problems of the far South-West.

We have the latest figures for February in the South-West, and they reveal an unemployment rate of 2.9 per cent. That compares with an unemployment rate in the rest of the country of 2.6 per cent. Looking at those figures, no Government could believe that they foretold a major problem of unemployment in relation to the rest of the country. However, the south-west region has always been below the national average.

Even as a region, it has an endemic problem. More important is the fact that the unemployment figures are very high in the development areas. In January of this year, the development areas in Cornwall and Devon had a very much higher rate of unemployment than any of the other development areas in the country.

In January of this year, in the development areas of Cornwall and North Devon, we had an unemployment rate of 6.1 per cent., compared with only 3.3 per cent. in Merseyside, 3.9 per cent. in the northern areas, 4.3 per cent in the Scottish areas, and 4.8 per cent. in the Welsh areas. The figure for all the development areas in the country was 4.2 per cent. So our unemployment rate in the development areas of the South-West is a third higher than that for the development areas in the country as a whole.

Leaving unemployment aside for a moment, we have, of course this very long-term problem of low incomes. In a Written Answer, the hon. Member for St. Ives (Mr. Nott) was recently given some very interesting figures about incomes in Cornwall, which showed quite clearly, as we had known, that Cornwall has the lowest employment income of any county in the country and the lowest average total net income. If we compare it with some of the other counties where we might feel that incomes would also be low—such as Pembrokeshire, Carmarthenshire or the Scottish Highlands—we still find that Cornwall is very low indeed. This problem has been with us for a great many years. It is not just a matter of putting right short-term issues.

What can be done? The first thing that can be done comes under the heading of taxation. We have the Selective Employment Tax. We opposed it during 16 hours of debate on the Selective Employment Payments Bill. No less than eight hours were spent on debating Amendments in the names of myself and my hon. Friends from the Liberal Benches. It really is crazy to put down a 40 per cent. investment grant to encourage industry to go to an area and then to put a very substantial tax on the employment that that grant is intended to create. All our warnings have been borne out. I do not say that the Selective Employment Tax is responsible for all the ills of the South-West, but it is true that its effects were more than its effects on any other area.

We have a lower percentage of manufacturing industry than any other area of Great Britain. We are the second highest area for people in the taxable services, so one could say that we are hit second hardest as a result of this tax. In the South-West the Selective Employment Tax levied an amount of 1¾ per cent. of total payrolls as opposed to only ½per cent. in the West Midlands. This is quite a substantial tax and is quite a substantial disincentive.

We want to scrap the Selective Employment Tax. If the Government will not do that, we would like to have regional variations, as we proposed in Amendments to the Finance Bill and to the Selective Employment Payments Bill last year. It should be selective by regions. Quite honestly, even when one has made it selective by regions, I do not like a tax of this sort. It must be related to the size of payrolls. if we had a percentage of the payroll tax, two-thirds paid by the employer and one-third by the employee, scrapped the National Insurance tax and the Selective Employment Tax, it would then be related to the region where the need is most. We have been badgering the Government for many years to have a tax of this sort, but instead, they bring in an abortion like the Selective Employment Tax.

I should like to go even further on tax reform. I would like to see substantial tax holidays. The hon. Member for Falmouth and Camborne (Dr. John Dunwoody) said he did not think that this would be a suitable precedent, in view of the fact that we are going into the Common Market, to the tourist industry of most of the Common Market countries. They already have very substantial tax holidays in order to encourage tourist development. One of the reasons why Portugal has been so successful in establishing herself as a major tourist country in a very short time is because of these substantial tax holidays.

In Southern Ireland, which is independent of Westminster, they have substantial tax holidays both in terms of company tax and in all manner of other taxation. I believe it is possible to discriminate in this way between certain areas and others. This is something which I would like the Government to look into.

Dr. John Dunwoody

The hon. Gentleman will agree that neither Portugal nor Southern Ireland are in the Common Market. The point I was trying to make was that a special tax relief for tin-mining would be contrary to the spirit of the Treaty of Rome as it is at the moment.

Mr. Pardoe

Yes. In fact, that is just the kind of thing that was advocated by the Labour Party, particularly by the Prime Minister, when he was in opposition. Although Portugal and Southern Ireland are not in the Common Market, they will almost certainly go in if we go in. The French tourist industry is subject to tax holidays in exactly the same way, and France is in the Common Market.

Mr. Bessell

The hon. Gentleman has raised a very interesting point. He rightly said that the Prime Minister when in opposition took a different line and moved Amendments to various financial Acts to provide tax holiday for the development of mining in Cornwall. As a Government, the Chancellor of the Exchequer has persistently refused Amendments both from this bench and from the Conservative benches.

Mr. Pardoe

I am grateful to my hon. Friend for that intervention. If the Government will not change the basis of the Selective Employment Tax and bring in a pay roll tax, they could alter the rate of the National Insurance contributions. There is no reason why we should not have a different value stamp for the development areas.

I turn from employment and incomes to some of the things which the Government have done. I refer particularly to the problem of interest rates. The hon. Member for Plymouth, Sutton (Dr. David Owen) remarked that he would like to see an electronics industry encouraged in the South-West, and particularly in Plymouth. I hope to have in my constituency part of the electronics industry. A small firm manufacturing transistors in London want to move out. The problem of interest rates, and the procrastination of various Government Departments, has been very serious, and may well cause this firm not to leave London.

I remind the Parliamentary Secretary that I have had considerable correspondence with the Minister of Housing and Local Government and the Department of Economic Affairs on behalf of this firm, which is called Allen Components. In the spring of last year Allen Components wanted to borrow money from the Camelford Rural District Council to build a factory, to move out of London and to take the plant to the new development area of Camelford in my constituency. The Government, who are allowing local authorities to borrow from the Public Works Loan Board at 5⅞ per cent., would not allow the Camelford Rural District Council to lend money at 6⅛ per cent. They had already specified in the Government circular that local councils only had to charge ¼ per cent. differential to cover their administrative costs.

We move on to September when Camel-ford Rural District Council renegotiated a loan at 7¼ per cent., admittedly rather a differential, but considerably more than that would be needed to cover the administrative costs. The Government said "No, we must not have that. Go back and say that 8½ per cent. is the lowest rate". I have raised this matter by correspondence and during Question Time, and I am still waiting for a satisfactory answer. I received a letter from the Parliamentary Secretary to the Minister of Housing and Local Government on 17th January which said, … I should tell you that Departments have under consideration the whole problem of the rate of interest on mortgage advances by the Board of Trade and by local authorities, Should this lead to any general change in policy on the rate level, we would certainly be prepared to look at the Camelford case again. That was on 17th January. A great deal of correspondence has been going on over the best part of a year. We have had a letter from the firm, in which they say quite categorically, further procrastination and delays, rather than the rate of interest, may well cause the firm not to move to Cornwall. I raise this point because it is all very well to give Government grants and incentives, but no one can be certain about his investment plans if he has to wait for nine months or more before getting a proper answer from a Government Department.

I have another case, again affecting Camelford. In January, 1964, a small firm in the business of pasteurising liquid eggs was prepared to employ up to twenty people. This would have been a major contribution to the employment problems of Camelford, but it was forced out of business by the British Egg Marketing Board. The matter was under consideration for a long time, and cost a lot of money. Many hon. Member know something about this case.

Eventually, in July of last year, the Minister received the report of the second inquiry by the Committee of Investigations for Great Britain. It said that the egg marketing scheme was against the public interest, against the reasonable interests of my constituents, and so the Minister asked the Board for its comments. The Board, in its bureaucratic way, waited for four months before giving its comments, which it did in December. Following this, the Minister, in an even more bureaucratic way, waited another four months before answering his right hon. Friend last week without even doing me the courtesy of replying to me, in spite of the fact that we had had considerable correspondence over a long time.

I shall raise this matter in great detail during an Adjournment debate next Friday. This case shows yet again that it is the problem of delay in the granting of these matters which is causing unemployment and lack of development in the South-West.

I propose now to say something about transport. In the South-West we have the third largest mileage of roads of any area in the country. We have a very high licence figure indeed. Our road building programme over a long period has been quite appalling. I am not blaming especially this Government for that. There is a long history of neglect. In the South-West, and particularly in Cornwall, we have substantial surplus capacity for road building. I have discussed with many road building contractors in my constituency the kind of jobs which they could undertake. They are sitting there crying out for work. They are having to lay off men, and their machinery is standing idle. It is not a matter of too little capacity. If the Government would give the go-ahead, we could build the roads in the South-West. If the Government are not prepared to provide public finance, then for heaven's sake let us do it with private finance and bring in the necessary legislation for this to be done.

Mr. John Ellis

It is an interesting idea that private finance should be used for this purpose. Will the hon. Gentleman expand on this and say where the finance will come from?

Mr. Pardoe

I should have thought that it did not need expanding. I should have thought that it had been made clear many times. My hon. Friend the Member for Bodmin (Mr. Bessel) has aired the matter in the House several times. These motorways could be built by private finance if the Government were prepared to allow tolls to be raised on them.

Mr. John Nott (St. Ives)

In my other capacity in the City my firm has raised more than 100 million dollars during the last few years to build roads in Italy. If we can raise 100 million dollars in a few years to build roads in Italy, why cannot the Government bring in legislation to allow us to do it in this country?

Mr. Pardoe

I am delighted by the hon. Gentleman's intervention. I remind the hon. Gentlemen opposite that it is their Government who have decided that private money shall be used to build the Channel tunnel. Presumably there will be a toll for using that.

Mr. Jeremy Thorpe (Devon, North)

Clean bowled!

Mr. Pardoe

We have had the problem of rail closures with us for many years, and we in Cornwall and in the far South-West are pleased to hear that the main line between Plymouth and Penzance is stable and there, we hope, for good, or at least for as long as many of us live.

I do not wish to reopen the problem of the branch lines which have been closed, but I feel that the British Railways Board and British Railways officials were guilty of gross deception of my predecessor, and indeed of my hon. Friend the Member for Bodmin by telling them quite categorically that the Padstow-Bodmin branch line would not be closed until 12 months after the closure of the North Cornwall line, and yet the Padstow-Bodmin line was closed in January, only four months after the closing of the other one. I have told the Minister about this. How can we believe British Railways officials who tell us one thing one minute, and then do the very opposite the next?

We are also faced with the problem of bus subsidies. We are pleased that in general the Government support the idea of subsidies for rural bus services, because these will be essential, certainly for the foreseeable future.

I welcome, too, the introduction of the Travel Concessions Bill, because I think that this will help people in rural areas. I hope that the Government will allow time for the Bill, and will hurry it on its way so that we can get the benefits of it.

The hon. Member for Falmouth and Camborne said that we needed an airport in the South-West to take international traffic. We already have an airport in the South-West which can take any kind of traffic that the world likes to send us. The Newquay Airport at St. Mawgan is a splendid piece of work, on which the Council has spent a great deal of money. I agree that it is rather fruitless to argue about the actual location of the airport. I am not convinced by the argument for Exeter, because, having spoken to the two companies involved in this sort of transport, I know that they recognise that the biggest draw would be from Plymouth. Their greatest traffic would have to come from there. They might not be able to get this traffic if the airport were at Exeter.

I am not trying to claim that the Government have taken no action at all to solve the problems of the South-West, and I think that in the Resolution which I put down hon. Members will be able to see that I have taken a rather different attitude. The Government have taken many actions to help, but they have not solved the problem. Our unemployment levels are higher than they were before these actions were taken, and therefore the time has come to take a new look at the way in which we develop industry, and at the level of economic activity in an area like the South-West which has been a problem child for so long.

I think that we need a South-West Development Bill to give an elected body for the far South-West the considerable powers which are needed to get on with the job of developing this area. We want to develop the existing resources, and the existing industries.

We have the tourist industry, one of the two major import saving industries in the country. Perhaps the tourist industry does not always do everything that it can to help itself, but I would like to see some of the money which the Government have promised to allocate to hotels which bring in foreign tourists held back and used to encourage those hotels which do not at the moment sufficiently encourage foreign tourists to come to them.

It may be that this could be done by advertising. For instance, I do not think that Cornwall has opened up the American market. Every American tourist goes to Stratford on Avon. American tourists are absolute suckers for King Arthur and Tintagel, yet they are never told about it. If I had my way, there would be an advertisement for Tintagel and the Cornish tourist industry on every programme of Camelot on Broadway. This is the kind of thing, for which we need Government help.

In the New York telephone directory there are many people with good Cornish names. I am sure we could convince them all that a holiday spent in their ancestral country would be beneficial to them.

Mr. Geoffrey Wilson

I have been told that if one goes to a travel agent in St. Louis and asks him something about Britain, he will say, "I know nothing about Britain—why not go to Brittany?" The reason is that Breton hoteliers give a commission to the American travel agent whereas ours do not.

Mr. Pardoe

I am grateful for that intervention. It is another factor in support of the argument that if Britain cannot get into the Common Market, Cornwall and Brittany should form one on their own.

Cornwall has special problems in agriculture, because many of its farms are small. Agriculture in the South-West is suffering because it is dependent on meat prices and also on the prices of milk and eggs. At present egg prices are quite disastrous for Cornish and South-West egg producers. On the Agriculture Bill I introduced an Amendment designed to ensure that the Meat Marketing Commission would regulate imports. Unfortunately, although my hon. Friends and I trooped into the Lobbies, we got no support from the benches behind us or the benches opposite.

A third major industry which could come to Cornwall is fish farming. There is enormous scope for this. I should like to see more Government research going into the possibilities of fish farming. The South-West area, with a suitable coastline, should be used for the purpose.

The Regional Planning Council is not taking sufficient care of the problems of the far South-West. Like the Government, it tends to look at the figures for the whole area,to say,"This is the problem", and then to identify and try to deal with it as a whole. It cannot be dealt with as a whole, because the South-West consists of two regions. Bristol really has nothing to do with Cornwall and Devon. It does not have the same problems. We are substantially under-represented in the councils of Bristol. We need an elected body of people in the South-West to deal with the South-Western side of Somerset and the whole of Devon and Cornwall, and to get down to the problem of industrial and economic development.

There has been a remarkable degree of agreement in the House on the philosophy of intervention. I am very pleased to note this agreement—and rather surprised. Not very long ago a Member of the Conservative Front Bench waved the finger of scorn at the Government and said that they were an interventionist party, as if it were a terrible sin. I do not regard intervention in economic affairs as a terrible sin. We need even more Government intervention to help the South-West get on its feet economically.

We are not passing around the begging bowl and saying that we want a pension for life. We want Government help to enable us to make our full contribution to the economy of the country.

2.13 p.m.

Mr. R. F. H. Dobson (Bristol, North-East)

The hon. Member for Cornwall, North (Mr. Pardoe) used a phrase which I thought I could use as a starter for my speech. He said, "The time has come to have a new look at the problems of the South-West." I welcome our opportunity today to look at the problems of the South-West, but I want to tell the hon. Member, with as much caution as I can, that he is not right in saying that nothing has been done for the South-West during the last two years. What the Government have been trying to do has shown little or no results in the short time they have had to develop. I should have thought that this was a relevant point.

The hon. Member also spoke rather disparagingly about the work of the Economic Development Council and the way in which it has done its job. I know that he has a special point of view about this, which he has expressed fully outside the House as well as inside. In my opinion, the South-West Economic Development Council has done some good work for the South-West as a whole. When it brings out its study in a month or two, I am sure that it will prove to the hon. Member's complete satisfaction that it knows something about the potentials of Cornwall and Devon, where, as the hon. Member knows, I lived for many years.

In its first Report, which was a brief one, it said: Cornwall is able to exhibit new techniques and modern adaptations of traditional skills deriving from the exploitation of indigenous materials. I would not have thought that he would object to that, as giving a clear idea of what Cornwall is entitled to.

I want to see as quickly as possible the study that the Economic Development Council has been spending so much time upon. I have been concerned with the delay that has occurred. I have had an opportunity to question Ministers and to meet members of the Council and talk about it. I am satisfied that what they have done is not merely to assist in solving the problems of the region, but to come out with some clear ideas of what is needed for the region as a whole, so as to provide it with an opportunity for the growth of which we know it is capable.

Mr. Nott

We all want to choose the best people for the Council, so that the plan can be on a proper regional basis, but any planning and suggestions made for the region must be based upon the consent of those who are being planned for. Does not the hon. Member agree that it would make the implementation of suggestions much easier if counties like Cornwall felt that they were adequately represented? It is a question of making them feel that they are part of the show rather than that something is happening 200 miles away.

Mr. Dobson

I accept what the hon. Member says from the point of view of getting it over to the public in the area and using it as a peg on which eventually to throw a hat, but the result will appear in the report which the Council is shortly to issue. If, then, the hon. Member and the people of Cornwall feel that the Council has not appreciated the problems of the area they will have ample opportunity to say so. I am convinced, having talked to many members, that the Council will produce a suitable recommendation for Cornwall. The Government rightly bowed to requests for further and separate representation on the Council, and hon. Members will probably agree that it has been a good thing and that the Council has been strengthened by the inclusion of many new members with a wider spread of interests.

My hon. Friend the Member for Exeter (Mrs. Gwyneth Dunwoody) mentioned the communication problems of the South-West. Anybody who has lived there for some years will say amen to the fact that many such problems require to be dealt with. The points made by hon. Members opposite were rather badly phrased. I recently got the impression that hon. Members opposite were complaining that not enough money was being spent on communications in the South-West, but if one uses the phrase, "Not enough money is being spent", it is possible to go on saying, "We must spend more and more money." Is it not germane to the argument to recognise that more than twice the amount of money is now being spent than was spent a year ago—and that that was an improvement on the previous year?

Capital investment on roads in the South-West is going forward to an extent never contemplated by the previous Government. It always takes time for road plans to come to fruition, but at least the Government have recognised the problem of road transport and all the things that flow from it if it is not a good one, and have laid definite plans for improving the situation. The slice of the national cake that has been allocated to the South-West shows that the Government recognise that this is the way to overcome the problems of that region.

I cannot feel quite so sanguine about the rail situation. My hon. Friend the Member for Exeter mentioned the 1962 Act and what she said about it was quite true. One of the difficulties about the Act which we on this side of the House objected to at the time is that it does not enable Members of Parliament to question the freight policies and policies for moving heavy goods, over which the Railways Board has complete control. That is a pity because we become more and more concerned about the way in which the Board appears to be throwing away opportunities of getting money in freight charges in the South-West Region and making the position worse by pushing what remains of that traffic on to already over-crowded roads. This makes nonsense of all we are trying to do in regard to roads and rail and in order to keep the roads unclogged by traffic.

Mrs. Gwyneth Dunwoody

Would my hon. Friend agree that we have been so disturbed about this situation over British Rail in the Western Region that we have asked for an inquiry and that we have been disturbed about this matter to an enormous extent?

Mr. Dobson

My hon. Friend is quite right. I was most disturbed when there was a complete turn-down of the pressure we put on for an inquiry into the way in which Western Region of British Railways has run down particularly the freight side.

My hon. Friend the Member for Bristol, North-West (Mr. Ellis) has spoken of the Portbury scheme. I take the opportunity to mention it again, not because it is necessarily a parochial scheme although we all feel very keenly about it, but to say one or two things which we think important to the region. It is quite clear that the Regional Development Council recognised this as a very important scheme for the region as a whole. It was listed with the spine road scheme as the two most vital projects for development of the region. It had the approval of the Development Council and many other organisations.

As the scheme existed it was too large in scope and far too costly for the Government to undertake. I am sure that the Port of Bristol Authority now recognise this and in reshaping an alternative scheme is prepared to bear this particularly in mind. The announcement by my right hon. Friend the Minister of Transport of the development of further ports on the West Coast was greeted with acclaim by me because she recognised the need for that to be done. I ask my hon. Friend the Under-Secretary, in his reply to the debate, to give a clear-cut understanding that the development of container ports other than Portbury will not prejudice the container port which we need to develop on the Portbury site and to make use of the existing facilities there.

This is most important, because if we have schemes approved for containerisation other than at Bristol the time could come when the Minister would say that there are already enough containerisation ports on the West Coast and that Bristol should not have the opportunity to develop in this way although it has a just claim because of the way in which it looked ahead in the matter of containerisation plans years ago.

I do not want to follow the argument about airports in the South-West. This has been fought out over many years. Plymouth Airport was all agog when I was there some years ago and there have been many attempts to increase the traffic to and from the Devon areas to the airport. It is difficult because there is not the background of tremendous potential in the North Devon area to make that an economic proposition. I hope that the position will improve and that someone may come forward with a scheme which would be pleasing both to my hon. Friend the Member for Falmouth and Camborne (Dr. John Dunwoody) and my hon. Friend the Member for Exeter.

It is true that we have seen an increase in unemployment in the South-West. I certainly would not go on record today as giving approval to that, but we must not over-state the case. The rate of unemployment is now 2.9 per cent. in the South-West generally, compared with about 1.8 per cent. a year or two years ago. There have been two or three peak periods when unemployment has been up to the 2.9 per cent. level and above it. But there are a considerable number of unfilled vacancies in the South-West. A third of the total could be absorbed if we could fill those vacancies. There are 13,254 vacancies out of a total unemployment figure of 39,476. We should be cautious about the way we use unemployment figures.

That is not to say that we want to see figures of this scale. I recognise that in certain parts of the country the figures are worse than they are in the whole of the South-West. I hasten to add that they are no worse in the South-West than they were two or three years ago; and 10 years ago they were about the same as they are now. In this matter, public investment in the South-West is very important.

The Economic Development Council mentioned one of the major contributions which, through it, the Government could make, by saying: The contribution which the Council can make towards establishing self-supporting growth in the south western half of the Region"— That is, further than Bristol— will mainly lie in the advice they offer to the Government on the disposition of public expenditure, in particular of public investment, and on the manner in which the Government should exercise the powers at its disposal in applying national policies for regional development. I think that the Council hit the nail on the head. Figures for public investment in the South-West are very good. In education, public investment has been increased by almost a quarter as much. In hospital development it has almost doubled in two or three years, in road development it is almost twice what it was, in local authority housing it is almost twice and in transport and communications apart from roads it has also increased. The amount of public investment in the fuel and power industries has increased.

All this shows an awareness on the part of the Government, which I am pleased to support, of the problems and the Government's determination to go ahead and to increase at all times the amount of public investment in the region as a whole. It comes very odd from some hon. Members opposite when they speak of the need for development in the South-West yet, at the same time, do not support schemes for development in the area. There are two large extensions of towns proposed in the South-West, Tiverton and Barnstaple. It seems that the reaction of people living in the area in general is good, but, certainly, a large number are very shortsighted.

If they want development in the South-West and are represented in this House by hon. Members who want it, they surely should accept that the addition of a large number of people and a good-sized area to a town gives more opportunity for expansion and development than there has been for many years.

Mr. Maxwell-Hyslop

rose—

Mr. Dobson

I know that the hon. Member has a point of view to put in this matter, but I am sure that he would rather do it in his speech.

Surely the opportunity should not be missed to extend towns into these difficult areas, as this gives us the best opportunity of developing the areas. I hope that the Government will go ahead with it.

As many hon. Members, luckily from both sides, have said, this neglect of the South-West has gone on for far too long. Those of us who have recently come on to these bences have taken the opportunity to push the case of the South-West on Ministers at various times, not for paro- chial reasons but because we believe that the South-West needs particular attention. I hope today that we will hear from my hon. Friend something more along those lines.

2.31 p.m.

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

It is a particular pleasure to follow the hon. Member for Bristol, North-East (Mr. Dobson), because we were opponents in Tiverton in the by-election in which I was elected in 1960. It was also a pleasure when he appeared in the House, although representing an area which I consider to be scarcely the West Country.

One of the causes of the economic difficulties in the West Country is undoubtedly the fact that Bristol is its administrative centre for regional government and publice service administration generally. Bristol is not a source of wealth to the rest of the West Country, but more like a vacuum cleaner drawing on the rest. If we define the West Country, as, broadly speaking, the area from which were drawn the forces which supported the Duke of Monmouth's rebellion, plus Cornwall, it is an interesting entity; and Bristol comes within that definition, because, although teetering on the brink, it did not rise in the rebellion.

Few people in London realise that Exeter for instance, is closer to London than Cornwall is to Bristol and that Bristol is more remote, for people in Cornwall, as the regional government, than if Exeter's regional government were in Westminster. It is totally unreasonable to set up a non-elected body in the remotest corner of what, by stretching words most improbably, could be described as the West Country and then to wonder why it does not work effectively. What has to be wondered is why anyone should have thought that it would.

It would be much more reasonable to have the centre of regional government in Exeter or Plymouth, where it would be far more accessible to those parts of the West Country which are most in need of the benefits of efficient regional government. I would also provide an employment stimulus. We should not forget that both these towns are suitable in many ways. They are congenial areas in which to live. Exeter is a university town and both are considerable medical centres. Surely the general principle ought to be that the administration centre, as far as possible, should be in the centre of the area administered and not in one corner.

Even the strongest Cornish nationalist, I think, would not support the proposition that Penzance would be the ideal centre of government of the United Kingdom—

Mrs. Gwyneth Dunwoody

Although agreeing generally with the hon. Member that we have not one region, but two—a region and a sub-region—and that this is what we ought to emphasise, perhaps he is being a little unfair. He will realise that, although the administration is still vested in Bristol, they are making efforts, for instance, to have their meetings in different parts of the region, so as to travel from place to place and be more immediately in one particular area.

Mr. Maxwell-Hyslop

If this works at all, it is merely a palliative in an extraordinary situation which should not be perpetuated. It is not a reason for perpetuating it—

Mr. Nott

One of the principal reasons for this is that it is impossible to get a train to Bristol from what I describe as the West Country after 2.30 in the afternoon.

Mr. Maxwell-Hyslop

I am grateful for that point, which again gives an indication of Bristol's remoteness. From the West Country, it looks like the beginning of Birmingham's suburbs.

A considerable number of problems face any new enterprise coming to the West Country and it would be useful to try to identify some of them, as that is the way to tackle them. First, of course, is the granting of industrial development certificates. The hon. Member for Bristol, North-East spoke of overspill town proposals and it might interest him to know that the President of the Board of Trade wrote to me that he was not prepared to alter the normal priorities in granting I.D.C.s even for overspill towns.

This necessarily means that, until the overspill population has arrived and built up a high level of unemployment, a certificate will not be granted to enable a firm to start building the factory to provide employment for the people who come. This is surely utterly topsyturvy—

Mr. Thorpe

Further to the hon. Member's point, is he aware that the President of the Board of Trade can give no guarantee that the necessary public funds will be available for the infrastructure like roads, hospitals and schools, so that the indigenous population could be worse and not better off?

Mr. Maxwell-Hyslop

I am well aware of this, because I asked these specific questions of the Ministers concerned. I wrote to the Minister of Health asking whether he would make capital funds available pro rata with the increase in population, so that the existing medical services would not deteriorate. His answer was, first, "no", and, second, that even if he did it would be available to the regional hospital board as a whole to spend where it wished.

Translated into English, that means spent in Bristol and not in the areas to which overspill would come—[Hon. MEMBERS: "No."] Yes, this was made clear to me by a previous chairman of the regional hospital board whom I went to see about trying to get a lift in the geriatric hospital in my constituency. He said that the pressure on maternity beds alone in Bristol was so great that the available funds had to be stretched in that direction—

Dr. Owen

rose—

Mr. Speaker

Order. There is still a number of hon. Members who want to speak in the debate and I want to protect them if I can.

Mr. Maxwell-Hyslop: Therefore, Bristol's effect is a draining one rather than a filling one to the West Country as a whole. Those sections which need help most will not have it. This is an entirely topsy-turvy way of trying to undo the damage which should not have been done to the area in the first place. The South-West Travel Association, which has been going now for about 18 months, has, from very meagre resources, been doing an excellent and enthusiastic job to popularise the West Country, to attract people to it, and to extend the effective holiday season. However, one can extend the holiday season effectively only by extending it at its marginally profitable points—that is, starting the season earlier and ending it later. S.E.T. tends to impinge on the industry's profitability and tends to contract the holiday period rather than extend it. This is another way in which S.E.T. is having a bad effect generally, remembering that the more we can extend the holiday period the more profitable will be our railway and other services.

The West Country has many facilities, but since several of my hon. Friends wish to speak in the debate I will not catalogue them. Atmosphere has been mentioned. The extensive presence of water and water power is another factor which has contributed to the textile industry existing in the West Country. Indeed, it is still one of the major industries there. These facilities should be borne in mind when new industries think of coming to the area because they are not universally available throughout the United Kingdom.

When one takes together the geographical difficulties and disadvantages and the completely artificial disadvantages imposed on the West Country by the Government, it is important that this part of the country makes the fullest possible use of the advantages which are left to it. They include amenities and the fact that—this is an advantage from the point of view of industries willing to come to the area—the young people trained in technical colleges there do not have outlets for their skills. We should broadcast this so that people wishing to set up enterprises in the South-West appreciate that there is a keen body of labour which is anxious to work there. We must do all we can to get rid of unnecessary restrictions, such as those to which the hon. Member for Cornwall, North (Mr. Pardoe) referred. In my constituency, some enterprising young people have taken enormous orders for racing cars from abroad, particularly from America. They cannot obtain planning permission to assemble the vehicles and this and other types of restriction are frustrating the economic and other developments which we want to see taking place in the West Country.

2.43 p.m.

Mr. Peter Mills (Torrington)

I am grateful for this opportunity to speak about the problems of the South-West and I am delighted to see that my hon. Friend the Member for Truro (Mr. Geoffrey Wilson) is obviously feeling so much better. When considering the problem of unemployment in the South-West it is well to look at the history of the area. In spite of what is being said in some quarters, moderate strides were being made up to a few months ago to do something for the area. I agree that much more needed to be done, but some black spots were being dealt with by the then Conservative Government, and the Labour Government, during their first year of office, continued the process. A good example is Bideford. It was made a development area and this had a real effect on the district. New factories were being brought in and the shipyard was put on its feet again.

My charge today is that the present Government have sabotaged these efforts and that we are now going backwards instead of forwards. I accept that there were faults in the past, but at least we were making improvements. Now we are going backwards. A combination of events has brought this about; the effects of Selective Employment Tax and other Government measures. The squeeze has taken away any incentive people might have had to expand and speculate. This combination of factors has brought about a reversal of the trend which had earlier been evident. All this has had a serious effect on the South-West.

Unemplyoment in this part of the country is rising. While I will not detail the figures, suffice to say that in my constituency it has gone up from 3.4 per cent. to 5 per cent. Businessmen, farmers and merchants are owing more to the banks and in the catering industry more people are in trouble than ever before. Many hidden problems are beginning to be discovered. The serious plight of many businesses, as a result of the squeeze and higher taxation, is evident and this trend must be reversed and confidence restored if we are to do anything to help the people who are unemployed in the South-West.

Development area status has been, and still can be, of great benefit to the South-West, but I plead for far more flexibility. The Ministry of Labour is not showing an appreciation of the real needs of the area and is fixing boundaries in a way which indicates that it is not meeting the needs of the places mostly in need but to suit itself.

I am thinking particularly of Okehampton, to which reference has been made. Although not included as a development area, Okehampton is desperately in need of help. Winkleigh is another small town with an ideal industrial site and aerodrome, but the Ministry of Labour has fixed the boundary 100 yards outside the aerodrome, yet Torrington Rural District Council is in a development area. I therefore plead for more flexibility so that help is given where it is needed.

I support what the hon. Member for Cornwall, North said about interest rates and I assure him that I, too, have come across exactly the same difficulties as he described. We have this nonsense of councils being prepared to lend at 7¼ per cent., and able to find the money, yet the Government, through the Ministry of Housing and Local Government, are insisting that they lend at 8½ per cent. This is enough to frighten away any industrialists who may be interested in coming to the area. Interest rates should be as low as possible.

We try our utmost to encourage new factories to the South-West, but our efforts are often made meaningless because we get bogged down by having to wait weeks and months for replies from the Government—and in the meantime industrialists, many of whom at first tend to be shy about coming to the area, lose their enthusiasm. I therefore plead for greater speed in dealing with these matters.

Agriculture must play an ever-increasing part in the life of the South-West, particularly if we are to comply with the National Plan. If we enter the Common Market we will need to expand our agriculture industry and, for these reasons, this industry should be given every encouragement.

We talk a great deal about communications. I hope that when we think in terms of future planning North Devon will not be forgotten. I want to see a spur road to North Devon off the motorway which is being built from Bristol to Taunton, because this would overcome many of our problems.

I make a special plea for the town and district of Okehampton, which is in serious trouble. Unemployment is high and people are leaving the district. The average wage is £11, which is very low indeed. It is no good the Minister saying that he will grant I.D.C.s. They have been granted in the past, but the industrialists concerned have later found that grants and other help are not available, and they have gone elsewhere. It is important for towns like Okehampton, which have particular problems, to be included in development areas so that they can get the one or two factories which are necessary to solve their problems.

I make a very strong plea to the Government to consider the smaller towns in these remote areas where employment is very difficult to find. Unless the Government are prepared to do something for them depopulation will continue, and the people will find themselves in an even more serious position.

2.50 p.m.

Mr. John Nott (St. Ives)

I would like to say, first, how delighted I am that my hon. Friend the Member for Truro (Mr. Geoffrey Wilson) is back in the House. We are all very grateful to him for having raised this most important issue today. I am also delighted that on this occasion, at least, the South-West appears to be fairly unanimous about what is needed. Apart from a few understandable lapses into partisanship, the debate has been reasonably non-political. I am glad of that, because the South-West is at present undoubtedly the country's most neglected region. We hear very much from the Welsh and Scottish Members, but the South-West is often not given a good enough hearing.

A lot of attention is given these days to attracting light industry to the South-West, but perhaps not enough attention is given to the industries already here. Great problems occur in bringing in new industry. In many areas we have a shortage of skilled labour. Although we have a very large number of unemployed, we lack the type of skilled engineer—the lathe operator, etc.—for light industry.

In Cornwall, for instance, we have huge resources of tin. There are two working tin mines—one in my constituency and one just outside it. It is a hoary old subject, I know, but the interesting thing about our tin mines, as the Under-Secretary knows quite well, is that although the expense of mining it is very high—one bores through granite, and the development and exploration costs are huge compared with those in Malaysia—the quality content of the ore is also extremely high and in practice, the costs of mining the tin related to the return on the ore are very similar to that of Indonesian, Bolivian and Malaysian tin. It is, therefore, not altogether reasonable that we should be importing about £2 million worth of tin a year when we have it unexploited in Cornwall.

When he was in opposition, the Prime Minister tried by an Amendment to the Finance Bill to get the same tax concession for our tin mines as is given in Ireland and in Canada. Tax concessions for mining are available all over the world. The hon. Member for Falmouth and Camborne (Dr. John Dunwoody) said that it would not be reasonable for the Treasury to make a special case here, but I do not agree because in every country mining is treated on a different basis. Because of the limited life of mines, the dividends received are, in part, a repayment of capital. This is recognised in every other country, but our Treasury cannot or will not understand the argument.

I have sent extracts from the Canadian Income Tax laws to the Chancellor of the Exchequer, and I hope that he will read them before the Budget and in particular the incentives taken to help to get a mine into production. We have these minerals lying unexploited in regions of heavy unemployment—in part of my constituency 11 per cent. of the working population are out of work—yet the Treasury under every Government, our Government, too, was at fault, in refusing to accept the view that similar concessions should be given to mining in the United Kingdom as it is in other countries.

It is all very well for the hon. Member for Falmouth and Camborne to say that special concessions should not be given to tourism, but we are not asking for special concessions. His party and this Government took away investment allowances for tourism, though they exist for every other industry. The Government has, therefore, discriminated against what is the largest industry in Devon and the second largest in Cornwall.

Reference has been made to the Regional Economic Development Council. I do not want to go on "flogging this old horse" day after day, but I cannot accept what the hon. Gentleman the Under-Secretary said to me in a very courteous letter that I received this morning, that the best people on the Economic Council to advise in connection with the far West are not to be found in Cornwall. We want the Council to plan regionally, we all desire to have on it trade unionists, university dons and businessmen, but the majority of the representatives come from Bristol and Gloucester.

There is no resemblance between those places and the rest of the region. Bristol is a booming manufacturing and commercial city with unemployment below the national average. In Gloucestershire, where large numbers of the Council come from, unemployment is 2.1 per cent. against the national average of 2.6 per cent. At the other end of the region, in Cornwall, the unemployment rate is 6.8 per cent. The two parts of the region must be looked at quite separately.

In the deoates on prices and incomes policy a lot has been said about the lower-paid workers. The figure floating round as representing the average weekly wage for the lower-paid worker is £14 a week, but the Annual Report of the Inland Revenue, which came out last week, shows quite clearly that the average weekly wage in Cornwall is about £13 6s. a week. One can therefore say that practically the whole population of Cornwall is on what amounts to a lower-paid worker's wage.

The plight of the average Cornish person, with a weekly basic wage of £3 7s. less than the national average is extremely serious. That would not matter so much if the cost of living there was less, but what is not generally appreciated is that the cost of living is considerably higher in the outlying regions. In addition, I should add that these Inland Revenue figures are biased against Cornwall because they do not include wives earnings, and we all know that, unlike in most parts of the country, in the far West wives cannot go out to earn because there is no work for them. Therefore, although on paper the average weekly wage in Cornwall is £3 7s. a week below the national average, in practice it is far more.

What happens when our young people leave school? Knowing that they cannot get an adequare wage at home, they leave the area to find work elsewhere and are replaced by the old people who come into the area. We have an ageing population and in itself this does not matter. There has to be some part of the country where retired people come to live, but the fact that we have this ageing population puts very great burdens upon the services, such as welfare, in the area. They are very much more expensive and this results in higher rates and a high burden of local taxation.

There is a vicious circle, low wages, higher cost of services, and so the cost of living goes up and up. Coal is an example. It is one of the basic necessities of life for these retired people, yet it is far more expensive in the outlying regions of this country than in the great cities. My wife keeps careful account of what she spends on food. We divide our time between living in Cornwall and London, and we know that food is much more expensive in Cornwall than in London. That may sound an astonishing statement, but if one does not shop in the King's Road, or Knightsbridge, or go to Harrods for one's food, then it is much more expensive in Cornwall, even in Penzance, which is one of the cheapest shopping centres in Cornwall.

I do not want to go too much into detail. The obvious need is first of all to change S.E.T. The chambers of commerce in the South-West is the only body to have carried out a survey into redundancies arising out of this tax. The Chancellor may have done, but he will not publish the figures. He refuses to do so. Everyone seems to know them, but we do not, so we have to rely upon the chambers of commerce survey. This shows that 2,600 people lost their jobs directly as a result of S.E.T. last year. If one takes the number of new jobs created in the south-west region as a result of regional development policies over the same period, it was about 1,500.

Therefore, S.E.T. has sent us backwards, not forwards. The hon. Member for Bristol, North-East (Mr. Dobson) said that the Government had doubled the road and the hospital programmes. I do not know where he got his figures from, because the Government have admitted that they have cut back on the programmes for the A38 and other roads. These were programmes agreed during our period of office, and during the finan- cial crisis which has arisen during this Government's term of office, these programmes have been cut back.

Mr. Short

I am sure that the hon. Gentleman would be prepared to distinguish between actual programmes being carried out, which are continuing at a record level, and paper plans which may have been made in years gone by, but which were not being carried out.

Mr. Nott

I think that the hon. Gentleman would agree that paper plans are fundamentally necessary. I believe that we would have carried out these plans. The road building programme was beginning to accelerate in the West Country under our Administration. I do not want to get into a party political dispute, but I do not accept the figures mentioned earlier.

There is a case for taxation concessions on tin mining—a non-partisan, nonpolitical case. The Government should think about restoring those tax incentives which they took away from tourism, our second largest industry. These are the existing industries in the area. I am sure that S.E.T. will be dealt with in the Budget in a month's time. It must be, because it has been a disaster for the South-West.

All in all, we have to solve these problems somehow, particularly in Cornwall, part of which I represent, where the wages in the county, as shown by the Inland Revenue report, are about the same as in the Highlands of Scotland. In Scotland, there is a development board and large-scale schemes are in operation. There is a Secretary of State for Scotland, and yet the figures show that wages in Cornwall are practically the same as those in the Highlands. They are lower than those in Pembrokeshire, lower than the Welsh and Scottish average, and at last we have statistical proof of this. I will now resume my seat and allow the right hon. Gentleman the Leader of the Liberal Party to attempt to catch your eye, Mr. Speaker.

3.4 p.m.

Mr. Jeremy Thorpe (Devon, North)

I am grateful to the hon. Gentleman the Member for Torrington (Mr. Peter Mills) and the hon. Gentleman the Member for St. Ives (Mr. Nott), who, I know, shortened their remarks to allow me a few more minutes in which to speak. I am very much in their debt.

I would also like to congratulate, as others have done, the hon. Gentleman the Member for Truro (Mr. Geoffrey Wilson) on introducing this subject. I want to say how delighted we are to see him back, restored in health. The extent of his recovery may be gauged from his speech, which ranged far and wide, with some very constructive suggestions—he even touched on bamboos and the use to be made of Cornish sand in the construction of roads. It was a very thoughtful speech to which, I am sure, the House gave considerable attention.

It has been accepted that the evils of the West Country did not begin on 8th October, 1964. I have been knocking around in politics in the West Country for the last 20 years. I even remember that the Under-Secretary was the unsuccessful Labour candidate in St. Ives. I hope that he will not hold that against the West Country when he winds up the debate. I was about to say that that was before the hon. Gentleman the present Member for St. Ives was born, but before we welcomed him to the West Country.

There are problems of low wages, depopulation and unemployment in the West Country which have been with us for many years. They are chronic. What has come out of the debate which is helpful is that Members on both sides of the House are impatient that something should be done, and I hope that from now on the Government, of whatever political complexion, will face a formidable three-party coalition to ensure that action is taken.

I represent a constituency in one part of which the unemployment rate is 11.6, and it has been scheduled as an area of high and persistent unemployment since 1959. In Appledore, in the constituency of the hon. Member for Torrington (Mr. Peter Mills), unemployment rose at one time to 30 per cent. Probably more was done to alleviate the situation by the individual activities of the hon. Gentleman's predecessor, Mr. Percy Browne, than by any Government Department. Some of us were hoping that opportunities which have recently presented themselves would have resulted in his being returned to the House. [HON. MEMBERS: "Hear, hear."] Unfortunately, that was not to be.

If one takes agriculture and tourism as the two main sources of income, in 1963 the West Country accounted for 9 per cent. of the country's agricultural production and tourism accounted for 21 per cent. of the holidays taken in the United Kingdom. There is no doubt that the Selective Employment Tax has been one of the greatest deterrents to economic growth among the fiscal measures introduced since the war. We have only 17 per cent. of our population engaged in manufacturing industry as against 38 per cent. for the rest of the country.

I should have thought that it was imperative that there should be regional variations in the Selective Employment Tax. I would suggest a flat rate of 7s., whatever the category of employment, which could be lowered to 5s. or even 2s. 6d., and certain areas could be exempted altogether. The hon. Member for Torquay (Sir F. Bennett) says that this is impracticable. But this is the purpose behind the Local Employment Acts—that we stimulate growth so that we can mop up surplus labour and get economic growth and, therefore, make a contribution to the economy. I should like to see the tax abolished altogether, but it might not be possible to do that in one year. I hope that this year, however, the Chancellor of the Exchequer will introduce regional variations.

I echo what many hon. Members have said about the importance of investment allowances for tourism. It is ludicrous that the Camelford and Okehampton councils, which were prepared to make loans to industrialists, should be told by the Treasury that they have to charge a higher rate of interest than they were prepared to charge. It is the same with the Devon County Council, which is prepared to make loans at 7¼ per cent. and the Treasury and the Ministry of Housing and Local Government say that it must charge 8½ per cent.

On the question of the attraction of industry, the Mid-Wales Development Organisation has shown that if employment can be provided in a deeply rural area for roughly 200 people it can have a beneficial effect on about 2,000 people living in the area.

I wish to make two comments on the Board of Trade's activities. An advance factory has been built in my constituency. I have nothing but praise for the speed and efficiency with which it was erected. The period from the moment that the Minister gave his consent to the day that the local Member opened the factory was, I think, six months. That is very commendable. What is not so commendable is the speed at which the Board of Trade Advisory Committee works when it is asked to make a grant or loan to attract industry or to expand existing industry. I had a painful case, albeit under the previous Administration hotly defended by the right hon. Member for Taunton (Mr. du Cann), when no less than six months and £10,000 in accountants' and other professional fees were expended on a large factory project capable of giving employment to 300 people, which was turned down. I believe that that aspect of the Board of Trade could be made much more efficient.

I also hope that we shall get help from some of the Ministries. The employment of 400 men is at stake because of an argument with the Ministry of Transport about a 4 ft. splay for the entrance to a factory, which is likely to take 18 months to resolve.

Communications have been mentioned. Railways are obviously of enormous importance. It is no good closing railway lines if the result is to cause areas of high unemployment. I stress the importance of Section 7 of the Local Employment Act, which enables the Board of Trade to spend money for communications to and from areas of high unemployment. Roads are the raw material for the tourist industry. They are just as important to us as to industrialists.

With regard to agriculture, I hope that the forthcoming Price Review will do something for the hill farmer, the hill cow farmer and those with very small holdings, whom capital grants would assist to become more efficient.

I do not think that the regional Economic Planning Council is the sort of body that will solve our problems. We want a democratically elected board, working to a 20-year economic plan with power to issue industrial development certificates. In this way, people would be made associated with and involved in the future of their area. I would like the possibility of rural development agencies, such as Canada has, to be considered.

In the extreme rural areas, we cannot keep young people in villages if they are expected to live where there is no main water or drainage, in some instances no electric light—I am still battling to get main drainage for three villages—very bad railway transport and no jobs to go to when they finish school and graduate to technical college. We are not going with a begging bowl, but we want action largely because we think that we can make a greater contribution to the economy of the country.

3.12 p.m.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

I join my hon. Friends and hon. Members opposite in congratulating my hon. Friend the Member for Truro (Mr. Geoffrey Wilson), not only on his recovery, which gives us all immense pleasure, but on his good fortune in the Ballot and the admirable subject he has chosen, and on the way in which he has introduced this important subject.

My hon. Friend's timing was superb. There could not be a more appropriate day for discussing one of the regions of Britain. I do not want to make any party point, but to echo the words of my hon. Friend the Member for Dorset, South (Mr. Evelyn King), none of the three major parties in this House can take much credit for the results of last night's by-elections, except that we must all take to heart the lesson that there is a real desire by people to take a greater part in the affairs of the region in which they live. South-West England nationalism is an awkward concept to which, wisely, none of my hon. Friends has subscribed. Nor have I heard anyone say that Cornwall is a nation, which may or may not be the case. I am not a West Countryman.

We have here the real lesson that we must find ways of devolving more of the responsibility upon those who live in the various regions of Britain. Many good examples have been quoted during the debate. Hon. Members have given instances of money being spent on their behalf but in ways which, perhaps, in the South-West people have not entirely wanted. What is the point of extracting large sums of taxation from the South-West and then not giving the people there the motorways and railways which they need for communications? Obviously, there is need to take more of the major Planning decisions in the regions.

The point was made by the hon. Member for Cornwall, North (Mr. Pardoe) and supported by my hon. Friend the Member for Torrington (Mr. Peter Mills) that if a local authority wishes to alter the interest rates which it charges to industrialists, it should be able to do so. These are instances of the sort of thing which people have in mind. I am quite certain that people do not really want us in this House to demand over and over again more Government money to dispense first in Scotland, then in Wales and then in Northern Ireland, and now in the south-west of England. I think that people have come to the conclusion that they want to take a more active part in the way their own region is run.

I think I should say in passing how bitter it is to read back over some of the speeches which Government spokesmen made before they became responsible for our affairs. I came upon these words of the Prime Minister at Blackpool: Nor shall we use unemployment and family hardship as a sanction to enforce a wage freeze. He spoke those words in 1964, and here we are, two and a half years later, discussing just the fact that unemployment has been used as a sanction to enforce a wage freeze, an unemployment which has hit the south-west region and hit it in a particularly hard way.

I will give some figures to the House because I think they are interesting. There were in 1965, the latest year for which I have these figures, 1,343,000 employees in the region and 23,920,000 in the country as a whole, giving a percentage of the total employed of 5.63 in the region as defined by the Ministry of Labour. Taking the peaks of the last three recessions, in 1957, 1963 and the present time, we find that in 1959, 5.64 per cent. of the unemployed resided in the south-west area; in February, 1963, and that appallingly heavy winter and very bad weather, the percentage had dropped to 5.48; and now, in February, 1967, the latest figure we have, the percentage is 6.54.

This is in fact the only region which has shown an increase in the percentage of unemployed to be found in it out of the total number of unemployed in the country. It shows a very startling in- crease, which is confirmed by the figures which have been given by the Government that unemployment in the south-west area has increased by 148 per cent. since July 1966 whereas the figure for the country as a whole is 127 per cent. That was from July, 1966 to January, 1967.

There is no doubt that the South-West has been hit harder than in any previous recession. The Prime Minister's boast on 28th July that we shall ensure that the unemployment level will be more equally patterned over the country than has been the case in the past has a slightly hollow ring to my hon. Friends and to hon. Members all over the House who sit for South-West constituencies, because not only has the figure for unemployment risen at least as much as in any previous recession, but in the south-west region in particular it has risen more, on a percentage-wise basis, than in any other of these three recessions which I quoted.

This is particularly odd, because the South-West is the only one of the regions which have always had an unemployment problem, which have development areas within them, into which there is net migration. In the last eight years there has been a migration of 24,000 employees, an average of 3,000 a year, and as this is the only region, of all the under-employed and development area regions into which we have migration, it does seem peculiar that it should have had to take this sort of caning from the recent dose of deflation. It may be that it is because Bristol is included in the region that we have this peculiarity. Immigration to the South-West has been almost entirely into the Bristol area, which is a prosperous area of low unemployment. However, it is peculiar that an area which has been attracting employees and one which hitherto has been a popular area to go to should have suffered so greatly from the present increase in unemployment due to the recession.

The development districts of the south-west region are much worse. Last month, the President of the Board of Trade gave the figure of 6.1 per cent. as the unemployment percentage for the development districts in the south-west region. Many of my hon. Friends have given examples of the way that that has affected their constituencies. My hon. Friend the Member for Dorset, South mentioned the Weymouth area, which one does not normally associate with unemployment but which is one clearly deserving of help and support. My hon. and gallant Friend the Member for Wells (Lieut.-Commander Maydon) mentioned Shepton Mallett, and my hon. Friend the Member for Torrington (Mr. Peter Mills) mentioned Okehampton. I must confess that the latter is the only town in the counties of Devon and Cornwall which I can claim to know, having undergone 14 days' military training many years ago on Dartmoor. As a result, I am hardly qualified to speak at length about the local problems involved in this debate. However, I was shocked to hear that the unemployment percentage in St. Ives had reached 11.6. We must ask why the figures are getting so much worse and what are the reasons for the failure to maintain a more realistic unemployment level in the South-West.

Mr. Bessell

The hon. Gentleman has expressed surprise at the figure for St. Ives. He may be interested and saddened to know that the percentage for Gunnislake, in my constituency is 13.7.

Mr. Ridley

I am saddened to hear that. However, because of my lack of knowledge of the county, I can only refer to the figures which have been referred to during the debate.

Mr. Nott

If I may put the record straight, the figure of 11 per cent. which I mentioned applies to the Helston employment area, which is one of the areas in the St. Ives division.

Mr. Ridley

I am grateful to my hon. Friend for that intervention. He made another real point which we ought to take seriously when he referred to the earnings differential. When the average earnings for the United Kingdom are £877 per annum, to find that the average for the county of Cornwall is £724 is something of which we should take serious account. As my hon. Friend said, it is almost identical to the average for the Highlands which is £723. So we find that the Highlands and Cornwall are enjoying incomes which are only 82½ per cent. of the national income average, and that is something which should colour our thinking about taxation and low earners from now on.

An extraordinary thing has happened in that the new poor in our society are no longer to be found in the industrial areas but in the underdeveloped agricultural areas such as the Highlands, rural Wales and now the South-West. That is a development which my hon. Friend has done a great service to bring to the attention of the House.

One of the answers lies in the point which my hon. Friend the Member for Truro made with such force, that the South-West is not an industrial area. The main industries are agriculture, tourism and the extractive industries. Another complication, of course, is the large number of retired people in the area. This is the type of society for which the party opposite has never catered in its thinking about unemployment, and it does not fit into the system of industrial development which is being adopted as the only solution for alleviating the unemployment problem. I say this advisedly, because we have a population of 1.3 million in this region which has found its living in the past with scarcely any industry in it at all. So a policy based entirely on industry is not likely to be the right policy.

Of course, we must bring in all that we can in the way of new industry, and I agree very much with the hon. Lady the Member for Exeter (Mrs. Gwyneth Dunwoody) that new industry would tend to draw people from the countryside and would bring areas of higher employment and higher wages to the South-West.

But this in itself will not be enough. I believe it is true that in Cornwall there are two advance factories which are unoccupied. It is quite clear that the one training centre in the whole of the South-West, which I am informed is at Plymouth, is not adequate to deal with the industrial needs of the county as a whole.

My hon. Friends are quite right in pressing for a tax concession for tin mining, one of our ancient industries, which has suffered very badly through tax treatment and which is not in a favourable position or comparable to industries in the rest of the world. We must try to apply solutions to the prob- lem which are based on indigenous industries just as much as on bringing in new industries.

My hon. Friends are absolutely right in stressing the need for new transport facilities. This is emerging as one of the great needs of the regions wherever they may lie. We are now spending £43 million per year on provision of new factories, and grants to factories to enable them to move to the underemployed regions. I am wondering whether it would not be wiser to spend more of this money on transport facilities. The South-West has very long communications. If the M4 and the M5 were completed down into the South-West, it would make an enormous difference to the ability of industry and trade to move there quickly.

Regarding railways, I do not know enough about the geography of the area, but I take it that my hon. Friend was referring to more main line railway services rather than keeping many branch lines. I am sure he is right. That might well be the sort of direction in which we would be wiser to spend more of our money in future, rather than concentrating entirely on the I.D.C. type of development.

The House will be glad that the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food has spent the day listening to the debate. I hope the hon. Gentleman who will reply will tell us why we cannot have the investment grant for agriculture based on the 45 per cent. investment grant which is available for industrial development. This is a very important point. The Government's contribution to investment through the agricultural grant of 25 per cent. is not the same as 45 per cent. through the investment grant. Clearly, it would be a great help to have this increased support for capital investment in agriculture, particularly as agriculture in the South-West tends to be based on small units which are not all that viable, particularly if competition becomes heavier.

It clearly would be of great help to get agriculture in the South-West on to a firmer economic basis, in case competition for the Common Market should at any time accentuate and make it harder for small farmers to compete. If this enterprise of joining the Common Market is to succeed, we must have more money to do this. We may have only four, five or six years to make this transition and to improve the viability of these small holdings. After that the main responsibility for structural grants will not be ours, but will lie with the Commission in Brussels, so I hope that the Parliamentary Secretary will take note of what has been said.

The next point which was made very forcefully was the need to help hotels and the tourist trade generally. As I understand it, the building grant of 25 per cent. under the Industrial Development Act applies only to an hotel which has had a good record of earning foreign exchange. This is the point which I understood my hon. Friend the Member for Truro to make. Can this really be true? Are the Government considering altering this? It is not an easy distinction to make at the best of times. How does one measure the number of foreign visitors who have come there? Is one year enough, or must there be a certain number? Surely it would be better to reform the whole tax structure and make it fair for all hotels.

I come next to the question of the S.E.T. Last month the President of the Board of Trade was insistent in claiming that an increase of £400,000 in the grant to the British Travel and Holidays Association was of immense importance to the South-West, yet the Government are taking £16 million out of the region by way of S.E.T. Apart from the general philosophy that it is better to leave people a little more of their own money to use for their own investments and to decide how best to lay it out—which I believe in part is the answer to the hon. Lady the Member for Exeter who suggested that the hotel industry could do a great deal more to promote itself, and perhaps it could—rather than take it away in tax, it surely must he wrong to take £16 million out of the south-west area by way of the S.E.T. net.

I think that the universal condemnation which this proposal has received from all hon. Members who have spoken during this debate shows that the introduction of this Tax in this form was a cardinal mistake anyway in so far as it affects this region, and I do not want to widen the issue except to say that in so far as it affects the Highlands, the South-West and regions of this kind, it was a mistake to bring it in. My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) put it very forcefully and well when he described how it affected the marginal profitability of various enterprises, thereby leading to a reduction in the work going on and the number of people in employment.

My hon. Friend the Member for Dorset, South described it as the poor subsidising the rich, which indeed in a sense it is, because these are the poor regions of Britain, and the net gainers from the tax are the Midlands, London, and other areas of industrial Britain where a large amount of premium is to be paid.

We cannot expect the Parliamentary Secretary to make any promises anticipating his right hon. Gentleman's Budget statement, but I think we are entitled to ask him to take note of the strong feeling in the House on the question of the S.E.T. My hon. Friend the Member for Torquay (Sir F. Bennett), the hon. Member for Cornwall, North and the hon. Member for Falmouth and Camborne (Dr. John Dunwoody) all made this point.

I think it is also fair to support the point made by my hon. Friend the Member for Torquay, that the small but nevertheless forced free loan which many farmers, and many others in the region, have had to make has been a serious drawback, a serious removal of liquid funds from the region. Although it is too late to do anything about it, I think that this aspect of the matter has done further damage to the south-west region.

I beliew that my hon. Friend the Member for Truro has done a great service in calling attention to the problems of this region. I am certain that the Motion will be generally acceptable to the House as a whole. I hope that the Government will take note of the important points which have been made during the debate, and accept the majority of them. I am certain that the Motion should be accepted by the House, and I urge its acceptance by the Government. I congratulate my hon. Friend on the way that he moved the Motion.

3.35 p.m.

The Joint Under-Secretary of State for Economic Affairs (Mr. Peter Shore)

Hon. Members on this side of the House, too, join the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) in thanking his hon. Friend the Member for Truro (Mr. Geoffrey Wilson) for raising this matter. I, too, am glad to see the hon. Member for Truro back in the House. I agree with those who have said that if his speech is any indication of his health he is obviously well on the way to recovery. We all congratulate him on his speech.

Many extremely good speeches have been made. I listened to all but one, of which I have been given a reasonable account. It would be invidious to single out speeches for praise or blame, but I hope that I shall not be accused of bias if I say that I was struck by the fact that the speeches of my hon. Friends and of the Members of the Liberal Party took a broader view of the problems of the region than some of the other rather narrower constituency speeches. This is important, because we are debating a region. The speeches made indicate the growth of regional feeling in the South-West.

I have discovered that this is the seventh debate on the South-West and its problems that has taken place since the Labour Government were first elected in October, 1964. Since I was naturally interested to follow the threads of the arguments adduced about the problems of the South-West I asked for information on debates in previous Parliaments. The House will be interested to know that I discovered that although there were one or two general debates, including one raised by the right hon. Member the Leader of the Liberal Party, on development problems, which covered broad rural problems, not a single main debate was held on this subject from 1959 to 1964.

There were two small debates, both of which were raised by hon. Members on this side of the House, first, on the problem of employment and unemployment, by my hon. Friend the then Member for Falmouth and Camborne, Mr. Harold Hayman, and, secondly, on the question of the regional hospital board in the South-West, by one of my hon. Friends who was not very happy about the situation. There was no discussion of the problems of the South-West.

I then asked if it was possible to go deeper into history, in order to see what happened between 1955 and 1959. I asked if there had been a debate in those years and was told that there had not been, so I went back to 1951. In the end I discovered that there had not been a single debate on the South-West for the whole period between 1951 and 1964.

I draw two conclusions from that. The first and obvious one is that there has been a growth of regional feeling. This is a very good thing. I am not terrified by it, although we have had some rather extraordinary political manifestations of regional thinking in different parts of the country. I am sure that regionalism—the consciousness of one's own regional problems—is a good thing for the South-West to have. I am glad to see it and to observe its reflection in the seven debates of which I have spoken.

The South-West is becoming more interested and politically more vocal than before. It is simply because during those years when the South-West was not debated the political representation of the South-West was almost wholly dominated by hon. Members opposite. With the single exception of the hon. Member for Falmouth and Camborne, there was not a Labour voice. Until the right hon. Member for Devon, North (Mr. Thorpe) broke his way through in 1959, there was not a Liberal voice either.

How the situation has changed since 1964! There were then three hon. Members representing the Labour and Liberal parties and today there are six out of the total of 15 seats in that area. Another conclusion I draw is an obvious one, that it is a good thing when the political monopoly of a single party is broken. I am glad that this happened in the South-West and that now the South-West has not one tongue but at least two, because there are other parties there. I am sure we shall have its problems put before us in future, as we have today, with a vigour and variety which we did not have when there was a political monopoly and it was taken for granted by hon. Members opposite.

Mr. Eric G. Varley (Chesterfield)

Has my hon. Friend noticed that the three Tory Members who have contributed to the debate are not doing him the courtesy of listening to his reply?

Mr. Nott

Will the hon. Gentleman allow me to add that up to now the debate has been, as I said in my speech, reason- ably non-partisan? The Under-Secretary has now brought an element of partisanship into it.—[HON. MEMBERS: "You were not here when it started."] I apologised in my speech for not being able to be here when it started. Surely the seven debates can have been nothing other than evidence of growing concern about what has happened in the South-West since the Labour Government came in.

Mr. Shore

I shall not go into that argument; I have explained why the South-West has found its tongue. I think I can now be allowed to proceed.

I do not mind that this is the seventh debate in this period—not in the least —because I think the hon. Member who moved the Motion has drawn attention to real problems which should be aired in this House. I accept, for example, that there has been, as he put it, a sharp rise in unemployment in the last few months. But the reasons for that and the extent of it have not been properly put by the voices we have heard opposite.

I hesitate to burden the House with any unnecessary information, but there has been a particular problem referred to throughout the debate. Hon. Members have spoken of the South-West and used figures without in any way defining what they mean. They have not said whether they mean the South-West in terms of the major region we now have; the South-West in terms, which I should imagine the Liberal party conceive as the South-West; in terms of the western sub-region which for certain statistical purposes has been created, or the South-Western Development Area, which again is a different thing.

All I say to hon. Members who have used these figures is that I shall study what they have said, but I warn them not to use the figures they have used in the House today anywhere where they are capable of being challenged because they will run into very severe difficulties, including the assertion in the Motion itself: the highest level since the war Of unemployment. It simply is not true. The highest unemployment, as the hon. Gentleman well knows, was during 1963 and we are referring now only to the one concept of the south-west region as a whole. As for the development area, it did not exist before—

Mr. Nott

There were still unemployed.

Mr. Shore

The hon. Gentleman insists on his point from a seated position. On a random basis, as we cannot compare the development area today with the previous position, when it did not exist, I have received figures from four so-called development districts—Falmouth, Camborne/Redruth, Barnstaple and Bideford. I took them at random—I could not do anything else, at short notice —and simply asked them what was the total unemployment in February of this year of people on the Register compared with the total in 1964 and 1963.

In absolute numbers, it was 2,741 in this winter, 3,372 in the winter of 1964 and 3,592 in the winter of 1963. All I am saying to hon. Gentlemen is that they must have more respect for the definitions and concepts upon which the figures are based—

Mr. Geoffrey Wilson

My figures related to the County of Cornwall, in which, compared with every year from 1949, which was the earliest date I could get—except for 1959—the figures are the highest now.

Mr. Shore

It is helpful to be given a fifth definition in the debate. But we get nowhere by trying to pursue these matters—

Mr. Nott

The hon. Gentleman raised them.

Mr. Shore

I did not raise them. They were raised here and I wanted to reply to them.

There should be little disagreement that these are not new problems. Of course they are not. For years, certainly as long as I have known the South-West, there has been a sharp increase in unemployment of a seasonal nature during the winter. This does not make the situation any more acceptable, but it happens, and the normal experience in the South-West is for unemployment in the areas where the tourist trade is strong to double at least in the winter as compared with the summer—

Sir F. Bennett

rose—

Mr. Shore

I must proceed. There were so many points and there is so much ground to cover.

I wanted to make that point to put the matter in perspective, but the basic and underlying problems of the area—I am now talking of the smaller south-west area, Cornwall and a substantial part of Devon, rather than the larger one—can be said to be these. First, there is continued high unemployment which goes back over the whole postwar period —higher than average, higher than the rest of the region and higher than other parts of the country. Second, and associated with this, is a drift of population which has been observed in the House on many other occasions. Indeed, the predecessor of the hon. Member for Torrington (Mr. Peter Mills) had some moving things to say about this in 1963.

The third factor is the area's heavy dependence on agriculture and tourism or on a particular single industry like china clay. Last, there is the lack of good modern communications. These are the linked phenomena of that part of the South-West and the problems which arise in a so-called free market economy. They will continue and get worse unless the Government are prepared to be frankly interventionist and try to tackle the problems.

I was glad to see that some hon. Gentlemen opposite were prepared to support an openly interventionist approach to try to solve the problems of endemic decline of important parts of the country.

I turn to the question of how we are approaching these problems and how we see the future development of policy relating to the regions. I suggest that, more than any other Government, we have taken the bull by the horns. We are aware of the importance of regional planning and the benefits that can accrue from it. It is because we believe in regional planning that we have set up new forms of machinery—machinery of central Government and machinery in the form of bodies which can advise the Government—to deal with the problem.

We, as well as our critics, are aware that to believe that we can get this new machinery operating in a way that will benefit the regions quickly is, frankly too optimistic. We realised that it would take time to build up their work so that, while allowing the bodies which we had created to advise us in the meantime, we decided to intensify a whole series of policies designed to meet the immediate problems of the area, including the South-west.

I will mention some of the actions we have taken. Hon. Gentlemen opposite have referred to the location of industry. It is because of that problem that we enlarged the development area and brought to bear on it a battery of new powers which, with the investment grants, are likely to be more effective than those which existed previously. We have used a tougher I.D.C. policy on the favoured areas of London and the Midlands. My right hon. Friend the President of the Board of Trade gave the House a detailed account on 1st February last of the things that we have done and are doing. That is why I am not cataloguing all our actions, important though they are.

Much has been said about the extractive industries of Cornwall. While I would not suggest that our tax laws applying to mining companies are perfect, I should have thought that the investment grant system, operating on a development area basis, would have been of considerable benefit to the tin prospecting companies of Cornwall. After all, under the investment grant system the benefit is not dependent on a firm making a profit—and the Government are going in up to 45 per cent. and are risking possible losses. Hon. Gentlemen opposite should consider this to be a helpful approach on our part, and I gather that the Cornish Mining Federation has expressed considerable satisfaction at what has been happening in this respect.

I turn to the King Charles' head or the demon king of the debate; S.E.T. One cannot yet be certain whether the unemployment and so on—which we have seen in Cornwall are a consequence of S.E.T. This form of taxation was not even introduced until October of last year.

Mr. Bessell

rose—

Mr. Shore

It is said that the effects of S.E.T. are being felt grievously by the tourist industry. In fact, the tourist season was over when S.E.T. was introduced last October.

Mr. Bessell

rose—

Mr. Shore

You must allow me to complete my speech because I have a great many questions to answer.

Mr. Bessell

At least let me intervene on this point.

Mr. Shore

You must have a little humility—

Mr. Speaker

Order. Not too many "you's". The hon. Gentleman must address the Chamber.

Mr. Shore

A little humility may be necessary here—[HON. MEMBERS: "Hear, hear."]—and not just a jumping to conclusions about a tax that has not yet been in operation six months. The moment we introduced the tax we said that we would be studying its implications and possible regional effects. That is the right approach to new taxation, and I recommend it. These studies are proceeding, but the House will recognise that I cannot say anything more about that at this season of the year.

Mr. Ridley

Would not the hon. Gentleman think that he should have studied the effects of the tax before introducing it rather than after doing so? It was surely easily predictable that £16 million would be taken out of the South-West without having to introduce the tax to find out.

Mr. Shore

There are very many points to make on the S.E.T., and I do not necessarily accept the effect of the Tax to have been at all as described by different hon. Members. Whether it takes out money in that way, or whether or not in the tourist industry it has gone on increased prices, or has had the effect of laying off people, I do not know, and I am certain that hon. Members do not know either—[Interruption.]

Mr. Speaker

Order. The South-West must control itself.

Mr. Shore

We need to take a much more considered look at the tax, and I am quite certain that my right hon. Friends are doing so.

Hon. Members have quite rightly focused attention on transport as being of enormous importance to the area. All I can say in the time left to me is that railway communications, the lack of modern adequate road services, and the need for strategic development of the ports and airports are just the sort of items for the Regional Council and the regional planning we have gone in for. I cannot conceive of the problems of the South-West being settled by an argument between, say, Plymouth and Exeter, face to face, as to who should have the airport. I should have thought it better to refer these and other matters to a body that would think of the region as a whole.

Regional planning is a new development in this country, and the Council has only gone through the preliminary stages of its existence. The most interesting and important stage will begin the moment it completes and publishes—and thereby offers for public and open debate—its report. This will be a preliminary survey of and strategy for the south-west region. I know that the Council is working hard on the report, and that we shall get it in a few month's time.

I do not see anything in the Motion to which we can seriously object, except, perhaps, on a point of detail. I would therefore be ready to accept it on the interpretation that it is meant to encourage the Government to carry on with their good work, and that it is an expression of long overdue self-criticism by hon. Members opposite for their own failures in years gone by.

Question put and agreed to.

Resolved, That this House bearing in mind that the rate of unemployment in the South-West has recently reached the highest level since the war, and in many places remains far in excess of the national average, urges Her Majesty's Government forthwith to take all necessary measures, fiscal and otherwise, to encourage the development in this region of agriculture, horticulture, tin mining, production of china clay, manufacturing industry and tourism, and in particular to improve the transport facilities of the region by road, railway, sea and air.