§ Motion made, and Question proposed, That this House do now adjourn.— [Mr. McBride.]
§ 11.5 p.m.
§ Mr. Arthur Lewis (West Ham, North)
I want to raise a question concerning the failure on the part of the Government— and, through the Government, the Board of Trade—to grant an industrial development certificate to a certain firm. When an hon. Member speaks of a matter in which he has a personal interest it is customary for him to declare that interest, which I do from the commencement.
Mr. Deputy Speaker
, you will have seen in today's Press reports to the effect that, unfortunately, our balance of payments is still not right—our imports are still rising and our exports falling. In those circumstances one would have thought that the Government would do everything possible to help exports. I have been trying to do that in my small way in the company with which I have a connection, which I can say without boasting makes some of the finest whitewood furniture 1247 in the country. The firm decided that as it had made a big inroad into the home market it should try to develop an export market.
Whitewood furniture is relatively cheap, and if it is exported in the ordinary way in packing cases it can easily be damaged if the cases are dropped. Sometimes the packing cases may cost more than the furniture they contain. We therefore decided that the furniture should be broken down, so that it could be more safely carried in packing cases. From our personal examination of the possibilities it seemed that there was the prospect of about £1 million worth of exports a year.
We found, however, that with our large home trade it was not possible to develop this type of merchandise for export and store it in the limited space that we have at our main factory at Leyton. We therefore looked around and obtained permission from the Leyton—now Waltham Forest—Council to take over a site which would have enabled us to have coordinated production and storage instead of having to carry the furniture all the way from Tottenham through the back streets, causing congestion and difficulties with other transport, both industrial and private.
We thought that we had found the ideal solution, which would enable us to store the finished product and get on with the job of increasing output and so develop exports. Then the Board of Trade said, " No. Although the local council is willing to grant you the land and although you are able to do this, we cannot grant you an I.D.C." The Board of Trade was most helpful. It said, " If you could get a place which you used only for storage, so as not to contravene the Government's plans for avoiding a build-up of labour in the South-East, with too much production in a so-called over-productive area, we might look favourably on the project."
They did suggest that we should go to the North or the North-East where there is under-employment, but of course it was explained to the Board of Trade— though they did not seem to appreciate this—that to try to build furniture of this type, which has taken a long time to develop, and to cart it all up North and then bring it all the way down again, 1248 would not be satisfactory, and that to shift the whole factory from London up to the North was not a practicable proposition.
So eventually we found a place where we could store the finished products in warehouses, where we could build up stocks for export, await the actual orders, and then put them on to the boats and get them out into the countries of the world where we could earn the dollars and the hard currency.
We then applied for an I.D.C. for warehousing in which to put the finished products in Tottenham, but believe it or believe it not, Mr. Deputy Speaker, the I.D.C. was again refused by the Board of Trade. I was told the reason for this —and this is really amazing. It was that this warehouse might be used for production.
You know, Mr. Deputy Speaker, that pigs might fly if they had wings, but the facts are that pigs have not got wings and so they cannot fly. What a stupid approach the Board of Trade takes towards this. Here we have underemployment and unemployment in the known furniture manufacturing areas of London; we have factories closing down in Tottenham; we have unemployment in Tottenham; we have unemployment in Leyton; we have short time in Enfield; we have just had the cooperative factory shut down in Enfield.
We have furniture workers and carpenters looking for work, we have unemployment, and here is an opportunity to absorb these unemployed and to get them into production. We have an opportunity of building up an export trade, and we therefore have the opportunity of helping the workers, the company and the country. But the Board of Trade say " No—we are going to stick rigidly to our policy of not granting an I.D.C. even if there will not be any question of this actual warehouse being used for production purposes."
I confess there will be a few extra workers taken on. There will be some extra workers needed to watch the warehouse, and there will be a need for the packing and stacking of these export articles when they are produced. But these are only limited in number because in fact if, as is the case, we can get the full run-on of this commodity and can increase our production, we could then 1249 make space for the increased production that would come from the goods coming out of our new warehouse, and very little in the way of extra staff would be needed.
Again, the Board of Trade say " No." Therefore, I thought the best plan was to raise this matter here this evening and try to get the Board of Trade to look at this on the basis of realising that all good rules are sometimes broken, and that sometimes there is a necessity to stretch these rigid rules which the Board of Trade and their advisers tell Ministers have got to be enforced.
I represent an area in West Ham where we have under-employment. I represent an area where there are a number of workers who have for years been engaged in the furniture industry. They travel to Leyton, now called Waltham Forest, to Tottenham, and as far as Enfield, but, whether the Board of Trade likes it or not, they will not travel to the North-East. It is not practicable to train workers for a new exporting factory in the North-East when all the facilities are available in this area. Therefore, I hope that the Board of Trade will be sensible, in view of this prospect of millions of pounds worth of export orders. We have even made inquiries of American stores, which have been promising, although I would not have thought that a possibility.
How can one expect people to travel to and from the North-East making white softwood kitchen cabinets, when the plant and equipment and run off from home production is available here? We make millions of pounds' worth of this type of commodity for home consumption, and the existing facilities would help to cover export production. The Board of Trade puts every difficulty in the way of our entering the export market. If they do not want us to, we will carry on making enough money by production for the home market. One of my fellow directors told me that if he wanted to be awkward, he could say, " I have made enough money and could retire and spend the rest of my days on the golf course or touring the world. Instead, I worry about building up an export trade—yet all I get is difficulties put in my way by this Government, who claim to be all for exports."
Every time we try to get support from the Board of Trade, they put difficulties 1250 in our way, and they trot out the hoary old excuse that they do not want this development in the South. Yet they allow it in some places in the South. If we wanted to build a big office block there would be no difficulties—
§ The Parliamentary Secretary to the Board of Trade (Mrs. Gwyneth Dunwoody) indicated dissent.
§ Mr. Lewis
My hon. Friend shakes her head, but I could show her three big blocks of offices in my constituency which were built three years ago and are still empty. The Greater London Council had to take over part of one, a big white elephant in Stratford Broadway, because it had been empty for three years, and the other two are within a stone's throw of it. I can show her blocks on the way to London Airport— one is a Turriff development, I think— which have been empty for four years. Either her Department granted licences for them, or they were built without licences. That is not helping the export trade.
I am presenting the Board of Trade with an opportunity to see that something positive is done. This project would not mean a great deal of labour being tied up. Naturally the firm would need packers, watchmen and similar staff, but that is all. We would have an opportunity of breaking into new markets. Does the Minister appreciate that we are speaking of virgin soil in trade terms? Many under-developed Commonwealth countries want this furniture because it is cheap and good. It would help them, since it is suited to their climates, to develop a better standard of living and it would help our balance of payments.
I am tempted to say that I hope that, even at this late stage, my hon. Friend will be forthcoming on this issue, but I feel that I would be optimistic if I used the phrase, " I hope." Frankly, considering how Ministers of even the Labour Government listen to the advice of their civil servants, I cannot hope for too much. But perhaps the publicity that may be given to this debate will result in something positive being done, with Ministers sometimes making their own decisions, rather than always taking the advice of their advisers.
§ 11.21 p.m.
§ The Parliamentary Secretary to the Board of Trade (Mrs. Gwyneth Dunwoody)
I thank my hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) for raising this subject. We are very conscious indeed of the need to do everything possible to facilitate the expansion of exports. We also attach the greatest importance to the objectives of the Government's distribution of industry policy. It is useful, therefore, to have the opportunity to discuss the problems which arise in pursuing these ends.
I know that my hon. Friend, who is a life-long Socialist, supports the basic aims of the Government's distribution of industry policy, which are, on the one hand, to encourage the development of industry in the less prosperous areas of the United Kingdom and, on the other, to contain the pressures on labour and other resources in the South-East and Midlands. I have no need to emphasise the overwhelming needs of the development areas for new jobs in manufacturing industry. In spite of all that has been done, their rates of unemployment are, in general, still well above the national average and some of their basic industries are still contracting.
As exports increase, the economy will move into an expansionary phase. We know only too well that unless we succeed in achieving a better regional economic balance, there will be signs of overheating in some parts of the country while there are resources still being under-used elsewhere. The Government's regional policies are designed to secure this better balance between different parts of the country and avoid the social and economic waste which lack of regional balance involves.
We have two main methods by which we seek to achieve these objectives. First, large financial and other inducements are available to industrialists setting up in development areas, and we are currently spending over £250 million a year on the development areas. This is because they need these sums to be expended on them. The need to obtain an industrial development certificate before new industrial building can be erected is the second instrument in the implementation of this policy; and if we are to achieve our aim, we must look critically at applications for major new 1252 projects or expansions in the most congested areas, which include, of course, London.
It must not be assumed from this, however, that we are completely rigid in our treatment of applications for industrial development certificates. On the contrary, each case is looked at most carefully to see whether the ties which the project may have with the area in question are strong enough to outweigh the advantages which a move of all or part of the production to an area where resources are under-employed would have for the economy. In deciding where the balance of advantage lies, all the relevant factors are taken into account, including exports.
A firm may claim that its exports will suffer unless it can develop where it chooses. This is a frequent line of argument. Particularly where a firm is already making a major contribution to the export trade, this is a factor to which we give full weight. But it must be remembered that today most firms, especially the more dynamic ones which are expanding, have an interest in exports. We cannot, therefore, always regard export considerations as overriding. Nor should we assume too readily that only in one particular location can the expansion of exports be achieved. I do not pretend that decisions on applications are alway easy, since there are often conflicting considerations to be taken into account, but I can say, and very forcibly, that each case is considered very carefully on its own individual merits.
My hon. Friend referred to the refusal of an application by Liden Products for a large extension to its factory at Tottenham. I am sure that the House will understand the reasons why we do not enter into detailed public discussion of individual applications, which would entail the disclosure of information given to the Board of Trade in confidence, but since this application has been raised I will try to be as helpful as I can.
This firm began production in North-East London in a small way after the war, and has since expanded rapidly to become a leading producer of whitewood furniture. Premises at Leyton and Tottenham have been acquired, mainly without the need to obtain an I.D.C., although when a comparatively small 1253 I.D.C. for an extension at Leyton was issued in 1960 the firm was told about the objections to further expansion in the London area, and it was emphasised that it should not rely on the approval of any further extensions.
The reasons why we have felt that this firm should be able to undertake any further major expansions away from the London area have been explained to it by my right hon. Friend the Member for Sheffield, Hillsborough (Mr. Darling) when he was Minister of State, Board of Trade, and by my hon. Friend the Member for Birkenhead (Mr. Dell), the present Minister of State, Board of Trade. The firm now wants to add a larger extension to its Tottenham factory, where it has already acquired certain additions, in order to release space for the expansion of production.
Like the rest of London, which has an unemployment rate of 1.5 per cent. compared with the national average of 2.4 per cent., this is an area where there are already adequate employment opportunities. Whatever may be the immediate demand for labour as a result of the expansion, I must say to my hon. Friend with the greatest possible respect that vacancies in Tottenham exceed the vacancies in the furniture trade generally. This is not an area where we are anxious to see major development with potential employment demands, particularly at a time when other parts of the country are in serious need of more employment.
It is true that the firm has argued that one of the advantages of having the additional space is that it would enable it to enter the export market with kits for local assembly, but I cannot conclude that this possibility of future exports, which the firm has had under consideration for some time, is in itself enough to justify allowing this further development involving new industrial building in London.
As I have said, I am very grateful to my hon. Friend for raising this matter, although I cannot agree that in the case of Liden Products there is sufficient justification for the issue of the I.D.C. I may say that this is a Ministerial decision—and I emphasise that—following 1254 very specific Government policy. If we are ever to do anything about the imbalance in our employment situation we shall have to drive most of the expansion which would go on in the London area to the less congested areas.
§ Mr. Arthur Lewis
The Minister must know, or ought to know, that since the original expansion, in West Ham, Leyton, Tottenham and Enfield, there has been a continuing shortfall in employment in the furniture industry. I could mention names of places along Westbury Road— big furniture factories. The place we have just taken is a former furniture factory. The hon. Lady speaks of 1.5 per cent. and 24 per cent of unemployment when my constituency is becoming a semi-derelict area because industry is going away from it. I agree that there is that percentage difference, but that does not mean much to the people there who are unemployed.
§ Mrs. Dunwoody
My hon. Friend will also realise that to say to a man where there is 8 or 9 per cent. unemployment in a development area that we are allowing expansion in an area where there are already more jobs available than people to fill them in this trade would be a negation of a balanced policy for the future of this country.
But I end on a more positive note for my hon. Friend. I remind him of the considerably increased incentives the Government offer to firms prepared to move production to or expand production in development areas. There is an opportunity for firms to help both themselves and the country and I hope that this firm will seriously consider the opportunities for expansion in the development areas. The Board of Trade will give every form of help it can if the firm is willing to consider a development area location and I am sure that, in the final analysis, this would not only lead to a successful development of the firm's business but would certainly do a great deal towards assisting a balanced programme of employment.
§ Question put and agreed to.
§ Adjourned accordingly at twenty-nine minutes to Twelve o'clock.