HC Deb 20 January 1970 vol 794 cc333-63 Section 15(3) of the Industrial Development Act 1966 is hereby amended by the addition, after the words 'population changes', of the words 'level of earnings'.—[Mr. Wallace.]

Brought up, and read the First time.

7.35 p.m.

Mr. George Wallace (Norwich, North)

I beg to move, That the Clause be read a Second time.

The objective of the new Clause is simple and straightforward. Up to now low average earnings have not been taken into account in the determination of whether an area shall receive assist-mice under the Industrial Development 1966. In Committee the Minister of State said: The Industrial Development Act, 1966, requires the Minister of Technology, in designating development areas, to have regard to all the circumstances, actual and expected, including the state of employment and unemployment, population changes, migration and the objectives of regional policies. In this context, the objectives of regional policies can in appropriate cases include raising the level of earnings."—[OFFICIAL, REPORT, Standing Committee A, 20th November, 1969; c. 63.] That statement provided my hon. Friends and me with at least a ray of hope in the continuous efforts which we have made to stress the needs of East Anglia, where average earnings have been among the lowest in the country for far too long.

The First Report of the East Anglia Economic Planning Council stated that the average weekly earnings of men in East Anglia were about 9 per cent. less than in the rest of the country as a whole. In fact, if the hours worked were no longer than the hours worked in the rest of the country, the difference would be 10 per cent. Further statistics indicate that the difference in money incomes also reflects a lower level of real consumption. In other words, the standard of life is lower.

Fundamentally, the problem is one for solution by management and trade unions and a diversity of industry to provide competition for labour. Efforts on a self-help basis have been made by local authorities and other bodies to attract industries into the area, and although the offer of a free flow of I.D.C.s, which we welcome, has been made, the fact remains that the competition from areas receiving Government assistance and those designated is too great, with the result that the problem remains unsolved.

What incentive is there if a man's take-home pay is no more nor less than he would receive if he were unemployed or on sick pay but for the wage stop? All we ask, for the sake of social justice, is that average low earnings should at least he taken into consideration, and, in my view, such a case is unanswerable.

If Britain enters the Common Market, East Anglia, with its close proximity to the Continent, will become a key area, and then the Government of the day will have to render assistance, particularly in terms of road, rail and dock facilities. But why wait? It seems incredible that an area working the longest average hours in the country should also average the lowest pay.

The people of Norfolk in particular are proud and independent. They are beholden to nobody. They deserve every effort we can make to see that they get at least a degree of consideration under this Measure, and that is all we ask. I trust that the Government will make this token concession.

Sir Harry Legge-Bourke (Isle of Ely)

All East Anglian Members will be grateful to the hon. Member for Norwich, North (Mr. Wallace) for his speech. Those of us who have the honour of representing East Anglian constituencies have to recognise that the Industrial Revolution started in East Anglia very much later than in other part of the country.

A great deal of attention has inevitably been given by various bodies to this problem. We find ourselves in the position in which all the Government-sponsored planning bodies seem to assume that there can be no question of treating this area as a special area. The Hunt Committee Report came as a great disappointment. The East Anglian Economic Planning Council's Report disclosed very disturbing factors, Right at the beginning, in the summary of the problems, we have these facts in paragraph 18e: East Anglia will have a limited industrial base for many years.…There are very few large firms and a restricted range of skills and training facilities. Employment in agriculture is proportionately five times as high as the national average but is running down rapidly. The most potent sentence of all is: It is difficult to see how, without major changes in government policy, sufficient employment will be generated within the region to provide jobs for the projected increase in population; earned incomes from employment are lower in East Anglia than in any other English region, lower than Wales and only fractionally above Scotland. They are about 8 per cent. below the average for Great Britain, and there are even more marked differentials of up to 12 per cent. between certain counties of the region and the national average. Those are startling facts by any criteria.

The Government must be now aware that after the decision of the Hunt Committee not to treat East Anglia, and particularly North Norfolk and parts of my constituency, as an area which requires special treatment, we have had the regional planning council rejecting this and now we have the Royal Commission on Local Government, which has very important relevance to all this also seeming in sympathy with the idea of setting up city regions of Norwich, Ipswich, Cambridge and Peterborough and letting the rest go hang.

Everyone who has the Eastern Counties at heart is aware that unless something more is done than so far has been propounded by any Government-sponsored body we shall finish with a sort of hinterland between the city centres where there will be no prospect of anyone doing anything other than agriculture. We know that as soon as those in agriculture get a rise all those in other industries put in demands, as a result of which the old agricultural worker is back in his former position relative to the rest. This is producing an economic debility and having an effect in the minds of men. I do not blame them for having concern about this.

In the Conservative Party we made a study of the East of England which we published at the end of 1968. Without having before us the East Anglian Planning Council's Report for which we were waiting anxiously, but having only the South-East Study, and without the Hunt Committee's Report, we reached conclusions which, although mentioned as possibilities in some of these reports, have been rejected. Those of us on this side of the House who have concerned ourselves with the Eastern Counties recognise that we have to make sure that if we extend a town such as Peterborough or Ipswich and do not at the same time take proper account of the rural areas we shall be grossly unfair to agricultural workers and all who live by the land. This calls for some consideration of the Industrial Development Act, 1966.

7.45 p.m.

The Government could ride out of the obligation in Section 15(3) of that Act by saying that it obliges the board to take account of all the factors, and obviously "all factors" could include what the hon. Member for Norwich, North has put in his new Clause. What makes us suspicious is that the Section lists particular things which must be taken into account within the overall bracket of the word "all". They are the state of employment, unemployment, population changes, migration and objectives of regional policies. The Government could say that the objectives of regional policies are to include what the hon. Member has put in the new Clause; but why not specify them? If the other arguments are specified we should equally say that these are embraced in all circumstances actual and expected. This is of great importance to the rural areas which are becoming more and more depopulated to such an extent that farmers are desperately short of labour despite mechanisation. They have almost reached a limit where no saving of labour is to be made if they are to carry on farming.

I stress that it is no good being "bitty" in this policy. It must be regarded as a complete exercise and integrated in the true meaning of wholeness. It has to be a wholesale exercise, not a bitty one. The Government need to have a very good reason for rejecting the new Clause. It would be an earnest of their real intention if they were able to show that in the re-gearing of this region—even if we disagree fundamentally, as I do, with the general basis of the policy—so long as tile policy is as it is and the machinery is what it is we do not leave out what should be brought in.

I quite from a statement by the group which I had the honour to chair and which reported to my right hon. Friend the Leader of the Opposition: In two sample areas in East Anglia, male earnings from employment have been the lowest of all the Regions in England and Wales, .8 per cent. or £90 per annum below the average for Great Britain and £190 below the average for the South-East. Norfolk, in particular, showed a figure of 15 per cent. below the average for Great Britain in 1965–66 but the East Anglian Economic Council points out that this is not solely due to agricultural factors. Industrial male earnings were £1 18s. a week less for over half an hour's more working time. Many of these figures cover much wider areas than that of this present survey. But they indicate clearly the typical increasing trends away from primary industries towards manufacturing and service industries especially in the area south of the Wash. Moreover, the trends greatly intensified in the last three years of the seven-year period 1955–62. The grisly thing is that, despite this increase towards manufacturing industries, the earnings from this industry are a long way below the average earnings in the country. This the Government have to recognise. In their regional planning boards they have to make sure that this matter is not overlooked. If they want to make a gesture of real good faith they ought to accept the new Clause.

Mr. Bert Hazell (Norfolk, North)

I support the case made by my hon. Friend the Member for Norwich, North (Mr. Wallace) and the hon. Member for Isle of Ely (Sir H. Legge-Bourke). All of us horn East Anglia were profoundly disappointed by the Hunt Committee's Report. Perhaps we had expected too much from it. However, the Committee's offer to East Anglia was nil. We had hoped for more encouragement. After all, Sir Joseph and his Committee visited Norfolk and other parts of East Anglia and learned about the problems from the witnesses and from the large volume of written evidence.

Unfortunately, the Government have largely accepted the recommendations, which left East Anglia out in the cold. The placing of the emphasis on growth areas in districts like Norwich, Ipswich, and even King's Lynn, has little impact an the wide rural areas of East Anglia. Such are the means of communication that, even if more work was available in the proposed centres, many of the rural people who are displaced for one reason or another, mainly because of the increase in mechanisation on the land, are unable to reach the more populous centres to take employment there. As the hon. Member for Isle of Ely and I know only too well, the problems of Isle of Ely and North Norfolk were highlighted. I hope that the Government will accept the Clause, which, although it may not mean much in toto will at least be an encouraging indication to the districts concerned that they are not left out of the planning for industry in these rural areas.

Agriculture will continue to lose a considerably greater volume of labour in the purely rural areas. In some districts —for instance, on the edges of large cities and industrial centres—agricultural labour is very scarce. However, it is in the purely rural areas where agriculture is the main source of employment, and where there are possibilities of still further automation taking place on top of the already intensive mechanisation which has occurred, that labour will come on to the market. Unless steps are taken now, the problems which are only too well known to us will persist.

Earnings in these rural parts of East Anglia are lower than in any other part of the region. I thank my hon. Friends for their assistance in not preventing I.D.Cs. from being granted in parts of Norfolk and East Anglia, but these certificates are insufficient in themselves to provide the necessary employment and to have a marked effect on raising earnings in this important part of Britain.

Mr. Paul Hawkins (Norfolk, South-West)

If the Government do not accept this Clause, I shall be glad to vote against them later. However, I do not think the words which it is sought to add to Section 15(3) would achieve much, because that Section says that the Board shall have regard to all the circumstances actual and expected". The Report of the Hunt Committee was disappointing. I did not have much faith in that Committee, anyway. I had even less faith that the Government would do anything about it even if the Committee had recommended any action. My expectations have been borne out by the fact that the Government have done nothing. It is the Government's fault, because even though the Hunt Committee made no recommendation, the Government could have taken soundings and taken action.

The tabling of this Clause is an extraordinary action by hon. Members opposite, but I am glad that they have done it. It is their Government who have let the basic industry of agriculture down. As the hon. Member for Norfolk, North (Mr. Hazell) has so eloquently said, it is rural areas which are dependent entirely on agriculture that are hit so hard, because the basic agricultural wage is so low. East Anglia, and Norfolk in particular, has a much lower level of earnings than any other area.

The Government promised great things for agriculture. However, after the "Little Neddy" Report, which said that agriculture was to be expanded, the Government have done nothing to expand it and raise its profitability, which would enable it to pay better wages. For a long time I have pointed out that agricultural wages are on the bottom rung of the wages of all manual workers and are £5 a week less for five hours' work a week more than the hours worked by any other section of manual workers. Yet other trade unions always want to keep agriculture at the bottom of the wages table. As soon as agricultural workers get an increase, the other unions want an increase. This is a basic cause of the low earnings in East Anglia in general and in the rural areas of Norfolk in particular.

Another factor depressing earnings in Norfolk has been the extraordinary attitude over I.D.Cs. The hon. Members for Norwich, North (Mr. Wallace) and Norfolk, North have said that the Government have been free in issuing I.D.Cs. That may be true now, but up to 12 months ago it was a very different matter. I had to fight before a small firm of oculists, which was to employ about seven men and five women, could come to the town in which I live. For nine months it tried but was told to go to Ulster, to Scotland or to the North-East. It wanted to be on the main line from Downham Market, where I live, to London where its head office was, but it was being prevented from going there. I took the matter up with the Board of Trade, which in the end had to give way, with very bad grace.

Another example is the fact that Norfolk-based industries have not been allowed to expand. In East Dereham there is a large national industry, a part of which is also in the constituency of the hon. Member for Norfolk, North. This firm, which wanted to expand its business operations by making a new type of vehicle, was told that it could not have an I.D.C., although the urban district council had an industrial site adjoining its works. At that time East Dereham probably had the highest unemployment level in Norfolk. Yet for month after month the firm was told that the shop would have to go anywhere else but in Norfolk. Yet that was an industry which had started in Norfolk and expanded there. It was told to go elsewhere. The only way in which the firm and I were able to bring pressure to bear on the Board of Trade was to say that the whole firm would close down in Norfolk and move elsewhere.

The Board of Trade has been most unto-operative and unhelpful in allowing I.D.Cs. to firms which the county wants and which are prepared to come to Norfolk, despite the attractions of all the other areas where they are given grants. The pressure of the Board of Trade is on them to go to a development area, even though they are suitable firms which want to come to Norfolk and are ready to put up with the lower financial incentives.

So I am prepared to support the Amendment in the Lobby if the Government will not support it or allow it to go through. But I emphasise again that it is the basic industry of agriculture which sets the wage rates and earnings in the county of Norfolk, and that until we have a proper policy for agriculture we shall not see those earnings rise to the proper level.

8.0 p.m.

Mr. John Golding (Newcastle-under-Lyme)

I support the new Clause, but I want to make it clear that I was pleased with the Government's attitude on the question in Committee. They then indicated that they would take the level of earnings into account when deciding their development policy. I think that the Government will do that whether or not the Clause is passed. But many of us would like these words included as a declaration of intent, as a public gesture that they will take the problem very seriously.

No trade union wants to keep the pay of agricultural workers down. The problem is not confined to agriculture or to East Anglia, although the tenor of the contributions so far would lead one to believe that that was so. The problem is shared by many areas.

Unfortunately, we cannot say which is the worst area. We can say something about regions, but we cannot say anything about areas, because we have no statistics on the level of earnings and wage rates in particular localities. I recently asked the Department a Employment and Productivity whether it intended to give us the statistics, and the reply was that there NN as no such intention. That is a great pity, because it blurs the issue and blurs the picture to talk simply in terms of regions.

I represent a constituency in a region that is considered very prosperous—the West Midlands. Yet there are pockets —and North Staffordshire is such a pocket—where the average earnings are very much below those enjoyed by workers in other parts of the region. So one of our requirements is to know very much more clearly than we do what the earnings situation is in particular localities.

The argument in favour of taking low earnings into account is that the problem of low pay can be solved ultimately only in that way. The Government have dismissed in the White Paper on incomes policy the practicability of a national minimum wage, a policy which many of us have advocated as a way to get rid of low pay in this country. It seems that it is not practicable in the years to come. For some of us, productivity bargaining is one way to get rid of low pay, but if the trade unions are to co-operate with employers in improving efficiency they must have Government help, and that help can best be given in the way of grants and encouraging modern firms to go into particular localities.

In North Staffordshire the level of unemployment is not high, but although it is about 2.2 per cent.—below the national average—the level of earnings appears very low. It is distressing to us to see that the locality is based on two, or perhaps three, traditional industries. Agriculture is one, but the predominant industries are pottery and mining. It is distressing to see the area based on industries which, certainly in the case of coal mining and possibly in the case of pottery, lack the very great prospects that modern technical industries can give. It is distressing to us to see workers engaged in the computer industry being declared redundant in an area like North Staffordshire and told that they must work in the South-East if they are to continue to be employed in that industry.

The Government should follow the policy of encouraging industries to go into such areas to provide some mix, to provide a balance of employment prospects. Therefore, I urge them to accept the Amendment as giving an indication to the public of the seriousness with which they treat the whole question of low pay.

Mr. Kenneth Lewis (Rutland and Stamford)

I, too, congratulate the hon. Members opposite who have moved and spoken in support of the new Clause, and hope that the Government will accept it. Although I recognise that what it would do may not be very considerable it would at least be a small token by the Government that they are serious about the low paid worker.

The Secretary of State for Employment and Productivity is constantly telling us that the Government are concerned about the low-paid worker. Nevertheless, we find that it is the already high-paid worker who is receiving the largest increase in incomes, through the pressure and power of the trade union behind him. Indeed, we are coming to a situation where the differential between the high-paid worker in industry and the low-paid worker in the countryside is even greater than that between the well-paid middle class and the high-paid worker. The worker in the motor car industry is now nudging up to, and sometimes going beyond, what the professional man is earning. The Ford workers say that they want equality of pay with those in the same industry in the Midlands. What would happen if the Government found overnight that there was an insurrection in the countryside against the acceptance of the right of the industrial worker to ante up all the time; if the workers in the countryside said that they too wanted equality of income with people working in manufacturing industry?

The situation is becoming serious. It used to be said that if one lived in the countryside one could live more cheaply. This is no longer so. Most of the costs in the countryside are now just as high as those in the towns. The basic living costs are virtually the same. The costs of some council houses are as high as in some of the smaller industrial towns, if not in the big cities. The difficulties and the costs of transport in the countryside are even greater than they are in the towns. Thus, the advantages of lower costs no longer accrue to those living in the countryside.

The result is that people are leaving. Those who have been educated are not looking to the countryside for their jobs but to the towns. If we go on like this, we shall soon have large conurbation areas whose people are prosperous with a kind of desert surrounding them. I agree that this does not only apply to East Anglia. My constituency bridges East Anglia and the East Midlands area in Rutland. I have the same problems in Rutland as in Lincolnshire.

There might be something to be said for the Government looking at some of our country areas and laying down there some of our larger industries. At the moment, if one goes to the Board of Trade for an I.D.C. for a very small industry, the chances are that one will get it. But small industries go to the countryside because they know that they can pay low wages. They do not have to compete in wages with large manufacturing concerns in the towns because there is no wage competition in the countryside and no general lifting up.

Here again, we have seen in the last few weeks the reactions of the farmers to the last Price Review. Inadequate attention is given by the Government in the annual Price Review—

Mr. Deputy Speaker (Mr. Harry Gourlay)

Order. The Second Reading debate on a new Clause certainly goes wide but not as wide as the annual Price Review.

Mr. Lewis

I appreciate that, Mr. Deputy Speaker, and I shall come back to the case of the low-paid workers. But when the Government are examining what they are going to pay to farmers in the Price Review, they should take account of the pay of the workers in the industry. The farmer does not want to be well off at the expense of his workers. He wants to run a prosperous industry with the ability to pay his workers well, and unless the Government, particularly the Treasury, are prepared to concede that the Price Review should grant more because of the low-paid workers, we will not get an uplift of pay standards in the countryside. In addition, where there is low pay, the chances are that there are worse conditions.

I am certain that any Government for the future must consider how we can redress the balance on this question because there is no doubt that, in the last few years, the countryside has fallen way behind the town in incomes, and in ability to earn. People employed in manufacturing industry are buying the products of the countryside. Why should they not have to pay more? The people in the countryside when they buy the products of industry have to pay a high price in order to pay those who are employed in those industries the high incomes they have secured and which apparently they are going to increase in the next 12 months.

It may be that the Government think that they get a large part of their support from the industrial workers in the towns. In the run up to an election, perhaps they are thinking, "We will pay the industrial worker more money, although he has enough already, because thereby we will get his vote". I say to the Government that the backlash on this from the countryside is not far off and that therefore they should accept the new Clause.

8.15 p.m.

Mr. James Tinn (Cleveland)

I had not intended to intervene but I feel compelled to express a contrary view to those I have so far heard on this new Clause. We all recognise and sympathise with the problems of low income areas but I submit that the priority must still go to areas of high unemployment, where so many men have no work at all.

This, I believe, must be so as long as unemployment in the existing development areas remains at a high level. For example, the Northern Region has well over twice the national average. In particular areas of the region, the level is as high as 10 per cent. This situation persists due very largely to the run-down in the mining industry. That run-down has been largely contained but not entirely by the Government's remedial measures. But so long as unemployment remains such a heavy burden and massive problem for the existing development areas, we must bear in mind that the purpose of this legislation is to stimulate employment in those areas rather than to seek to disperse it even more to areas which are not experiencing high rates of unemployment and whose people are, by and large, in work, even if it be low paid. I sympathise with the point of view expressed by my hon. Friends on the new Clause, but it is more important to provide the men unemployed in the existing development areas with work before we divert resources to other areas.

Mr. Hazell

Does not my hon. Friend agree that, while one has sympathy with the development areas in their situation of high unemployment, nevertheless unemployment and other social benefits often are higher than the earnings of people such as those I am privileged to represent and which operate throughout many rural areas? There is merit in the new Clause because the earnings of these people are lower than the unemployment and associated benefits in development areas.

Mr. Tinn

It is not often I disagree with try hon. Friend the Member for Norfolk, North (Mr. Hazell) but the problem of the lower-paid has to be tackled first at the social security level. There is no reason why such a system should not take care initially of the points he has raised. Secondly, it should be dealt with by trade union action. Only after legislation such as this has solved the major problem for which it has been devised—high unemployment—can much greater attention be paid to other areas than hitherto.

Mr. Eldon Griffiths (Bury St. Edmunds)

I find myself in some difficulty over the new Clause because I dislike the prospect of the whole country being turned into a patchwork quilt of areas, some intermediate, some derelict land clearance areas, others development areas and the rest. I do not like that conception. We would do far better to improve the infrastructure. Nevertheless, we have the policy, at least for the time being, and we must make the best of it.

In my part of the country the application of this policy is working, if anything, against the interests of the people I represent. Because the development areas are sucking away most of the footloose industry in Greater London, that industry is not going to the overspill towns of East Anglia. Consequently, we have a Government policy which, on the one hand, decants population into the country areas but on the other hand prevents the industry which is needed to sustain that population from going to those areas.

Because I face this difficulty, I pondered before deciding to support the new Clause. But I decided to support it for several reasons. The first was stated well by my hon. Friend the Member for Norfolk, South-West (Mr. Hawkins) when he said what a bitter disappointment to us in East Anglia the Hunt Committee's Report had been. In my area the local Labour Party led us to believe that Hunt was the deus ex machina. Leave it to Hunt they said, and all our problems of inadequate support for overspill, inadequate income for farm workers would be dealt with. Lord Hunt would come up with a solution and a nice fatherly Government would accept it. What happened? The local Labour parties all rushed after Lord Hunt and gave evidence. They got into the headlines and told us that what they had said would be accepted. Lord Hunt considered the evidence and produced his Report.

Mr. Hazell

May I remind the hon. Member that it was not Lord Hunt but Sir Joseph Hunt. He seems to have mixed the two individuals. They are quite different.

Mr. Griffiths

I apologise both to Lord Hunt, who is so excellently representing our country in Nigeria and who has done such sterling work in Northern Ireland, and to Sir Joseph Hunt, who produced this report and perhaps did not receive his peerage because the Government were not prepared to accept his recommendations.

I need not draw the attention of the hon. Member for Norfolk, North (Mr. Hazell) to this, but it is stated in the Hunt Report that: In North Norfolk … unemployment averages about 2 per cent. above the regional average and is aggravated by seasonal variations due to the high proportion employed in agriculture and the holiday trades. In January and June of 1968, the year with which the Hunt Committee was dealing unemployment stood at 4.8 per cent. and 3.2 per cent. respectively. An analysis of the arge of those registered as unemployed in this region showed that the proportion of unemployed males aged 60 and over was twice the national average. What this means, and I am sure that the hon. Member will confirm it, is that the elderly male worker very often the retired agricultural worker whose fingers are no longer supple, whose limbs are very often arthritic, because those who have worked on the land knows that this happens to the elderly, is more likely to be unemployed than anyone else. This was a point borne in upon the Hunt Committee.

I am sorry to say that the primary reason for it is S.E.T. In our part of the world many elderly retired farm workers have been taken on and have been kept on by other families in part-time jobs that were perhaps not very demanding but were the sort of things that gave a man a bit of self-respect and enabled him to continue earning a few bob which helped him and his family. Many of those elderly men have now been put out of work by S.E.T. and as a result have very low incomes indeed.

The Hunt Committee was absolutely right to draw attention to this sector of the Norfolk and Suffolk population and to ask that the Government should do something about it. Hunt, as I said, was a disappointment but the Government's action was not only a disappointment, it was a disaster. They accepted the Hunt Committee's recommendations if they thought that it would do them a bit of good. I notice that its recommendations for Merseyside were accepted at once, but other parts of the country, East Anglia in particular, were ignored.

I come to my second reason for supporting this new Clause. Here I am thinking particularly of the low earnings of many of the industrial workers in the overspill towns of my constituency. I have four industrial towns, Haverhill which has had some difficulties, Bury St. Edmunds, which on the whole has managed its overspill programme very well, and the very small towns of Mildenhall and Brandon. Because of the downturn of demand in the economy and the many other difficulties which have arisen due to this Government's mismanagement of the nation's affairs, we now have a situation where overtime is very hard to come by in the overspill towns. Consequently net income—I am not talking of the wages rates although they are not very high—and actual income of many of our industrial workers is extremely low.

In Haverhill there are many families who have come from London, young people with the highest expectations who have bought new furniture on the instalment system and moved into a brand new house at a higher rent—and who now are finding that with the escalating cost of living and the fact that their incomes have fallen because of the loss of overtime and the increased stoppages from their wage packets as a result of the Government's activities, that they are in a severe personal squeeze. They are finding it very difficult to make ends meet. This new Clause deserves to be supported if only on the grounds that there are many people, particularly in East Anglia, who are finding it difficult each week to make their incomes stretch to meet the very high cost of living and bring up their families.

My third reason for support is that in some of our towns in East Anglia we are at a peculiar disadvantage because the Government's policy, inherent in this Bill, of pushing industry towards the development areas. This is placing us in East Anglia at a disadvantage. Let us consider two firms, one of which goes to East Anglia and the other to the North-East. The firm which goes to the North-East will get the regional employment premium. The East Anglian firm will not. The North-East firm will get accelerated amortisation of its plant but it will not get it if it goes to Bury St. Edmunds. If it goes to the North-East it will get a complete rebate on S.E.T.: it will almost certainly, depending on the type of industry, get preferential treatment for credit by the commercial banks. It will get none of these if it goes to the West Suffolk area, to any of the towns in East Anglia.

Our overspill programme and the great possibilities for expansion that there are in East Anglia are actually being held back by this absurd policy of pushing industry into certain areas but denying that industry the oportunity to go to others.

Mr. Tinn

I am a little puzzled. The hon. Gentleman seems to be so tremendously impressed by the effectiveness of the Government's policy of inducing industry to go to the development areas that I wonder why he usually supports the Opposition and attacks that policy for its ineffectiveness.

Mr. Griffiths

I said nothing of the policy's effectiveness. I referred only to the amounts of money and advantages which industrialists can obtain from going to particular areas. I was not suggesting that it was an effective or an intelligent use of public money. It would be far better to provide the infrastructure which would lead industry to go to those areas of its own volition—indeed speaking as an East Anglian, I see no advantage in our handing out as a nation about £20,001 for every industrial job created in particular development areas. Nor do I relish a policy which is being implemented to the disadvantage and detriment of my constituents.

8.30 p.m.

My last point concerns agriculture. As report after report to the House has demonstrated, the agricultural industry is shabbily dealt with. The agricultural worker is at the bottom of the wages scale. My hon. Friend the Member for Sudbury and Woodbridge (Mr. Stainton) drew lo my attention some figures on this subject in the East Anglian study. My hon. Friend pays much greater attention to these intricate reports than most people. In paragraph 415, under the heading "Regional Incomes", it is stated: East Anglia has the lowest average earned income from employment of all the English regions, lower than Wales, only slightly above that of Scotland but some way above that of Northern Ireland. Income from self-employment is also low".

I should put the figures on record. In Schedule D, which is earned income from self-employment, East Anglia ranks seventh out of the 11 regions, the tenth and eleventh being Scotland and Northern Ireland. In Schedule E, which is earned income from employement—in other words, wages—East Anglia is ninth. With the exception of Northern Ireland and Scotland, East Anglians earn less than people in any other region of the country; they earn the least in England. That is not good enough.

Those facts, by themselves, justify every East Anglian Member, whatever his party political outlook, in supporting the new Clause. I hope that the Government will have the good sense to accept it. They will not win any seats in East Anglia by doing so. They will almost certainly lose those which they hold anyway. I am sorry to say that to hon. Members opposite, but those are the facts of life; no doubt they will be able to make some other arrangements. In fact the Government owe it to their East Anglian colleagues, who have fought for higher incomes in the area, to ensure that there are higher earnings in the area, for they themselves are going to need them in less than a year's time.

The Minister of State (Mr. T. W. Urwin)

The debate has been so wide-ranging as to be reminiscent of a Second Reading debate. My hon. Friend the Member for Norfolk, North (Mr. Hazell) properly drew attention to the low-wage economy which has obtained for so long in North Norfolk and in East Anglia generally.

I wish first to take up one or two points made by the hon. Member for Bury St. Edmunds (Mr. Eldon Griffiths), who has excelled in making an election speech during the debate on the new Clause.

Mr. James Dempsey (Coatbridge and Airdrie)

On a point of order. May I ask for your assistance, Mr. Deputy Speaker? Am I to take it that the debate is being wound up?

Mr. Deputy Speaker

The hon. Gentleman has been a Member sufficiently long to realise that the Minister is intervening.

Mr. Urwin

The hon. Member for Bury St. Edmunds was at great pains to point out that, because of the introduction of the additional policy of classifying intermediate areas and the Bill before us to implement that policy, he concedes that we have a policy, even though, to use his words, it looks like a patchwork quilt. I remind him of the many years of inactivity of his party when in office concerning the adoption of a regional policy. Had he and his hon. Friend the Member for Sudbury and Woodbridge (Mr. Stainton) appreciated the difficulties which were arising in industry long before the Conservatives left office in 1964 and taken the necessary steps to improve the situation and to initiate a regional policy, it may be that we would not have had to consider the more serious question of the extension of development areas.

The Bill seeks to anticipate the serious problems which will occur in some intermediate areas which have been classified or are about to be classified in the Bill in advance of those problems developing. I suggest that the hon. Gentleman when he leaves the Chamber might read the Hunt Report. He apparently has not done so, since he said that the Government, whilst rejecting the recommendation for the de-scheduling of Merseyside, had also rejected a recommendation about East Anglia. The Hunt Report did not recommend intermediate status for East Anglia.

Mr. Eldon Griffiths

I did not say that.

Mr. Urwin

The inference could be drawn from what the hon. Gentleman said.

Mr. Keith Stainton (Sudbury and Woodbridge)

It is fair to point out that the Hunt Committee proceeded on the assumption that the expansion of Ipswich will go forward. This has not been the case.

Mr. Urwin

I do not think the point is a valid one. Other factors are more relevant than Ipswich, and I cannot recall in the Hunt Report any reference to the importance of the development of Ipswich. The Hunt Committee did not recommend East Anglia for designation as an intermediate area, but there were references to Ipswich and its development as there were to overspill towns in other regions.

May I remind the House of the difficult problem with which the Government were faced, on receipt of the Hunt Report, in determining how slender resources could be allocated to produce the best possible results. It was decided that there should be three criteria as the basis of need; first, the nature and level of unemployment; secondly, migration; and, thirdly, the potential of the area for industrial development. Whilst some of my hon. Friends have expressed disappointment at the omission of East Anglia, I think that they appreciate that those three criteria are not applicable to East Anglia.

References have been made to the application of the I.D.C. policy. My hon. Friend the Member for Norfolk, North (Mr. Hazell) appreciates that a liberal I.D.C. policy is in operation in his constituency. The Minister of Technology, who is responsible for the location of industry, has to vet applications for an I.D.C. If a firm can be regarded as suitable for establishment in a development area, the policy is to encourage it to go there.

This is somewhat different from the criticisms made by the hon. Member for Norfolk, South-West (Mr. Hawkins) of I.D.C. policy. As I have said, there are three criteria, one of which relates to the nature and level of unemployment. The hon. Gentleman placed great stress on unemployment in the area. I might not have referred to this matter had it not been for my hon. Friend the Member for Cleveland (Mr. Tinn), who drew attention to the difficulties which arose in development areas when this policy was extended. There is no comparison between the levels of unemployment in development areas and those which obtain in East Anglia.

Mr. Eldon Griffiths

It is 4.8 per cent.

Mr. Urwin

I am speaking of the region as a whole, in which the unemployment rates are substantially lower than even the national average, which is not the case in the development areas. I realise that North Norfolk—and I have taken the trouble to visit the area—perhaps has a worse problem than any other part of East Anglia, but certain events have taken place which are appreciated by my hon. Friend the Member for Norfolk, North and which might produce a distinct improvement in the relatively near future.

Perhaps because of the extensive departures from the precise wording of the new Clause, I will be excused for wandering a little widely from the Clause itself, but I felt that I should recount to the House the criteria adopted by the Government in considering the intermediate areas. They are similar to the Industrial Development Act of 1966 which requires the Ministry of Technology, in designating development areas, to have regard to all the circumstances actual and expected, including the state of employment and unemployment, population changes, migration and aims of regional policies". In this context the objectives of regional policies can in appropriate cases include raising the level of earnings. The Governmen- will have regard to the same indicators in designating intermediate areas, although, as Clause 1(1) provides, intermediate areas will be designated when it is the opinion of the Government that special measures are necessary but that the economic problems are not as severe as in the development areas.

Mr. Wallace

Do I take it from what my hon. Friend says that Government consideration of East Anglia could include the matter of the lower level of wages? Are they prepared to say that they would give consideration to this matter if the necessity arose?

Mr. Urwin

I said that the Government continuously keep under review all aspects of regional policy. In these circumstances if decisions were to be taken as to extension of designated areas this would be one of the factors to be taken into consideration.

My hon. Friends have referred to the statement made by my hon. Friend the Minister of State in the Ministry of Technology during the Committee stage of the Bill when he assured the Committee that the Bill as drafted would enable the Government to take into account the level and rate of growth of earnings in designating intermediate areas. What I cm suing is a repetition of what the Minister of State said in Committee.

Other factors relevant to the selection of development and intermediate areas—low female activity rates, for example, or heavy reliance on declining industries —are not specified in the legislation, but this does not prevent the Government from taking such factors into account, just as they can take into account the level of earnings. However, I believe it is right that the legislation should stress the need for the relief of unemployment, which is the most obvious waste of economic resources and which gives rise to such acute social problems, both for the community and the individual.

8.45 p.m.

I do not wish to underrate the significance of low earnings levels. However, it is worth pointing out that, while the statistics of earnings are being improved and extended, they are still not entirely satisfactory for the purposes which my hon. Friends have in mind. Few up-to-date and reliable earnings statistics are available below sub-regional or county level. To concentrate the funds available and the limited supply of mobile industry on the areas of greatest need, the Government have frequently had to base the boundaries of the development areas and the proposed intermediate areas on rather smaller units.

However, I assure the House that the Government already have power to take the level of earnings into account in designating development areas and intermediate areas and that, to the extent that we judge appropriate, we already pay regard to earnings levels.

The hon. Member for Isle of Ely (Sir H. Legge-Bourke) referred to tables of statistics culled from, amongst other places, the report of a Conservative Party study group. He used them to supplement his argument about the low rate of earnings in East Anglia. He could have quoted from Appendix E of the Hunt Report, which shows the increase in earnings per tax unit between 1949–50 and 1964–65. The rate of increase in Norfolk and Suffolk was at about the national average, and well above it in the rest of East Anglia. The counties in which the lowest rates of increase are to be found are wholly or partly within the development areas and the proposed intermediate areas.

Sir H. Legge-Bourke

The only reason why we did not quote the Hunt Report was that it had not been published by the time that we came to publish our report.

Mr. Urwin

It is more modern than the Conservative Party's report, apparently. Perhaps one of the reasons is that it is so long since the Conservative Party looked at regional policy, and probably its figures are out of date, anyway.

I conclude by repeating the assurance which I have given to my hon. Friend the Member for Norfolk, South—[Interruplion.]

Mr. Wallace

On a point of order Mr. Deputy Speaker. There has been a great deal of confusion. There is only one hon. Member for Norwich, North, and it happens to be me.

Mr. Urwin

I apologise to my hon. Friend. I repeat my assurance to him that low earnings is one of the matters which can be taken into account in any future considerations with a view to designating new areas. In the light of what I have said and the explanation that I have given, I trust that my hon. Friends will be willing to withdraw their Clause.

Sir Keith Joseph (Leeds, North-East)

It is because of the sudden illness of my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) that I am intruding on the work of what has been a diligent and interested Committee. I am glad to have had the chance to listen to this well-informed debate. There is obviously a strong case behind the new Clause. I have listened to the trenchant arguments of hon. Members on both sides and been much impressed by the marshalling of evidence.

The speech of my hon. Friend the Member for Isle of Ely (Sir H. Legge-Bourke) represents a great accumulation of knowledge culled from his long representation of the area and his work in preparing, with a number of colleagues, the report of the Conservative Party's study group on East Anglia, to which I thought the Minister referred a little churlishly just now.

The Government do not seek to deny that East Anglia suffers from low earnings. Even where labour has moved from agriculture to industry, the industrial earnings are still low. My hon. Friend the Member for Rutland and Stamford (Mr. Kenneth Lewis) put his finger on the reason when he pointed out that labour in East Anglia does not have the blessing of competition for its ser- vices. There is not enough demand for labour, even though unemployment may be marginally lower than in the development areas. As a result, we have these very low earning figures.

The Minister of State may say that the Government are now adopting a liberal I.D.C. policy in this area. But "liberal" is a relative term in this context. He cannot shrug off the cogent arguments of my hon. Friends and of hon. Gentlemen opposite, the figures given by my hon. Friend the Member for Bury St. Edmunds (Mr. Eldon Griffiths) and the picture painted by my hon. Friend the Member for Norfolk, South-West (Mr. Hawkins). Even with a liberal I.D.C. policy, the fact is that relatively few firms apply to move industry into East Anglia. Why? Because the infrastructure is not yet good enough.

It is no good the Government saying that they have not got the money to improve the infrastructure in East Anglia to attract industry, because they are sitting on a huge pile of wasted resources that they could move into improving the infrastructure in East Anglia and in other parts of the country.

It is the view not only of Her Majesty's Opposition but of growing numbers of the Government's supporters that the development area investment grants are going in far too great quantity to capital intensive projects that would go to the development areas anyway even if there were not any differential investment grants for them. Scores of millions of pounds are going to waste—not increasing employment in the development areas—that could be spent on improving infrastructure. If infrastructure were improved there might be more applications for I.D.Cs. and some competition for labour in East Anglia and in other low earning areas.

But behind all this lies the larger phenomenon that, under this Government, industrial growth has been so wretchedly low. There is an absolute lack of footloose industry, and, combined with poor infrastructure in areas like East Anglia, the result is the situation which we are all deploring today.

The Minister of State gave a pedantic answer to the new Clause. He said that the Government already have power to consider the level of earnings. Why, in that case, do they have specified power to consider by name other particular evils? Why are some evils specified by name and others, like low earnings, not referred to? If they already have power to consider low earnings, what harm is there in accepting the new Clause? The Minister of State has not begun to answer the reality of the debate.

I do not want to give any hypocritical impression. I cannot advise my hon. Friends positively to support the new Clause, because it would give the impression that we wanted to increase the patchwork quilt to which my hon. Friend the Member for Bury St. Edmunds referred. We do not want to multiply the number of different types of area because at each boundary there is a new set of distortions.

We see no harm in accepting the new Claues, because it does no more than recognise legally what the Minister of State has already said that the Government have power to take into account. We ask the Government to recognise that infrastructure, which could be increased by moving into relevant expenditure some of the wasted expenditure to which I have referred, and growth lie behind this evil of low earnings and that, until there is competition for labour in the low earnings areas, earnings will not be raised. The Government had a chance to show whether they were really concerned about low earnings, or whether this was all ministerial cant, and the Minister's speech did not give very good testimony.

Mr. Dempsey

I, too, have listened to the debate, and I think that we should get back to the Clause. The speech of the right hon. Member for Leeds, North-East (Sir K. Joseph) was a typical hysterical outburst against Government policy, and it detracted from the value of the argument adduced by my hon. Friend.

What I wanted to say, Mr. Gourlay,—

Mr. Deputy Speaker

Order. Perhaps I should remind hon. Members that we are meeting as a House, and not as a Committee.

Mr. Dempsey

The protocol might be different, but the formula is similar. We have been doing our utmost to induce industrialists to go into those areas where there is unemployment. In spite of the inducements offered by the Local Employment Act, we have found difficulty in doing this. East Anglia has been discussed, but it has been generally admitted that low earnings are common in other areas of England and Wales, and therefore the policy set out here could become general.

My view is that we should have regard to the situation in other parts of the country. In Scotland, for example, we have twice the United Kingdom average of unemployment. In North Lanarkshire, where my constituency is situated, the unemployment figure is three times the United Kingdom average. In one part of the County of Lanark unemployment is almost as much as 15 per cent. It seems to me that if we include areas such as East Anglia, where there is nothing like that kind of unemployment, merely on the ground of low average earnings, we shall reduce the global sum which is available to try to induce industrialists to move to those parts of the United Kingdom which genuinely require new industry and new jobs, and where unemployment amongst school leavers is very vexing indeed.

I cannot support a Clause, from whichever side of the House it comes, if it results in reducing the global sum available to help areas where there is existing unemployment, and where we are endeavouring to solve the problem. It appears to me that if you have to choose between contemplated and existing employment, you have to decide to spend the money where the unemployment problem exists. If you have to choose between low earnings and existing unemployment, you have to spend the money on those areas where there are no earnings at all because of unemployment.

Mr. Deputy Speaker

Order. Perhaps I should remind the hon. Gentleman that the Chair is not making any choice at all.

Mr. Dempsey

I think that it would be difficult for the Chair to make a choice. I should not suggest that the Chair should make a choice, but I am sure that if the occupant were out of the Chair he would make one all right. For my sins as a Member of Parliament I happen to be blessed with the fact that I am not in the Chair, and I can make a choice, and my view is that if we have any money to spend we should spend it in those areas—

Hon. Members

In Scotland.

Mr. Dempsey

Yes. I am willing to concede that hon. Gentlemen opposite have been kind enough this evening to admit that Scotland has an unemployment problem. Most hon. Gentlemen opposite have said that there is a low wage earning problem there. Prior to the Christmas Recess figures were given from the Dispatch Box which showed that as a result of the Local Employment Act and trade union organisation the gap between average earnings in Scotland and in other parts of the United Kingdom had been reduced from 7.3 to 2.4. This itself shows how local employment principles and financial inducements are now beginning to operate. Therefore, as long as unemployment stays at the rate that it is in the North-East and in Bonnie Scotland, surely we should not think of reducing that global sum by spending it in areas with nothing like these unemployment figures.

I agree with the Minister that we must get our priorities right and should spend whatever resources are available in the right areas and for the right purpose, that of inducing industrialists to come to those parts of the country, particularly Scotland, which have an unemployment problem. Hon. Gentlemen have said how difficult it was to attract an industry to East Anglia; but it still went there. It financial inducements are to be provided for areas like this, more industries will go there and fewer will come north. This will be the inevitable consequence of inducing them to go where they are not so necessary. I hope that we get our priorities right and satisfy ourselves that the global sum for attracting industry is spent in the areas where the need is most urgent.

9.0 p.m.

Dr. Hugh Gray (Yarmouth)

The sweeping and superficial generalisations by the hon. Member for Bury St. Edmunds (Mr. Eldon Griffiths) should be corrected. He carefully forgot that the Hunt Report drew attention to the increased prosperity of East Anglia. If there is a General Election this year, I have no doubt that the inhabitants of Norfolk will remember this. One has only to point to the increased number of motorcars parked in the streets of Great Yarmouth.

This is not to say that many of the criticisms are not justifiable. The right hon. Member for Leeds, North-East (Sir K. Joseph) spoke of the necessity for a new infrastructure in Norfolk. Certainly the communications network must be opened up to both the North and the Midlands if Norfolk is to benefit, particularly from going into the Common Market. But I could not agree with him that the Government's policy is a patchwork, particularly when one remembers that the policy which the Opposition propose to put in its place, apart from promising to provide the infrastructure, is that they also intend to engage in promoting growth points.

In the recent foreclosures in Great Yarmouth resulting from mergers, only one firm concerned is moving to a development area. Another is moving to the increased and very prosperous city of Norwich. I suggest that a policy of growth points will not help the county as a whole, as the right hon. Gentleman's study group seems to have suggested.

Sir K. Joseph

When I spelled out the Opposition's regional policy in Brighton in October I do not recall using the phrase "growth points", or referring to them at all.

Dr. Gray

If that is so, I must apologise to the right hon. Gentleman. In that case, it seems that his policy does not even have the benefit which I supposed that it had. What does he suggest? Does he suggest that the Government should go on from the dichotomy of development and non-development areas to something more sophisticated? No, he suggests nothing of the sort. At least hon. Members on this side with constituencies in East Anglia have suggested that this should be done; they support a policy of grey areas. Our difference with the Government is on the criterion chosen; namely, that of unemployment alone.

Low average wages also should receive consideration, particularly in view of the redistribution of wealth which has taken place between areas as a part of the Government's policy. This seems to me to have been a success, within the limited framework set, but I hope the Government will go further and look at the special problems of such areas as Norfolk. Sometimes it seems to me that the Government are, perhaps, misled by the basis on which the statistics are collected. It is often not narrow enough to apply to Norfolk as a county, let alone to regions within that area.

There is mounting discontent on low average wages, and also on the question of the social consequences of mergers such as the four which I have mentioned. These will also swell the figures of unemployment. It is true that skilled men are assimilated much more quickly than unskilled men. Nevertheless, the employment figures, on the basis of what the Minister said, will need to be looked at closely by the Government. It seems to me also that the Minister has made a promise that low average wages will not be forgotten.

The policy as it stands—-of development and non-development areas and the new grey areas—is not set for ever. We live in a changing world and a changing economy, and one expects the Government to take account of new factors as they arise. Perhaps hon. Members on both sides erred in the evidence which they gave to the Hunt Committee in that their evidence was not sufficiently convincing. The Hunt Committee was set up by the Government, and we should have been able to convince it that there was a case to be considered for East Anglia to be made a grey area and to receive the aid which it richly deserves, particularly in the rural areas.

One hon. Member opposite drew attention to the low wages which prevail in rural areas and which are not cured by a drift to the towns, where the wages are slightly higher. I sometimes think that some of my hon. Friends forget how low these average wages are. I find it exceptional for a man in Yarmouth to earn £15. Many are taking home £11 and £12. The talk about average wages for the whole of East Anglia, including the South-East fringe of London, being £20 is completely illusory.

Also in Yarmouth there is the problem of more available employment for women. We know that that may be solved by the Government's policy of equal ply for equal work, and I hope it will he introduced—

Mr. Deputy Speaker

Order. The hon. Gentleman is departing somewhat from the new Clause before the House.

Mr. Kenneth Lewis

On the question of equal pay—

Mr. Deputy Speaker

Order. The hon. Gentleman is out of order to mention it.

Mr. Kenneth Lewis

Putting it another way, does the hon. Gentleman realise that there are some women who earn more in the town by typing than men do in my area and in his area?

Mr. Deputy Speaker

Order. The hon. Gentleman must not pursue a question which is out of order.

Dr. Gray

I regret that I cannot reply to that assertion, though it is true that for some occupations such as typing, women are sometimes paid more than skilled workmen. We should regret that. It is a state of affairs which will be cured only by a more sophisticated policy than the Government have had in the past.

I accept my hon. Friend's assurance that the Government will keep the question of low-level earnings in mind, and I hope that he can move on from that assurance to something stronger, even before this debate finishes, so that my hon. Friend the Member for Norwich, North (Mr. Wallace) will not have to press his Clause to a Division.

Mr. Wallace

For my hon. Friends and myself, our purpose in raising this debate was to bring out into the open and confirm what was said by the Minister of State, Technology in Committee. My hon. Friend in replying to the debate today clearly reiterated what was said, and I accept it in good faith. [An HON. MEMBER: "Naïve."] It is not naive. Some of the positive actions taken by my hon. Friend as Minister, seeing for himself what was needed in the area and assisting hon. Members who have asked for his aid, are sufficient for me to know that his integrity is beyond doubt, and I accept what he says in good faith.

I am not playing politics on this issue, in spite of the attempts made by some hon. Members opposite whose contributions to the debate have been very poor. In the circumstances, I beg to ask leave to withdraw the Motion and Clause.

Hon. Members


Question put, That the Clause be read a Second time:—

The House proceeded to a Division: Mr. Ernest Armstrong and Mr. James Hamilton were appointed Tellers for the Noes, but no Member being willing to act as Tellers for the Ayes, Mr. DEPUTY SPEAKER declared that the Noes had it.

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