HC Deb 20 January 1970 vol 794 cc363-98 The Minister shall, with the Minister of Housing and Local Government and the Secretary of State, cause to be carried out a comprehensive review of development area policies to determine the effectiveness of existing measures and their consistency both with other Government policies and with policies for other areas and shall lay the report on this review before Parliament within twelve months of the passing of this Act.—[Mr. Ridley.]

Brought up, and read the First time.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

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

The Clause calls for a review of development area policies. It follows a recommendation of the Hunt Committee that there should be such a review to test the effectiveness of the policies being pursued by the Government. In paragraph 493 of its Report, the Hunt Committee said: It is important in the meantime, therefore, to prepare the way for a transition from financial policies primarily based on incentives to policies of strengthening the infrastructure and improving the environment. The opportunity should be taken now to assess the impact of current policies and to evolve more closely integrated and balanced regional policies. We recommend that the Government set a review in hand without delay. Those are fairly strong words. They are a positive recommendation from an official Committee set up by the Government that the Government's own policies need overhaul and reappraisal. Moreover, there is no doubt that that view is shared by a large number of people both inside and outside the House.

To put the point in its context, I remind the House that the Government's regional policies as a whole are costing nearly £300 million per annum. We want to know what results we are getting for this expenditure.

9.15 p.m.

The figures for the number of jobs provided are not all that encouraging. I have with me the statistics covering the change in employment in the various development areas between June, 1964, and March, 1969, a period of nearly five years. There are now 272,000 fewer employees in employment in the five principal development areas. The level of unemployment in those regions has gone up by 103,000, a startling figure, but it means that 169,000 people have migrated and have left those regions for good.

One can hardly claim, therefore, that the results of this large expenditure has dramatically transformed the employment pattern in the regions. It is extraordinary that unemployment has gone up by 103,000 while migration has gone up by 169,000, despite this enormous expenditure.

Mr. Edwin Wainwright (Dearne Valley)

Over what period has that migration taken place? Does the hon. Gentleman know what occurred prior to 1964?

Mr. Ridley

The figures I quoted were for the change between June, 1964, and March, 1969. Thus, during the period which, broadly speaking, has been under the stewardship of the Socialists, there has been an increase in unemployment in the development areas of 103,000 and, in addition, a net migration of 169,000.

I appreciate that there are reasons why the task has been particularly difficult, such as the run-down of the coal industry. I am not saying that the problem has not been difficult. However, the results have not been as good as we would have liked.

Mr. Wainwright

The hon. Gentleman has not answered my question. What were the figures prior to 1964? I will, of course, understand if the hon. Gentleman does not have that information.

Mr. Ridley

I do not have the figures with me. There has always been migration from the development areas, but it has not been as high as that. As I say, in addition there has been a large increase in unemployment. I am not trying to compare records but am pointing out that we should not be entirely satisfied with the results.

The Government have resisted pressure for their development area policies to be reviewed. They have contented themselves with a few limited studies of the effectiveness of those policies within Departments, and from time to time we are told that those studies are proceeding. When will the results of those studies be published? I hope that the Minister will tell us more about them.

I do not know if a study is going on into the effectiveness of the regional employment premium. This benefit costs about £100 million a year, although it will be less when the selective employment premium comes to an end in April. What has been the result, in terms of an improvement in the unemployment position or in economic activity, of that benefit in the various regions?

The guarantee does not run out until 1974, which is not all that far away. The time is coming when we will have to reassess the position. It is our intention to phase out this benefit when we become the Government. In the meantime, we want to know the Government's views on the subject. Will we have their support when we perform that operation and when they are in opposition? We shall need to know what they think about its effectiveness.

Yesterday at Question Time the Government admitted that the 40 per cent. investment grant was not particularly designed to improve employment. I quote from the OFFICIAL REPORT for yesterday: … the facts are that the investment grant was not primarily intended to increase labour in particular areas. There are other methods of doing that."—[OFFICIAL REPORT, 19th January, 1970; Vol. 794, c. 15.] What is it intended to do? It is costing the best part of £100 million and it has been very severely criticised, not least by hon. Members opposite. The hon. Member for Middlesbrough, West (Dr. Bray) made a devastating speech when he talked about costs up to £20,000 per job in refineries and chemical works on Tees-side. We know that there is now a rush of capital intensive industries to development areas which provides some jobs, but by definition capital intensive industry is the least suitable because it provides the least number of jobs.

Professor Brown in his note of dissent in the Hunt Committee's Report underlines this argument strongly. He seriously questions whether it is right to put so much reliance on capital intensive subsidies of this sort. We hear stories of cost up to £70,000 per job in certain chemical complexes which are contemplated. The stories of possible levels of cost per job are becoming more and more extraordinary. Many industrialists say that they would probably have moved to whatever region they decided to settle in anyway even if the capital incentive had not been provided.

Without seeking to prejudge the issue, here is another field in which there is ample room for study of the cost- effectiveness of these policies. The Government have undertaken some sort of study of effectiveness of investment grants. Perhaps the Minister of State will say whether this is confined to investment grants as a whole, or to regional parts of those grants, or whether it may concern other aspects. We should like to know what is being studied and what are the Government's intentions as to the future of the 40 per cent. grant rate as they see it at present.

There is ample ground for making a study of what is actually happening in the regions. I am always surprised at the very large migration which takes place even when there is no change in the total population of a region. Every year about 40,000 workers move in and out of the Northern Region quite apart from any net migration. Who are these people and why are they moving and to what degree is the population mobile? How can we increase the mobility of the population? Who are those who cannot move and are not being helped by present methods?

We have approached this matter too much from the point of view of industry and infrastructure and not made enough studies of the effect of regional policies on certain classes and groups of individuals. We do not know whom we are helping and whom we are failing to help. We know there are serious problems of shortage of skill and ageing populations in some districts because the young are leaving and certain benefits are of help to certain classes, but we do not know enough about this. I should have thought the time had come when the study of the individual side of development area policy was long overdue. I have said enough to show that there are a whole number of areas which would repay further study.

The time has come for there to be a full-scale committee or Royal Commission which can take evidence in public and consider these matters closely. The trouble about an interdepartmental or entirely internal inquiry is that people cannot give evidence before it and that it does not take place sufficiently in the public eye for it to be clear what is going on.

I therefore urge the Government to undertake such a review. This is an ideal moment at which to do so. The Bill will be passed tonight. That will end the problem of what to do immediately for the grey areas, right or wrong. It is wholly appropriate for the Government now to announce that it will initiate a proper study of the effectiveness of all the different aspects of regional policy so that the House can be better informed on whether it is getting value for money.

Mr. Charles Mapp (Oldham, East)

I take a somewhat different view about the Clause from that taken by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). There is a germ in the Clause which commends itself to me. For that reason, although I do not think that the Clause as a whole can be accepted, I ask the Government seriously to consider whether there should not be a complete and exhaustive review of one aspect of this matter.

I am convinced—philosophically, economically, and politically—that the Government's policy on development areas is right, but I have difficulty in coming to terms with their selective treatment of intermediate areas. I come from Lancashire which, with its sister county of Yorkshire, is one county where the words "grey area" have an application. It is because of the discriminations in Lancashire that I want a review to be held.

The House has had no opportunity of discussing the Minister's decision as to the choice of intermediate areas. The Bill precludes us from discussing the question now, but the Clause, if it were accepted, would enable us in 12 months' time to consider whether the Minister's decisions today about the intermediate areas in particular were correct.

I have made some study of the selective treatment which has taken place in Lancashire. I have taken into account the criteria, from which I do not differ, stipulated by the Minister. However, it is no good enunciating principles unless the details are filled in. The Department has been wholly unconvincing in the matter of producing facts to satisfy a fair-minded person like myself of the correctness of the selective treatment which has occurred across Lancashire and, to a lesser extent, across Yorkshire.

One of the defects about the Report of the Hunt Committee, defects for which the Committee was not responsible, and one of the defects about the Bill, is that the problems of the grey areas are not exclusively problems of employment. They are problems of environmental decay—industrially, socially, and in terms of civic furniture.

I should appreciate an assurance that in 12 months' time there will be an independent appraisal of whether the choice of the intermediate areas was right. Such an independent body should consider questions such as these. Were the areas chosen correctly? I have indicated reservations. Were the criteria for selection correct? Are the forthcoming economic benefits worth the cost? This general question must command serious attention on both sides, because there is a good deal of money involved.

9.30 p.m.

There is the question whether, in the context of such a Report, the problems of housing and environmental difficulties should run parallel. This is perhaps the key to the new Clause. Anyone who travels in Lancashire, and doubtless in Yorkshire, will see not so much a lack of jobs, though the counties have more than their share of this problem, as the depressing effect on businesses and households that too often cause our people to leave.

The unemployment figures are deceptive in my town, which is losing 900 people a year. It is no wonder the unemployment figures are what they are in my part of the county and other parts. I think not only of my town, because I have been too long associated with the county. Every hon. Member will have a vivid picture of the old industrial background of the vast industrial area running across central Lancashire, including the North-East and right around Manchester. In many ways its furniture is worn out. Most of its industries, including an engineering industry that was appropriate 30 or 40 years ago and coal and cotton, are disappearing fast, coal overcome by other sources of power and cotton in the heat of modernisation. I want a speedy appraisal to be made of what the Bill might effect in 12 months' time. I took part in the debates in 1960 and 1956 on the two major Acts that preceded the Bill. The major argument in 196E was on getting rid of narrow development areas and having blanket treatment for vast areas and even countries—Wales, Scotland and a great deal of the South-West. The suggestion was that the narrow, selective treatment was inadequate to the region or countries concerned, and it was accepted. If that reasoning was good in 1966, what has changed it now?

Even Hunt, with all its imperfections, made blanket recommendations. Some of them should doubtless have been rejected by the Government, but the substance was a blanket recommendation for the two major industrial counties outside the Midlands. But the Government, for reasons peculiar to themselves, decided to go in for selective treatment.

I have spent some time researching on the facts of the differing treatment across the county of Lancashire. May I say as kindly as I can to my Government that the case for Merseyside was doubtful. Merseyside includes the south side of the river. There is a case as powerful as is to be found anywhere for development status for Liverpool and its immediate background, but can anyone say fairly that that applies to the growth area of oil installation plants all around Ellesmere Port, about which we have had an important announcement in the past few days?

I knew the area intimately, and I cannot be persuaded that it should be a development area—not when I look across Lancashire at the dereliction all around me. I ask hon. Members to think of the great trunk motorway running north and south through the county, containing a vast population of nearly 6 million people, and ask where are the new growth zones? The Preston new town, the biggest new town to be, is nearly on the motorway. It is close to North-East Lancashire. Below it is Skelmersdale, another new town. Below that is Warrington, a new town to be. Then there is another new town, Runcorn.

Has it not struck the Minister that all the growth is emerging around and west of the motorway and that the area lying east of the motorway, where this old, vast industrial area had its cradle, has been more or less overlooked? I urge him to look at this pattern and to ask himself whether the choice the Government have made may not have been inadequate. Rather than say it was the wrong choice, I merely say that for the south side of the Mersey there is not even a case for intermediate status. But there is a case for the great background of Liverpool.

The status for North-East Lancashire is the correct one, but if that judgment is still shown to be right in 12 months' time, then the case for the vast area including Oldham, Bury, Rochdale and Bolton and down to Stockport is just as great. The case for North-East Lancashire was stronger three or four years ago than it is today.

As I have mentioned, we have 5 per cent. outward migration from a town like Oldham. Manchester and Salford, two cities which cannot be distinguished from each other, also have a heavy net migration outwards. It may surprise hon. Members when I tell them that, in a Written Answer to me on 6th June, I was told that the net emigration figure from Manchester and Salford between 1961 and 1966 was 9 per cent. Such figures do not emerge quickly. It is obvious, however, that there is a vast movement away from that great conurbation.

There are other equally dramatic figures. In common with other hon. Members, I belong to the North-West Industrial Development Association, a non-political industrial body. I have mentioned the growth points. A recent news letter issued by the association listed practically every new industrial venture in the area in the last few months and also the closures.

Along the motorway and west of it lie about one-third of the population of Lancashire. Two-thirds of the population live east of the motorway. There have been 81 new ventures west of the motorway during the period covered by the news letter. On the more populated east side of the motorway, the new ventures total 79. Five new ventures closed to the west of the motorway; nine closed to the east of the motorway.

In the last week it has been learnt that another 300 jobs in Oldham are likely to go in the next few months, because of the closure of a mill. The firm says that it cannot stand up to the giants. I have a branch of Ferranti's in my constituency and 600 to 700 jobs will be in jeopardy after next July. My latest information does not give me room for optimism. Those jobs are going from Oldham to Blackburn in the new intermediate area. This is a highly technical firm doing advanced work in a huge factory.

I am not saying this with any satisfaction but am merely trying to express the feelings throughout Lancashire—in the North-East and in Liverpool—that if blanket arguments were good in the past, what will happen now that we have this selective treatment? Hunt has proved that despite what was said in an earlier debate, development areas suck more from the adjacent industrial areas than they did from Birmingham or London. We in Lancashire and Yorkshire know this. We are so near to the North-East and Scotland. We do not complain too much, but we notice the haemorrhage. If we are to add to this another selective area in the north-east of Lancashire, what is left of industrial Lancashire will be bleeding even more.

Whatever review takes place, in 12 months or so, will show the Government the reaction in adjacent vast industrial areas. Although their choice of selective areas or intermediate areas is not mine, I do not find basic fault with it except inadequacy. My colleagues from Yorkshire know their constituencies as well as I know mine and they know that there is still time, before the Orders are laid, to reconsider the figures for the old industrial towns, excluding the seaside. There is still time for my right hon. Friend to change his mind, and not by political persuasion from me—in 15 months I shall not be interested—but through persuasion based on economic facts and a social and economic infrastructure of those parts of Lancashire which must be revived and given hope and the kind of incentive which these old areas found in the challenge which they met 100 years ago and can meet again.

This incentive should be spread evenly across the county. The words of the Clause are quite inappropriate for an Act of Parliament, but I should like the Government to accept the implication. Although we in the central Lancashire belt may feel that we have missed the boat for the time being, the time will come when this kind of new Clause will prove that the Government's judgment, although inadequate, can be remedied in the near future.

Several Hon. Members rose—

Mr. Speaker

Order. I would remind the House that we are beginning the second of five debates on five New Clauses, after which we shall take a number of Amendments to the Bill, after which we will take two more Bills. The night is wonderful and beautiful, but not infinite. Brief speeches will help.

Mr. A. P. Costain (Folkestone and Hythe)

I will take your broad hint, Mr. Speaker, and keep my speech very short.

The hon. Member for Oldham, East (Mr. Mapp) made a very good appeal to the Government, but I did not see his Front Bench moved by his remarks. I want to make a plea for the South-East. The Clause is good because I believe that the policy in development areas is taken much too literally. Over the past two or three years we have seen in my constituency a most regrettable and dramatic rise in unemployment because factories have been shut down—as they have in Oldham—and this has been worsened by the Government's defence policy which has removed many troops from an area which to some extent depended on the camps there.

The effect of S.E.T. has produced great difficulties for the hotel industry. Why should the Government not face up to the situation? This new Clause asks for the matter to be reviewed in 12 months' time. Why should it not be so reviewed? What are they ashamed of, that their policies will not stand up to this? If they are not ashamed of this they should accept it. If they will not accept it they should say why quickly.

9.45 p.m.

Mr. Frederick Willey (Sunderland, North)

I congratulate the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) on raising this important issue. I am sure that he is using it as a peg to put before the House an argument which he recognises is not appropriate to this legislation. We know that the Government constantly keep under review development area policy. We have had a succession of Distribution of Industry and Local Employment Acts, so that we can rest assured on that point.

We get the annual statements made under the Local Employment Act, and the Economic Planning Councils issue a good deal of information. What I am concerned about is who should take part in the review. Here there is a case for the hon. Gentleman's argument.

Mr. Ridley

The right hon. Gentleman will be aware that under the Local Employment Act, 1960, the Government have to lay a report before Parliament every year whereas under neither the 1966 Act nor this Measure is there any such provision There is statutory precedent here.

Mr. Willey

I accept that. We have today what is comparatively new, the reports from the regions through the planning councils. My lack of sympathy with the hon. Gentleman and the provisions he is asking the House to accept lies in the fact that he is asking the Government to hold this review. I have some sympathy with him in that I feel that there ought to be a review and I have a suggestion to make. The Select Committee on Nationalised Industries, in its report on the N.C.B., made several comments about pit closures which are relevant to the problems of the development areas. There is a good deal to be said for the comment in the report that it would have been more economical to have kept some pits open.

We have set up one or two new style Select Committees dealing with specific matters or departments. There is something to be said, particularly as the Estimates Committee has produced one or two valuable reports on the development areas, for the Government using these new style Committees to hold a review of this kind. As the Minister of State knows I am critical of some aspects of development area policy and a little apprehensive of hon. Gentlemen opposite because I know that they wish to economise at the expense of development areas, which could be fatal to them. The Government ought to consider this approach. These new committees have done some very good work and there is something to be said, knowing that the Government keep this matter under review, for the House playing a more important part and being given the opportunity collectively to look at the evidence, which is more voluminous than it was, and to recommend what changes, if any, should be made.

Mr. Michael Shaw (Scarborough and Whitby)

I, too, will try to assist the progress of the House by keeping my remarks to the minimum. I congratulate my hon. Friend on moving the new Clause. It is significant that, he having covered the ground so expertly, every subsequent speaker has supported the new Clause. I hope that this agreement will continue to the end of the debate.

I was particularly interested in the speech of the hon. Member for Oldham, East (Mr. Mapp), and I regret that he will not be enjoying the luxury of another contest. I know with what seriousness he has tackled all the problems both in Committee and outside during his period in the House. I welcome his speech because its theme followed closely a theme which I raised on Second Reading. He emphasised the problem raised by the blanket type of assistance. This problem will be accentuated by the Bill, and so make the need for review more necessary. It is along the edges of the region which is being helped that the effect is most starkly felt. If there is imposed on the other side of that area, to the south in this case, an intermediate area of special help, the area in between has an attraction to the north and an attraction to the south, and this will exacerbate its difficulties. The effect of this should be carefully studied.

May I now deal in detail with the new Clause and particularly with investment grants. The cost of investment grants is rising, and is estimated this year to be running at the rate of £560 million—

Mr. Ridley

The figure is £590 million—

Mr. Shaw

I am corrected by my hon. Friend—£590 million. In spite of this, manufacturing investment remains at a low level. Regarded as a proportion of the gross domestic product, the level has been lower only once in the last 15 years. In 1963 it dropped to 3.5 per cent. of the gross domestic product, whereas now it is 3.6 per cent.

The Hunt Report recommends—and the new Clause follows closely upon the Hunt Report—that there should be a comprehensive review of development area policies. The Government are already beginning to probe the effectiveness of the aid given to industry. The aid given by the Government to industry in the development areas amounts to about £300 million a year, £200 million of which is being spent in three ways, R.E.P., S.E.P.—until it finishes in April —and the investment grant differential. This is a large sum and, if we continue to spend at this rate, we need to know much more about the effectiveness of that expenditure in curing the problems at which it is aimed.

What attracts new industries to development areas and to intermediate areas? Are there sufficient attractions to induce industries to come to the areas? What deters firms from going into development areas? Is there a shortage of skills in the areas and a need for retraining? Is there a shortage of universities? Are there inadequate roads and a lack of industrial and social amenities? All these factors must be considered to ensure that the money is spent in the best possible way.

There are two factors above all to bear in mind. First, the sums spent in these areas are substantial; secondly, the problems facing these areas are still considerable. We must ensure that those substantial sums are spent in such a way that they will have the maximum effect in helping to solve those considerable problems. For this reason I believe it essential that there should be some review as recommended in the Clause.

Mr. John McCann (Rochdale)

I, too, will be brief, although it is a considerable time since I had the opportunity to address the House, and to do so now feels rather like making a second maiden speech.

I wish to support the idea of a review. Many of us support the Government's policy on development areas, and so does the Hunt Report which suggests that the Government for some years yet must continue the development area policy which they are carrying out.

The Minister of State made the case for a review during the Second Reading debate when he said: I turn to the need to assist the intermediate areas. Any system of discrimination between one part of the country and another in respect of assistance for industrial development leads to criticism from those areas which just fail to qualify—and the greater the differential between the development areas and the rest of the country, the greater the criticism tends to be."—[OFFICIAL REPORT, 5th November, 1969; Vol. 790, c. 1028.] Although many of us broadly support the Government, we were worried about the areas which did not qualify. This led to the agitation for some help for grey or intermediate areas.

We welcome the setting up of the Hunt Committee. The matter was examined thoroughly and recommendations were made, but our joy was tinged with sadness when it was learned that the Minister of State had taken out large areas. In his remarks today the Minister of State mentioned the three criteria which were applied. One wonders how the criteria were in fact applied when even in the intermediate areas in Lancashire some towns which are better off than others have become grey areas under the Hunt proposals.

I wish to make a plea for my own constituency. Rochdale is a very progressive town, but finds it rather difficult to attract industry because of the attractions of the nearby development areas. We have a very fine technical college, thanks to the initiative of successive Governments, and a very lively student body, but the danger we see is that these youths eventually will have to move out of the town to find jobs suitable to their talents and training. At the moment the town is being cut in half by a magnificent motorway concept, the M62, but it will be tragedy if this motorway ultimately is used only to take jobs and workpeople to neighbouring towns.

We accept that the economic position demanded that some of these towns be taken out, but a difficult situation has been made worse. I should like to quote a personal example of what happened in Rochdale. A well known international firm with a very good export record wanted to expand. It had the land, it had the orders, and it approached the Board of Trade for advice. Instead of offering the firm a grant or loan, the Board of Trade said that if it moved to the North-East it could have an advance factory and regional premium. In other words, if we want to expand we risk losing the jobs that we have.

We in the North-West have the finest craftsman in the country. All we ask is the chance to compete on equal terms with our neighbours. I ask the Government to think again about the question of a review.

Amendment No. 1, which was in the name of my hon. Friend the Member for Oldham, East (Mr. Mapp) and myself, but which was not selected, asked the Minister to take advice from an appropriate body. I think that this House would be "an appropriate body" to decide this matter. The Hunt Committee considered all aspects of the problem and made certain recommendations. On these recommendations some areas which are not even intermediate areas, on the grounds of migration or prospective migration, dependence on older industries, and industrial dereliction should be included along with some of the better parts of the present development areas. The review—

It being Ten o'clock, the debate stood adjourned

Ordered, That the Proceedings on Government Business may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Varley.]

Question again proposed, That the Clause be read a Second time.

Mr. McCann

A review could do nothing but good because justice would not only be done but would be seen to be done. I am confident that if the recommendations of an impartial body were accepted justice would be done.

Mr. John H. Osborn (Sheffield, Hallam)

I, too, will be as brief as possible. I come from an area that is critical not only of the policy being pursued but of the decisions taken by the Government. In fact, any Government which take decisions in these matters are bound to gain more critics than supporters. It would be a little out of place if I extended sympathy to the Government in the difficult problems which face them largely emanating from the unsatisfactory economic climate in which the country is operating at present.

The Hunt Report in paragraph 493 suggests that the Government should set in hand a review without delay. This is the purpose of this Amendment. Earlier in that paragraph the Committee states: We think it important, however, to use this time for a thorough evaluation of current development area measures and their relationship with the measures we are advocating for the areas which seem to us to give cause for concern. These are what are now designated as intermediate areas.

I welcome this Amendment because there should be a specific review when this Bill becomes law. I welcome this since it will be a milestone if we review progress after the passing of this Bill, although it is equally essential that there should be regular reviews of policy and that this and future Governments should be fed back with information about employment, migration and the effectiveness of measures.

The most important aspect of the new Clause is, The Minister shall, with the Minister of Housing and Local Government and the Secretary of State, cause to be carried out a comprehensive review … As I see it, this involves more than one Minister because it involves town and country planning and other aspects of development.

I cite as an example the problems created by the designation of the South Yorkshire coalfield area and its impact on Sheffield. To what extent is it desirable, from a planning point of view, that development should be carried out in cities that already have the infrastructure for industry, whether this be housing, cultural facilities, including education, or the normal facilities, such as drainage? To what extent should this be encouraged outside in possibly intermediate areas?

Sheffield has facilities as a city. Many other cities wish to embrace larger areas of industry. Sheffield is one of many cities in a period of transition. Therefore, it makes absolute nonsense to have an intermediate area on its boundaries.

It would be wrong to pursue the extent of this nonsense, as the time to press this issue would no doubt be when orders are placed before the House. But the Government will make decisions by placing orders before the House.

The hon. Member for Oldham, East (Mr. Mapp) pointed out that a development area will suck industries away from the immediate proximity, not from the South of England. So could an intermediate area. Therefore, I hope that within one year of the passage of the Bill, the Minister of Housing and Local Government will see how his overall plan for industrial and housing development in each region is progressing—and the Sheffield area would include Yorkshire and Humberside, the East Midlands, the West Riding and other counties—to find out whether the intentions of the planners, in terms of the right area for housing and industrial development—I have asked many Questions on these matters—are being implemented or are being distorted by the new Act. I support my hon. Friend who so ably outlined the reasons for the new Clause. I urge the Minister to agree to the new Clause.

Mr. John Mendelson (Penistone)

I have been trying to follow the debate since the new Clause was moved to find out whether hon. Gentlemen opposite are arguing that there should be a built-in stipulation of review within 12 months on institutional grounds and general grounds or merely because they are not satisfied with the kind of detailed decision that the Government have made on this occasion.

Mr. Osborn

My immediate reaction would be to say both. There is a good case on both grounds for a quick review after the passage of the Bill to see how it is working. All Governments are fallible, and it is important to see that this Measure operates effectively.

Mr. Mendelson

Surely the hon. Gentleman knows how long it takes to get new industry into an intermediate area. Will not 12 months be too short a time to see the fruits of this new legislation, of which many of us have great hopes?

Mr. Osborn

There is some point in the hon. Gentleman's observation. But I suggest that this is a suitable time limit. Whether the 12 months in the new Clause is the right time scale is another issue. But there should be some method of assessing the effectiveness of the Bill when it becomes law, bearing in mind that there has been criticism and we do not know how it will operate. I support the new Clause.

Mr. Bert Oram (East Ham, South)

There is a considerable case for the proposed review, but I cannot believe that the addition of the new Clause is the way to bring it about, partly for the reason that my hon. Friend the Member for Penistone (Mr. John Mendelson) pointed out in terms of time scale.

My right hon. Friend the Member for Sunderland, North (Mr. Willey) put forward an important suggestion in this connection: that Members of this House might have the opportunity of reviewing not only the effects of the Bill, but other related industrial Measures.

I believe that it is necessary for somebody to have under constant review the situation not just in the development and intermediate areas, hut in areas which have been affected by the movement of industry and population to those areas. It is particularly necessary to have a close look at pockets of difficulty in terms of industrial development and employment within more affluent regions.

The Borough of Newham, part of which I represent, has been affected in this way. That is why I intervene. In view of the time, I will not do more than give the headlines of the many difficulties that face that borough, which is getting the rough end of the stick in many different ways.

To begin with, our industrial fortunes have been affected by the moving of factories into new towns and related areas, and the borough council is most disturbed by this development. In addition, there has for a longer period been a decline in employment opportunities in the gas industry consequent upon the use of North Sea gas, and this has added considerably to our difficulties.

The Bill deals with derelict and unused land. This again is a problem facing Newham. For many years there has been sterile land in the area. It was hoped that this land might be used for dock extensicns, but these plans now look doubtful of fruition, and development which might have taken place has been held up for years.

There are other problems which I shall no: detail in view of your strictures, Mr. Speaker, but when one adds up the problems in each area one sees that we have a situation which is as serious, not in terms of geographical extent but in intensity, as the problems facing the development and intermediate areas.

The fact that we are part of a larger region which is generally affluent is no comfort to those who have the responsibility of overcoming the difficulties facing their areas. It is for this reason that some kind of review is necessary. I believe that it will be necessary to have a new kind of partnership between the national Government and local authorities in areas such as mine. It is no use suggesting that local authorities can be left to deal with these problems. There must be this new partnership. I shall not this evening suggest what the nature of the new partnership should be, but this is one of the things which might come out of the activities of a Select Committee such as that suggested by my right hon. Friend the Member for Sunderland, North.

Mr. Ted Leadbitter (The Hartlepools)

When reference is made to a review, the question that we have to ask ourselves is: Why? The question has already been put, and in, I thought, some considerable haste in answering my hon. Friend he Conservatives committed the unforgivable sin of wanting to back both horses and appear to win. When a review of this kind is asked for, there has to be an underlying imputation, or genuine expression, of concern, and this falls into two areas. Either the policy has failed, or it has been successful. If it has been successful, we can seek to redeploy some of our aid in other areas where it is necessary. If, on the other hand, the policy has failed, we should seek either to redeploy the financial aid within the development areas as they exist, or supply some additional financial succour.

That, in brief, is an analysis of the question which has been asked. Un- fortunately, the Conservatives cannot come anywhere near answering it, because already, without a review, they have said—and the right hon. Member for Leeds, North-East (Sir K. Joseph) said so specifically—that millions of £s are wasted in the development areas. The corollary of that is that the Conservative Party intends to cut considerably the amount of financial aid given to the development areas. If that is a reasonable conclusion to come to, then we, the country, and, more specifically, the development areas, have a right to ask: what is the extent of the cut, and by what test will it be made?

10.15 p.m.

We should consider a familiar situation to project our thinking about the efficacy of the present Government policies. The Hunt Committee, a very responsible body, made it clear that those policies should go on for some years. Let us turn from that authoritative opinion to a situation which will bring out the sense of Hunt. My constituency is a specific example. I have spoken of this before and I will not go into it at length. In 1963–64, the unemployment level in my constituency was 12½ per cent.—the highest in the United Kingdom. Today, it is approaching 5 per cent. and more than 3,000 new jobs have been found in the constituency. If the policy had not been successful, we should not have had that result.

On the other hand, if the Conservative policy had been in operation instead of the Labour one, there would have been 4,000 people out of work, and 3,000 new jobs would have been lost. That would have been a dreadful situation. If nothing else, the Labour Party has averted a tragedy in the development areas.

We must consider two other factors. In the Northern Region in 1963–64, the Conservative Government's aid was about £13 million. At the moment, under this Government, it is £105 million—

Mr. Speaker

I know the hon. Member's enthusiasm for his own constituency —a similar emotion is felt by all hon. Members—but we are discussing whether there should be, according to the new Clause, a comprehensive review from time to time.

Mr. Leadbitter

When addressing ourselves to the question of a review, we may ask what, between these two poles of aid, is the maximum advantage. There are many imponderables and unpredictable elements and some complexities in aid because of the complexity of industrial society, but the chances of getting a specific answer which would help us must be carefully examined. We must not convince ourselves that an illusion is reality or try to kid the country that, because we talk about what appears to be common sense, we are helping its best interests.

I should be greatly surprised—in fact, I would be a disappointed Member of Parliament—if I thought that, with the immensity of this problem of aid to development areas, there was not a con- tinuing review. There is such a review, and the regional economic planning councils give us, for the first time, a channel whereby reviews can be rolled on at the request of the Minister, of the House, or of any hon. Member. If the Minister could not answer questions about my area, I should be coming back on him very hard. Finally, whatever else might be said about the new Clause, it is not appropriate for it to be put into a Bill of this kind. The Bill deals specifically with intermediate areas, and to that extent the new Clause has really been put in to provide the House with an opportunity for a debate on the side. I am quite satisfied that the objectives which have been mentioned have long since been put under way by the Government.

Mr. Edwin Wainwright (Dearne Valley)

I have some sympathy with the new Clause, but I doubt the motives behind Lt. We ought to examine it carefully and, if possible, look at what is in the minds of hon. Members opposite in presenting the Clause. We should look at the Bill and consider how the new Clause would affect it. I am surprised that the Clause has been put down; the Bill has not yet become an Act, and there is nothing to review. If it were intended to review the whole situation throughout the country, one could understand the purpose behind the Clause, but I am afraid that the motive is to prevent the Government from spending even the money allocated for the intermediate areas.

I thought that my hon. Friend the Member for Oldham, East (Mr. Mapp) did not come out with a stentorian voice on an issue of this kind. He ought to have asked for an additional amount of money to look after the area which is his concern—

Mr. Speaker

Order. T he hon. Gentleman would have been out of order if he had.

Mr. Wainwright

I appreciate that, Mr. Speaker, but what was in my hon. Friend's mind was the motive in the mind of hon. Members opposite in putting the Clause down. The Clause could do great harm to my constituency. The kind of review suggested could affect the planning taking place in my constituency as a result of this Bill. It is the motive behind the Clause which makes me speak about my constituency.

There are nearly 6 per cent. unemployed in Mexborough. Mexborough wants help, but hon. Members opposite want to stop help coming to Mexborough by their new Clause. There is a lot of migration taking place. I thought that the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) made a selfish speech in support of the Clause. He talked about people travelling to Sheffield to work and about the accommodation available for them. He gave the impression that there is no housing waiting list in Sheffield. If there is not, the people of Sheffield are very lucky. That kind of approach creates the impression among people outside Sheffield that a very selfish attitude is operating from Sheffield, and I should not like to think that that was so.

Mr. J. H. Osborn

The hon. Gentleman attributes to me and to Sheffield motives which we in no way entertain. I stressed the value of bringing in the Ministry of Housing and Local Government, and what concerned me was that rural and country areas should not become urban but should remain rural and countrified, not being interspersed with haphazard industrial development. I wanted that matter to be subject to review within 12 months.

Mr. Wainwright

I am sure that, if I tried to answer the points which the hon. Gentleman has just raised, I should be out of order, though I should like to have a chat about them over a cup of tea or in some other place.

Mr. Osborn

Come and join me now.

Mr. Wainwright

There is something else behind this new Clause. The West Riding now has a land reclamation scheme under way. If the new Clause were accepted, it could stop that scheme half-way through. There are 130 acres involved, and the outcome of the scheme could be of tremendous help. Thirty acres will be cleared by 1971. The new Clause might stop that, and I do not want any such thing to happen. At the end of the scheme, there will be 80 or 90 acres available for industrial purposes, the rest going for playing fields and so on. The dirt stacks are to be removed and the land is to be reclaimed. But hon. Members opposite want to stop that sort of thing happening. I hope that the Government will urge the House to vote against their new Clause, which is both premature and unnecessary.

If I said all that I could on this subject now, I should be ruled out of order again, so I end on this note. The amount of money which has been allocated for the grey areas is not really sufficient. If my hon. Friend the Member for Oldham, East, would care to press for that amount to be doubled, so that his area might be included, I should give him wholehearted support.

Mr. Robert Howarth (Bolton, East)

On Second Reading, I urged upon the Government that they should review at some future date the areas which they proposed to include under the Bill. I did that because people in my constituency, half of the County Borough of Bolton, were very disappointed at not being included within an intermediate area, and I felt then, as I still do, that we must be able to look forward to a time when we can gain from these provisions.

Several hon. Members from textile towns, of which Bolton is one, have made various points in support of their inclusion under the Bill. Although Bolton has been successful in absorbing the tens of thousands of textile workers who have lost their jobs through the contraction of the cotton textile industry in the last two or three decades, the alternative employment has arisen from both new industries and expanding older industries, principally engineering, which have, in the main, established themselves in ex-cotton mills. This only contributes to our environment problems in the North-West. When one goes to the more fortunate and newer areas of Britain, seeing there the new factories and developments which are common place and taken for granted, one realises how lucky they are. Also the size of the problem which faces the old industrial towns of Lancashire is realised. Because these buildings were cheap to these new industries we have attracted a large number of mail order firms, precisely because the industrial buildings were so cheap. If eventually, as, obviously, we hope they will, they wish to replace those premises, then they will be faced with a very large bill indeed.

10.30 p.m.

The difficulties which we see are still in the future, I would agree, but there is no doubt that the proposal to establish just north of my constituency an intermediate area—the southern boundary of the east Lancashire intermediate area—will possibly add to the difficulties of my constituency in overcoming the problems of the continuing contraction of the cotton textile industry.

Mr. Speaker

Order. The hon. Member will link what he is saying to the question whether we have a comprehensive review, as is proposed in the new Clause which he is talking about?

Mr. Howarth

Yes, of course, Mr. Speaker. I was just going on to say, as I had already remarked, that although these problems of renewal are very much in the future, unless we can look forward to eventual inclusion in the intermediate area they will be very serious problems indeed to the future of my constituency.

Another reason why I support the idea of a review, though not necessarily in the way in which it is expressed in the new Clause, is that we also have the problem of industries which do not offer to our young and well trained young people coining from the colleges and universities the sort of employment which induces them to stay in the area of Bolton.

Therefore, I hope that we can at least extract from the Minister this evening a clear indication that after a reasonable time—the time proposed in the new Clause is unreasonable for the reasons which have already been given—after a reasonable time, say, two years, a review will take place and further extensions of the intermediate areas will be made.

In conclusion, as I said in the Second Reading debate, so much has been done by the Labour Government in the last five years to help the old industrial—I am thinking of Lancashire, of course—with the massive advances in education, with new schools at every turn, new housing, the great expansion of the roads policy, and, now, with the derelict land grant, that it would be a pity if all this were to be held back in the years ahead by the reluctance of the Government, whose difficulties I appreciate, to include the old textile towns in the intermediate areas. Therefore, I am confident that my hon. Friend in his reply will be able to offer us some hope that the future of industrial development in my constituency, and the other textile towns of south Lancashire which have industrial problems, will be assisted by Government policy as outlined in this Bill.

Mr. Eric Ogden (Liverpool, West Derby)

This new Clause opens the door to a very wide debate, and while Mr. Speaker, a few moments ago, before you took the Chair, Mr. Deputy Speaker, dropped a gentle hint that there was no welcome on the mat for those going too far through that door, I feel that when hon. Members have debated South Wales, North Wales, Scotland, Vietnam, east of Suez and points yet farther away at all times of day or night, so there are times when it is desirable, when hon. Members from the regions of this country get an opportunity to do so, to talk about the things which we think important. Though I have not spoken in the House since the beginning of this Session—so I cannot be blamed for any nonsense to which you may have had to listen since last October Mr. Deputy Speaker—I shall be brief.

I suspect that hon. Gentlemen opposite worded the new Clause in its present form, not so much out of conviction but in an attempt to gain the widest possible support in the House. That is reasonable from their point of view, but when, earlier, one of them said that all hon. Members who had spoken had welcomed the new Clause, I could only conclude that he was either over-optimistic or hard of hearing. There may have been some quiet support earlier in the debate, but the proposal has received loud and strong opposition.

When hon. Gentlemen opposite raise the matter of our development area and regional policies I always bear in mind their claim that they will, should they take office, "cut Government expenditure". Since they have been looking hard at the development areas in the last 12 months, I fear that these areas as well as the intermediate areas would suffer most.

I am sure that the Minister will tell the House that the Government's various regional policies have been and are under review and will remain under review. That can be proven because in the last four or five years these policies and the methods of implementing them have undergone change.

It should not be forgotten that a regional policy cannot be changed overnight. It cannot be chopped about every other minute as the tides ebb and flow. Regional policy must have time to work through so as to provide a degree of certainty for employers and employees, who can be certain of continuity of aid. If chat is not done we will lose all hope of developing the regions.

If hon. Gentlemen opposite really want an inquiry, why not say what sort of inquiry it should be? The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) said that he did not want an interdepartmental committee to conduct such an inquiry. But he did not say if he would prefer a Royal Commission or a Select Committee of Parliament to do the job. Either insufficient thought has been given to the whole question, or they do not want to tell the house what they would really prefer.

The hon. Member for Cirencester and Tewkesbury wants the effectiveness of the existing machinery to be determined. Hon. Members generally will agree that, while the methods used have proved effective, a degree of rough justice, they have been expensive in the development and intermediate areas. For example, about £60 million worth of Government aid has gone to Merseyside in the last five years. This money has certainly been needed. In three or four years' time we hope Merseyside will be in a position to say with pride, "Thank you for the help you have given us. We can now stand on our own feet and we do not need further help".

Unfortunately that cannot be said for some time, for as aid comes in, along with new industries which are being attracted to the area, we are losing a considerable amount of employment from older industries and factories. As a mill, factory or depot closes we lose employment overnight. This is happening, with 500 people here and 1,000 people there finding themselves unemployed. Those jobs cannot be replaced overnight.

We have a large Shell development in the North and this will provide a welcome addition to the employment prosperity of the area. However, it is an expensive addition, costing £225 million worth of capital, part of it in the development area and part in the general area. I estimate that it will cost between £35 million and £40 million of Government aid to provide about 1,000 jobs inside the region in connection with this development—£35,000 per job. I remind the Minister that there are other, less expensive, ways of providing employment.

The hon. Member for Cirencester and Tewkesbury was right to point to certain other ways, such as the provision of housing, to encourage new firms to the development and intermediate areas. For example, a company wants to provide 1,500 jobs in North-East Lancashire, but to do so the firm must bring in certain key workers from outside because this skilled labour is not available in the area. Houses are needed for these workers from outside. Yet, only one local authority of the half-dozen authorities concerned has offered to create a special housing scheme for key workers from outside. About 70 new homes will be provided by this authority for this purpose in the next few years. It would be disastrous if we were to lose these 1,500 jobs because of a lack of housing, so that the employment went away from the North-West.

Hon. Gentlemen opposite have suggested that a committee of inquiry—they have not specified the type—should be established to look into this whole matter and report within 12 months. By all means appoint a body to do this work and say "You must act urgently," but it would be completely wrong to place a time limit on its activities. The committee might be comprised of full-time members, but the time they take over their deliberations must not be limited. They must decide how they operate and when they report.

Above, all, for practical political reasons it will be apparent to every hon. Member on this side of the House that January, 1971, would not be a good time to report back. I do not think that any major changes in regional development policies will come in the next two years. We want time for this Bill and other measures to work before we come back to this subject. I look forward to 1972 when a Labour Government will bring forward its proposals for the second tier of regional development. Let us have no nonsense from hon. Members opposite in the meantime.

Mr. Michael McGuire (Ince)

I want to spend a few moments on the general principles outlined in this new Clause about the need for review of Government policies and in particular the question of development of the intermediate areas.

I am in the rather curious position of representing a constituency in South-West Lancashire referred to in the Hunt Report as an area not of outstanding beauty but of outstanding dereliction. In two of the seven towns I represent there is the highest land acreage of dereliction—old pit heaps and the like—of any part of Lancashire and one of the highest in Great Britain. Industrial dereliction brings in its wake social dereliction, poor housing and poor schools; but we also have a new town which is a development area. Skelmersdale and Up Holland urban districts have been amalgamated to form the Skelmersdale and Holland U.D.C. which covers almost the new town development area and in that area, though we have not enough skilled employment, we have new schools and a more prosperous environment.

This forms a magnet by which the prosperous new town draws possible employment from the derelict areas. We need some kind of selective review. The policies of any Government are subject to review from time to time, but this should not be done in a piecemeal way. We have to see how these policies work and 12 months is not sufficient time for that. We need an assurance that there will be some kind of review body to study the effect of preferential treatment of what we used to call grey areas.

Most hon. Members who have spoken from this side of the House have referred to the North-West Region and we have also had the voice of Yorkshire. In the Hunt Report there is reference to industrial dereliction of the North-West, the cradle of the Industrial Revolution. We have to see what effect the action in the Merseyside and North-West intermediate areas will have on the country in between. There is already too much industrial dereliction and the social dereliction that arises therefrom. It is a deprived area.

If the situation is to be aggravated by a new policy—which we welcome—there must be a review. It is no good saying that we do not welcome it because our area has been omitted. We must say that the policy is necessary for the areas which are included and we want our areas to be included. We hope that a sensible review will persuade the Government to spread the net a little wider to save the areas from becoming more derelict, thus obviating the need for more drastic action.

I hope that the Government, although not committting themselves to the proposed time scale, will assure us that they have the matter under review and are as concerned as we are to ensure that the effects of the new policy will not aggravate the situation in areas which benefit from neither one policy nor the other.

10.45 p.m.

The Minister of State, Ministry of Technology (Mr. Eric Varley)

This has been a long debate. Many detailed points have been raised. I shall seek to answer some of them, although I realise that the House is anxious to make progress, because it has much more work to do tonight.

I can well understand the motives which led the Hunt Committee to recommend, in words which the Clause reflects, that there should be a comprehensive review of development area policies". This proposal, and in particular the suggestion that a review should be carried out and a report published within a set time limit of twelve months, is rather less simple than hon. Gentlemen appear to realise.

I invite the House to consider two basic points. First, new regional development policies can only make their full impact over a period of years. It takes time for new incentives to be reflected in the investment plans of firms, for these plans to mature, and for new projects to be fully manned up. The wider development areas and investment grants were introduced only in 1966. The regional employment premium and the special development areas followed towards the end of 1967. We now have the intermediate areas. It is still too soon to make a clear and specific assessment of the impact of the more recent incentives.

There are also a number of technical and conceptual difficulties to be overcome before the effectiveness of regional measures can be fully assessed, partly because many of these measures are relatively new. For example, we have area statistics of employment and unemployment, but we cannot be certain precisely how far changes in the figures reflect regionally-differentiated policies and how far they reflect other developments such as the rate of growth in the national economy. A very important article in the Economic Journal by Professor Brown, who was a member of the Hunt Committee, considered some of these matters.

However, the Government are anxious to develop a reliable assessment of the costs and benefits of development area policy and are trying to make progress in this field. The Report of the Hunt Committee was itself a most valuable study of the parts of the country outside the development areas. As the House knows, a review of the investment grants scheme is already in hand.

The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) talked about the loss of jobs and unemployment in development areas. I believe that the hon. Gentleman does under-estimate the nature of changes occurring in the employment structure of the country. There has been a major rundown in employment in coal mining, heavy engineering, shipbuilding, railways, agriculture and so on, and without the Government measures we should have faced massive unemployment in large areas. On Second Reading I quoted figures for the relationship between the development areas and the country as a whole.

The hon. Gentleman also raised the question of migration and the importance of making a study of it. Here I think that he was on an important point. We agree that much more needs to be known about migration movements. It is a very complex matter, and studies need to be made of migration problems.

The question of investment grants generally was also raised by the hon. Gentleman. This is becoming a bit of a hobby horse with the Opposition. We have seen a developing interest in it over the past few months, but there is no evidence to suggest that investment grants are any more costly than investment allowances would have been had that system still been in operation.

The point is that with investment grants one can estimate, and as time passes one can see, the full cost. This was very difficult with investment allowances. The hon. Gentleman knows this very well.

Mr. Ridley

How can the Minister say that when he was £130 million out this year? It is quite a lot of money to be out by.

Mr. Varley

This was readily acknowledged in 1966, when the matter was before the House. The hon. Gentleman took part in the debates then, and knows that the Government made no firm predictions. The real point is that the cost can be truly seen now, whereas with the investment allowance it could never be seen.

There is no evidence to suggest that investment grants are more costly than investment allowances would have been. Where the investment grant scheme scores over the old investment allowance system is that individual grants are predictable and more readily understood and assessed by industry.

It is true that a review of the investment grant scheme is already in hand. The higher rate of grant helps in development areas and helps the creation of jobs. This is not a prime objective, I accept, but where a capital intensive project has established itself in the development areas, if there is to be any expansion it will obviously expand there. It assists indirectly in helping employment and the creation of jobs. There is the additional factor that it is absolutely essential that capital intensive industries should he well established in development areas and should base their expansion there.

My hon. Friends the Members for Oldham, East (Mr. Mapp), Rochdale (Mr. McCann) and Bolton, East (Mr. Robert Howarth) supported the idea of a review, although they did not completely support the Opposition Amendment that it should be done in 12 months' time. I say to my hon. Friends from these very difficult areas that this is a continuing review; we shall watch their areas very carefully.

My hon. Friend the Member for Oldham, East raised a specific point about Ferrantis. I know that he is in correspondence with my hon. Friend the Minister of Defence for Equipment, and that he will pursue that matter with him.

The hon. Member for Folkestone and Hythe (Mr. Costain) asked why we could not have more information, and my right hon. Friend the Member for Sunderland, North (Mr. Willey) properly referred him to the wealth of information that already exists. There are the Local Employment Act reports, the Economic Planning Councils, the regional studies, and the Report of the Select Committee on Nationalised Industries. All have made comments about development area policies.

The hon. Member for Cirencester and Tewkesbury was wrong when he interrupted my right hon. Friend about the annual reports. It is not true that they are not published. The annual report covers activities under Part II of the Industrial Development Act, and the annual report under the Local Employment Acts will also be covered under the Bill.

I understand the reasons for my hon. Friend the Member for East Ham, South (Mr. Oram) intervening on what was primarily a grey area, development area problem. I know something about his problem. It is true that, in his constituency, there is the impending closure of the North Thames gas plant and that this will create difficulties. Our assessment is that the situation should not remain as difficult as currently it may seem because jobs for unskilled workers are available for those willing to travel to work and the more skilled workers should be able to adapt to new skills. Generally, we do not consider that the situation in East Ham gives cause for concern, particularly in comparison with the problems of the development areas as a whole and some of the proposed intermediate areas. But I assure him that we will keep an eye on the situation. I can well understand the concern he has expressed.

My hon. Friend the Member for Dearne Valley (Mr. Edwin Wainwright) put his finger on the point. He perhaps made the most effective argument so far against the new Clause. He said that wanting a review already or in twelve months' time is nonsense, since not a penny has yet been spent in the intermediate areas, that the orders have not yet been made and that we are anxious to get this Bill on the Statute Book as quickly as possible and get the scheme into being. He also mentioned, quite properly, the serious unemployment problem in Mexborough, which forms part of his constituency.

My hon. Friend the Member for Ince (Mr. McGuire) talked about dereliction. Ince will be included in a dereliction area, where the new rate will be 75 per cent. I know that the local authorities in his constituency will be taking advantage of this but I understand his concern.

My second point is that, if it were known that a general and major review was to take place over the next twelve months, this could well have the effect of delaying investment decisions. If a firm knew that consideration was being given to possible major changes in the lists of development or intermediate areas in the financial incentives and the operation of the I.D.C. control, it might be reluctant to embark on new projects until it was in a position to know the full implications of the changes and the effect they would have on its plans. It is true that we keep careful watch on progress in the development areas and are prepared to make changes from time to time if we judge them necessary. It is one thing for firms to be aware, as they are already, that changes in development area policy or in the coverage of development areas may take place at some indefinite future date, but it is another matter for them to know that a major review is going to take place, and that a report is to be published in a specified time.

The Government have always accepted that the development area policy should be kept under regular review. The policy was examined most recently when the Report of the Hunt Committee became available. I believe that it would not be sensible to commit ourselves to a full-scale cost-benefit study of the development area policies within a fixed, limited time, and I hope that, in the light of my arguments, the new Clause will be withdrawn.

Mr. Ridley

Perhaps I may speak briefly again by leave of the House. We have I ad a good debate, and if this new Clause has facilitated opportunities for many hon. Members to make constituency points, the time has been well spent because it is one of the virtues of this type of debate that all sorts of local problems can be raised. There has been a general feeling, although not with unanimity or wholeheartedness, that there is something to be said for a general review of this policy and of the boundaries of the various areas. I was a little disappointed that the Minister of State did not go a little further than acknowledging that this was the will of the House.

The idea of a Select Committee, put forward by the right hon. Member for Sunderland, North (Mr. Willey), is appealing, but it is not for the House to state which Select Committee should set out to study the matter. It would be for some Select Committee to take notice of these suggestions. We cannot compel a Select Committee to do anything under the Bill. Indeed, it is a little disappointing that the Government have not proposed some open inquiry. The mood of the House and of the country—and I was surprised to note how many hon. Members shared that view—is that the time has come to take general stock of the position, to measure cost effectiveness and to see what is the best way to go from here.

We must, therefore, return to the subject from time to time and keep the Government under pressure to consider such a review. In view of the short time before we are on the other side of the House, perhaps it will be better if the Conservative Party institutes that review.

With that comforting thought in mind, I beg to ask leave to withdraw the Motion.

Motion and Clause, by leave withdrawn.

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