HC Deb 11 February 1972 vol 830 cc1742-821

Order for Second Reading read.

11.41 a.m.

Mr. William Rodgers (Stockton-on-Tees)

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

The impelling motive behind the Bill is simple—that regional policy has failed. Despite the best endeavours of two generations of politicians, of administrators, of publicists, of all of those who have been involved in some place and in some way with regional policy, the problem is still with us very much unchanged. We are running to a standstill and we are very seldom gaining ground. By the regional problem I mean the social and economic disparities between different parts of Britain. It may be defined in a number of ways, sometimes in terms of inadequacy of public investment, sometimes by the physical effects of dereliction. But I think the criterion most generally accepted is the overwhelming evidence of unemployment.

I am not denying the special problems of land shortage and congestion in the South-East and the Midlands. These are counterparts of the regional problem as I shall be dealing with it. But in its most devastating and immediate and damaging form we find the regional problem in the areas where we see the brutal ugliness of men without jobs—and I mean men without jobs not only in times like the present, with unemployment generally at over 1 million, but in other times, when we are sharing in a more general prosperity.

In parenthesis, I should give an explanation. If much of what I say refers to the development areas it is only because this simplifies my task in presenting the Bill; and I am most familiar with them. The Bill applies to the intermediate areas as well, and I am sure that my hon. Friends will have much to say about those areas in the debate. Similarly, if I refer mainly to the North and also perhaps to Wales and Scotland, this is not because I ignore or am not aware of the problems of Merseyside and parts of Devon and Cornwall. I was born and brought up in Liverpool and remain acutely aware of the economic and social problems of that part of the country.

Finally, I hope no one will say, least of all the Minister, that because there are over 1 million unemployed there is a regional problem, and that, provided this figure falls—no doubt the hon. Gentleman will argue that it will fall as the measures introduced by the Chancellor work through—there will be no regional problem left with which to deal. As he must know, this is simply not true. There is a regional problem even in good times, and if unemployment fell by half or more we should still be faced with a problem which we have not solved. So I return to the problem as I have defined it—the South-East, fundamentally prosperous with a high confidence and rising living standards, and the development regions, only too conscious of men on the street corner with nowhere to go and, most important, deeply worried about their future. Looking at the regional problem and the facts of the situation, the temptation is to say in relative and regional terms that here at least the rich get richer and the poor get poorer.

In one form or another, the regional problem has been with us and has been acknowledged now for almost 40 years. We had the distressed areas; then the special areas; then the development areas. I gather that the latest all-embracing euphemism used by the present Government is "assisted areas". The first legislation setting up a Commissioner for the Special Areas was passed in 1934; then we had the great trading estates at Team Valley and Treforest; the Barlow Commission arrived in 1937. In 1945 came the significant legislation passed by the Coalition Government in its closing hours—the Distribution of Industry Act. More recently, as many of us in the House now will recall, having been involved, there was the passing of the Local Employment Act, 1960, and the setting-up of the councils and boards in 1960–65.

I mention this simply to stress that the history of the problem is long. For almost 40 years we have been looking at the regional problem and we have not solved it yet. There have been periods of remission. This would be true of the late 1940s and most of the 1950s. But there has been no cure. I hope that it will be accepted on both sides of the House that there is an acute problem remaining to which no cure has yet been found.

There is a minority—and there are one or two representatives of it in this House, including the now absent hon. Member for Oswestry (Mr. Biffen)—which argues that there is no strong case for regional policy at all. But it is a minority and I am sure that such an outlook is not acceptable and will not be acceptable to either side of the House. I am certainly prepared to defend if required the record of the Labour Government of 1964–70 in this respect. I was more closely associated than anyone else present, I believe, with the setting-up of the new machinery for regional planning, and many of my hon. Friends, including my hon. Friend the Member for Houghtone-le-Spring (Mr. Urwin) played a notable part in that period. But I cannot deny that, over all, I find the results disappointing. I say that because I think we should face the problem not with preconceptions or positions to defend but out of an anxiety to solve it. I hope, similarly, that the Minister will not try to dazzle the House, as perhaps all of us have done, about jobs in the pipeline or an upturn in investment or advance factories which are now being built. This is a familiar story. It may be true; it may be half-true. But it has proved to be irrelevant to solving the basic problem of regional policy.

But this is not to say that all our efforts have been in vain. On the contrary, had successive Governments not made efforts in this direction the situation would be a great deal worse. I want to pay tribute not only to those who have been involved in major administrative decisions here but to all those in the regions who have devoted a great deal of time and sometimes a large part of their lives to dealing with the acute social and economic problems on their doorstep. They have done a great deal, and it is not their fault that the problem remains today.

Although we are all familiar with it, it is right that I should give the House some figures reflecting the problem because when one looks at them, particularly in sequence, one sees how little has changed. First, I give a sequence of annual figures of unemployment for all development areas in two periods—the first being 1956–60 and the second 1961–65, a sequence of five years in each case. The sequence in the first case is: 1.9 per cent., 2.2 per cent., 3.3 per cent., 3.7 per cent. and 3 per cent.—variations from as low as 1.9 per cent. up to 3.7 per cent. But the similar sequence for the following five-year period of 1961–65 is 2.5 per cent., 3.4 per cent., 4.3 per cent., 3.1 per cent., and 2.5 per cent.—never below 2.5 per cent. and in one year as high as 4.3 per cent.

Let me make another comparison, again in broad terms, in percentages between the North, Wales and Scotland, in the late 1940s and early 1950s on the one hand and the late 1950s and early 1960s on the other. I am seeking to show, first that the differentials between the development areas and the prosperous regions are real, and, second, that the differentials have not changed during the second period. In 1948 to 1954 the figure was seldom over 3 per cent. for the North and occasionally under 2 per cent. For Wales it was over 4 per cent. in the early part and under 3 per cent. for much of it. For Scotland it was always under 4 per cent. and often under 3 per cent.

But in the period 1958 to 1964 the North was generally under 3 per cent. in the early part and often over 4 per cent. in the later part. Wales varied roughly between 3 and 4 per cent. in the early part, rising occasionally to 5 per cent. in the later. Scotland was rarely below 3 per cent. and was often over 4 per cent., and sometimes as high as 6 per cent. These figures show, in those periods—I have taken a range of years and not one particularly bad one—how little it has changed.

Then, I compare two dates separated by 20 years—December, 1948, and December, 1968. In December, 1948, the figures were 1.2 per cent. in the South-East, 2.7 per cent. in the North, 4.3 per cent. in Wales and 3 per cent. in Scotland. In December, 1968, they were 1.6 per cent. in the South-East, 4.9 per cent. in the North, 4 per cent. in Wales and 3.7 per cent. in Scotland. Every figure for the development regions is well over twice that for the South-East—the same in 1968 as in 1948. If one takes a crude ratio of the South-East to an average of the other three, it is almost exactly the same on these two dates—separated by 20 years and a great deal of regional policy.

So we come to the present time, and the figures which we debated in the House less than a fortnight ago, those for 10th January, 1972. I simply remind the House of them, not because they are not very much in our minds, but because they continue to illustrate dramatically the disparities with which we are dealing.

The figure for Great Britain, leaving out Northern Ireland, is 4.3 per cent. The individual figures are 6.9 per cent. in the North, 5.8 per cent. in Wales and 7.1 per cent. in Scotland. That is the total registered unemployed, and we know that these figures conceal male unemployment as high as 9.1 per cent. in the North and 9.3 per cent. in Scotland. The South-East figure is twice what it was in December, 1968, but the figures for Scotland and the North are considerably over twice the present figure for the South-East.

I said that the most accepted measure of regional disparities was unemployment, but in case it is argued that other indices are appropriate, may I refer to one other which confirms the position? I refer to family expenditure and the sort of goods which households increasingly take for granted. These are percentages of families owning a car or more than one car, a telephone and central heating. I give them in that order respectively. For the South-East the percentages are 58, 46 and 33; for the North they are 43, 22 and 22; for Wales they are 45, 21 and 17; and for Scotland they are 42, 30 and 17. These figures illustrate the extent to which these regional disparities are reflected in the living standards which many people now take for granted.

Of course I am not saying that most people in this country are not infinitely better off than they were 20 years ago, and certainly before the war. Most people are significantly better off than they were 10 years ago. There have been great advances in getting rid of dereliction and improving roads, but the disparities remain the same—the relative position is unchanged.

There is no evidence, either from the course of events over the last 20 years or from an objective analysis of the present position, to suggest that the regions are on an escalator of progress. In the jargon usually applied to the developing world, they are not "taking off". The debates which we had on regional policy 10 years ago are very much like the debates which we are having today. In the absence of a new initiative, this debate will be a debate which we are still having in 10 years' time. That is the size of the problem which the House is facing.

There is time for a new initiative, and I would like to believe that it is the sort of initiative which I have sought to embody in the Bill. We have machinery for regional planning. We have the councils and boards set up in 1964 and 1965 and we have the voluntary efforts of many bodies, the restrictions of industrial development in congested areas and I.D.C. policy, which many people believe is still the most effective way of getting industrial development, by preventing it from going to other places. Then we have the whole framework of loans and incentives available, often, if not always, as of right, right across the board.

My proposal is for a new agency, aggressive, committed, highly professional, which could be a dynamo for development, generating the energy which could transform the regions in the next 10 years. It is not an alternative to present incentives or procedures. It has to be judged in its own right as an addition to the present provision.

Particularly as we started later today, I do not intend to go through the Bill Clause by Clause, but I would like to draw attention to certain parts of it, and I should be glad to help to explain later if need be.

As the House will see, I have in mind £20 million to be available for grants in any financial year, and loans to an aggregate of £200 million. In relation to these figures and to other detailed matters concerning the Bill, I have no wish to be dogmatic but would be very open to discussion and Amendments in Committee. I said as much to the Secretary of State 10 days ago when I suggested that he might let me have in advance any de- tailed points of this kind. He has not done so, and in the absence of that I am not aware that there are any points of detail where he feels that my Bill falls short and which we might usefully have discussed before today. I made it clear to the Secretary of State that I would he very happy to discuss these points.

Clause 1(5) refers to members of the Corporation and to those having close knowledge of regions or areas. I am aware that hon. Members on both sides—my right hon. Friend the Member for Sunderland, North (Mr. Willey), who has pioneered so much in regional policy in the North East, and the hon. Member for Middlesbrough, West (Mr. Sutcliffe)—may take the view that there is something to be said for separate regional corporations. The problem is that in the absence of executive regional authorities there is no one to whom they could be finally responsible for expenditure. In addition, at this stage there is a great deal to be said for having a single corporation which applies broadly the same criteria right across the board.

I envisage my corporation operating in such a way that there would be corporation members specifically appointed for their knowledge of the regions and contributing in that way, and the corporation might well sit in different regions—if not physically, then in the sense that the members, in looking at their problems, would rely largely on the advice of other members with local knowledge. Certainly I would envisage regional offices for the corporation and regional executives. I say that not only because it is what my right hon. Friend and others would like but because I have recognised their argument and this is something I shall be prepared to consider in Committee.

In Clause 2 I refer to the provisions of the Bill not interfering with the present powers of the Secretary of State under the Local Employment Acts. That, I think, is important, and bears on what I say about my agency being an addition to the existing incentives.

In Clause 3 I refer to pollution and the environment because it is important at the present time that a corporation devoted primarily to industrial development should nevertheless take cognisance of the social and environmental consequences of what it may do, which can have a direct effect upon the attractions of a region. In the second part of Clause 3 I refer to consultation. There again, I would be very happy to accept any Amendment which suggests that consultation should be wider than the consultation indicated here.

I want to make it clear that if the corporation were to function successfully it would be not only a matter of very widespread consultation but a matter of co-operation, too, sometimes with statutory bodies or quasi-statutory bodies like the Estates Corporation, sometimes with essentially private ones like the Finance Corporation for Industry and the I.C.F.C. I do not exclude corporations of this kind whatsoever. I am wholly undogmatic on how best the corporation could do its job. I am concerned with the principle of the Bill and the need for an agency—at the moment at least because I think the wisdom of the House is important here on how the Bill might function.

What I have tried to do in this Bill is to draw ideas from a number of sources. There is, for example, the experience of development policies abroad, particularly of the Cassa per il Mezzogiorno in Southern Italy, especially in the Bari—Brindisi—Taranto triangle. There is the proposal announced by the Home Secretary in the House on 29th November last to set up a Northern Ireland Finance Corporation with £50 million of Government money at its disposal. This is virtually an investment bank arising from proposals made by Professor Cairncross. I should like the Under-Secretary of State to say, if he has any hesitation on this score, why should an investment bank of this kind be provided to promote development in Northern Ireland and not be provided for the promotion of development in Wales, Scotland, the North-East of England or Merseyside. I can look on my own agency as in part an investment bank, although there are, of course, additional functions open to it.

There are parallels with the I.R.C. I hesitate to mention it because the Government abolished it with such haste only a short time ago. Certainly I wish to arouse no opposition to my proposal on the ground that I am drawing on something which the Government have abolished for reasons best known to themselves, but I think it would be true to say, forgetting the name, that there are increasing numbers in business, in the City, including friends of the Government and hon. Members opposite, who do believe that there is a strong case for something which functions in a very similar way to the I.R.C. So if we can forget the name I hope that the extent to which my Bill draws on that experience will not be held against it by the Government.

Finally, I have looked, and perhaps most importantly, at the role of the Highlands and Islands Development Board, and I am very grateful for the advice of my hon. Friend the Member for Greenock (Dr. Dickson Mabon) and my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan), who are in their places today, and who have in their different ways great experience of that institution. The area in which it works is unique. Its resources are small, and it works under the gloomy shadow of the Secretary of State for Scotland—the inevitably gloomy shadow of the Secretary of State for Scotland. Nevertheless I think the conception is very interesting indeed, and that its achievements are real, and, if I were asked to accept major Amendments to this Bill, certainly I would not complain if the alternative model which the Government put forward were that of the Highlands and Islands Development Board. I want to say this about the board, that, of course, it does enter into enterprises with private capital, and the provision clearly in my mind is that regional development would draw not only on public funds but on all sorts of funds which might be available.

I would make three points briefly about the corporation, about its style, its staff and the risks it takes. I see the corporation, as I have said, as being an aggressive one going out for business, seeking situations where, by means of loans or grants or equity—mainly, I would think, loans—it keeps a factory in business, brings together firms which are complementary and can prosper in partnership when they would fail on their own, to identify a total situation for development in terms of types of industry and then of firms—a sort of executive search technique. I see it being specific and selective within the rules laid down, and with provision for general directives from the Minister. It would be specific and selective, but it would perform functions which Government Departments and merchant banks, by their very nature, cannot.

Secondly, about staff. There is no doubt at all that the I.R.C. did attract a group of middle-rank executives of remarkable skill. They trod on people's toes—but so much the better, because it is increasingly necessary in industry today. The interesting thing is that all those middle-rank executives who served the I.R.C. are either turning round companies from failure to profitability, or are making a lot of money for themselves. I do not regard this as the only criterion for success in that field. Nevertheless it is a very relevant one and one which should attract this Government. Similarly, I understand—my hon. Friends will tell me if I am wrong—that the Highlands and Islands Development Board has succeeded in recruiting a very high quality of talent, and for this reason it is able to do a constructive and worthwhile job.

There are all sorts of reasons why young and capable people from business, from the universities, from accountancy, would like to work for a corporation of this kind and are not attracted into some of the more conventional institutions which are available. The Civil Service—and the Civil Service at its best is very good indeed—would, I think, be the first to admit that it cannot compete in this area. We all have our experience of the regional controllers of the former Ministry of Labour and Board of Trade. They are honourable, competent, hard-working men, but they are hardly thrusters, and I want to see my corporation attracting the finest talents to serve the nation, and particularly to solve the regional problem.

Thirdly, there is the question of risk taking, and this may be something which the House will want to discuss. I remember talking some years ago to an official of a Government Department or a quasi-governmental institution, and I remember what he said: "Mr. Rodgers", he said, "We have a very good record; we are very careful; we never lose money; we never take risks." This was a measure of his success, and, of course, I understand it, because we in this House are deeply concerned that public money should not be wasted; but if nothing is risked in the regions, nothing will be gained. That is why I am asking for a corporation which will, within well laid down limits, take the sort of risks which will bring the regions back to life, because I think that without risk taking there will be no redemption.

I would say this, in case there is any misapprehension. I do not see the corporation giving subsidies out of generosity or simply to maintain employment, althought that might be virtuous. I see its aim as being to create self-sustaining growth industry which will have a future in the regions where it lives.

I could describe many situations in which I see the corporation acting. I could talk about engaging consultants and investigating linkages with other firms. I could talk about it surveying land and using its expertise and resources to create a complex of industrial enterprise. I am sure hon. Members will have ideas of their own on this. We can look either at the small scale of the Highland and Islands Development Board or the large scale of the Mezzogiorno.

I should like the corporation to have a clean slate, the minimum of preconceptions about its rôle except for what the Statute lays down, and a great deal of freedom. The chairman and executive of the corporation would be men of distinction and achievement who would identify situations and act.

What is to be said against the Bill? Could it be the need for such a body? I hope that I have shown the need and that the regional problem is not being and will not be solved by any of the conventional methods used so far.

Second, could it be the details of the Bill? Here I have made clear to the Secretary of State, and to the House this morning, that I should be very ready to sit down with a view to amending the details if need be in Committee.

Third, could it be cost? Here again, I am flexible on the figures, and no one can say that the figures in the Bill are too high a price to pay for regional regeneration. If reports are to be believed—and reflecting on the days when I sat on the Treasury Committee on the Budget—the Chancellor of the Exchequer has in mind to give away more in April than my corporation would be likely to consume in years.

Fourth, could it be hesitation at the principle of a public corporation? I wonder whether some of my hon. Friends may chide me for not making it more of a public corporation and for referring to the private capital which should be involved. This may be a criticism, because my right hon. Friend the Member for Birkenhead (Mr. Dell) on 10th December, 1971, in this House made a devastating speech in which he argued the case for a State holding company. If my hon. Friends are perhaps a little reluctant to endorse something which they regard as pink rather than red, that is a good reason for the Government to welcome it as being somewhere in the middle.

Fifth, could it be pride or even pique about accepting from a private Member a Measure of such importance and complexity? I know what the officials will say. They will say, "Minister, this is a very complex Bill; Minister, we have not had time to discuss it fully; Minister, I think you would be wise not to accept it; Minister, this is a proper matter for Government and not for marauding back benchers." I have been a member of a Government, and until a short time ago I sat on the Opposition Front Bench, but I do not think the House should exclude the marauding back bencher when it comes to making policy. So in so far as I am a marauder today, together with many of my hon. Friends, I am sure that the hon. Gentleman would not oppose the Bill on that ground.

Finally, could it be that Lord Rothschild, who is apparently close to God in his thinking and close to the Prime Minister in his physical proximity, is busy thinking it all out? Could it be that Lord Rothschild's tank is working away and that Lord Rothschild's thrusting civil servants, who could well join my corporation when he goes out of business, are seeking views in the regions so that they can produce the answer to the problem?

But the Government cannot abdicate their responsibility for this to Lord Rothschild or to anyone else. Any Government which lose their nerve will lose the respect of the House if they fail to judge an issue on its merits and rely on someone somewhere to provide an answer at some time in the future. I do not believe that the Under-Secretary of State for Trade and Industry, who has been long in this House and who tries to help us as far as he can, will allow the name of Lord Rothschild to cross his lips today.

I hope very much for a warm response. I make no exaggerated claims for the Bill. I am a modest back bencher doing my best. I do not say that the Bill will solve the regional problem overnight, but it is new and constructive thinking, building on the experience and ideas of many who are anxious to solve the regional problem, and it should command itself to the House.

12.15 p.m.

Mr. John Sutcliffe (Middlesbrough, West)

I am sure the House will agree that the hon. and marauding Member for Stockton-on-Tees (Mr. William Rodgers), who is also modest, is to be warmly congratulated on his Bill and for providing a forum for debating regional policy on the broadest front and at a crucial time. He put his case comprehensively, eloquently and cogently, all of which are qualities which one expects from him. I welcome above all his lack of dogma. I agree with some of what he said, but not all of it. For some time I have believed that a single regional force is required. I only wish that the hon. Member for Stockton-on-Tees when he had power to do so had promoted such a regional force.

The corporation which the hon. Member proposes would be centralised and, therefore, out of touch with and divorced from instead of indigenous to the regions. Clause 3 of the Bill sets out all the bodies involved in regional affairs which his corporation would have to consult. One of my major criticisms is that he is adding one more body and making the channels of decision more rather than less cumbersome.

The Bill provides for limited public funds, and there is a danger that this will become open-ended. It is not clear to what extent the hon. Gentleman is prepared to go along with private funding and to accept a degree of commercial accountability. If the corporation is to be geared to creating mini nationalised industries to sustain employment—although I do not think the hon. Gentleman is dogmatic about that—commercial judgment and discipline will be needed.

The discretion allowed in the Bill on grant aid is £250,000. This represents only about 100 jobs since it is reckoned that an investment of £10,000 is needed to create one job.

Clause 1 stipulates as membership of between nine and 16 for the corporation. This is far too many. The successful and professional Industrial Estates Corporation operates with four members and a chairman. I wholeheartedly agree with the hon. Gentleman when he insists that members of the corporation and staff must have a known commercial thrusting background. The logic of arguing that forces him towards a more commercial approach for this corporation.

Having said that, I applaud the initiative and concern exemplified in the Bill. The hon. Gentleman and I represent parts of Teesside, and I am glad today that every Member from Teesside is in his place. We in Teesside know the job that has to be done, we know it is not being done and we know the need for one body to do it.

The debate is about the 25 per cent. of our population who live in the intermediate areas and the development areas, special and not so special, and our constituents are among these latter. They differ from the 75 per cent. not just because they continually suffer the higher unemployment, illustrated by the figures given to the House by the hon. Gentleman, but because they earn on average 20 per cent. less, and have a lower standard of services and amenities—indeed, all the things that go towards the quality of life.

Just as we know the regional problem, we know the money which has been put into solving it. Each year over the past five years the assistance given to industry in the development and intermediate areas has averaged at least £200 million and at present rather more than this vast sum represents the additional regional spending by Government on infrastructure. But a decade of massive subsidy has not stemmed the flow of emigration from the regions which has deprived us in the North-East of skills and of enterprise and which has added to the congestion of the South-East and the Midlands.

The hon. Gentleman said how little the position has changed. Only margin- ally has the vast sum of money which has been spent over all these years narrowed the regional gap throughout the 'sixties and into the 'seventies. I should like to know what went wrong with the Hailsham Plan for the North-East. What went wrong generally with our regional policies? Undoubtedly they have become a botched-up piecemeal affair of expedients. There have been too many changes too often in regional measures. The incentives are too numerous and complex for businessmen to be able to calculate the balance of advantage. There is too much delay in referring applications and queries to too many Government Departments, and too little differential between regional and national incentives. I do not know whether it is realised that there is at most a 10 per cent difference in total investment costs between regional and national incentives, and this is not a particularly compelling inducement.

There has been too great a concentration of incentives in manufacturing industry—a field of declining employment in the 1960s—when service industry and office work provide almost double the new employment provided by manufacturing. It is an amazing fact, but none the less a fact, that by moving their headquarters from central London to, for instance, Maidenhead firms are able to make a saving as great as they would make were they to move to Teesside. There is no inducement for firms to move their headquarters further afield than out of central London and into the South-East. Therefore, we tend towards what my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) referred to in a letter to The Times this week as "branch factory economy" in the regions. When world markets are depressed it is a relatively easy decision for a firm to reduce activities at the periphery.

I feel that we have made two further mistakes. What could be more senseless than for an obvious growth centre like Teesside, with the potential of mopping up unemployment further afield in the areas to the north to be throttled back by lack of special development area status? When we want indigenous industry to expand and diversify, why have we assisted only incoming firms? Much money has been spent, much of it wastefully and mistakenly. Why is it not enough now to put right these mistakes, to fiddle about with incentives with the emphasis changed, the differential raised, a return to grants dictated by Community policy, and generally to simplify what has become a confusion of inducements?

I will try to point out why this is not enough. Firstly, special development areas of today have a history stretching back nearly 40 years, and in a decade they will not be celebrating but mourning a jubilee of special treatment. Secondly, there is every indication that the gap is opening up in the 1970s. A new pattern of structural change has emerged on Teesside. We lost three jobs at least for every one gained last year and we now have 16,500 out of work. This is what this debate is all about. I believe the process will be inexorable. As Mr. Peter Jay said in an article in The Times last week, on the basis of conventional policies, including a higher rate of growth, only one new job will arise in the development area for every two existing jobs that can be expected to disappear in this decade.

Thirdly, we are highly vulnerable in the context of the E.E.C. I believe increased competition will make for more and not less, faster and not slower, redundancies in our basic North-East industry. Unless the level of regional incentive is doubled, it will disqualify us from peripheral status if we do not act. For these reasons, a bit more of conventional policy will not do, as I believe the hon. Gentleman's Bill is intended to emphasise. If it is not to be a regional corporation, then let it be some body or agency and let us have Hailsham Mark 2 urgently and imperatively.

I know that the feeling of many of my hon. Friends is often that the problem of unemployment is now countrywide and that there is nothing so very special now about the regions. My answer to that is that there is nothing very special about their present plight of the unassisted areas that a higher rate of growth will not cure.

It is then said that the North-East and places like it should not be such a drag, so depressingly defeatist and so sorry for themselves. Hon. Members say to us that the Northern Region should do a Puerto Rico and pull itself up by its bootlaces. The answer of all those with knowledge of the problems of the North with whom I have talked is that it can be done and that we will do it. But, 40 years on and at the start of a new decade, all that we ask is to be given the chance.

That implies a breakaway regional policy, and a completely fresh start, I believe, from a regional base. We in the North-East know—and I presume that people know similarly in Scotland, Wales and Merseyside—what needs to be done in our area. We have one thing in common. It is the long-term decline in basic industries. But I do not think that the methods of combating the decline in the different areas need necessarily be uniform or fixed. There should be one autonomous body set up in each region. Like the hon. Member for Stockton-on-Tees, I do not want to be dogmatic. However, I put more emphasis probably than he would on the commercially-minded professional approach, on the men of business who will be as far as possible commercially accountable and run it.

In the North, as I see it, this body would take under its roof the research and publicity of the North-East Development Council. It would take under it the business acumen and commercial awareness of the Industrial Estates Corporation and the expertise of the Economic Planning Council. It would have the closest liaison with local authority planning officers. This body would be a focal point for the first time and a clearing house for our region in the North. It would promote and coordinate. It would go out and get jobs, with the power to decide growth points in the North-East. It should have the resources to back its judgment as to the kind of regional assistance that we need in the North: should it go for rent-free periods, for example, for office development, or for port development, oil-based industries, more retraining, and so on?

The Government have moved out of London the Department of Employment offices. Now we need a decision to regionalise also this kind of industrial decision-making body. It is no good having the infrastructure without the power on the spot to make use of it. I do not think it is any good having firms from Britain or from the Continent interested in setting up in our region if they have to wait for answers which must come from hundreds of miles away and from many different departments. One man under one roof should be able to deal with the availability of labour, industrial location, training, housing and education. In other words, when a managing director wanted to know where he should send his children to school, he would be told by this agency.

This body would not only be selling the region, promoting jobs, co-ordinating and acting as a clearing house. It would be engaged in planning, manpower forecasting, and why not research? Research and development is usually outside the regions. Business decisions are made with the interests of the parent company in mind outside the regions. What we need is an indigenous agency for research and development. As I see it, this body would carry out feasibility studies and develop the region commercially in a way that Government Departments could not possibly do because it is not their rôle.

Businessmen have better commercial judgment, and the regional body for the North-East would be able to turn to commercial sources, to joint stock and merchant banks for loans and venture capital. I do not think that the hon. Member for Stockton-on-Tees would rule that out, so long as, apart from the basic Exchequer grants, the Government were also to guarantee private finance. There is North Sea oil off the North-East Coast and there is a likelihood of its coming ashore in the Tees. We desperately need one properly co-ordinated authority in our area to turn this vast new opportunity to the advantage of the North-East.

These ideas are not particularly new. They are obvious. They are obviously right, and I say this having talked to people in the North. They all say the same. Whether such a policy be called Hailsham Mark 2 or anything else, if we were to follow such a policy and if at the same time we were to bring about a dispersal into the regions of Government work so far as that was feasible, I believe that the North-East and the other regions would at last be able to stand on their own feet. I know that there is one region of the United Kingdom above all others that is occupying the mind of my right hon. Friend the Prime Minister at present, for reasons not exclusively related to development. My right hon. Friend knows the Northern Region well. He had direct Ministerial responsibility for it. I cannot believe that a Government that he leads will be indifferent to its needs or to its plea to be given a chance to save itself.

12.39 p.m.

Mr. Ifor Davies (Gower)

I join readily with the hon. Member for Middlesbrough, West (Mr. Sutcliffe) in offering congratulations to my hon. Friend the Member for Stockton-on-Tees (Mr. William Rodgers) not only on his good fortune in the Ballot but also in respect of the Bill that he has chosen to introduce.

Unlike the hon. Member for Middlesbrough, West, I shall be dogmatic. I am in full support of the Bill. I am sure that there is agreement on both sides of the House about the urgent and pressing need for a more dynamic and effective approach to the problems of the regions. The Secretary of State for Trade and Industry has acknowledged this by undertaking a review of regional policy. I understand that the right hon. Gentleman expects to present the report within six months.

This debate, therefore, is of major importance, particularly to those of us who represent development areas. I should emphasise that I am convinced that the provisions of the Bill will go a very long way towards revitalising the regions—this point was emphasised by my hon. Friend—and will make a major contribution towards an effective regional policy. We are in need of an effective regional policy.

In essence the Bill recognises the need for an organisation in the form of the proposed corporation to intervene in the economy both to promote industrial efficiency and to plan consciously—this is extremely important—and shape economic development in line with the priorities and needs of the regions.

It cannot be denied that the structural problems in our economy are deep-seated and the regional disparities about which we heard from my hon. Friend are very real indeed. If these matters are not resolved, sustained growth in our economic life will certainly not be achieved. I therefore welcome the Bill because it recognises the need for industrial and financial decisions to be taken by the needs of the whole community—communities in which the need to provide for employment, for industrial change and for social improvement must be met by policies designed to stimulate economic activity in the whole area.

This leads to a demand for an extensive programme of regional development, a programme, as the Bill proposes, which is imaginative and flexible and able to provide selective incentives to encourage development with powers and, indeed, finance to enable initiatives to be taken. If I remember rightly, this was the effective and operative word throughout my hon. Friend's speech.

For example, I am convinced that an essential requirement for regional development is a return to the policy of investment grants The Bill makes provision for this. The Government's decision in 1970 to end investment grants was a catastrophe for the regions. What the Government did by that action was to create uncertainty and insecurity by removing what in my view has proved to be one of the best incentives for regional development. So the Bill will go some way to remedy that state of affairs, as outlined in Clause 2(3).

One of the main problems of the regions has been that of uncertainty regarding policy. As far back as 1934, as my hon. Friend mentioned, commissioners were appointed to promote the economic development and social improvement of certain areas which have been specially affected by industrial depression. But there was a big omission. They had no brief to attempt the restructuring of industry.

A great deal more has been done since 1934. We have heard of the Distribution of Industry Act, 1945, the Local Employment Acts, 1960 and 1963, the Industrial Development Act, 1966, and other Acts. But during some of the intervening years there has been great neglect of the opportunities provided. I remind the House, for example, that between 1951 and 1959 not a single advance factory was built, However, despite the efforts which were made—I have not the time to give all the details—the fact remains that the designation of special areas in many parts of the regions demonstrates, as my hon. Friend rightly said, that nearly 40 years of attempts have still not succeeded in rooting out the causes of regional im- poverishment. The reason for this is that the problem of the regions is not static. There have been continual changes and we have been too slow in adjusting policies to meet new conditions. There have been long periods of neglect of capital investment in development areas.

Ten years ago, if I may refer to Wales, the figure for assistance under the Local Employment Act was as low as £397,000 in a year, as is shown in the 11th Annual Report on the Local Employment Acts, 1970. Under the impetus of a Labour Government it is right that I should say this—this figure had improved by 1969 to £15 million. But last year it dropped again by as much as £4 million down to £11 million.

Again, the total figure for the promotion of local employment in the United Kingdom, as shown on page 25 of the report, stands at only £73 million. The Regional Development Corporation proposed in the Bill would therefore strengthen and add to the promotional activity, and particularly the development of indigenous industry. I put great emphasis on this possibility.

I do not consider that, for example, the services offered by the existing Industrial and Commercial Finance Corporation, the I.C.F.C. as it is called, are adequate as they are not dedicated to the regions and do not provide grants. The corporation is afraid of taking risks. Risks must be taken if we are effectively to tackle the problem of the regions. Also, despite the excellent promotional work of the Development Corporation for Wales and the complete dedication of its officers to Welsh interests, this organisation is extremely limited both in its power and in its financial resources.

In human terms the most significant and telling measure of success, or indeed of failure, in any regional policy is in the last resort the level of unemployment, to which my hon. Friend rightly refers. In this context the regions are facing new problems. In addition to the lack of capital investment, we are faced with technological developments which have enabled, as we all appreciate, higher output to be achieved with a smaller though more highly skilled labour force. The effect of all this on Wales particularly has been that we now have the high unemployment figure of over 56,000—more than double the figure of 10 years ago—which is equal to 5.8 per cent. and is the third highest regional percentage figure next to Scotland and the North.

It is quite clear, therefore, that the provisions of the Bill would be of great importance to Wales. I need hardly remind the House that the greater part of Wales is designated as a development area. The fact is that the industrial structure of a region cannot be shaped overnight, but the seed must be planted that will make economic growth self-perpetuating and progressive.

At the same time I express my great concern regarding one aspect of economic growth. There is a strongly advocated view that the growth problems of some of the regions in Wales particularly can be solved only by concentrating the main effort on those areas which offer the greatest potential. But I must give the warning that those areas must be chosen in such a way that travel to work is kept to a minimum to preserve the special character of life within the Welsh valleys.

I also commend Clause 2 which says that it shall be the duty of the proposed corporation to develop those services or facilities that will assist industrial reorganisation. If ever the regions are to catch up they must be able to offer something special. The training for skills must be not merely for traditional industries but must cater for skills which will be needed in the future. To make this possible the whole training and education system must know in advance what technological changes industry expects, together with the likely impact on future requirements. This will enable organisations carrying out fundamental industrial research to be well placed to translate their findings into forecasts of the future pattern of labour needs. It would be useful for them to market some of their laboratory ideas and go into manufacturing and development in the regions, particularly in the development districts, in close liaison with the proposed corporation.

What is needed in a regional policy is a complete change of emphasis as outlined in the Bill so that short-term hardships in a region can be dealt with speedily while the long-term use of regional resources is intelligently planned. The provisions of the Bill will serve that purpose, which is why I am glad to give it my full support.

12.52 p.m.

Mr. John Cordle (Bournemouth. East and Christchurch)

Like the hon. Member for Gower (Mr. Ifor Davies), I believe that this is a most appropriate time to discuss the whole question of unemployment, and in this context I warmly congratulate the hon. Member for Stockton-on-Tees (Mr. William Rodgers) on making this a matter of urgency. We are entirely agreed upon that.

The hon. Member said that there was a shortage of land in the South-East, and I take it he meant land for development. In the South-West we have adequate land for development and we have an unemployment problem. Although we recognise that there is an enormous problem in the North, especially on Merseyside and Teesside and in Scotland, in the South-West the figure has risen above the average for the region and is now around 6 per cent. or 7 per cent., a matter of grave anxiety to those of us who take this subject more than seriously. Bournemouth and Christchurch therefore have a serious problem of unemployment.

The hon. Member mentioned the immense size of the problem and said that it would persist. It will not persist for long if we can get the economy buoyant and growing. A wiser way in which to approach the problem would be to inject such moneys as are envisaged being used in the Bill into the economy to provide a strong and virile background to the enterprises that can be distributed effectively throughout the country. In his comprehensive, eloquent and cogent speech the hon. Member for Stockton-on-Tees was able to show us what are the needs in the North and throughout the East and West. I wonder what exactly the needs will be if and when we enter the Common Market, as I hope we do. I suspect that this problem could be enlarged and might well be part of another debate. It is right that we should be racking our brains to find some solution to the problem and that no stone should be left unturned.

All hon. Members will welcome new measures to improve the employment position, national or regional. It is difficult to see what the proposed corporation adds. Much of what it can do is already covered by the existing powers of the Secretary of State or the industrial estates management corporations. The real difference is that the new corporation will be able to buy shares or set up its own companies and go into business on its own account. It is the same old Socialist play, simply performed in modern dress: nationalisation as the answer to our economic problems.

To put it another way, we have nothing much more than an attempt, in respectable regional disguise, to re-introduce the last Government's Industrial Reorganisation Corporation and the general powers of their Industrial Expansion Act which this Government have swept away. I for one do not lament their departure and have no wish to see them back in this or any other form. Even if I could endorse the general philosophy of the purposes of the Bill I believe that these proposals are wrongly conceived.

We may well need new and better policies here but if so I am more and more convinced that we do not need another nationalised, centralised body operating from London, whatever its powers. We should be looking for new ways of capturing and focusing the initiative, energy, local knowledge and concern of those who live and work in the regions. This would be a far more worthwhile Bill if instead of one corporation it proposed a mini-corporation for each development and intermediate area or in some cases for a group of areas where they are relatively small, and if instead of trying to promote the stale old doctrine of nationalisation it concentrated on transferring to such corporations some of the money and the decision-making at present concentrated in the hands of the Secretary of State. This would be welcomed. It would provide new scope for regional enterprise and self-help.

I have another and broader worry about the approach lying behind the Bill. Like so much else in the discussions of our employment problems, it deals only with those areas whose problems are of long standing and well established. No one denies the need to help such areas. Certainly the Government have extended and improved the range of available help not least by measures to improve housing and other basic social facilities. Equally, no one would deny two other basic propositions. One is that the old regional problems can only be tackled if the whole economy is expanding so that new jobs are provided. Secondly, there is little point in concentrating on these older regional problems to the point when they strangle the industrial strength of other areas and overlook problems elsewhere. A regional policy which simply moves the difficulties about from one part of the country to the other is not worth having.

Like many of my colleagues from the Midlands who have expressed their concern about the operation of industrial development certificate policy in restricting the growth of industries, I believe that we are in danger of neglecting areas whose unemployment problems could become persistent if they are not dealt with now.

In my area of Bournemouth, which is the largest provincial resort in the United Kingdom, we face a considerable and growing level of unemployment, and this has been greatly increased in the past year or so by extensive redundancies at the British Aircraft Corporation's establishment at Hurn. Unemployment is running at the rate of between 6 per cent. and 7 per cent. against the regional average of 2.4 per cent., and this week another 190 men will be laid off.

In the past I have been considerably criticised locally for advocating the development of Hurn as an international airport, perhaps particularly for freight, provided that proper regard was paid to noise and other amenity considerations. I saw this as a basis for building up the economic potential of the area by exploiting its geographic convenience for Europe and for attracting new industries and services to provide the new jobs we need.

There is now much greater local understanding and support for my case and also for my view that a far more positive effort should be made to establish new industry in the vicinity of Hurn and Bournemouth. Over 460 acres in the Bournemouth area alone and zoned for industrial development, out of which 300 acres are ready for immediate development.

The first step must be to remove the present restrictions which confine industrial development here to those connected with the aircraft industry, which is obviously absurd when that industry is shrinking rather than expanding. Permission should be given for industrial development to whoever would like to undertake it and can be persuaded to do so. All the relevant local authorities should actively seek to attract firms to set up in the area and should be given an assurance that the Department of Trade and Industry will support their efforts; for example, in considering applications for industrial development certificates.

The need for action of this kind is becoming urgent. My constituents who are unemployed have the right to demand that their problems should not be pushed to one side even if there are other areas where the problem is older and bigger, and unless the right action is taken now we risk building up the long-term problems of tomorrow.

Several Hon. Members


Mr. Deputy Speaker (Mr. E. L. Mallalieu)

Mr. Fitch.

1.4 p.m.

Mr. Alan Fitch (Wigan)

I congratulate—

Mr. John Robertson (Paisley)

On a point of order. I believe that when I was looking in your direction, Mr. Deputy Speaker, in an effort to catch your eye, you were reading from some sort of list. Is it not the case that a list is contrary to the usages of the House? If not, would you consider publishing it, if it is a list of hon. Members, so that we may not be inconvenienced?

Mr. Deputy Speaker

I do not know which list the hon. Gentleman saw. I had three or four lists and various other documents, including one to help me to identify hon. Members. It helps if hon. Members give notice of their desire to speak, but I know of nothing more official than that.

Mr. Robertson

Further to my point of order. I feel obliged, Mr. Deputy Speaker, to assert that there is such a list—[Interruption.] I assert that such a list is contrary to the usages of the House and I further assert that it is contrary to the best interests of the House to ask hon. Members to send in their names so that they may be called to speak. Such a procedure will only make our debates farcical.

Mr. Deputy Speaker

If the hon. Gentleman wishes to alter the usages of the House he will have to table a Motion. Who is called to speak in a debate is entirely a matter for the Chair. Mr. Fitch.

Mr. Fitch

I congratulate—

Mr. Robertson

Further to the point of order which I have raised with you, Mr. Deputy Speaker—

Mr. Deputy Speaker

Order. The hon. Gentleman's point of order has been well dealt with.

Mr. Robertson

On a point of order, and I must insist in putting it, Mr. Deputy Speaker. I am not suggesting that any alteration should be made to the usages of the House. I am simply asking—

Mr. Deputy Speaker

Order. I have told the hon. Gentleman that if he wishes to make representations on the subject, he has a way of doing so. I trust that, if he wishes to do so, he will do it in such a way that it will not disturb the debate and will not prevent hon. Members from taking part in it.

Mr. Robertson

On a fresh point of order, Mr. Deputy Speaker. May I seek your guidance? Will you inform the House how, for example, I can adequately deal with this matter? This is not simply a question of raising—

Mr. Deputy Speaker

Order. I have already answered the hon. Gentleman's question. I explained that he may table a Motion. Mr. Fitch.

Mr. Fitch

Third time lucky. I hope.

I congratulate my hon. Friend the Member for Stockton-on-Tees (Mr. William Rodgers) on introducing such a timely Measure. It will make a constructive contribution by providing a public corporation to promote and assist the economic and social development of parts of the country which suffer from high and persistent unemployment, and I am sure that such a corporation would prove to be a necessary agency through which an effective regional policy could be operated.

The Bill is timely because, among other things, the Government's economic policy has utterly failed. Perhaps it is more precise to say that they do not have any regional policy at all. Prior to the 1970 General Election hon. Gentlemen opposite were telling us how indiscriminate subsidies, as they called them, would be brought to an end and how incentives such as the regional employment premium and investment grants would be abolished. We were told that in their place a Conservative Government would give assistance to what they called growth points or growth centres. Will the Minister give an example of a growth point or growth centre in the North-West?

The policy of replacing investment grants with investment allowances has weakened the incentive to new industries to come to the development areas. The hon. Member for Middlesbrough, West (Mr. Sutcliffe) quoted from an article by Peter Jay in The Times. I, too, read it. The extract which the hon. Gentleman quoted was, in fact, part of the findings of Lord Rothschild's Committee, which was saying that only one new job would arise in the development areas for every two jobs that could be expected to disappear during this decade. What the hon. Gentleman opposite did not quote was that this was the result of the Government's policy.

Approvals of industrial development certificates in the North-West totalled 9.2 million sq. ft. for the year ended 30th September, 1971. That was 37.4 per cent. down on the previous year, hardly anything about which to boast.

There are a number of important steps which the Government should be implementing and the Bill will help them to be implemented. The Government should increase substantially the level of public investment in the North-West. They should extend the number of regional development areas to include, as well as Merseyside and Furness—both areas which should have development status—all traditional coal and cotton towns. Irrespective of employment consideration, grant should be made to com- panies towards the cost of constructing new industrial premises and modernising old ones. A 100 per cent. grant should be made to local authorities for the clearance of derelict sites. The 75 per cent. house improvement grants at present payable only in the development areas should be paid throughout the region. Road-building programmes in the North-West should be extended.

I am especially interested in the possible construction of a motorway from Sheffield to Manchester. Perhaps that is not quite in the pipeline, because the Government have not yet given permission for it to go ahead, but it would greatly assist the North-West in solving some of its economic difficulties. All these improvements can be brought about by the Bill.

I do not want to bore the House, but I turn now to what some people, perhaps, regard as a parochial matter but is to many of us, particularly to me as the Member for Wigan, extremely important—that is, the position of Wigan and the surrounding areas. The present prospects in Wigan are certainly anything but encouraging. The medium prospects are certainly not encouraging, neither, indeed, are the long-term prospects. At present unemployment is running at the rate of 5.2 per cent. We have around us new towns. I do not object to new towns. They are very good things. We have Skelmersdale, the proposed new town at Warrington, Runcorn, and the Preston-Leyland-Chorley new town. Obviously all these places more or less surround Wigan. One could regard them as a ring around Wigan, making it more and more difficult for new industry to come to Wigan.

Obviously industry will be attracted by incentives and other means, by development area status, into the new towns. Skelmersdale was built to take the overspill population from Liverpool. But quite a number of people who live in Wigan work in Skelmersdale. The travel-to-work area extends for many miles around the town. A high proportion of manufacturing employment in the Wigan area is in static or declining industries. I have mentioned two of those, coal and textiles. Then we have the heritage of the Industrial Revolution, which leaves a handicap in industrial dereliction. All these things form a vicious circle which is extremely difficult to break through at any point.

This situation has not been created by a lack of effort, on the part of the borough council or its administrators because during the period when Wigan had developement area status, from 1945 to 1951, under the first post-war Labour Government, we created 7,000 new jobs. We did so well that when the Conservative Government came to power in 1951 they took away from Wigan its development area status because they considered that we had gone a long way to solve our problems. Sometimes it appears that hard work and effort do not bring real rewards. The town has a very good record in slum clearance and the building of new houses, and urban renewal has gone ahead to the limits of available finance.

I come to the present time. The January, 1971, unemployment figure was 2,436. Today it is almost 4,000. The figures for the last 12 months show that there has not been the usual seasonal reduction that one can expect. Moreover, during the past year some cotton mills have closed, and, as hon. Members will know, cotton mills employ a considerable number of women who, when they lose their work, in certain cases do not necessarily register as being unemployed. So the true position is probably far worse than the figures show. All these things show a continual upward trend in unemployment. There does not seem to be a glimmer of hope that we can expect any reduction of unemployment in the foreseeable future. We ask that the Government give serious consideration to the employment prospects in the Wigan area.

We have a very fine shopping centre, which has meant that employment in the service industries has slightly increased; but employment in the service industries depends upon employment in industry generally. Closures of cotton mills, coal mines and even engineering industries have an effect on employment in the service and distributive trades. In the last decade employment in the mines decreased from 10,000 jobs to 1,800, and in textiles from 8,700 to 4,800. Employment in the textile industry is still declining. In 1971 2,000 jobs were lost, with no visible growth to replace them. This can have a very serious effect on the long-term prospects of Wigan and the surrounding area.

During the time that we had development area status the local authority made great use of the opportunity. Trading estates were established and, as I have said, 7,000 new jobs were created. So the problems we face were not created through lack of effort on the part of the local authority or the inhabitants of the town. The vigorous effort applied to job creation when the opportunity was there has also been applied to urban renewal. The County Borough Council of Wigan, the county council and the urban district councils have gone ahead as far as possible with urban renewal. The County Borough Council of Wigan has built 11,000 council houses of which 8,300 were built since the war. A total of 6,550 slum houses has been cleared and more are being demolished. We hope to have completed our slum clearance within the next two years.

We are also dealing with the problem of traffic congestion. New roads in the centre of the town and on the outskirts are under construction, and others are being improved. Wigan Technical College, in spite of the decline in mining, still has over 8,000 students. Seven new primary schools are being built and three secondary schools have been built. Industrial relations in the town are excellent. During my 13 years as Member for Wigan, we have never had an industrial dispute of any size, apart from those which could be termed national disputes. The relationship between the trade union leaders there and the employers is extremely good.

It can be seen that we have done all we can to help ourselves. We have not spent the last decade sitting on our bottoms just crying for help. We have been on our feet, eliminating bad housing conditions, constructing new roads, building new schools and dealing with pollution of the air and of our river. This has been done by hard work and efficient planning.

The problems we face today are not of our making. We are entitled to help. We are entitled to be granted development area status. I believe that the Bill will give us the help we so greatly need.

1.22 p.m.

Sir Anthony Meyer (Flint, West)

I shall try to be a little less parochial than the hon. Member for Wigan (Mr. Fitch) was, and I also hope to be rather less party political.

I welcome the spirit in which the hon. Member for Stockton-on-Tees (Mr. William Rodgers) moved the Second Reading of the Bill, which contains a valuable proposal. I was particularly glad that his approach was so specific and selective, and that he emphasised the risk-bearing that must form part of any successful operation to improve the lot of the less active, less highly employed areas.

There certainly is a need for radical new thinking on the whole matter. Before we even started to consider the solutions perhaps we should have pondered the nature of the problem much more deeply. Should we not question the effectiveness of regional aid policies pursued by Governments of both parties, as the hon. Gentleman did? Should we not also question the objectives of the policies? Those objectives have largely been common to Governments of both parties, but they are possibly none the better for that.

The plain fact seems to be that local unemployment is not cured by creating new jobs locally. In many instances labour is sucked in from outside and the area ends up with a local rate of unemployment, and perhaps even an absolute figure, higher than at the outset, and probably with a housing shortage to boot. That is perhaps not universally true, but it is certainly true of my part of the world.

The questions of regional unemployment—how far it is cyclical, how far it is seasonal, how far it is technological, how far it is short-term, how far, indeed, it is absolutely inevitable, in the sense that some people classed as unemployed are not really seeking work—should have been examined most thoroughly and dispassionately long ago. It is now too late to delay action until we have carried out that examination. I am crying over spilt milk in a sense, but we had better attempt such an examination, because in seeking the kind of radical new solution that the hon. Gentleman seeks we still run the risk that we may even now be going in a totally unhelpful direction.

I strongly agree with the hon. Gentleman that if we are to reduce unemployment in those areas where it is unduly and persistently high we need much more selective and much more arbitrary methods than anything tried so far. We do not need the blunt instrument of universal investment grants or allowances. Incidentally, I am inclined to think that allowances are better than grants, because they tend to produce enterprises that stand a better chance of survival in the long run. But by the same token I also believe it was a mistake of the present Government to make a changeover at the time when they made it, because it did damage to confidence. I am also inclined to think that the problem is not as important as most industrialists consider it to be, which is to say that it is not important at all. But if the object is to create more jobs in depressed areas I agree with the hon. Gentleman that a sharp instrument and not a blunt one is needed, and that in particular it is useless to try to do what our existing blunt instruments succeed in doing, which is to prop up decaying labour-intensive industries which must eventually be phased out or try to introduce numbers of new labour-intensive manufacturing industries which are only too liable to become the lame ducks of tomorrow.

The best hope for such areas—I have heard the hon. Member for Wrexham (Mr. Ellis) put forward this idea on another occasion—is to introduce a complex of industry and services. This will preferably have a nucleus of a technologically-advanced industry which may itself be a very small employer of labour but will generate surrounding demand, partly from sub-contractors but much more among services, including—this is most important—services catering for leisure, pleasure, enjoyment and a better life for the people involved in the technological industry and its spin-off. It is that kind of complex of a little bit of manufacturing industry and a lot of services that I believe some such agency as the hon. Gentleman proposes could alone effectively help to bring into existence.

Mr. Arthur Probert (Aberdare)

Is not the hon. Gentleman aware that there are many areas, particularly in South Wales, for example, and in the North-East, where the services to which he refers already exist?

Sir A. Meyer

I am aware of that, but I am also convinced that there is scope for an enormous expansion in the services.

I believe that one of the reasons for the unsatisfactory achievements of the development area policies of both parties has been an obsession with heavy industry. I do not want to make party points, but I think that the sort of outlook exemplified by the way in which the Leader of the Opposition was constantly talking about candyfloss is symptomatic. In my constituency the manufacture of candyfloss keeps a large number of people usefully employed and gives a great deal of satisfaction to a large number of consumers. If we are going to get into the state of mind that the only honest kind of work is one in which one risks one's life or health, we are not going to make a satisfactory contribution to solving our unemployment problems. Those industries which can best take on extra workers and at the same time increase their efficiency are the service—tourist, hotel, catering—industries and so on, whereas inexorably the move in manufacturing must be towards reducing manpower.

Again I do not want to make party points, but the selective employment tax, which, as a payroll tax, has a great deal to be said for it, was, in the way in which it was applied by the Labour Government, noticeably unhelpful in that it perpetuated the notion that it was virtuous to employ people in manufacturing industry but vicious to employ them in service industry. I am sorry that this should be so because I believe a better-thought-out kind of payroll tax and payroll premium system could be of considerable help in solving unemployment problems both national and regional.

I will be brutally frank about this. In my area a payroll premium would help to get over a particular problem which no doubt also applies to many other areas. This is that we have low average wage levels, partly compensated for by the local cost of living being perhaps lower than in some other areas. But we still, quite rightly, have the same level of social security benefits as the rest of the country. This means that the margin between the low average earnings locally and the universally available social security benefits is not all that large, and when, as often happens, people have to travel on expensive public transport to get to work a point can be reached where it is not worth while going to do a job unless it is round the corner.

Perhaps I have not thought this right through, but it seems to me that in these circumstances an employment premium could be of value in that it would enable the employers to pay a little bit more to their workers and so increase that differential but still get their labour cheaper than they would get it in other parts of the country. This would give them an incentive to provide local employment. By the same token, the mirror image of this must be some element of payroll tax in those parts of the country where normally there is over-employment—not that there is such a thing at the present time. But such a tax would have to go hand in hand with an employment premium in normal times.

There is one aspect of the Bill which I regard as rather arbitrary or insufficiently flexible. It perpetuates the existing notions of development areas, special development areas, intermediate areas and the rest. My area is one of those particularly penalised by these artificial divisions. The western end of Flintshire and the western half of my constituency—the rural development area—is not in itself in any category of assisted area or intermediate area, but is surrounded by areas which are either development areas or intermediate areas. This means that we are discriminated against not merely over investment allowances but over such things as grants to our vital hotel industry, housing improvement grants, grants for the clearance of derelict land and the new schemes recently announced for environmental improvement.

I warmly welcome the Bill, and I hope that it will be given its Second Reading but amended in Committee so as to ensure that this does not still further add to the load of items of discrimination against areas such as mine. Such areas are victims of where the line is at present drawn. I do not regard the Bill as perfect, but I am not alarmed at all by the fact that it would give the Government an instrument which could be used for all kinds of purposes. If a Government are evil minded, they do not need such an instrument to perpetuate evil deeds. The Government need a sharp instrument. This Bill would be a sharp instrument, and I am glad to be able to speak in support of it.

1.36 p.m.

Mr. Gordon A. T. Bagier (Sunderland, South)

It was with interest and delight that I heard the hon. Member for Flint, West (Sir A. Meyer) say that he hoped the Bill would get a Second Reading. I also listened with interest to the speed of the hon. Member for Middlesbrough, West (Mr. Sutcliffe). When he finished I was not certain whether he was in favour of the Bill or not, but I suspected from its tone that he would welcome something if it was not in the form of the Bill.

Mr. Sutcliffe

I thought I had made my position clear. I would welcome a regional body—one may call it what one likes—but I think there is no room for another central body such as the proposed corporation.

Mr. Bagier

From the speeches on both sides of the House today, it must be clear to the Minister that there is a general opinion that the Bill or something closely akin to it, amended, if it must be in Committee, should be acceptable to the House. I know that he is a kindly man and takes notice of the House. I hope that he has not come pre-committed to advise the House to throw the Bill out and that he will allow it to have its Second Reading and go into Committee.

I am glad that the hon. Member for Flint, West mentioned the question of grants and allowances. He was right in saying that the change from grants to allowances, made so suddenly in October, 1970, was too quick. It created much uncertainty in industry which was considering developing in the areas, and this showed up in the figures following. As I have said before, if there is argument for grants and argument for allowances one accepts that there is an argument for both. I suggest that it would not be a bad thing to try a little of each and not be too dogmatic in sticking to allowances.

I want to pay tribute to my hon. Friend the Member for Stockton-on-Tees (Mr. William Rodgers) for the way in which he moved the Second Reading. His speech was eloquent and non-partisan. It developed the arguments in such a way that the whole House must be aware that successive Governments over the years, whatever they have done, have not solved the differential between the regions and the more prosperous South-East, and that we must therefore look for something more dramatic. How serious the situation is can be shown, if I may be a little parochial, in the Northern Region.

The Minister for Industry has estimated—estimates under both Governments, admittedly, have a sad habit of falling short—that 22,500 jobs are in prospect in the Northern Region over the next four years, 17,000 of them in the special development areas. This sounds grand until one bears in mind that in 1971, through closures, redundancies and so on, the North-East lost 23,000 jobs. So, even if that estimate is completely accurate, the number of jobs created in four years will not replace one year's redundancies.

Of the large number of people unemployed, 33 per cent. are aged 18 to 30 and 25 per cent. 30 to 45, which means that 57 per cent. of the present unemployed male population in the North-East are under 45. It is no longer a problem of finding jobs for the over-45s. If we can find jobs for the groups I have mentioned, the over-45s will find jobs for themselves.

This is the brutal core of the problem. There is no slowing down of the trend. The latest figures show that between 6th December, 1971, and 10th January, 1972, the notified redundancies in the Northern Region were 1,522, of which 1,438 were for men. These dramatic figures emphasise the need for some dramatic action.

The Bill would set up a new body to encompass the activities of some existing bodies. Those of us who know the Northern Region know that bodies like the North-East Development Council do a first-class job of selling the region, but they are subject to the strengths or frailties of successive Governments. They can only sell what they have—they are High-powered public relations outfits—but they have no teeth. They can only urge different departments, like L.E.A.F.A.C., to get proposals for new industry through much more quickly.

I strongly agree with the hon. Member for Middlesbrough, West about grants for existing industry. This proposal should be examined very closely, either through this machinery or by the Government. In answer to a question of mine, the Secretary of State for Trade and Industry said just before Christmas that there were difficulties but that he was prepared to examine evidence. I have asked for some evidence in my constituency and have heard of local firms which could, given the same facilities as outside industries, create 400 jobs in Sunderland alone. I know that the North-East Development Council and other bodies are receiving similar evidence.

Grants should be based on the number of jobs which can be created. I appreciate that grants were originally given to incoming industry to replace the rundown in the mines, the rationalisation of the shipyards and the closing of some factories in some of our heavy industries. Now, however, we drastically need a number of jobs from whatever source.

The Minister may be worried about the financial Clauses, but I welcome them. I hope that when regional employment premium is due to be wound up in 1974 the Minister will feel that this is a good chance to replace that money. This could provide the basis of the financial structure for the Bill.

The atmosphere of the regions is one of great dismay. Last week at Pennywell Comprehensive School in my constituency a number of us on a panel attempted to answer questions on employment prospects for young people in the area. It was a very saddening experience. I pay tribute to the school for arranging this through the parent-teacher association. Parents and children turned up in good numbers.

Examples of questions that we were asked are: "Does the panel think, as many others do, that the North-East is a forgotten area?" How would the Government reply to that? "What can be done to attract more industry of the type employing men rather than women to the North-East? "Would the panel advise ambitious young people of 16 to 18 to be prepared to move away from the North-East to start their careers?"

These questions by young people and their parents arise from a despair for their own region—a despair which I regret. No doubt a boy aged 16 to 18 feels that his only opportunity to make great progress is to move away from the region. This is a great tragedy, and it is why I agree with the hon. Member for Flint, West, that there should be a big growth in the number of jobs in service industries. This is why I regret the decision not to allow the Inland Revenue computer centre to go to Washington. These are job opportunities of the type which we need in the region. This is the approach which can help to solve our unemployment problem not only in the manufacturing industries but also in the social and service industries.

I hope that the Minister will say that the Government are prepared to accept the Bill and not to advise the House to reject it, that they are prepared to let it go to Committee and to suggest any relevant amendments. I would see this acceptance as an indication that they see the relevance of the fear which is in the hearts of so many people in the regions of Scotland, Wales and the North and that they are prepared to do something positive by letting the Bill make further progress.

1.48 p.m.

Mr. Tom Boardman (Leicester, South-West)

Like the hon. Member for Sunderland, South (Mr. Bagier) and others, I congratulate the hon. Member for Stockton-on-Tees (Mr. William Rodgers) on the way in which he introduced the Bill. There is no difference between us about motives. We all want to remove the social scars and the other results of unemployment, the indignities and the consequences about which the hon. Member for Stockton-on-Tees spoke so eloquently and well. Where we differ is over the means.

One of the other common features in speeches today has been the emphasising of one of the problems which the Bill itself would present—the element of parochialism which was, quite understandably, introduced into almost every speech. I can understand hon. Members wishing to promote their cause, whether of Wigan or Sunderland, Teesside or Bournemouth, but this highlighted the problem with which this corporation would be faced in trying to attach priorities to the allocation of its resources.

I would like to analyse, briefly, the causes of the problem which the Bill is aimed to solve. There is a problem because of the physical conditions in the areas we are talking about, conditions which were not inviting to managers or key technicians to move into from the South-East or the Midlands, conditions of dereliction accumulated over a period of time. However, there has been a great change in many of the towns in those areas. I have recently visited some of them and I have been impressed by changes which have taken place over recent years. They are changes which have been created by Governments in the past as well as by the present Government, and, of course, by the local authorities. I have been impressed with some of the dramatic changes which there have been in areas which some years ago seemed very uninviting indeed.

Like the hon. Member for Sunderland, South, I am sure we have to be very careful not to do what some hon. Members sometimes tend to do, and that is knock their own areas. In putting up a case for special consideration for an area they may be tempted to overplay the problems in the area, the conditions of dereliction, and so on. This is an acute discouragement to those who otherwise might be induced to go there. It is particularly a discouragement to the wives of men who might he required as specialists for new factories in those areas.

A second cause of some of the problems—and I refer to it in no partisan way—is industrial relations. There is no doubt that, for reasons which I shall not attempt to analyse now, some of the areas which have the greatest social problems at the moment are areas which have had unhappy industrial relations.

Mr. Robert Maclennan (Caithness and Sutherland)

Has the thought crossed the hon. Member's mind that if that is true it is perhaps because of the very insecurity in those areas?

Mr. Boardman

Indeed. Perhaps I should not have given way just then but should have finished what I was going to say. Success in persuading people to move to an area depends, perhaps, less on investment grants or investment allowances and so on than it does on the feeling that one will have there a happy, secure labour force which will not disrupt work. I accept that the problems which arise, and have arisen, in those areas may largely result from a feeling of insecurity which there has been in the past. I recognise, too, the argument, in so far as it is an argument, that private industry has been hesitant to move into those areas. It was because of the unhappy record of industrial relations. The argument is one which I hope we can dispel, and I would be glad if it were dispelled. In so far as it is a valid argument it is one which would be in support of the Bill, were everything else equal. That I accept.

Mr. Sutcliffe

I hope that my hon. Friend will accept that Teesside has exceptionally good industrial relations but that the state of industrial relations there, at any rate, has not promoted development to the extent that we would like.

Mr. Boardman

I said that a factor in certain areas is the belief by industry that industrial relations are not secure, or not as good as they are in other parts of the country. One has heard from industrialists that they would not put a factory in such and such a place because of the industrial relations record which there has been. I accept that that argument is an argument in support of the Bill, that private enterprise has been restrained or hesitant in going to those areas because of what it believes to be a problem. Hon. Members may well say that that is a reason why there should be a development corporation. I accept that this would be valid if everything else were equal.

Another reason I would suggest, in analysing the causes, is that the areas are mainly areas of the older industries which in many ways have been overtaken by technology and have no longer the future which they had—some of the old parts of the textile industry and the like. What is needed there is new industry with new ideas, industry which can be brought there only by people with enterprise and innovation. I wonder, notwithstanding all the powerful arguments which have been put forward, whether something in the nature of a State juggernaut can bring along that enterprise and innovation, which, as my hon. Friend the Member for Flint, West (Sir A. Meyer), said, must be a catalyst around which other industries and services could grow.

My hon. Friend the Member for Flint, West made another very valid point. I am sorry he is not here. He made a number of points with which I did not entirely agree, but he rightly laid emphasis on the way in which service industries have suffered. I shall not develop an argument now about selective employment tax, but it is one which, I am sure, hon. Members recognise, and the point was well made by my hon. Friend.

Another reason why these areas are in their present condition is the difficulties of communication, added transport costs and so on. Industry was prepared to go to those areas as it was compensated for such additional costs, by the wages payable in those areas being below those payable in the South-East. My hon. Friend the Member for Flint, West referred to the lower wage rates which there were in his own part of the country and said that they were justified on the ground that there were lower costs of living. One of the almost invariable consequences of new industry moving into one of those areas and, because of the lower wage structure, accepting added costs has been that wage rates have then been brought up to the rates applying in Coventry, London and so on. Such advantage as there was previously available has been lost. For that reason when there have been pressures requiring a cutback in production it has been the remote factory that has been closed.

I turn now to the question of how this Bill can tackle those causes if my analysis, which I have tried to make briefly, is correctly summarised. I have sought to mention only the main causes. There are many others. Will the Bill overcome the problem? Will it achieve the aim which is common to hon. Members on both sides of the House? I must confess that I have considerable hesitation in believing that the Bill can achieve its purpose. It could result, and I fear it would result, in a pouring of very large sums of capital into ventures which in only the short-term may create employment. It is perfectly possible to create employment by pouring capital into a project, but what is required is viable employment, employment which in the long term is secure.

I shall not develop the argument which there has been across the Floor of the House about investment grants and allowances. What is important is to get industry established in a way which will provide jobs not just for the span of a Government or a pre-election period but for a lifetime and for the future vitality of an area.

The method o applying large sums of money, when the social and economic factors are confused with the pure financial objectives of creating a viable industry, can lead to substantial and continuing losses or to losses accumulating to an extent that one Government or another will decide that the losses are no longer bearable. The industry will then be closed down and the situation will become worse than it was before.

Dr. J. Dickson Mabon (Greenock)

What evidence has the hon. Gentleman for saying that? My hon. Friend the Member for Stockton-on-Tees (Mr. William Rodgers) said that the Bill in part reflected what had happened with the Highlands and Islands Development Board. I have with me reports of the board under both parties and different chairmen, so no one can say this is a party issue. What the hon. Gentleman said is completely contradicted by what has happened during the five years of the board's operation. I put that forward in evidence. What will the hon. Gentleman nut forward to substantiate what he has just said?

Mr. Boardman

As a random suggestion, there is the small case of the Beagle Aircraft Company, when there was an injection of capital into a project which it was considered to be socially and economically desirable to support, precisely the situation which the Bill envisages. I urge hon. Members to read carefully the Report of the Select Committee of Public Accounts on that project. It contains valuable lessons of the consequences that can flow from injecting capital into what is thought to be a socially and economically desirable project without applying the commercial guidelines and management which are essential if the project is to become viable.

I do not doubt that the Highlands and Islands Board has some significant achievements. I would not close my mind to any form of support which is appropriate but I have considerable doubt whether the creation of a corporation with blanket powers as wide as those proposed would secure the objectives which are sought.

The hon. Member for Stockton-on-Tees spoke of the achievements of the I.R.C. Those achievements were limited and possibly outmatched by the failures. The creation of mergers and so on by the I.R.C. resulted in a drop in employment rather than an increase. If there is a confused objective, which is partly economic, partly social and partly the achievement of an adequate return on capital, there is a danger that one will fail to achieve any of them. The Report of the Select Committee on the I.R.C. makes it clear that the I.R.C. was an experiment which few people would wish to be repeated. With no disrespect to the hon. Gentleman's motives, there is a danger of there being a rag-bag of objectives.

The right hon. Member for Birkenhead (Mr. Dell) on 10th September spoke about a State holding company on the lines envisaged in the Bill. A holding company, whether in the public or the private sector, covering a diversity of operations is seldom a financial success. Without financial success, I feel little confidence in its success in providing long-term security of employment. There is the risk of cross-subsidisation and the distortion which occurs when one part is used to subsidise or keep afloat another. This would be reinforced with a regional corporation covering all the regions within the United Kingdom, where the appeals of the hon. Member for Wigan (Mr. Fitch) will have to be matched against those of my hon. Friend the Member for Middlesbrough, West (Mr. Sutcliffe).

Mr. Sutcliffe

Hon. Members who have spoken in the debate have stated how they see their areas—my hon. Friend has accused us of being parochial—and how they see the problems being resolved. Is not the implication that we know best how to resolve the problems in our own areas and, therefore, what we want is a regional organisation based in the region and doing the things which are necessary in the region?

Mr. Boardman

I followed the point which my hon. Friend made in his speech. The point was put differently by the hon. Member for Stockton-on-Tees. I realise that this could be applied in different ways, but that does not detract from my argument that, whether the blanket be spread over one region or over the whole country, there is still the problem of selectivity and defining the correct objective.

The right hon. Member for Birkenhead made a clear and cogent speech on 10th December, which I read with interest. The main plank upon which his suggested State holding company was based was that … its main influence would be through the force of competition."—[OFFICIAL REPORT. 10th December, 1971; Vol. 827, c. 1693.] That State holding company idea is either the fosterparent of the Bill or the child of it.

As I understand his argument, the right hon. Gentleman was suggesting that a State holding company would have a competitive effect which would be good for the economy and would produce more dynamic and profitable industry and greater employment. I ask whether competition can be fair, healthy or good when it comes from a State-controlled corporation which achieves its capital on far different terms from its competitors and whose responsibility for earning returns is quite different. There must be a danger of side effects on other industries. If one subsidised, for example, the hosiery trade in Scotland, what effect would that have upon the privately-financed hosiery trade in Leicester?

Dr. Dickson Mabon

There is a hosiery trade in Scotland.

Mr. Boardman

Indeed there is. Is it envisaged that the State should inject capital into one firm or another in Scotland or start another industry there which competes with a similar industry in a more prosperous centre?

A clear example of the use of public resources in competition is the direct-labour schemes which have been operated by some local authorities. Hon. Members will be aware that the effect of the operation of direct-labour schemes by local authorities leads to competition with local builders. Many of these schemes have been disastrous and have succeeded in putting out of business small private builders, the loss of whom is severely felt.

I suspect the consequences of the Bill though I support its intentions. If I believed that it was a practical way of achieving the objective, I would gladly put aside any doctrinaire view I might otherwise adopt. As I have said, I have reservations about the Bill, and I apologise if I have expressed them at too great a length. I congratulate the hon. Member for Stockton-on-Tees on the way he has introduced this Measure.

Mr. Speaker

I propose to call the hon. Member for Goole (Dr. Marshall) and then I understand that the two Front Bench speakers wish to try to catch my eye. I hope there will be time for the six or seven hon. Members who have sat throughout the whole day to make their contribution.

2.12 p.m.

Dr. Edmund Marshall (Goole)

One of the criticisms of this Bill to be heard in this debate is that we should not be advocating a nationwide body to cure problems of regional economic underdevelopment. I submit that the problems of the regions have gone so far that anything based on the region to tackle its own problems will not be sufficient. The regions cannot pull themselves up by their own bootstrings. We need something nationwide to co-ordinate the policies best suited to all the different regions, including the overheated regions, so that problems which are in a sense complementary from one end of the country to the other can be tackled within the framework of a major strategy.

The hon. Member for Leicester, South-West (Mr. Tom Boardman) referred to the corporation proposed in this Bill as a State juggernaut. I do not see it in this light. The way in which it has been proposed, in the admirable speech of my hon. Friend the Member for Stockton-on- Tees (Mr. William Rodgers), suggests that this would be a body with the power and the funds to act to tackle the problems of individual regions with the necessary flexibility.

My own constituency in the West Riding of Yorkshire is all classified at the moment as part of the intermediate areas. In a sense the way in which regional policy has failed is typified by experience in the intermediate areas. We fall between two stools. We are classified as an assisted area, and this gives some comfort to those who like to think something is being done for such areas. Yet when it comes to the point of initiating programmes of work we sometimes fall short of assistance which is given to development areas. Part of the flexibility proposed for the development corporation in this bill would go some way towards tackling the problems of intermediate areas more in their own right.

There are pockets within the intermediate areas with problems which are more severe than the problems in development areas. It would be wrong of me to omit reference to one part of my constituency to which I have already referred many times, namely the Thorne rural district. According to my calculations there was in January a male unemployment percentage rate in Thorne of 19.8, or nearly one in five. This is a figure which the Department of Employment is reluctant to admit. I have learned that there are only three other exhange areas in England with a worse male unemployment rate, and those three exchange areas are all in development areas. Apart from those three, all the other employment exchange areas in development areas are better placed than Thorne.

I have commended the flexibility of approach which I see within the proposal for a regional development corporation. This would be able to take a more sensitive attitude towards the varied geographical and social problems of so many of the areas which for one reason or another have found themselves dependent on declining industry. I also hope that the corporation would pay great attention to the balance between the provision of male and female employment in an area. One of the characteristics of the constituency I represent is that by and large there are plenty of jobs for women who wish to go to work. There are strange social consequences when men who cannot find work are left at home to look after the house and family. The repercussions of this situation on the domestic front and on a wider social front are indeed far-reaching.

I also welcome the proposal to set up a corporation as something which is far more positive than anything that we have had before or have at present. There will he an opportunity for initiative to be taken, and I hope there will be an opportunity to give directions, which would help to overcome so much of the imbalance in the country as a whole. At present our regional policies are based on financial inducements and on the negative operation of industrial development certificates. I feel that we need something which will go a stage further and introduce a more positive appraisal of the problems in the regions.

I also commend the possibility of this corporation undertaking co-ordinating functions in terms of encouraging development in depressed areas. It is not sufficient to say "We have brought a factory to such-and-such a point" and then be satisfied just because it has been dumped down in that situation. Everything has to be co-ordinated with the other activities in the area—with the infrastructure of the area and with the social needs. There must be a flexibility of approach, not just in terms of geography and labour but also in terms of the whole social and economic framework of the locality. We must bear in mind what roads are available, what ports are near at hand, and whether there are airport facilities. These are matters which must be taken into consideration when finding out what is the best kind of economic development in an area. It is not sufficient to bring in a factory which may have a tremendous amount of machinery and plant but will not provide jobs. We must look at the kind of employment which will absorb a lot of manpower.

I conclude by relating this to the potential of my own constituency. I suggest that it is a part of the West Riding of Yorkshire which is very ripe for economic development. There is no shortage of manpower. At the moment motorways are being constructed which will enable ready and speedy access to other parts of the country. The M62 and the M18 spread through the area. There is also a network of inland waterways, which, I hope, will not be jeopardised by any proposals for reorganisation. Those waterways are concentrated on the port of Goole, which is the most inland port in the country. This gives particular significance to the area from the point of view of manufacturers who want to ship goods to Europe or further afield from a nearby port. Finally, there are the possibilities of airport development in the locality as a whole, so that manufacturers who wish to export their goods by air can know that there are these possibilities in the future.

At the moment, these attractions are hardly realised. I am sure that they could be made more known and more operative if we had a body such as the proposed regional development corporation which could take cognisance of the facts and put them before all those manufacturers and others responsible for economic development who could bring more prosperity to the area.

I commend the approach of my hon. Friend the Member for Stockton-on-Tees in moving the Second Reading, and I commend his whole Bill to the House.

2.20 p.m.

Mr. Albert Booth (Barrow-in-Furness)

My hon. Friend the Member for Stockton-on-Tees (Mr. William Rodgers) has been rightly congratulated by every hon. Member who has taken part in the debate. His Bill reflects a very considerable knowledge of the problems of the development areas and, with it, a very keen concern and desire to go a long way towards bringing about the solution of those problems.

In the last 12 months unemployment in the United Kingdom has risen from approximately 700,000 to 1 million. The increase took place following a year in which unemployment in the North-West, the Northern Region, Yorkshire, Humberside, Scotland, Wales and the South-West had risen very dramatically. It is a greater tragedy for the development areas that this overall increase in unemployment has taken place, hitting them, as it must, much harder than the rest of the country until such time as we have an effective development area policy.

The Bill is to be welcomed, first, because it recognises the need for a public agency to promote economic and social development in areas of high unemployment. Part of our argument with the Government on development area policy has been the extent to which there is a rôle for direct public intervention. The Bill will provide a very useful vehicle for hon. Members and the Government to re-examine their positions.

Broad fiscal measures aimed at balancing unemployment between regions obviously can result not in a solution of the unemployment problem but merely in balancing out the misery as between one region and another. What the Bill does is to offer an opportunity for relating assistance to the particular needs of the development areas, looking not only at their levels of unemployment but at their available skills, their capacities, and the nature of their individual problems.

I defend my hon. Friends against the charge that they have been parochial in what they have said today. The tests that they have applied by relating the problems of their own areas are completely fair ones to apply when we discuss whether we are succeeding in tackling the problems of the development areas. As tests, they are as effective as the numbers involved. The numbers can conceal the social problems, the tragedies and the inability to use skills. They can conceal the breaking up of families when young people have to leave regions to seek employment. What my hon. Friends have said about the problems of their own areas is totally relevant to this overall discussion of the development areas.

I was impressed by the point which was raised about the nature of the balance between male and female unemployment. Far too often in the regions I have heard the criticism advanced that, although there is a large number of highly-skilled unemployed engineers, the result of development area policy has been that factories have been brought along which have offered employment primarily to semi-skilled women. Clearly this must be one of the results of applying broad fiscal incentives to put up factories as opposed to using a public agency to ensure that the type of development which takes place is related to the needs of the area.

This approach in my hon. Friend's Bill is also to be welcomed because it will enable the corporation to distinguish between those developments which are labour-intensive and those which are capital-intensive and the way in which they are appropriate to particular regions. It is a balance which needs to be struck in the interests of the community.

The effect of the tug of war which has taken place between regional employment premium and investment grant has often resulted in capital-intensive industry being placed in locations where the greater need was for labour-intensive industry. The result of this is in no small measure due to the political battle between the parties. The doubt always existed whether regional employment premium would continue if a Conservative Government again came to power. It was not surprising if a board of directors, discussing whether in investing in a development area it should set up a capital-intensive indusiry or a labour-intensive industry, concluded that the bird in hand was to be preferred to the one in the hush, and that it should make sure of the investment grant now rather than set up a labour-intensive industry only to find regional employment premium withdrawn and all its calculations set to nought.

To this difference in party approach there is a considerable background which has come out in the debate so far. The Labour Government of 1945, by their location of industry and town and country planning legislation, interfered massively in the way in which jobs were distributed. Between 1945 and 1951 373,000 new jobs resulted from movements of industry. Of that number 237,000 went to areas which are now called development areas. Compare that with the movements which took place between 1952 and 1959 when, with a return to Conservative Government, there was a change in policy not only as regards the distribution of industry generally but especially with regard to relaxing industrial development certificates. In the 1952–59 period, 274,000 jobs arose due to movements in industry. Of that number, only 79,000 went into what we now call development areas.

If we admit, as we must, that our development area policy was not a total success, that should not blind us to the fact that the kind of intervention practised by the Labour Government beneficially affected the movement of labour for development areas. The 1960 Act of a Conservative Government limited specific aid to areas with unemployment rates of more than 4.5 per cent. For that reason I am surprised today to hear people calling for a mark 2 version of that policy. If we have learned any lesson, it is that we have to look at the economic infrastructure of development areas and not deal solely with very small parts of them. We must have realised by now that many parts of the areas stand or fall together. Single industries cannot exist where there is not the infrastructure, which comes only with a fairly high measure of economic activity.

The range of measures introduced by the Labour Governments of 1964 and 1966, read merely as measures, makes very impressive reading. To mention a few, there were investment grants of 45 per cent. for plant and machinery, building grants up to 35 per cent., tax allowances on new buildings, regional employment premium, training grants, additional Government training centres and so on. I could continue with the list.

All those measures did not solve the problems of the development areas. It is arguable whether their success or failure depended on the overall measure of economic activity in this country. I think that if we had had a higher overall measure of economic activity, those measures would have brought considerable prosperity to development areas.

That is not the problem we have now. There is no question that the level of economic activity is such that it must militate heavily against any opportunity even of measures such as those working. We must now examine far more closely what can be done by direct Government intervention.

Our objection to new industry continuing to be drawn into the South-East and other relatively prosperous areas is not only that it denudes the development areas of industry which they require, but that at times when we have a higher measure of overall economic activity, it places high social costs on the congested areas. We do not believe that it is an unmitigated advantage to certain parts of the Midlands or even to the South East to have such a relatively high amount of industry pouring into those areas and such a big depression in the development areas. In fact we believe that they suffer considerable disadvantages, but of a different kind.

It is for that reason that I listened with great interest to the speech by the hon. Member for Flint, West (Sir A. Meyer), who argued about the place of a payroll tax from the point of view of his own philosophy in approaching this problem. If we are to create the best background conditions in which the proposed corporation can work, it will be necessary to recoup from firms which, despite all the considerations which we have mentioned, still go ahead with the setting up of factories and expanding within London, the South-East, or the prosperous regions of the Midlands, part of the additional social costs which they heap on the community. For example, there is the high cost of providing transport and services in these areas because of their industrial congestion. We might call it a payroll tax or a wages levy, but it will be the same thing: it will be a means of recouping from these firms part of the high social cost they create in these areas to enable us to pay regional employment premium or a wage subsidy in areas which we now call development or intermediate areas.

I take the point about there being a serious fault in our present set-up which enables a number of firms to gain considerable advantage by moving a short distance away from London or one or two other places. To meet this fault, we must not abandon our ideas of trying to draw boundaries between development and intermediate areas, and so on; we must go further in drawing our boundaries and create yet another type or area—call it a neutral area—to which there would be no advantage in moving in order to concentrate the greater incentive on moving to intermediate or development areas.

I should like to express a personal point of view. Public ownership not only has a major rôle to play in solving the problems of development areas, but it would be an essential corollary to the kind of work which would be done by a Conservative Government if they accepted the Bill. I do not accept the interpretation that the Bill is a massive nationalisation Measure. It is nothing of the sort. It is clearly designed, in order that the corporation may be operated by a Government which do not necessarily believe in nationalisation, to enable the corporation, by loans and certain other financial arrangements, to promote economic and social development in development areas.

I think that public ownership has a major rôle to play for four reasons.

First, we need public ownership in certain development areas to create diversity in place of over-reliance on a single industry which is dying or where there is the almost classic case of the company town with its bad social effects of denying to the community opportunities of other forms of labour and of restricting the amenity of the area.

Secondly, I would argue that there are many cases where social considerations outweigh commercial criteria in deciding whether an industry is to be set up or retained. I believe that public ownership has a rôle to play in these cases. It is surprising how many people are suddenly converted to the idea of nationalisation in a flash, or at a stroke, when faced with the prospect of massive closures in their own areas. We must move ahead of public opinion and advocate that public ownership has a rôle to play in dealing with such situations.

Thirdly, I contend that where the loss of a single industry or economic unit in an area would bring in its train a serious total collapse of overall economy there is a rôle for public ownership.

Because I have defended my hon. Friends who have been accused of being parochial, I will deliberately be parochial and take my own area as an example. When the Millom Ironworks closed, half the import tonnage at Barrow docks disappeared. This threw the docks into a dilemma of grave proportions. It threatenend the commercial activity of the docks, which in turn threatened the industries dependent on them. So the story builds up. It is probably a better example of the domino theory than that used to illustrate the Communist advance in South-East Asia. If one economic element or unit is knocked out, one factory, a chain of events will follow which can be particularly detrimental to development areas. I think that public ownership has a rôle to play in this sphere. I am suggesting not that we should maintain an industry which is outdated and outworn, but that something in its place which will fill a social and economic need as a deliberate act of public ownership and policy is justifiable.

Lastly, we need a far greater measure of public ownership in development areas as a means of securing a return for the public. I see this not only as a means of helping the "lame ducks", to use the Government's terminology, but as a means of sharing some of the wealth which can be obtained by efficient operation in the development areas. With this I place the question of public accountability. If we add up all the public money which has gone into development area policies of one kind and another pursued by different Governments over the years, it must amount to a massive public donation; so massive that had it been an investment in any of our major industries they would have been virtually owned by the public by now.

The utter failure of the Government's policy threatens to turn what we have nreviously called development areas into economic graveyards. Believing that it will make a valuable contribution towards solving this problem, I urge the House to give a Second Reading to the Regional Development Corporation Bill.

2.40 p.m.

The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant)

In intervening now I do not intend in any way to stifle the debate, because I know that many hon. Members wish to speak. I intervene because I think it is right to indicate the Government's view at this stage.

I do not in any way object to the fact that many hon. Members have spoken from what is described as a parochial or constituency point of view. I believe that that is helpful and enables the House to form a more useful judgment. I hope that I shall be forgiven if I do not answer specific constituency points directed to me, but hon. Members know that they can see me about them or raise them in Adjournment debates. If they do not always get satisfaction, I hope that they get at least a sympathetic and patient hearing of their problems.

I congratulate the hon. Member for Barrow-in-Furness (Mr. Booth) on what I believe is not his first appearance at the Dispatch Box, but is his first appearance there on trade and industry matters. I was interested to hear what he said, but it is no disrespect to him if I say that I suspect that some of my hon. Friends on this side of the House were perhaps more persuaded by the arguments advanced in support of the Bill by the hon. Member for Stockton-on-Tees (Mr. William Rodgers) than by his arguments. The hon. Member for Stockton-on-Tees described himself as a marauder. I can only say that he is one of the most reasonable and sophisticated marauders that I have come across.

Differing and interesting views have been expressed by the two sides of the House. On my side I think that my hon. Friend the Member for Flint, West (Sir A. Meyer) was the most enthusiastic, while my hon. Friend the Member for Middlesbrough, West (Mr. Sutcliffe) came somewhere in between. My hon. Friend the Member for Leicester, South-West (Mr. Tom Boardman) was perhaps the least enthusiastic. Nevertheless, I think that we can all endorse the primary objectives underlying the Bill, which are to improve economic and the social conditions, particularly in the regions of persistent unemployment. Another area in which benefits might arise is in the further stimulation of investment in capital plant and equipment.

It might be helpful, before going on to consider how those improvements might be achieved by way of the proposed regional development corporation, to recall briefly some of the factors which need to be taken into account in considering further measures designed to improve the present situation.

This Government, like their predecessor and Governments before that, have repeatedly made clear their concern at the problems presented by regional disparities in employment and associated industrial activity. We also recognise that we have no monopoly of such concern. Unemployment anywhere involves both human suffering and economic waste. But when it is con- centrated in particular areas or communities there are much deeper and more serious human, social and economic consequences. In extreme cases the spirit and confidence of whole communities, often living amid the dereliction an decay of the 19th Century, can be eroded and the young and enterprising leave to seek their fortunes elsewhere.

When we came to office in 1970 we came pledged, as an essential part of our economic and social strategy, to pursue vigorous policies to reduce the regional disparities which give rise to those effects. We would not claim any monopoly in our determination to tackle problems which have taxed Governments of all parties for more than 40 years.

As the hon. Member for Stockton-on-Tees sensibly recognised, the seeds of the "regional problem" were sown long before, in the midst of the industrial expansion of the last century which gave rise to three consequences.

First, it led to heavy dependence by particular parts of the country on certain basic industries—especially coal, steel, shipbuilding and heavy engineering. Secondly, it left behind massive problems of dereliction. Thirdly, it led to the growth of major urban areas with substantial social capital which is obsolescent by the standards of many of the countries which have industrialised more recently.

Before the war the economies of the South and Midlands were diversified by the development of new growth industries—for example, light engineering and the service industries—but comparable diversification did not occur in North Britain and Wales, which had also suffered most acutely from the effects of the depression. The war and the subsequent periods of growing prosperity in the world sellers' market to some extent masked the magnitude of the underlying problems.

However, the process of structural change accelerated in the period 1960–1970. Basic industries on which employment in North Britain and Wales was heavily dependent were then shedding labour rapidly, and in those areas the newer growth industries were insufficiently represented to provide enough alternative jobs.

Therefore, in the primary sector—agriculture, mining, and so on—and, indeed, in some of the older manufacturing industries—textiles, clothing, footwear; locomotives, railway carriages and shipbuilding North Britain and Wales bore the brunt of a contraction of employment of more than 1 million jobs during the period, whereas in the strongly growing service sector, service employment in the South and Midlands increased by 14 per cent., but only 8 per cent. in North Britain and Wales, and, as the hon. Gentleman said, the bulk of the jobs lost were male.

Much of the recent rise in unemployment in these regions appears to reflect the recent rise in the national impact of inflation, in particular the reassessment by employers of their labour requirements in the face of rapidly rising costs, but inter-regional migration, too, has played a major rôle in reducing the immediate impact of these changes.

Our working population, contrary to what is sometimes believed, is highly mobile—not as much as in the United States, but more so than in other countries. But much of the movement is within regions or, in terms of interregional flows, is largely self-cancelling. Between 1961 and 1969 the net movement from North Britain to the South and Midlands was almost half a million; Wales remained in balance; but Scotland suffered heavily in a net loss of 5.8 per cent. The prospects for the future offer no automatic remedy as employment in the primary sector and in a number of basic industries—including coal, steel, shipbuilding, and textiles—must be expected to continue to decline, with the main impact still being felt in certain of the regions.

These problems have received ever-increasing attention from successive Governments. As understanding of the nature of these problems has developed, so the measures adopted have become more numerous, more intense, and in some cases more sophisticated, in a continuing process to which both parties have contributed.

Between 1945 and 1965 more than 400,000 new jobs were provided in new manufacturing industry moving to our development areas, where whole new industries have grown up—the motor industry on Merseyside, for instance, and the computer industry in Scotland. A major contribution has been made by overseas firms. Nearly one-third of all overseas firms setting up in the United Kingdom between 1945–65, for instance, went to Scotland. An important point which we should bear in mind is that the firms that have moved, in general, have been in growth industries able to offer prospects of stability and expansion.

During the 1960s especially the concept of regional economic planning was developed and many hon. Members have drawn attention to this. It was the publication of the White Papers on the development and growth of Central Scotland and the North-East in 1963 that set the pattern for a comprehensive and co-ordinated approach to the problems for the regional areas as a whole embracing every aspect of industry and the environment and instituting what has now become the accepted basis for regional development throughout the country.

As I have said, all Governments since 1945 have put strenuous efforts into tackling the problems in the regions. But the difficulty in the task before us, as the hon. Member for Stockton-on-Tees made clear with the figures he gave, may be gauged by the fact that unemployment in the development areas relative to unemployment in the country as a whole has remained virtually the same during these 25 years, if not longer. We are now faced with the additional problems whereby regional anxieties are no longer confined only to the traditional areas of unemployment in the heavy industries.

The problems are deep-seated and need new solutions. The present Government have already taken major steps to this end. First, as must be recognised, we have taken action to achieve renewed and continued national economic growth and to stimulate demand and investment throughout the economy. This is vital in the interests of development areas as well as non-development areas. The measures we have introduced include new investment incentives, a cut in Bank Rate, corporation tax reduced twice to help with finance for capital investment, S.E.T. halved and a host of other measures amounting to cuts in taxation of £1,400 million in a full year and more than £700 million additional expenditure. No Government have ever before taken so much action to create employment.

We have recognised the problems peculiar to the regions and measures we have taken of special relevance to them include £164 million on infrastructure improvement and £80 million on ship-building orders. These measures should continue to ensure a major expansion in economic activity. These are necessary to give confidence for industry in the regions to expand and create new investment. It has been necessary over these years to run very fast in terms of regional policy simply to remain in the same place. We must avoid complacency but we must also recognise that the measures taken have resulted in the avoidance of a much worse situation in the regions. That is the answer to those, not in the majority, who advocate the entire abolition of regional policy.

Of course regional aspects of unemployment are important but so too are the cyclical and the structural aspects. These were considered during the debate on unemployment on 24th January. The cyclical problem creates additional unemployment in the troughs of economic activity. This is another problem which has to be tackled by reflationary measures. We are dealing not only with the regional problem, substantial though this may be, but also with cyclical and structural problems which make their effects felt over all regions, assisted or otherwise, within the United Kingdom. It is relevant to ask how the proposed Regional Development Corporation might be expected to contribute meaningfully to these other problems which also have a considerable bearing on the major problems of unemployment.

Special measures in whatever form can have their full impact only in an atmosphere of expansion. As the national economy grows in strength and industrial confidence continues to increase, so there are much better prospects of increasing the flow of projects to assisted areas. The Government have made it clear that we do not regard our present regional measures as the final answer to those problems which by their very nature are long-lasting.

We do not claim that even our substantial measures can necessarily provide a complete answer to what is a complex and ever-changing situation. My right hon. Friend the Prime Minister acknowledged this in the debate on the Address and he and my right hon. Friend the Secretary of State for Trade and Industry have made it clear that we are looking for the best means of tackling the individual problems of particular areas. This must be a continuing process.

The hon. Member for Stockton-on-Tees is to be congratulated on bringing forward his Bill which was intended to be an interesting new measure of regional policy superimposed on those measures of regional policy which the Government have already taken. The Bill outlines a further possible major measure which could be introduced to help tackle this problem. This is but one type of measure from a wide variety of different types that could be introduced with the same declared objectives of reducing unemployment and so on. Further, the Regional Development Corporation is but one possible variant out of a wide range of such agencies that might be mooted and a variety of alternatives are perfectly feasible.

The question then arises: which of the possible measures is the one to select, which of the possible agencies is the one to promote if, indeed, this is the measure selected?

Tackling first the problem of whether the particular measure represented here is the best one to promote, we need to recognise that the Government have already introduced other relevant measures specifically designed to help in alleviating unemployment through the improvements in employment-linked assistance available under the Local Employment Acts within development areas. We have to consider whether in dealing with substantial sums of money it is best to use this or other vehicles to solve the problem.

Before embarking willy-nilly on the creation of an independent agency as suggested in the Bill we must he sure that the solution proposed will have as beneficial an effect as might be achieved through commitment of similar resources to alternative measures. I have mentioned one area, the Local Employment Act provisions, in which we have made considerable improvements. There are others, such as the continuation of the initial allowances for industrial buildings and the extension of free depreciation for new fixed plant and machinery to service industries.

The second problem pivots on whether the particular type of agency set out in the Bill is the best choice where this is the measure selected. For example, is there positive evidence to suggest that an outside agency of the type proposed would be able materially to accelerate the processes of modernisation already at work in the regions?

The hon. Member for Stockton-on-Tees will be well aware, in his capacity as Chairman of the Trade and Industry Sub-Committee of the Select Committee on Expenditure, that the subject of Government-financed agencies—or para-governmental agencies, as they are often horribly described—of one form or another has been discussed widely in the last few months.

The rôle of these para-governmental agencies, with power to lend money to industry, has been considered frequently in the Sub-Committee's discussions. Since June, 1971, the Sub-Committee has questioned the need for some form of such para-governmental agency to establish and promote new commercial enterprises under public ownership or in co-operation with private capital.

Both the T.U.C. and the C.B.I. have put forward views on forms which such an agency might take. The T.U.C. recommended that a single agency on the lines of the Italian I.R.I. be established, with wide terms of reference, for the promotion of industrial, technological and regional development, but with a greater degree of accountability to Parliament. The C.B.I. did not go so far but it is fair to say that the C.B.I. suggested that there might be a rôle for mixed-finance corporation funded by both Government and the institutions.

Para-governmental agencies of one form or another have been suggested elsewhere. The possibility of establishing a regional development authority was raised in the debate on development areas on 7th December. In the debate on public expenditure on 9th December a large development bank was proposed to finance development and employment in regions and areas of high unemployment. I gather that £1,000 million was suggested as appropriate launching capital. A State holding company was proposed in the debate on public ownership on 10th December by the right hon. Member for Birkenhead (Mr. Dell). Thus, a whole range of possible measures have, as it were been published.

The objectives of such agencies as have been proposed range from broad economic aims having nationwide implications—improved employment, increased capital investment, dealing with industries in decline—down to more restrictive aims directed to specific industries and assisting individual firms in terms of improving managerial efficiency. I mention these to indicate the wide range of possibilities that exist in addition to the proposal under discussion today.

These possibilities clearly do not exhaust the whole range of potential objectives for agencies of this nature. But the main problem that has to be faced is how to secure the most effective deployment of the country's resources, not only for short-term needs but to achieve a soundly based economy in the long term, especially in the assisted areas.

In considering what such an agency, if established, might do for the country, it is worth looking at the experience of other countries which have tried something similar, and such experience abroad was looked at quite fully in the debate on public ownership on 10th December last.

Without going into all the details, it might be appropriate to mention the Swedish State Holding Company, the Italian I.R.I.—it has objectives relating to the provision of employment and the holding down of prices in certain sectors, such as steel and cement, on which other industrial sectors are basically dependent—the Canadian Development Corporation, the proposed V.I.A.G. in West Germany and the I.D.I. in France. There is also the Irish Industrial Credit Company. From any review of examples from abroad it is apparent that each agency serves different purposes depending on the needs and history of the country concerned.

As I have indicated, we in Britain must recall that the public sector already contributes substantially to the generation of capital investment.

Dr. Dickson Mabon

From the examples of these activities in other countries, is it not clear that the same is true elsewhere, with a substantial element of public ownership?

Mr. Grant

It is fair to say that, with variations, a substantial element of this sort of development exists in other countries.

Reference has been made to the I.R.C. but I do not want to rehearse everything that was said in the debate on this subject. The Government abolished the I.R.C. last year. It was not considered to be an ideal organisation to deal with the problems of the 'seventies. The present need is clearly not so much for artificially stimulating major regrouping activities within industry but to deal with the specific problems that arise in particular areas.

I should mention that this country is fortunate in already having a rich variety of financial institutions providing essential services to industry. The Sub-Committee discussed with the F.C.I. and the I.C.F.C. the type of financial institutions required in today's circumstances, as well as comparing the rôles of the F.C.I., the I.C.F.C., the finance houses and so on.

Clearly, the concept of development agencies is attractive to a number of different interests in present economic circumstances. Much depends on the type of agency proposed; various deficiencies have been seen by a number of witnesses to various forms of agency and these need to be given full weight. It would be necessary to ensure that the agency did not usurp or hinder the delicate working of Britain's sophisticated capital market and institutions. This is vital.

At the same time any agency must be flexible in its approach, as the hon. Member for Stockton-on-Tees indicated, and must be ready to react quickly and commercially if it is to be effective. The continuing review of regional policy, into which these very complex issues must be fitted, must be taken into account so that the right overall policy and combination of measures is devised.

I emphasise, as have my right hon. Friends the Prime Minister and the Secretary of State, that from the Government's point of view no options are closed in that respect. The evidence already put before the hon. Gentleman's Sub-Committee has been followed very closely, and we shall certainly study extremely carefully his Sub-Committee's views when it finally reports.

I accept entirely, as do the Government, the motives behind the Bill. I again congratulate the hon. Member for Stockton-on-Tees on contributing so very much to the important thinking on this matter. It may well be premature to go forward on the precise basis proposed in the light of, among other things, the continuing discussions of the hon. Gentleman's Sub-Committee. Because of the importance and magnitude of the problems underlying the promotion of the Bill, we must be sure that any actions that we take have been very well thought out, so as to work for the advantage not only of the regions but of the country as a whole.

Having said that, I would not advise my hon. Friends to oppose the Second Reading. [HON. MEMBERS: "Hear, hear."] However, as the hon. Gentleman will appreciate only too well, having been in Government, substantial sums of public money are involved. It is only fair that I should warn him that the Government do not consider this to be wholly appropriate to a Private Member's Bill. As the hon. Gentleman knows, we are conducting a fundamental review of regional policy and we shall certainly take full account of the thoughtful views expressed by him and other hon. Members in the debate.

Mr. William Rodgers

Would the hon. Gentleman be kind enough to make absolutely clear what he is saying to the House, because it is not wholly so at present? He has said that the Government are not opposed to the Bill and that they accept it. Does he mean by that that the Government will facilitate its progress through Committee or has he some other object in mind? It is right and fair to the House that he should clarify this now.

Mr. Grant

I cannot go further than to say exactly what I have said already. The Government and I do not advise my hon. Friends to oppose the Second Reading of this Private Member's Bill. But I repeat—and having been in Government the hon. Gentleman will realise this—that unlike some Private Member's Bills this one involves very substantial sums of public money, and the Government do not regard this subject as wholly appropriate for a Private Member's Bill. However, we shall certainly not oppose the Second Reading. I do not think I can go further than that.

3.8 p.m.

Mr. Robert Maclennan (Caithness and Sutherland)

Following the Under-Secretary's speech, there is bound to be an air of anticlimax, because the House has been waiting expectantly to hear the Government's attitude to this very important initiative taken by my hon. Friend the Member for Stockton-on-Tees (Mr. William Rodgers).

The Under-Secretary's concluding remarks to my hon. Friend did not wholly clarify the Government's attitude. It may be that by refraining from advising his hon. Friends to oppose the Bill the Under-Secretary was saying that the Government accept in principle the Bill's merits, but that they rather regret that the idea has come from this side of the House. Indeed, it is possible that in the review of regional policy which is being undertaken by the Government such a scheme as this is being canvassed for all we know. There are rumours suggesting that Lord Rothschild, to whom my hon. Friend cautioned the Government and the House not to refer, is contemplating precisely such a measure as this, are a para-governmental agency with powers of this kind. So, to the extent that the Government have welcomed the type of body my hon. Friend has proposed, I am pleased by their response.

There cannot be much doubt, in the light of the Minister's intervention, that the Bill will receive a Second Reading today. The whole House will wish to pay a very warm tribute to my hon. Friend for the extremely hard work that he has put into what is admittedly a complex Measure. It may indeed be true, as the Minister suggested, that a Measure of such complexity, involving such large sums of public money, is one that it is difficult for private Members to hope to enact. But if the Government chose to adopt my hon. Friend's proposal or to facilitate the Bill's passage I have no doubt that my hon. Friend would be most willing to co-operate with them.

As the drama has perhaps gone out of the debate, I wish to look at some of the background experience upon which the House can draw in setting up a paragovernmental organisation of this kind, as the Minister put it, and in particular at some of the Minister's objections.

My hon. Friend said that in making his proposal he had in mind some of the experiences of other countries, such as Italy. He referred to the Cassa per it Mezzogiorno and in this country the experience of the Highlands and Islands Development Board. The Minister said, perhaps rather ungenerously, that there were a number of different types of paragovernmental organisations that might be used to meet the purposes in my hon. Friend's mind. He talked of the possibility of establishing a State holding company, an organisation like the Italian I.R.I., or a regional investment bank. One of the attractions of my hon. Friend's proposal is that in a sense it encompasses all these different purposes within the framework of one organisation.

It may be asked whether the type of organisation my hon. Friend has proposed is suitable for the vast task proposed for it. It is certainly the case that both the Cassa per it Mezzogiorno and the Highlands and Islands Development Board are operating in areas which are by their nature not exactly typical of the regional problems of this country as a whole. They operate in rural, peripheral areas, where the economy is predominantly agricultural and the problems are created in part by the flight of rural labour from the land. Therefore, it may be asked whether such a body would be appropriate to deal with the needs of the conversion of the industrial foundation of our economy.

I feel that it would indeed be an appropriate body. I want to draw a little on the experience on the Highlands and Islands Development Board, of which I know a fairly large amount, in support of that case. But I make the initial caveat that, while I think the board was one of the most important and original creations of regional policy by the Labour Government, I cannot go so far as to say that it has been wholly successful in dealing even with the problems of its own area. This is for a number of reasons inherent in its nature and in the nature perhaps of any such body as that proposed by my hon. Friend.

What above all this type of para-governmental body requires is strong political direction and backing in carrying out its functions. It also requires substantial public funds and freedom within the broad framework of that governmental direction to exercise its own judgment as to what the priorities should be both in planning and in canalising the resources available to it.

The Highlands and Islands Development Board has a remarkable record of creating precisely the kind of manufacturing industry needed in order to establish a healthier and integrated economy in such rural areas. Where it has been at its weakest it has been weak because Governments have not been prepared to allow it to take the kind of initiatives needed if the whole economy is to be transformed. Strict limits of spending have been placed upon grant and loan schemes. For example, only recently the Under-Secretary of State announced that he was proposing to raise the limit of grant and loan freely made on any single project to £75,000. That sum may seem quite large, but it is not commensurate with the needs of creating major industry of the kind which it is possible to create at this time. It does not suggest a high degree of confidence in the capacity of the board to carry out its functions.

Although the board has formulated its regional strategy by locating and identifying areas capable of great industrial growth—for example, the area around Invergordon, the area of Lochaber and the area of Caithness, connected with the prototype fast reactor—remarkably little has flowed from this because the board has not been in a position to back up its planning with the kind of resources needed. I am particularly pleased that my hon. Friend has thought big in setting forward, for discussion at least, the kind of sums that he has in mind both for individual projects and for the corporation to manage over the development areas as a whole.

Another problem which gave rise to some anxiety in the debate is whether a national body is the proper one to carry out this type of function. It has been suggested that what is needed is a series of regional corporations exercising, pre- sumably, similar functions to those described in the Bill. I do not think that this is excluded by the Bill. I believe that under it the national corporation could operate by means of regional panels. Certainly, the large membership of the corporation—the Bill allows up to 16 members—would permit such an approach. Perhaps this matter should be specified in Committee.

As the Government intend to enter the European Community, we should now be considering how best, in a regional context, we can take advantage of the Community's framework to canalise the resources in which we shall share. The European Investment Bank, which is a powerful instrument for regional development in the Community, operates in the context of the Italian problem through a body similar to this corporation—the Cassa per it Mezzogiorno, which channels available community funds to the south or those parts which most need help. The priorities are determined by this national organisation.

I do not see how we are to take advantage of these funds without an organisation like the corporation proposed. It is plainly undesirable that every scheme for reconversion of old industry should have to be vetted by the international bureaucracy itself.

I welcome the Government's expressed non-opposition to the Bill. I hope that they will go a good deal further in preparing the way for its effective acceptance and operation. Many matters in a Bill like this can be refined and improved in Committee. We shall have the advantage of the evidence and probably the opinion of the sub-committee of the Select Comittee on Expenditure of which my hon. Friend is chairman.

We should also have the results of the Government's own review of regional policy—it is extraordinary that we have not had them before now, but one assumes that the Government will bring them forward as a matter of urgency—and perhaps Lord Rothschild's verdict. If all the whispers in the country are right, the Government will either accept this Bill or bring forward an institution for regional development along materially similar lines.

Several Hon. Members


Mr. Deputy Speaker

Order. Perhaps hon. Members do not mind my saying that many people still wish to speak. If they are to get in in the remaining 35 minutes, considerable brevity must be shown.

3.23 p.m.

Mr. Cecil Parkinson (Enfield, West)

We have a mutual ambition, Mr. Deputy Speaker, about the length of my speech. I have found this debate, in which I have heard every speech, stimulating and interesting.

The hon. Member for Barrow-in-Furness (Mr. Booth) talked of a social levy on industry in the South, penalising it to subsidise industry in the North. But we do not exist as a nation by taking in each other's washing. We must remain internationally competitive. The idea that we should penalise the South, because it is competitive, to subsidise the North might produce an internal solution but might in the end ensure that all of us had a much more mediocre future.

Although the hon. Member for Caithness and Sutherland (Mr. Maclennan) might have had the ambition of backing up the hon. Member for Stockton-on-Tees (Mr. William Rodgers) and encouraging us not to oppose this Measure when he spoke of "strong political direction" being given to this agency, he reinforced the anxieties of a number of my hon. Friends and myself about the Bill.

I listened with great interest this morning to the hon. Member for Stockton-on-Tees putting forward a very reasonable case. He outlined in a most interesting and compelling way a problem of which we are all aware but to which he gave new dimensions, while producing new indices, which brought home to all of us the social consequences for the people in the regions and the sort of life they are forced to lead as living in low-wage areas with risky employment prospects. It was the very reasonableness of his approach which made me feel wary.

The hon. Member suggests a sum of £20 million in Clause 4(3). If we compare that with what was stated in an article in The Times on 21st January, and which described how the present Lord Chancellor went to the North-East and came back with as it said, a "flea in his ear" and how, despite £800 million spent in 10 years the crisis still exists, we begin to see that the £20 million annual expenditure would be merely scratching at the problem. On the other hand, if it were to be as big as it would need to be—because we know that in the North-East alone over the last 10 years £80 million a year has been spent—it would be too big for hon Members on this side of the House to join our hon. Friends on the Front Bench in not opposing it. While we might accept a small regional bank using £20 million a year, if it is to be as big as it would need to be to make any real contribution the Government will find that I myself and a number of my hon. Friends will not be happy if they do not oppose the Measure.

Mr. William Rodgers

The hon. Member will be aware that £20 million would be grants which, as I said, was less important. As far as loans are concerned, what is most important is not how much money is spent, but how it is spent. That is the whole purpose of the new agency.

Mr. Parkinson

I think how the money is spent is important, but, considering the size of the problem, I think that how much money is spent is a very serious matter indeed.

The hon. Member outlined two rôles for his corporation. I should like to deal with each. First, he saw it as a regional bank, and then as a promoter—a mini I.R.C.—of its own propositions. One of the things which has constantly hit me since I became a Member of the House has been the way in which hon. Members opposite talk about cash as the answer to so many of our problems. They talk about company liquidity, the need for investment grants and how they are desperately aware of the problem. It remains true that during the time hon. Members opposite were in power there was a deliberate cash squeeze. Companies which wanted to expand could not have access to the market. Companies could not raise capital; if the Government wanted industry to survive, it was incumbent on them to produce something like an investment grant scheme. The hon. Gentleman and I have argued about this before, but if one creates a deliberate cash shortage, and hands over large sums to Government Departments, one must not be surprised if a very large number of people come along to claim such funds.

Because company profitability during the Labour Government's term of office fell, and because taxes rose, the cash flow was badly hit, because the market was shot to pieces deliberately by the Government, just because interest rates were high, and because banks were forced not to be lenders, it does not seem to me that we can take that experience of those years as proof that we must have an agency which must have at its disposal funds which must be made available to industry in the regions. Nobody in the debate has produced any evidence that there is a company with an idea which it wishes to promote in the regions and is being held back by the absence of cash.

Hon. Members opposite know that the fact is that the banks are full of cash at the moment. They want to be lenders. They are charging low rates of interest, and there is not the cash shortage which hon. Members opposite created during their term of office and had to create agencies to deal with.

Where is the need for a source of capital for industry which is not being met out of the normal banking system? If there is such a need I should he interested to hear about it. In my work as an accountant I have found that it is now possible to raise funds for worthwhile propositions in any part of the country. The first function for the corporation is one which is capable of being met and which the existing system is prepared to meet here and now.

The Government's contribution must he twofold. They must make sure that we never get back to the "stop-go" and "stop" situations which caused the problems which might make it necessary for agencies such as this to come into being. Secondly, it is time that the Government gave a boost by cutting Bank Rate. Interest rates on medium-term loans are still too high. The banks are full of cash and a cut in Bank Rate would make the people who have cash anxious to spend it. This would be as big a contribution as the whole of the Bill.

Mr. Edmund Dell (Birkenhead)

The hon. Gentleman is saying that no one has brought forward evidence of projects which need to go forward. The Prime Minister has been going round the country trying to persuade industrialists to advance their investment projects. He obviously thinks that there are projects which should go forward. My hon. Friend's suggested corporation or a State holding company with wider powers would have that effect.

Mr. Parkinson

I have given way to the right hon. Gentleman on the last three occasions on which I have spoken. His interventions each time have had one thing in common. They have relied on a complete misrepresentation of what I or somebody else said. What said was that there is no evidence that a shortage of cash is holding back investment. It is cash that the corporation, in its function as a regional bank, has to offer. If the right hon. Gentleman has evidence that any industrialist with a suitable project is being so hampered, I would say that that industrialist was badly advised financially. There is plenty of cash available for worthwhile propositions.

The idea that the corporation should promote ideas and projects of its own is much more interesting to the hon. Member for Stockton-on-Tees and is the basic aim of the Bill. I do not share his view that we can look at the I.R.C. and see what it achieved and feel confident that the proposed corporation will have at its disposal people with commercial expertise which they are dying to make available to the corporation.

There was a time during the Labour Government's period of office when it was very difficult to find venture capital. That is not so now. People who have the gift of recognising commercial possibilities, the entrepreneurial gift of seeing a need which should be met, would not put their gifts at the disposal of the corporation. The right people simply would not be interested in joining the corporation.

Dr. Dickson Mabon

What about the Highlands and Islands Development Board?

Mr. Parkinson

The hon. Gentleman keeps on talking about the Highlands and Islands Development Board. He should not need to be told by me that the Highlands are a unique and special case. That board is pretty small beer in financial terms and I do not accept it as a pilot scheme for the North-East where the problems are huge in dimension and the needs totally different. Yet it is the only evidence the hon. Gentleman has put forward today. Nor do I accept the evidence that in the south of Italy there is a problem the solution of which we need for the area around Newcastle. That to me is not very compelling logic.

The hon. Member for Stockton-on-Tees has outlined the problems of the regions. He and his hon. Friends have not, in my view, made a case that the proposed corporation would, in exercising its two functions about which I have spoken, be making any worthwhile contribution to solving the problems.

3.35 p.m.

Mr. Arthur Probert (Aberdare)

In accordance with Mr. Speaker's injunction for short speeches, I shall try to be brief. Although I do not intend to deal fully with many of the points put forward by the hon. Member for Enfield. West (Mr. Parkinson), no doubt many of his points will be touched upon in my remarks.

There are two main groups of provisions in the Bill: Clauses 1 to 3, which describe the establishment of the regional development corporation, and Clauses 4 to 10, which deal with financial assistance for the areas described in the Long Title. I welcome the first part of the Bill for its explicit and implied intention. I also welcome the second part, and as I proceed I shall refer to certain anomalies in the existing system of grants to industry.

I congratulate my hon. Friend the Member for Stockton-on-Tees (Mr. William Rodgers) on the sophisticated way in which he dealt with this complex Bill. I had the experience of introducing a Bill last year, and I only hope that his Bill will end as mine did, because my Bill went through.

The indirect and direct consequences of the Bill will have two main effects. First, the Bill will bring about a better balance of industry in the United Kingdom and, by so doing, will apply a more equitable and certainly a more economic use of our manpower and social capital. This is apt to be forgotten.

I want to put to the House a few brief observations on the thinking in recent years on development area policy. There are three main lines of approach in the distribution of industrial development. Firstly, there is the question of moving workers to the job; secondly, bringing the jobs to the workers; and, thirdly—and this perhaps is an offshoot of the first line of approach—the creation of new towns, not merely to solve overspill but to initiate growth areas.

It is surprising what illusions still prevail—indeed we have heard some of them today from hon. Gentlemen opposite—in regard to three matters. I hope to dispel some of those illusions and show how valuable the Bill will be, if enacted. Much has been done in recent years to induce workers to move. There have been incentives such as retraining assistance in travelling to a new job, and so on. I regard all these as necessary, and they must remain. However, the real solution is to create jobs in the home environment wherever possible.

Everybody would agree with this view, but many would say—and we have also heard this from hon. Members opposite —that, while this should be the ideal approach, it is not possible to fulfil. There are extra burdens placed upon the employer in the form of new capital development, extra transport costs for the goods produced, lack of social amenities, and so on. These are the illusions of those who would oppose such measures as we are producing. It has been shown, for example, that the classic objection to redistribution of transport costs is a quite illusory item. I am sorry that many of my hon. Friends when in Government did not realise this.

My Scottish hon. Friends present will remember the Toothill report of an inquiry into Scottish firms operating in Scotland. The report showed that these firms had transport costs operating at less than 2 per cent. of their sales. These costs, even if they are an increase on what could be expected in more central areas—and this is doubtful—are far more offset by the many other advantages, such as rent, rates, labour rates, and—what is most important—the small labour turnover.

Let us also remember that a few years ago in another place is was stated that one major firm in the motor car industry drew its components from 750 factories at an average distance of 120 miles from its factory. Another one drew its products from 450 factories over an average distance of 130 miles. I think we should dispel at once this illusion about extra transport costs. After all, we are a comparatively small and compact island. What is more, in my reference to Scottish firms and their 2 per cent. transport costs, it must not be forgotten that although Scotland is far more remote, distance does not have a significant influence on transport costs.

What has not been considered adequately by previous Administrations is the saving to the community to which the provision of each extra job in unemployment areas gives rise. I have in my possession some statistics following a very careful examination of this some years ago. I shall not go into them in detail. However, it was found that for every new job in a development area the saving to the community, taking all costs into account, was £1,000 per man. This calculation covered only a period of five years. Over a longer period, obviously it would be more. The calculation shows what a tremendous loss to the country there is not merely in unemployment but in the incorrect distribution of employment.

I have touched briefly on two of the items to which I referred at the beginning of my remarks namely, bringing jobs to workers, and bringing the workers to jobs. I hope that I have shown that certain preconceived ideas should be re-examined.

I now deal briefly with the subject of assistance to regional development by the creation of new towns. Two such projects have been considered in South Wales, the Severnside development and the Llantrisant new town. I feel very strongly that the time has come to examine more closely the results of new towns before embarking upon one in South Wales. It has been admitted that a major development of a new town should be accompanied by the parallel development of some of the other neighbouring existing towns.

In this connection, I refer to what was said in the consultant's proposals about a new town in Mid-Wales: To secure the maximum benefit in terms both of relieving population pressures elsewhere and of revitalising Mid-Wales, we be lieve that the major development recommended should be accompanied by the parallel development of some of the other towns. This will strengthen the prospects of viability for a new town. But there is a further consideration; unless deliberate action is taken to encourage development in a number of the smaller towns, it is likely that a new town would become so powerful a magnet that it would depopulate a large part of the area beyond its immediate environs. We in the Welsh Group have stressed this time and time again, and I may say that these proposals for a new town in Mid-Wales were scrapped. I believe that that was a sensible decision. It was decided instead to concentrate on the development of the small towns in the area.

If I may relate this to the proposal for a new town at Llantrisant, I have indicated already what a powerful magnet it would become in terms of depopulating the South Wales problem areas. Parallel action should and must be taken. My own view is that the right action is the abandonment of such a stupid scheme in South Wales.

We are not dealing here with an overspill problem. I should be out of order if I discussed that. We are dealing with assistance to areas of high unemployment and how to bring jobs to them. As I say, new towns in this context are ridiculous.

In dealing with the South Wales valleys, especially with the area known as the Heads of the Valleys, I put forward a scheme some time ago for the setting up of such a development corporation as a way of co-ordinating Government activities in a problem area. My hon. Friend the Member for Stockton-on-Tees may be interested to know that such a suggestion is now before the Welsh Office, which is producing a report on it in a few months' time. It has said that the suggestion must not restrict the terms of reference for the report. However, it is being considered. It is worth looking at this problem area, realising that my lion. Friend's Bill provides the tool with which to do the job but, of course, on a much higher financial plane.

Resources, human and physical, are not fully used in the United Kingdom at the present time. Economic activity is so below average in areas like my own that we have a golden opportunity for economic development. Surplus land is ripe for development, and reclamation is taking place. There are great water resources available. Existing housing and social capital are equally valuable assets. The location to markets of the Heads of the Valleys area is now becoming more and more known. It is far easier to get from this area to London and the Midlands than it is from the South Wales coast, where we are continually having the development. I exclude the Newport area.

Much has been done in infrastructure in recent years. I have a lot more to say, but I will not say it. If we are to depopulate these areas I understand that it will cost £1,550 million to replace those people in areas other than where they are now.

The development of the Heads of the Valley area must be seen in a wider context. In that sense, leaving aside many of the matters which I wanted to raise, I congratulate my hon. Friend the Member for Stockton-on-Tees. I hope that the House will consider not only the items which I have mentioned, such as transport costs and the cost to the community of creating jobs and not just putting so much capital in, but the net saving for the United Kingdom. I think that over the past 40 years this country has been very lax in tackling this problem.

3.46 p.m.

Mr. James Johnson (Kingston upon Hull, West)

No Member is more popular than he who sits down quickly, particularly with his own side. I shall do just that in, I guarantee, less than two minutes.

I merely wish to raise a constituency point about Humberside. In the past we have had stability with a low-wage economy, but we have not had too much unemployment. Those days are gone. We have unemployment well over the 10,000 mark, and school leavers of all ages have difficulty finding jobs.

I should like to put one specific point to the Minister concerning estuarial development, and I should like to link it with Maplin Sands and the new third port on the Thames. The Minister knows as well as I do that we are having, or shall possibly have, two docks closed in my constituency. The tendency today is for docks to move towards deep water, towards the sea—Bermondsey to Tilbury, and so on. Inside Spurn Point we have Spurn Bight. Just like Holland, we have literally tens of thousands of acres of first-class estuarial land which would make a Europort like Rotterdam. In the past we have had this and that feasibility study. We have had M.I.D.A.S.— Maritime Industrial Development Area Studies—and the like. These have all gone by the board. I do not know where they are now.

We had the earth-shaking decision a few days ago to spend thousands of millions of pounds on the estuary of the Thames, on Maplin Sands, Concorde, and so on. As a Humberside M.P.—my hon. Friend the Member for Goole (Dr. Marshall) talked about Goole being well up the estuary—I am making a plea for a Europort towards Spurn Point in the 1980s. If we can have Maplin Sands, surely we can have something in the North as well.

The Minster has been amiable and considerate. He has been more than diplomatic; he has been statesmanlike in accepting the Bill. I applaud the Minister and my hon. Friend the Member for Stockton-on-Tees (Mr. William Rodgers). But I ask the Minister to find out from his Government colleagues what is happening on the Humber. We want to see some development in future. We have a bridge coming, which will provide better communications, but this will he no good if we do not bulwark and buttress and back it with substantial economic activity on bath banks of the Humber, particularly the north bank. I ask the Minister to look into this matter to see whether it is possible in the light of what is happening elsewhere.

Dr. Dickson Mabon

I should like to follow the example of my hon. Friend the Member for Kingston upon Hull, West (Mr. James Johnson). The Bill, if carried, would give us the chance of doing precisely the same at Hunterston where we have the same problem regarding the development of docks. There is a so-called private company there which would be an ideal vehicle with which to start.

I have a complaint against the Minister. Towards the end of his shifty Salome act of dropping the seventh veil he told us what he was going to do, but I do not like the tortuous words he used in saying that he would not oppose the Bill. I warn my hon. Friend to beware. At the best this is a dog in a manger and at worst—I am accusing the hon. Gentleman's right hon. and learned Friends, not himself—it is procedural trickery. The Minister's integrity is at stake. We think that the Bill is going through the House of Commons and ultimately through the other place. Looking at his words closely, he would make Horatio Bottomley seem like St. Thomas Aquinas. If we have to deal with not a St. Thomas Aquinas but an Horatio Bottomley, we shall hold the Minister solely responsible for having tricked us on this occasion. This is a good Bill, and the Minister has admitted that. We all agree with his diagnosis. Let us get the Bill through the House entirely, not just through Second Reading.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).