New Clause 2

HC Deb 14 February 1980 vol 978 cc1823-47

INTERPRETATION OF PART II (No. 2)

In this Part 'industrial building' has the meaning given by section 66 of the Act of 1971 and 'industrial undertaking' has a corresponding meaning.—[Mr. Goodlad.]

Brought up, and read the First time.

7 pm

Mr. Alastair Goodlad (Northwich)

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

Mr. Deputy Speaker (Mr. Bernard Weatherill)

With this new clause it will be convenient to take the following amendments: No. 1, in page 5, line 37, leave out clause 5.

No. 2, in clause 6, page 6, leave out lines 12 to 16.

No. 3, in page 6, line 17, leave out '(c)'.

No. 4, in page 6, leave out lines 20 to 22 and insert— '(2) In this section "small firm" means an industrial undertaking which has no more than 100 whole-time employees.'

Mr. Goodlad

I should like to speak briefly to the amendments in my name. I am persuaded by the argument that Private Bills are not the right way for individual local authorities to seek new powers to assist industry. The resultant proliferation of powers of subsidy would not be in anybody's interests.

If the powers exercised by various local authorities, combined with their financial means, are totally at variance, the regional and other priorities which must be co-ordinated by the Government will be impossible to achieve. If the authorities with the greatest powers, or the longest purses, are for ever upping the ante in a never-ending auction, the changes in regional assistance announced by my right hon. Friend in July of last year, which are designed to concentrate assistance in the areas of most acute need, would be frustrated—as would the outcome of the Government's present review of the assistance given to industry by the public sector and the future role of the local authorities therein. Pending decisions by the Government and this House on these matters, it would be inappropriate if other powers to assist industry were taken in Private Acts. The public interest, as well as the interests of Merseyside, would be damaged.

I hoped that the considerations which gave rise to these amendments would be applied evenhandedly by the House in deciding on powers to assist industry in other Private Bills currently before Parliament. I understand that the relevant Private Bill Committees have already deleted similar provisions from Bills promoted by the Greater London Council, the Isle of Wight county council and the county of Cheshire. I understand that the Committee examining the Greater Manchester Bill is to examine a report proposing similar changes and that at the appropriate time the Committees examining the West Yorkshire, Tyne and Wear, Humberside, Derbyshire and County of Kent Bills will do the same.

This series of amendments would delete from part II of the Bill those provisions relating to assistance to industry which are not substantially precedented in existing Acts applying to the area.

New clause 2 seeks to narrow the definition of "industrial" for purposes of part II of the Bill. The definition in the new clause—that contained in section 66 of the Town and Country Planning Act 1971—is similar to and a little wider than that used in the existing Private Acts. This means that the types of firms and premises in respect of which assistance could be given under part II of the Bill would be broadly similar to the types that can be assisted under previous private legislation applying to the area. The new clause rectifies a defect in the amendment which tabled earlier, which I withdrew and which failed to define explicitly an "industrial undertaking" in clause 6.

Amendments Nos. 1, 2 and 3 would delete clauses 5 and 6(1)(a) and (b). Clauses 4 and 6(1)(c), 7 and 8 are unaffected as these are precedented in earlier Private Acts in parts of Merseyside.

Amendment No. 4—the insertion of the definition of "small firm" in clause 6—is a drafting amendment in consequence of the intended deletion of clause 5. It brings forward the definition from the deleted clause.

I ask the House to accept the clause and the amendments.

Mr. Allan Roberts (Bootle)

I wish to speak against the amendments. I do not believe that the case that the hon. Member for Northwich (Mr. Goodlad) made justifies the legislation being amended in the way that it is proposed. It was argued by the hon. Gentleman that the powers included in the Bill would give the local authorities in the Merseyside area the power to make grants on interest payable by small firms or money borrowed by them for land for industrial purposes.

It was argued that that power was unnecessary because Government national legislation enables the necessary facility to take place without this local power. It was also suggested that loans should not be allowed to be given by the councils on Merseyside on interest payable by small businesses on money borrowed to provide machinery and equipment for any purpose. It is also suggested in the amendments that grants for the costs of preparing the site of an industrial building, or any land owned or leased by a small firm, should not be allowed.

It is suggested that all these loan restrictions should be placed on local authorities in the Merseyside area because national legislation should take care of these matters. There should not be duplication of what one local authority can provide to attract industry compared with another local authority.

If we were comparing differences between the counties of Cheshire, Essex or Sussex, I should agree with the mover of the amendments. However, if we are comparing local authorities with those in areas such as Merseyside, Tyneside and Clydeside, I must point out that the inner city urban areas have terrific problems, some of which I hope to describe in my speech. If we are talking about those areas, surely even this Government, in their policies for regional investment, have said that there are special cases to be made out for areas such as Merseyside in respect of the incentives that should exist to attract small businesses into these areas. The existing powers in the legislation, which the amendments would destroy, would not have a detrimental effect upon the whole of Merseyside. Merseyside's problems are especially acute. That is why these measures should be kept in the legislation. These provisions, which would allow all the councils in Merseyside to use grants and loans to help small industries and businesses, should be retained in the light of the employment situation on Merseyside. If we consider the Merseyside economy and its history, we understand why these powers and provisions should be retained.

In Liverpool in the early 1970s we saw a continuation of the trend of the previous decade of declining job opportunities in the city. Over the 10 years to 1971, about 75,000 jobs were lost from the city, or 19 per cent. of the local work force. This dramatic decline was halted only temporarily by the national economic boom of 1972–73. Since then the situation has continued to get worse. Between 1971 and 1975, the number of people in employment in Great Britain rose by 3 per cent. while in Liverpool it fell by 5 per cent. The number of people in manufacturing industry in Great Britain fell by 7 per cent. In Liverpool it fell by 10 per cent. The number of people in service industry in Great Britain rose by 10 per cent.; in Liverpool it fell by 10 per cent. The number of people in the construction industry in Great Britain rose by 4 per cent.; in Liverpool, it fell by 12 per cent.

Within the past few months, the Government's declared policy of encouraging the entrepreneur to invest has had no effect on Merseyside. What has happened in Merseyside during that period demonstrates why special powers should be kept for Merseyside even though they are not being provided in other local government Bills.

At Ford's, Halewood, 200 jobs are to be lost, with a reduction of cars in kit form for export. The closure of Meccano, Liverpool was announced on 30 November, with the loss of 930 jobs. In Gandy Frictions Limited, Wallasey, one-third of the employees will lose their jobs in January. The brake shoe manufacturers are suffering from the world recession and the industrial unions have accepted the position. In BOC Chemicals, Brom- borough, 140 workers in all occupations are to be made redundant. In Girling Limited, Bromborough, 450 of the 1,400 work force are to be made redundant. In the Wirral borough council, 87 teaching posts have been earmarked for axing in economy cuts. At BSC Shotton, 900 workers have accepted redundancy terms and will leave in January.

In the Bootle district, the area that I represent, in GEC Distribution Equipment, Gilmoss, 200 redundancies are planned for April 1980. J. W. Pickering & Sons, Bootle, only 18 months after moving to new premises with hopes of expansion, has had to close the ship repairing company because of lack of business, and 40 jobs will be lost. At Ulapalm, in Knowsley, the theft of garments and cash from the factory threatens the future of the factory, which opened in 1978. At present 60 staff are employed and it was planned to employ 130, but those jobs are likely to go. In Rockware Glass, St. Helens, 450 jobs are to be lost next March. In Vanda Limited, Skelmersdale, the American company, Dart International, has decided to sell its cosmetics factory and 140 jobs are threatened unless a buyer can be found. At the CWS, Crewe, 164 workers may be made redundant as it is planned to close the menswear factory. In the British Steel Corporation, Warrington, 700 workers may be made redundant with the proposed closure of the rod and section mills at Bewsey Road. At Twinlock, Crewe, 89 workers have received notice of redundancy. At Heron Motors, Penketh, 42 jobs will be lost because of closure in early 1980. So it goes on.

Mr. Nicholas Baker (Dorset, North)

Many of us who do not live in Merseyside are aware of the decline that has taken place over a long time. Is the hon. Gentleman suggesting that there is no place for a policy that tries to encourage entrepreneurs to get new businesses started? What recipe is he putting forward?

Mr. Roberts

I am sure that the hon. Gentleman's intervention means that he will vote against the clause. I am suggesting exactly what he suggests in his intervention. The legislation will provide grants and loans to encourage the entrepreneurs that he is talking about.

Mr. Robert Parry (Liverpool, Scotland Exchange)

In addition to the horrific list of jobs lost given by my hon. Friend the Member for Bootle (Mr. Roberts), since the beginning of this year a further 200 jobshave been lost in the CBS Shipbuilding and Engineering Company in my constituency, and also over 400 jobs at Tillotsons. In addition, 680 jobs will disappear on the docks. There is also a question mark over 1,700 jobs at Tate and Lyle.

7.15 pm

Mr. Roberts

I thank my hon. Friend for his intervention, adding to the list of workers who have been thrown on the scrapheap in Merseyside.

Mr. Anthony Steen (Liverpool, Wavertree)

Is the hon. Gentleman aware that in Liverpool there are about 1,600 acres of derelict, dormant and vacant land, of which about 800 or 900 acres are in the hands of nationalised industries and local authorities? Does he agree that if that land could be auctioned and used, new jobs could be created? He has been talking about the decline of Merseyside and Liverpool, but surely he will agree that if nationalised industries were no longer allowed to hoard land, many new jobs could be created.

Mr. Roberts

I wish that I shared the hon. Gentleman's confidence. It is no good having land available for industry if there is no industry to go on to the land. If we are to encourage new small businesses to come to Merseyside, there is plenty of land in the private sector and in the public sector on which they can be sited, and we shall need the powers in the Bill that would be taken out by the clause. The hon. Gentleman, I assume, will be supporting me by voting against the clause.

Let me continue by highlighting the facts that I have been describing in listing the redundancies that have occurred in the past six weeks. In the Merseyside employment service area, 2,876 redundancies were notified in October, compared with 2,680 in 1978 and 1,095 in 1977. The major industries affected are shipbuilding, with 1,000; vehicle manufacture, with 400; timber and furniture, with 318; and glass, with 300. All, with the exception of vehicle manufacture, were within the Merseyside special develment area, which had 2,202 redundancies notified in October compared with 1,575 in 1978 and 816 in 1977. As can be seen, the situation has worsened.

One of the worst aspects of this unemployment, with about 12 per cent. of active males being unemployed in Merseyside, is that many of them are young people. Another disturbing aspect is the long-term unemployment figure, which indicates that in October last year 41.5 per cent. of unemployed males and 24 per cent. of unemployed females had been out of work for more than 52 weeks, compared with 30 per cent. of unemployed males and 17.2 per cent. of unemployed females in Great Britainas a whole. That shows that the situation is much worse in Merseyside and that special powers are necessary in that area, if not elsewhere. In October 1979 the Merseyside metropolitan county had the highest rate of unemployment—11.5 per cent.—of any county in Great Britain.

There are many problems, particularly in relation to the docks, and I return to my constituency to illustrate a problem that is not untypical of many areas in Merseyside. In Bootle there are about 30 people chasing every job vacancy in the area. It cannot be suggested that people are voluntarily unemployed or are unemployed alongside job vacancies that they could take up. The latest Department of Employment statistics show that there are 5,088 people registered as unemployed in Bootle, and during the past month another 160 people joined the town's dole queue.

The Merseyside county council structure plan states: Because of the weaknesses in Merseyside's economy, unemployment continues to rise, nearly doubling in the past five years. In June last year more than 81,000 people were out of work, one in every eight of the workforce. The county has the largest concentration of youth unemployment in Britain: last year the county had nearly as many youngsters out of work as Greater London, which has four and a half times its population. And those out of work on Merseyside have, on average, been out of work longer that the unemployed of anywhere else in the country. Jobs will continue to fall, says the report, from 630,000 now to only about 580.000 by 1986. Policies must encourage private firms to invest and take on more. That is exactly what the clause will prevent. The structure plan continues Land has to be provided for industry's needs". One of the amendments removes the power of local councils to grant loans to help with the interest payable by small businesses on money borrowed to buy land. The plan refers to modern factories provided in the city areas". Of course they should be, and the local authorities should have the power to assist small businesses to do that. It continues: factories should be encouraged in the dockland areas, and office development in the urban centres. In Merseyside, especially in Bootle, the prospects are grim unless action is taken to encourage investment and small businesses. The amendments would have the opposite effect. We must do a great deal more to help small businesses.

I regret that Merseyside is being abandoned to a free market economy. Since the Labour Government of my right hon. Friend the Member for Huyton (Sir H. Wilson) in 1964, there has been a policy to provide incentives for private business to invest in Merseyside. A massive amount o fassistance has been given to small firms. The incentives that have helped small businesses would be destroyed if the amendments were passed.

One of the major problems in Merseyside is that 86 per cent. of all new jobs generated are in firms that do not have their headquarters in the area. Those firms do not exist as an entity in Merseyside but merely establish branches in the area. There is a greater likelihood of branches being closed than of company headquarters being closed. That is why the clauses in the legislation are so important.

A small business that sets up in Merseyside is a headquarters business and not a branch of a massive company that stretches throughout Britain, and possibly overseas. An entrepreneur or business man operating on a large scale would invest and build factories near the centre of communications. He would not invest in Merseyside unless he was encouraged to do so by incentives. It would be more economic for him to place their factories nearer to the markets in which he was trying to sell. That is why many large companies have closed their branches in Merseyside. It is important that there is legislation that enables local authorities to encourage small businesses, which often produce for a local market. If the legislation passes unamended, it will achieve that aim.

Mr. Malcolm Thornton (Liverpool, Garston)

Is the hon. Gentleman suggesting that Merseyside does not enjoy good communications? In trying to promote Merseyside, I would certainly say that it enjoys exceptionally good rail, road, air and sea communications. It is an essential part of our promotion of Merseyside.

Mr. Roberts

I thank the hon. Gentleman, who wishes to promote Merseyside. His intervention demonstrates that he intends to oppose the clause.

I was not suggesting that we should sell Merseyside short by telling the outside world that it does not have good communications. However, it is not as near as London is to the markets of the EEC. It does not have the advantages enjoyed by many parts of the South of England in terms of access to the Common Market.

There is no doubt in the minds of those who live inor represent Merseyside that the reasons for its continued decline is its position in Britain, the fact that the port is facing the wrong way, and the fact that many businesses have chosen to invest nearer the centre of the market in which they are trying to sell.

If we have the right Government economic policies and if we allow the provisions in the Bill under which local authorities could encourage small businesses, we could make it viable for industry to invest in the Merseyside area.

In the long term, we must not accept the view that unemployment is here to stay. Structural unemployment is not an acceptable excuse. Before 1970 full employment in Britain was taken for granted. It is only since 1970 that, for the first time since the war, unemployment has increased to a totally unacceptable level. It has affected Merseyside and similar areas more than other parts of the country.

A policy of full employment remains, and will always remain, the policy of the Labour Party. I am sure that it will be the policy of the next Labour Govern- ment. I wish that the Conservative Government would adopt that policy. It does not augur well for the future that a Government-inspired series of amendments would take away from Merseyside powers that would help to solve the unemployment problem.

The obscenity of unemployment must not be underestimated. It is soul-destroying for the school leavers who face the prospect of ongoing unemployment, becoming institutionalised in our employment exchanges and having their spirits destroyed. It will prevent them from living successfully in the real world.

Massive expansion of investment in Merseyside is essential. We should be using the National Enterprise Board instead of destroying it. We should be creating new, publicly owned industries.

Mr. Deputy Speaker

I hesitate to interrupt the hon. Gentleman, but we are not having a general debate on Merseyside; we are discussing the interpretation of the clause. Will the hon. Gentleman please confine his remarks to part II of the Bill?

Mr. Roberts

I shall try to remain as relevant as possible. I am sure that the House will agree that the clauses have to be seen in the context of the present posi-in Merseyside and that the justification for their existence can be argued only in relation to the problems faced by Merseyside. Those problems can be considered only in the context of the economic problems faced by the nation.

I argue strongly that the amendments should be rejected. If hon. Members who represent Merseyside wish to see entrepreneurs invest in the area, and if they wish to see help for small businesses, they will vote against the amendments. In so doing, they will provide Merseyside county council and the district authorities with the necessary powers. I am sure that they will not accept that a general piece of legislation applying to the whole of the country is relevant and sufficient for Merseyside.

The Inner Urban Area Act 1978 gives powers to local authorities to grant loans similar to those provided in the Bill. The legislation applies only to those district council areas where the Minister, through statutory instrument, designates that the powers can be used. There are only two designated districts in Merseyside—Liver- pool and Sefton. Hon. Members representing constituencies that do not fall in those two districts would be even more disadvantaged than the hon. Members representing Liverpool and Sefton. I am sure that they will be voting in the Lobby in order to ensure that this bad series of amendments is defeated. The amendments will virtually destroy what powers the local authorities have to take their own initiatives to help small businesses, and I am sure that every hon. Member representing a Merseyside constituency will vote against them.

7.30 pm

Mr. Eric Ogden (Liverpool, West Derby)

My purpose is to join my hon. Friend the Member for Bootle (Mr. Roberts) in supporting the Conservative-controlled county council in its proposals and to resist the amendments that have been suggested by the hon. Member for Northwich (Mr. Goodlad). If I do so in less time than my hon. Friend, it is simply because he referred to many of the problems.

While the list of difficulties mentioned by my hon. Friend is accurate, that is by no means the whole picture of Merseyside. I shall be meeting at least one industrialist tomorrow. He is thinking of coming to Merseyside. Had he read only the earlier part of my hon. Friend's comments—about deprivation, difficulties, dangers and all the disadvantages—he might get the impression that that was Merseyside. He may ask himself "Do I want to leave a prosperous area and come to this?" just as in earlier times people in Wigan and Manchester talked about living in a grey area and expected people from outside to come to such an area.

In spite of all the problems, Merseyside is busy, active, lively, industrious and working extremely hard. It is an attractive proposition for many people, as 99 per cent. of the employers' organisations or the companies themselves will verify. My hon. Friend's picture was completely accurate, but it was only part of the picture.

So far as I can gather, Northwich is not officially, or even unofficially, inside Merseyside. It might well wish to be. We may consider it at some time, but it is definitely in Cheshire. Even though Cheshire now comes to the north side of the Mersey, it is not my idea of what the true boundaries are. A long time ago in this place there was a view that Cheshire Members could decide what they wanted and that other Members could get onwith it; if Merseyside Members wanted what was contained in this type of Bill, they could sort it out for themselves. It was a case of non-intervention. Of course, every Member of Parliament has the right and the duty to scrutinise, but that was a good, practical, day-to-day working rule.

The hon. Member for Northwich has said, as he is entitled to, that the existing provisions will not be good for Merseyside. I do not know how much interest he has taken in the affairs of Merseyside, but he has taken a direct one in this instance. He will be aware that the Bill has probably had more scrutiny, consideration, discussion and argument than any other. This is the Eliza Doolittle of legislation—we have grown accustomed to its face.

The hon. Gentleman must know that four hon. Members—my hon. Friends the Members for Consett (Mr. Watkins) and for Middleton and Prestwich (Mr. Callaghan) and the hon. Members for Shrewsbury (Sir J. Langford-Holt) and for Meriden (Mr. Mills) went through the Bill line by line and clause by clause. Each of them looked at clause 5, to which the hon. Member for Northwich referred, and gave it their approval after the most detailed consideration. If Government legislation were to receive the kind of detailed consideration that this Bill has had, we would save ourselves a great deal of trouble. Has the hon. Member for Northwich considered in any broad outline the evidence submitted to the Committee by Mr. Raymond Francis O'Brien or the treasurer, Mr. Hill? Has he read that? Does he agree with the broad outline? The clause in question was certainly recommended by them.

The arguments adduced by the hon. Gentleman, and those that will probably be adduced by the Under-Secretary of State, are the arguments that were adduced by members of the previous Labour Government when the matter was discussed on Second Reading. I suggested then, when my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) was Secretary of State for the Environment, that local ratepayers should decide, through their local representatives, how some of their money should be spent. That caused gasps of astonishment from the Labour Government, as it did from Conservative Members. It seems that someone in the Department has managed to hold on to the reins of power irrespective of which Government are in office.

Things are a little different with the hon. Member for Northwich and the Government. They are committed to non-intervention and to a policy of do-it-yourself. They believe that people should sort out their own problems and get on with it. They believe in less Government control, intervention and expenditure. That is predictable. But we are not asking for that. We are not asking for another handout from the Government. We are asking that the county council be allowed to use a little of its money to help local business and endeavour and to get the money back in rates and all the rest.

The money that any county council can provide is minute compared with the money that comes through regional assistance. I hope that the Minister will not argue that the county council proposes to destroy the balance, reason and organisation as well as the whole of the Government's regional aid plan. I hope that he will not suggest that by pouring in millions of pounds the balance will be upset. Not even the Secretary of State has suggested that.

The Bill has been brought forward on a non-party basis. It was prepared by a Labour county council and it is now supported by a Conservative-controlled one. We want to use some of our resources—very small compared with the Government's resources—in a way that will not destroy the balance of Government aid and support between one region and another. We want to sort out our own problems and to get on with it. Let us have the chance.

The Under-Secretary of State for the Environment (Mr. Marcus Fox): It may assist the House if I intervene at this stage—I am sure that that delights the hon. Member for Liverpool, West Derby (Mr. Ogden) if no one else—to clarify the Government's attitude towards the clauses in part II of the Bill which relate to local authority powers to assist industry.

My hon. Friend the Member for Hampstead (Mr. Finsberg) made it clear in the debate on the Greater London Council (General Powers) Bill last June that the Government were firmly opposed to any extension of the existing powers of local authorities by way of local Acts. For the reason that he gave on that occasion, the Government reported to Parliament against certain powers in part II of the Bill now before us, and we now support the amendments tabled by my hon. Friend the Member for Northwich (Mr. Goodlad).

I can understand very well the desire of all local authorities, especially those in areas such as Merseyside, to do all they can to promote and encourage industrial development in their areas, and there can be no doubt that local authorities can play a vital part by helping to create the sort of environment that will encourage the development of industry. Many authorities, including those on Merseyside, are, I know, aware of the value of adopting planning policies and procedures which will bring rewards in this way, and there is much more that can be done.

We have heard in this debate of the special needs and problems of Merseyside, and I think it is important to put on record that reason for the Government's continued opposition to certain of the clauses in part II of the Bill. It is certainly not the purpose of the Government to deny Merseyside the means to deal with its special circumstances. On the contrary, it is the desire to prevent the undermining of those means already available or proposed which leads us to oppose these provisions.

I have in mind our proposals to bring into operation—

Mr. Allan Roberts

The Minister said that the Government were opposing these provisions. Can he assure the House that there is no Whip on these amendments and that there will be a free vote, because this is a matter which should not divide the parties, and certainly not hon. Members who represent constituencies in the Merseyside area?

Mr. Fox

The hon. Gentleman must know that I could not possibly rise to that. The Government have the responsibility of getting their business through. Certain proposals are outlined here which we find unacceptable. If the hon. Gentleman listens to the rest of my speech, he will perhaps understand why we feel that these matters are of importance.

Mr. Allan Roberts

I am rather concerned about what the Minister said about getting Government business through. This is not Government business. It is a Bill promoted by the Merseyside county council. Although I am relatively new to the House, I understand that traditionally the Government do not interfere in the kind of way that this Government are interfering with this kind of legislation. If the hon. Gentleman is saying that his hon. Friends who represent Merseyside constituents should vote against the needs of Merseyside because the Government are adopting what seems to be a doctrinal, rigid and uniform policy on local governent powers for the whole of the area, despite Merseyside's difficulty, I find it a disturbing statement.

Mr. Fox

Of course, the hon. Gentleman is right. This is a Private Bill. I intervened to put to the House the feelings of the Government on this issue. There is no way in which Merseyside can be divorced totally from national policies. I hope that the hon. Gentleman will listen while I mention one or two points which will help to solve the very serious problems of Merseyside, which we all understand, whether or not we represent a constituency there.

I have in mind our proposals to bring into operation an urban development corporation which will concentrate its efforts in revitalising the dockland areas of Merseyside, and I welcome the support of my hon. Friend the Member for Liverpool, Waver tree (Mr. Steen) for that. We propose to increase the concentration of regional industrial assistance which results from our review of the assisted areas last year and under which the major part of the country remains in the highest priority category as a special development area. We recommend the continuing availability of Inner Urban Areas Act powers and urban programme funds to the designated districts in Merseyside. Those measures constitute a substantial attack on the problems of the area and give it a priority consonant with its difficulties.

The powers in the Bill which we are unable to support represent an extension to those powers which are precedented by the existing local Acts which predate local government reorganisation. We have stated clearly that we are opposed to any further proliferation of powers for local authorities to give financial assistance to industry by way of local Acts. The effect of conceding any additional powers in the Bill would undoubtedly create a precedent for future local Bills. It would inevitably make it more difficult to resist the demands of other areas for similar powers. Industrialists would be faced with a chaotic multiplicity of competing schemes of assistance from different local authorities.

Mr. Ogden

Tyne and Wear have those powers, and I hope that the Government are not proposing to take them away.

Mr. Fox

I am not suggesting that we take those powers from Tyne and Wear, but a precedent was set a long time ago. It is in operation, and we do not intend to change it.

The hon. Gentleman has been in the House long enough to know that everything did not start with the election of a new Government in May of last year. Many Acts gave certain powers. Those powers end in 1981 or 1984. The hon. Gentleman is right. We are attempting to bring some sense into the system.

As I explained, that would be bound to lead to the wasteful use of limited resources. The end result would be to undermine and dilute the policies which the Government have been pursuing with the express objective of giving priority to the most needy areas. The hon. Member for Bootle (Mr. Roberts) and the hon. Member for West Derby have got it wrong. It is because we wish to protect Merseyside's special position that we oppose the policies that they suggest and the clauses that they would presumably support. To support them would lead to a proliferation of local Act powers, which would lessen the edge which Merseyside can at present offer the potential developer.

For those reasons, we support all the amendments—in particular new clause 2—which have been propounded by my hon. Friend the Member for Northwich. They will achieve what is required to restrict part II of the Bill to powers for local authorities, to give financial assistance to industry, which are precedented in the Merseyside area. Apart from those points, I commend the Bill to the House.

7.45 pm

Mr. David Alton (Liverpool, Edge Hill)

I should like to deal with two of the points made by the Minister. He began by saying that the Government are taking two steps to assist small businesses on Merseyside. They are establishing an urban development corporation, and they are continuing their urban aid programme. If local government had behaved in the manner in which the Front Bench behaved in drawing up proposals for the urban development corporation, the Minister and the Secretary of State would have been castigating local government as being downright irresponsible. Urban development corporations have been set up, but they have been given no budgets for the forthcoming year. We do not know how much money they will have or who are to be their members. Only last week we were told the names of the chairmen and deputy chairmen. It does not give me any confidence to find that the deputy chairman of the new urban development corporation in Merseyside is also the chairman of the Merseyside county council—a point to which I shall return later.

Mr. Ogden

Sir Kenneth Thompson said: If you can't beat 'em, join 'em. There is something to be said for that.

Mr. Alton

Even though Sir Kenneth Thompson became a convert on the road to the urban development corporation, I am not convinced by those arguments. I am not convinced by the setting up of an organisation that is without a budget and that is in no way accountable to the Liverpool city council or the Merseyside county council, or to Members of Parliament representing the Merseyside area. It is amazing that someone who is a leading critic of and totally opposed to the principle of the urban development corporation should so suddenly be converted to that principle.

Mr. Allan Roberts

Does the hon. Gentleman agree that the urban development corporation covers only a small part of Merseyside—in fact, areas in only two of its districts, Liverpool and Sefton? It covers a small part of my constituency. Even if the urban development corporation had a massive budget and represented a real commitment to investment, it would be a small contribution to the needs of the whole of Merseyside. The clauses that we are discussing affect the whole of Merseyside.

Mr. Alton

I certainly agree with that. There are many parts of Merseyside that gain no advantage from the development corporation. To take away the power to assist small businesses would be a disadvantage to those who wish to establish businesses in Merseyside. The establishment of an urban development corporation would be no use to the people living in the township of Kirkby, whose problems do not need to be repeated again tonight. I agree with the reason given by the hon. Member for Liverpool, West Derby (Mr. Ogden) that far too often we talk about our problems but we do not talk about some of the good things.

The Minister spoke about urban programme funds. I should have a lot more confidence in the Government and in the Front Bench if they were to announce tonight that they will revoke their decision to enforce time-expired clauses on urban projects in the city of Liverpool. The practical effect of that will be that many projects that have been financed through the urban programme are now living with a sort of Damoclean sword over their heads. They face great uncertainty about their future. One such project dealing with handicapped children in the Holly Road area of my constituency has recently been told that its grant may not be renewed next year because of the time-expired principle. That will mean that it may not be able to continue to employ staff and to deal with the children who are being helped by the project. If we are serious in the resolve to try to assist Merseyside through the help of the urban programme, it would be a good idea to review the time-expired procedures.

If the clause and the amendments are supported, they will result in a deliberate discrimination against Merseyside, Liverpool has been developing a system of small business extension by the development of advance factories and by assistance of small entrepreneurs who are already based in Merseyside. Many of those small businesses have been expanding and creating new jobs. That has been done with the assistance of grants. If the additional assistance which is made available under the Bill were to come into effect, many more jobs would be created and small businesses, which are the life-blood of the nation's economy, would be assisted.

Liverpool's main problem is that it is burdened with the most profligate spending authority in the United Kingdom. I should like to quote from Tuesday night's issue of the Liverpool Echo: Ratepayers all over Merseyside face staggering rate rises; although the district councils have not yet announced their demands, in Liverpool the new rate could be as much as 60 per cent. up on last year. Part of this increase will be due to the extra demand of the Merseyside County Council, whose officials are recommending an increase of 29 per cent. in the rates they levy through the district councils.

Mr. Deputy Speaker

Order. The hon. Gentleman must confine himself to what is in the new clause and in the amendments which are being discussed with it.

Mr. Alton

I intend to relate the quotation to the clause, on the basis that it deals with small businesses, which will be very badly hit by the increase in rates. If the existing clauses are not supported this evening, it will be one more body blow that will affect small businesses. But I will bear your comments in mind, Mr. Deputy Speaker, in trying to keep to the point.

The Liverpool Echo went on to say: This is not, of course, a direct 29 per cent. on the ratepayers' bill, but only on that proportion of the bill which goes to the county, but it is none the less a big jump. The ratepayer is also going to face huge rises in the water rate. Increases for domestic users will average 23.5 per cent. throughout the North-West. The article concludes: Can the County council really say there is no way they can avoid asking for £36 million more? I believe that there is. The first thing it should do is to abandon and scrap the Liverpool inner ring road scheme, which is also dealt with in the Bill in the clauses covering the use of powers granted under the Liverpool Corporation Act 1966.

In the past, many small businesses have been blighted and many jobs have been lost as a result of the Liverpool motorway scheme, which later became the Liverpool inner ring road scheme. Over the last 15 to 20 years, about 100,000 people have left Liverpool. Many jobs have been lost and many small businesses, due to the effects of clearance and blight, have been closed down. That is why, as the hon. Member for Liverpool, Waver-tree (Mr. Steen) said earlier, there is so much derelict land in the heart of the inner city. It is not because of Hitler's blitzkrieg but more because of the blitzkrieg imposed by the Merseyside county council and its predecessor, the Liverpool city council, in demolishing people's homes to make way for a road that will be of no use to anyone, particularly the small businesses on Merseyside.

The Merseyside county council has just completed a structure plan which cost £3 million, and it tells us very little that was not already known. Last year it budgeted for a £17 million contingency fund, and it was over-budgeted by £6 million. Nevertheless, it still has to go on putting up the rates, and it is as a result of that that Liverpool city council will have to decide whether to cut back on school meals, school milk and so on. [Interruption.] I am afraid that there will not be very much school milk or many school meals as a result of the measures announced by the Secretary of State for Education and Science.

I am trying to make the point that the Liverpool city council is faced with a dilemma—should it raise rates or should it cut services? If it cuts such services as school meals and home helps, jobs will be lost in that area. If it puts up the rates, small businesses will inevitably have to close. For that reason, too, it is important that this burden should not be placed upon the ratepayers of Merseyside.

Many people do not seem to accept the position that Liverpool is facing. They do not seem to see its seriousness. The Minister said earlier that Liverpoool in some respects is no different from the rest of the country, but there is more unemployment on Merseyside than there is in the entire country of Wales or in Northern Ireland. If a general labourer is out of work on Merseyside, the odds against his getting a job are 222 to 1.

Merseyside has a different kind of problem from that in other parts of the country. It is not that we are putting our hands on our hearts and bleating and saying that we cannot solve our problems ourselves. Merseyside has the determination and the desire to solve its problems, but it needs support and assistance from other local authorities and the Government. That is why councillors on Merseyside see one way of assisting small businesses in their development by enacting clause 6, on page 6 of the Bill. Not to pass it would mean that many more small businesses would go the way of those that have already disappeared.

We do not hear a great song and dance about the disappearance of small businesses. We do not hear people complaining about this in the way that they complain about closures by Plessey, English Electric, Western Ship Repairers or Meccano, or when any of the well-known firms wish to cut 1,000 or 2,000 jobs. We are faced with a constant list of closures and redundancies, yet Merseyside is prepared to fight back for itself. That is why it desperately needs the sort of assistance that the Bill is trying to give it.

We are approaching a position in which not just on Mersey side but throughout the rest of the country we could be back to the hungry 1930s. The county council, behaving in an almost totalitarian way in its handling of some of Merseyside's problems, is to blame. Yet this part of the Bill is an example of something that it has done to try to ease those problems. We cannot be over-critical. We have to accept that the Bill is something of a curate's egg. It is good in parts. I hope that in the Division this evening the House will support this part of the Bill.

Governments in the past have persuaded themselves that big companies are far more efficient and effective than small ones, and have directed subsidies and tax relief, therefore, towards the bigger companies. In effect, Governments have discriminated against the small businesses already in existence, while at the same time making it extremely difficult for people to start up new businesses. We lag far behind our successful industrial competitors in terms of the proportion of manufacturing that is done in small firms. It is about time that Governments noticed that one reason why our economy is so much weaker than that of our competitors is precisely that ours is based so largely on centralised, bureaucratic and self-satisfied corporations which receive special favours from the national public purse. We are asking this evening for help from local funds, and that is a very different matter.

I also believe that our tax codes must be dramatically recast to ensure personal initiative, so that more people will want to set up and continue with small businesses. There should be at least as much incentive to invest in small businesses as there is to invest in pension funds. A Government-backed loan scheme, as recommended by the Wilson committee, should be establihed immediately, along with a small firms investment company. There should be a permanent post in the Cabinet for a Minister to range over all Government offices connected with small businesses.

One of the concessions obtained for small businesses during the period of the Lib-Lab pact was—

Mr. Deputy Speaker

Order. The hon. Gentleman is straying wildly from the new clause. I must bring him back to order.

Mr. Alton

I am sure that you are right, Mr. Deputy Speaker, but small businesses have suffered as a result of the removal of a Minister from the Cabinet. During the period of the Lib-Lab pact, when there was a Minister appointed, it was a help to small businesses. In the same way, I hope that the enactment of the clauses of the Bill will be a help to small businesses on Merseyside.

The self-employed are the forgotten power-house of Britain. If they flourish, so will Britain flourish in the future. I hope, therefore, that these important clauses will be supported and that the amendments propounded by the hon. Member for Northwich (Mr. Goodlad) will be negatived.

Mr. David Hunt (Wirral)

This has been a fascinating debate, ranging very widely indeed. In considering new clause 2, several of the speakers strayed from the point, but far be it from me to criticise them, because I detect tonight something very important indeed—an all-party resolve on the part of all Merseyside Members to revitalise Merseyside.

8 pm

I should not like people outside the Chamber to feel that Merseyside wants to hide anything. We are an exciting and important area, deserving of the greatest attention. I detected that in all the speeches that I have heard tonight. In my constituency there are already signs of the new technology, with the siting of the new microchip factory, and there are many other important developments in progress.

I came to the Chamber to listen to all the arguments with an open mind. The argument that impressed me most is that which was adduced by my hon. Friend the Minister, and it is very simple. [Interruption.] It is logical, if Opposition Members will listen.

Mr. Allan Roberts rose—

Mr. Hunt

If we allowed local authorities, as standard practice—for which the new clause would set a precedent—to adopt powers of this nature, Merseyside's special position would be seriously eroded. I regard Merseyside as having a special position far above that of any other part of the country. I am glad that that has been recognised by Ministers in this Government. One thing about which I felt disturbed under the previous Government was that Merseyside did not receive the high priority that it should have done. Unemployment doubled and trebled in my constituency at a time when we should have given Merseyside more concentrated power. Now, that has all changed because—

Mr. Allan Roberts rose—

Mr. Hunt

I wonder whether the hon. Member for Bootle (Mr. Roberts) would allow me to finish my point. I did not interrupt him. For those who believe in Merseyside and want to support it, this is a time to listen. The important fact about Merseyside, which was not recognised by the previous Government, lies in the philosophy of regional policy. We were then giving regional aid to about half the country. The present Government have decided to give that aid in greater concentration to areas such as Merseyside.

Before I decided to acquiesce to the new clause and the amendments, I made some investigations. I asked for examples of new businesses, existing jobs, old businesses and small firms which would not be able to set up on Merseyside if the new clause were passed. I am happy to tell the House that not one job will be lost on Merseyside as a result of the clause and not one inquiry that has been made will be turned away. I asked for evidence, and I have it. I am therefore able to reassure the House that the reason why the promoters of the Bill have instructed me to acquiesce in the new clause and the amendments is that they have been reassured that there will be no loss of jobs as a result of the change. It will mean a perpetration of deliberate discrimination in favour of Merseyside.

Mr. Ogden

Not before time. About six stages back I wanted to intervene. The hon. Member for Wirral (Mr. Hunt) said that if the proposals in the Bill are accepted it will set a precedent. It will not. The Minister will discover, if he checks with his Department, that the 1976 Tyne and Wear legislation will not expire with all the other legislation. The precedent has already been set. If the county council thought it was right then, why is it now saying to the hon. Member that it does not want it? What the county council will provide is minute. No local county council could upset the balance of regional power in industry.

Mr. Hunt

A great deal has happened since the Bill was first introduced. There are a new Government and a new resolve to help Merseyside, which I recognise and applaud. That is what has happened as a result of the change at the general election. I have heard much from the Opposition about entrepreneurs, private capital and small businesses, and I appeal to them to join me in a stronger Merseyside lobby for the policies which I have confidence this Government will bring forward.

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

Question accordingly agreed to.

Clause read a Second time, and added to the Bill.