§ Question again proposed, That the Bill be now read a Second time.8.20 pm
§ Mr. Robin F. Cook (Edinburgh, Central)
As I was saying, before, to my regret, the House decided to go private, I was in the House during half of the period when the illegal regime in Rhodesia defied the Crown. I was recalling with my hon. Friends that, during that period, there were hon. Members who were happy to extend succour and support to those rebels against the Crown, and that, on the whole, those hon. Members who were prepared to do that were the same Members who pride themselves on a rigorous financial orthodoxy. However, we now see from this clause that those hon. Members, while supporting not simply the most rigorous but the most savage financial orthodoxy at home, were also prepared to support a regime that had welshed on its international financial obligations.
One question arises on the clause, and I hope that someone among the ministerial football team that has come along to support the Minister will be capable of answering it. I understand that there were five different debts on which the illegal regime defaulted, thus triggering our guarantee. Of those five, three are accepted and extinguished by the clause that is now being considered. That leaves another two that remain the responsibility of the present legal Government of Zimbabwe. What is strange about this division is that the two debts that the Government of Zimbabwe are left with are worth more than the three debts that we have accepted. Their debt liability is some £20.8 million; the debt liability that we are accepting and extinguishing in the Bill is £13.4 million. I therefore ask the Minister: why is there this distinction among the five debts? What logic is there in our accepting the liability for part of those debts? Why, if we are accepting only part of those debts, do we accept the lesser part?
Clause 4 provides that Treasury guarantees can be provided on a more flexible basis to cover more flexible borrowing requirements. The Opposition are happy to support the clause, in so far as it goes. Plainly, it is desirable that when public sector bodies borrow, they should be able to borrow on the best terms that are available. However, it is ironic that the House should be asked to consider this clause, which provides for greater flexibility in Treasury guarantees, in the immediate wake of a public expenditure White Paper that provides for a further reduction in borrowing by public bodies. If we look at the table on nationalised industries in the White Paper, we see that the White Paper provides over the next couple of years for a reduction in net external finance for the nationalised industries of no less than 30 per cent. At the same time that nationalised industries are to have a reduction in external finance of 30 per cent., they are expected to achieve the trick of raising investment by 12 per cent. Candidly, I do not believe that that trick can be performed. In my opinion, one cannot make more bricks with less straw. I do not believe that the nationalised industries will be able to increase investment while reducing their borrowing.
Those entries in the public expenditure White Paper are pure fantasy. They are a piece of the fantasy that covered last year's expenditure White Paper, and that stimulated 86 the Treasury to provide a deficit of £10 million in that White Paper for the shipbuilding industry although in the current year, a year of international recession, there is a deficit in our shipbuilding industry, not of £10 million but of £70 million—all of this is at a time when major public bodies are being allowed, if not encouraged, to place orders for ships in Korean shipyards.
if there is to be borrowing of any amount, it is plainly desirable that that borrowing should be on the most flexible basis. I wish to put a question to the Minister. It is a question that involves Treasury policy, and presumably, therefore, an answer can be obtained tonight: why does the Treasury persist in its perverse policy of counting a Treasury guarantee as an item of public expenditure? It is frankly silly to do so. The risk of default by a major public body is minimal. All that need concern the Treasury is that it has the capacity to honour the guaranteee should it be triggered. If we ever arrive at the state in which the Treasury is liable to be bankrupted by the triggering of one of those guarantees to one of the public bodies beneath the Treasury, we shall be in such financial turmoil that the fall of that guarantee will be a small matter indeed. It is, in truth, a daft practice that acts as an artificial constraint on borrowing for investment and it is high time we had a more realistic system that does not impose an artificial burden on the PSBR every time a Treasury guarantee is offered.
Clause 5 relates to the Crown Estates Commissioners. I say straight away how refreshing it is that at a time when many businesses cannot see beyond the next few months or perhaps weeks there should be one body in the land that finds 100 years too short a time span for effective planning and is therefore obliged to request us to enable it to extend the leases for 150 years. It will not surprise the House that that body trades in property. I doubt whether many manufacturing companies in the length and breadth of this land can see beyond the next 100 days, never mind beyond the next 100 years.
One obvious question arises in relation to this clause and I shall touch upon it only briefly because my hon. Friend the Member for Holborn and St. Pancras, South (Mr. Dobson) intends to ventilate it at rather greater length from his constituency experience. If the House is to extend to the Crown Estates Commissioners the right to increase their period of chief lease, that entitles the House to ask questions of the Crown Estates Commissioners about the terms on which they make that lease available to subtenants or sub-lessees, particularly when there is some evidence from practices within London, some of which have come before the courts, that some of the lessees who have obtained a lease from the Crown Estates Commission appear to have been pioneering techniques designed to avoid the provisions of the Rent Acts. Therefore, I hope that when my hon. Friend raises the matter in the course of the debate he will receive a full reply from the Minister because I suspect that this is one matter to which we might wish to return when the Bill is committed to a Committee.
Clause 6 deals with the extinction of annuities, to which the Minister referred. I felt that he did not do full justice to the colour and background of the clause which clears up the lumber-room of history. I have sat on the last half dozen Finance Bill Committees and in the course of each of those we have spent a considerable time debating at length the treatment of the taxation and excise Jury on alcohol. Throughout those entire six years I was in a state of complete ignorance that each year we were paying £803 87 to the Duchy of Lancaster on the grounds that it has surrendered the right to levy prisage and butlerage on wines brought into the Duchy of Lancaster. There are one or two hon. Members from the north-west in the Chamber tonight. I would not care to try to describe to the House the response that the Duchy of Lancaster might get were it to stop those hon. Members on their way into the northwest and seek to apply prisage and butlerage on any wines and spirits being brought by those hon. Members into the duchy.
I also find it rather strange that we are still paying £4,000 to the Duchy of Cornwall in recognition of its surrender of the right to mint coins in Cornwall. I am surprised that a Treasury team so committed to the doctrine of monetarism should have waited so long before striking out from the legislation a measure that could have created such havoc with M3 if the Duchy of Cornwall were to seek to reassert its ancient right to mint coins. The Opposition will not stand in the way of sweeping out that particular corner of the lumber-room and we shall happily support the clause.
Among the disjointed parts of the Bill I come lastly to clause 7. Not only do we support that clause, but we warmly welcome and enthusiastically endorse it. Indeed, it is only fair at this point to pay tribute to my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans) because that clause is the fruition of his long campaign to achieve recognition of the problem. It is similar to an amendment that he moved during a debate on the Local Government Finance Act 1982 in the last Session. The clause will end an anomaly that deprives many councillors of any allowance if they fall unemployed while in office. I have been a councillor and I am bound to say that there is little understanding among the public at large as to the financial sacrifice that many individuals experience upon entering local government. There is little appreciation of the loss of income, the certain loss of promotion and, in cases that I have known, the loss of pension rights that flow from participation in local authority duties. From experience of people I have known I can say that any unemployed councillor is in a desperate plight. Even when unemployment is low, an employer will not take on an unemployed councillor in the full knowledge that he will have to give him the right to time off to attend to his local authority and civil duties. Therefore, I strongly support the clause, and it will receive the Opposition's heartiest endorsement. However, the need for the clause has become urgent as a result of the explosion in unemployment under this Government, which has affected members of local authorities as well as their electors.
I turn back to the first two clauses, which deal with the promotion of industrial development. We support clause 1, which will widen and strengthen the Development Commission's powers to carry out the promotion of industrial development in rural areas. Indeed, it would be strange if we did otherwise, because it was the Labour Government who greatly expanded the role of the Development Commission in promoting industrial development in the rural areas. I have studied the fortieth report of the Development Commission—it is available in the Library—which confirms how right we were to expand that role of the Development Commission. It also confirms 88 the valuable role carried out by the Development Commission and COSIRA, which acts as its agency in stimulating small businesses in rural areas.
I noted what the Minister said about COSIRA, and I welcome his endorsement of its work, but I was intrigued to note that the commission's fortieth report contains a reference to it having achieved the target of a 10 per cent. reduction in manpower. Where did that 10 per cent. cut come from? Was it something that the commission thought up, or was it imposed from outside? If the Government proposed to the commission or to COSIRA that there should be a 10 per cent. reduction in manpower, it casts an ironic light on the statements of general support that we have heard today from the Dispatch Box. It is impossible to read the fortieth report without noting the comments on the way in which the Development Commission's role has been made much more difficult by Government policy. For example, the Development Commission notes that local authority expenditure cuts havehit rural areas particularly hard.It also notes that it is now more difficult for it to carry out its task of training the unemployed and of retraining those in employment because, as a result of reductions in public transport in the rural areas, those undertaking training have to travel much further and almost certainly have a more expensive journey.
§ Mr. Cook
The same paragraph points out that many trainees have to stay overnight to undergo retraining, because there is no transport. That is extraordinary in a comparatively compact country. Above all, the Development Commission repeatedly points out that the economic context of low demand and high interest rates constantly frustrates its efforts to persuade private industry to invest in the rural areas that it seeks to assist. If we acknowledge that problem in relation to the Development Commission's work in the rural areas, we see it writ large in the context of the four English regional development organisations, dealt with in clause 2, which cover a great part of the assisted areas in Britain. I assure the Minister that we shall support the clause and will not stand in the way of putting assistance to those development organisations on a regular footing.
It is only fair to say that the additional resources released by clause 2 are dwarfed by the onslaught on incentives to regional development launched by the Government when they took office and sustained remorselessly since. The Minister with responsibility observed:Regional policy is obviously likely to be more effective if it is concentrated on a smaller number of areas where there is greatest need.That might make sense if areas of need were diminishing and contracting. In that context one could understand the case for concentrating resources on diminishing areas of need. All right hon. and hon. Members know that that is not happening. We know that under the present Government areas of need have expanded as never before.
Last July the Secretary of State for Industry made a statement that effectively halved the population covered by assisted area status. The percentage of the working population covered shrank from 47 per cent. to 27 per cent. Within the areas that lost their status that day are no 89 fewer than 300,000 men and women who are unemployed now, but who were not unemployed in 1979. In each of those areas the problem is worse today than it was in 1979—it is not better.
Concentrating on the areas that were assisted in 1979 understates the Government's epic achievement. The Government's epic achievement is to create areas of urgent need where before there was no need for assistance. An obvious example is the west midlands where unemployment is higher than in Scotland. In the west midlands the largest number of people are chasing the smallest number of jobs. The west midlands has the highest ratio of unemployed persons to vacancies in mainland Britain. The ratio is 49:1. The Government have created in many areas of mainland Britain an unemployment to vacancy ratio which before was known only in Northern Ireland.
The Government's response is further to cut regional development assistance. In the financial year that draws to a close next month £600 million will have been spent on regional development grants. In real terms that is the lowest figure since the mid-1960s when the regional development programme began in earnest. The public expenditure White Paper issued a fortnight ago forecast that in the next financial year that figure, already at a record low, will be cut by a full 25 per cent. to £474 million. We are witnessing, not a concentration of resources in the areas of greatest need, but a cut in resources at a time when the demand and need for the resources are expanding.
Of course we are glad that some support has trickled out of the Treasury in the direction of the four regional development organisations, but when regional expenditure is being butchered we cannot be expected to be thankful. Each of the regions has suffered under this Government but the north-west has suffered the highest proportional increase in unemployment. All regions are bad, but the north-west is outstanding.
In January 1979 about 192,000 men and women in the north-west were unemployed. In January this year about 419,000 men and women in the region were unemployed. Even that figure understates the problem because it is compiled under the new Tebbit index. If we use the comparable basis for the figure collected in January 1979, the true figure for January 1983 is not 419,000 but 447,000 men and women unemployed. That is well over double the rate of unemployment of January 1979.
Even when we contemplate the modest expansion of resources to these development organisations we find an element of controversy. The North of England Development Council applied to the Minister of State, Department of Industry for a grant of £1 million. The Minister gave it £850,000. Since that same Minister is saving £126 million in expenditure on regional development, it is rubbing salt into the wound now to save a further £150,000 at the expense of the North of England Development Council. But the position of the North-West Industrial Development Association is bizarre. Indeed, it has sought a meeting with the Minister of State, which will take place on Wednesday. Unfortunately, that meeting will come after rather than before the Second Reading of the Bill. I therefore hope that the Minister will be able to shed some light on this matter before the House proceeds to give the Bill a Second Reading.
As I understand the background to the controversy, the grant to NWIDA was originally introduced on the basis of a one-to-one formula—for every £1 the Government gave 90 in grant, the local authorities in turn matched it with £1 of their own. The previous Labour Government changed the formula to be more generous. They introduced a two-to-one formula—£2 was granted for every £1 matched by the local authorities.
In 1980, as part of the Government's general retrenchment on regional expenditure, that formula was undermined and replaced once again with the one-to-one formula. However, there was a catch this time—a catch that was absent when the previous Conservative Government employed the one-to-one formula. The requirement that every £1 of Government money should be matched by £1 of local authority money was reimposed in the context of a savage drop in the resources available to the local authorities, which were unable to honour their part of the formula with the result that in each of the three years since then NWIDA has underspent because it cannot get the matching grant from the local authorities.
In Hansard of 19 January the Minister of State, Department of Industry, said that for the next financial year he will give a grant to NWIDA up to a maximum of £260,000. That figure is completely meaningless. Because of the constraint of local authority expenditure, NWIDA anticipates that it will be lucky if it receives £150,000 from the local authorities in the area and therefore it will be able to draw only £150,000 of the Government grant. Therefore, the Minister's figures are wholly fictitious and misleading.
The interesting question is, why did the Minister retain the one-to-one formula? When NWIDA applied for its grant, it applied to be put on the same basis as the North of England Development Council which has now—we welcome it—been freed from the constraint of matching Government grant with a grant from the local authorities. In that written answer of 19 January, the Minister of State said:I have not, however, been able to satisfy myself that the requisite degree of commitment to a fully and effectively coordinated regional programme by all the local authorities and new towns in the north west has yet been domonst-ated".— [Official Report, 19 January 1983; Vol. 35 c. 145.]My hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) intervened in the Minister's statement to ask a question on this point. I repeat that question and I hope that, with the time that has elapsed since we touched on this point earlier this evening, the answer will be available when the Minister comes to reply. My understanding is that every local authority and, admittedly only recently, now every new town authority within the area has agreed that NWIDA should act for them in coordinating and liaising on the promotion of industrial development. Given that every local authority and every new town has agreed to that, it is incomprehensible what the Minister means in saying that he demands further demonstration from NWIDA that it has the support of its local authorities. This point is of particular pertinence because I understand that the Yorkshire and Humberside development association proposes to embark on a phased expansion of its budget.
§ Mr. Campbell-Savours
I intervene because my hon. Friend is referring to the organisation that is responsible for promoting industrial development in my constituency, NWIDA, that operates in the north-west. Does he recognise clearly that the Minister, in leaving the arrangement as it is for NWIDA and leaving the funding as it stands, is, in effect, saying to the north-west region 91 "You must have second best to the northern region"? It has been acknowledged that the northern region has better funding, but it has not been demanded of NWIDA that the service that it provides to each of the local authorities in its area is as good and effective as that provided by the NEDC. Therefore, lower standards are being imposed in the north-west than in the northern region.
§ Mr. Cook
I shall respond to my hon. Friend's intervention with some temerity. I am conscious that as a Scots Member I am treading on eggs throughout my observations. In my contact with the regional development organisations during today, each one said that it wished that it could be outside with the Scots. The North of England Development Council felt that it would have been outside with the Scots if it had obtained the full £1 million. It received only £850,000, which, it believes, leaves it 85 per cent. on the way to being out with the Scots.
My hon. Friend the Member for Workington (Mr. Campbell-Savours) is right to raise an issue which I am sure will wrankle with those in the north-west. It is not at all apparent why the north-west has failed to meet a test which has been successfully passed by the North of England Development Council. It has demonstrated that it has the unanimous support of every local authority and development corporation in the area. That was demonstrated by the North of England Development Council. I accept my hon. Friend's argument that the two organisations should be put on the same basis.
The Yorkshire and Humberside Industrial Development Association did not apply for the same basis of funding in the current year because it wanted to see its budget rise in an appropriate and manageable way. However, it has applied for and succeeded in obtaining a significant increase in resources. Next year it will wish to be in the same position as the North of England Development Council and in the position which NWIDA had hoped to achieve this year. It wants some assurance that when it makes that application it will be received favourably. Unless it has that assurance it cannot with confidence plan for the expansion that it wishes to take place in phases.
When the Minister replies, I hope that he will be able to explain the curious chain of reasoning by which he has justified refusing the application, or, better still, say that on Wednesday, when he meets the delegation, he will be expressing a change of heart and will be putting the association on the same basis as that which prevails in the north of England.
I am indebted to The Observer for reminding us that it was precisely 20 years ago yesterday when Lord Hailsham donned a flat cap and went to the north-east as the Minister with responsibilities for regional affairs. He went to the north-east to mark concern and anxiety about the rate of unemployment in the area, which was then 5 per cent. The rate in January was 20.6 per cent. One is bound to say that the Government of which the noble Lord was then a member sprung from a very different Conservative party from the party that created the present Government. The current rate of unemployment is now four times that which prompted the noble Lord's visit, yet we do not see the appointment of a special Minister. We do not see the spurious initiative of a special visit. We do not even see 92 the purchase of a special hat. All we see is a cut in public expenditure to reduce the moneys available to the regions for regional development grant.
§ Mr. Cook
The Cambridge Economic Review has spelt out clearly what will happen if the Government's policy in the regions is continued. It has perceived that by 1990, 800,000 men and women will have been obliged to leave assisted areas in the search for work—half going abroad and half staying here—(Interruption.] As my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans) says, it will be the only growth area. Even though those 800,000 people will have left assisted areas by 1990, the rate of unemployment in the assisted areas will be 20 per cent.
On the front page of The Observer, there was a headline that said that the Prime Minister has given the CND what she described as a Hitler warning. If there is a warning to the House from the lessons of that period, it is a warning of the malignant and evil political forces that are released by mass unemployment and leaving a generation of young people without hope. If we are to save this nation from those malignant and evil political forces, it will not be necessary for us to provide additional resources on this scale for development organisations; it will be necessary for us to change the whole thrust of the Government's economic policies. It is perfectly plain from the past four years that to do that it is necessary first to change the Government.
§ Mr. Frank Hooley (Sheffield, Heeley)
I do not intend to follow my hon. Friend the Member for Edinburgh, Central (Mr. Cook) into all the complications of the Bill. I shall comment briefly on matters that relate to clause 3 concerning the extinguishing of some Zimbabwean debts.
Clause 3 echoes battles that were fought a long time ago. Some of us took part in them. It is a curious reflection on the solemn and slow proceedings of the Treasury that it should take 31 years to write off a debt that was originally incurred by the colony of Southern Rhodesia, which is now, happily, demised. It has also taken the Treasury 25 years to write off the debt of that ill-conceived and unlucky venture known as the Federation of Rhodesia and Nyasaland. Few people will recall that experiment with any satisfaction.
The Sub-Committee on Overseas Development has reported on the Zimbabwean economy. The report relates to debts and the land resettlement scheme. I do not wish to go over the points that were made in that report as it is available to hon. Members and was the subject of a formal reply by the Government. I should like to emphasise that the United Kingdom still owes a debt to Zimbabwe in respect of 10 years of civil war which her people suffered on account of the mishandling and bungling of the federation, subsequent political developments and our failure to put a rebellious, racist regime in its place more vigorously and energetically when the rebellion occurred.
It is pleasant to be able to record that the present independent Government of Zimbabwe are tackling the country's problems with great vigour, energy and some 93 success in the light of the constraints and difficulties that they face. Last year, or the year before, Zimbabwe had a record maize harvest. It was able to contribute to the alleviation of the food problems in that part of the world. Unfortunately, that has not continued.
The country is faced with serious difficulties on account of the deliberate policy of subversion and harassment by its neighbour to the south—South Africa. In that connection, I am appalled by the recent decision of the Sheffield chamber of commerce to send a trade mission to South Africa. It is intending to expand and promote our economic relations with that country rather than contract them.
The economic problems of Zimbabwe, which will be alleviated slightly by the provisions of clause 3, are compounded by its position as a land-locked country. The difficulty that arises there is that all of its essential supplies of energy have to go through Mozambique and dangerous and difficult country, again because of the unashamed and admitted incursions, attacks and sabotage carried out in Mozambique by the South African Government.
Therefore, I hope that in addition to writing off the debt, which is provided for in the Bill, Her Majesty's Government will look carefully at other possibilities of assisting the Zimbabwean economy directly by such further technical and other assistance as that Government may request and indirectly by making sure that we have good relations with Mozambique, and in particular by helping Mozambique with the communications, oil pipelines and other facilities that are vital not only to its economy but to the economies of the land-locked central states in southern Africa, notably Zimbabwe, Zambia and Malawi.
In a recent report by the Select Committee on Foreign Affairs dealing with the work of the Commonwealth Development Corporation, the Committee suggested that the corporation should not expand its operations unduly to various parts of the world in view of the amount of opportunities that still exist in the Commonwealth. We made a special exception in the case of Mozambique, precisely because of the reliance of the British Commonwealth countries such as Zimbabwe, Zambia and Malawi on communications through Mozambique, by road, rail and in the form of oil pipelines. I hope that in due course the Government will reply to that point.
The other aspect of the economy of Zimbabwe about which it is appropriate to talk in connection with the clause is the Southern Africa Development Co-ordination Conference, which is an organisation set up by the nine states—I do not know whether one can call them front-line states, but the nine African states—immediately to the north of South Africa. It is designed to harmonise and bring together the economic policies of those nine states with a view to providing mutual assistance and development and to overcoming the considerable problems that the states share, not least the subversion and harassment from South Africa.
I hope that in addition to writing off the debts Her Majesty's Government will give serious consideration to how they can best and most profitably join in that cooperative effort of the nine states in the SADCC in helping to build up their economies. Those countries have enormous potential wealth. They could and will in due course provide considerable markets for British enterprise. They are of great significance politically in Africa, because on their democratic development and full 94 independence will depend the peace, stability and prosperity of a vast area Of the world in the southern part of that continent.
Therefore, I welcome the somewhat belated action by the Treasury in writing off debts that are 23, 25 and 31 years old. I hope that that is a sign that this country is still alive to the debts and obligations that we owe to the newly independent countries within the Commonwealth. I hope that we shall consider these debts and obligations not only directly in terms of Zimbabwe but in the wider context of our relationships with the countries of the Southern Africa Development Co-ordination Conference to see what greater economic assistance we can give to assist in their development.
§ 9.4 pm
§ Mr. A. J. Beith (Berwick-upon-Tweed)
I do not think that when the Minister opened the debate well over two hours ago he anticipated the strength of feeling that he would meet, particularly from hon. Members from northern constituencies who see the Bill against the background of the enormous unemployment rates and the withdrawal of a number of crucial forms of assistance. If he thinks that it should not be he who is falling victim to the anger of northern Members, he must reflect that we attribute much of the policy that has brought about this unemployment to Treasury thinking. Most of us feel that his Department plays a large part in determining the doctrines under which the Department of Industry has so scaled down its regional assistance. The Bill represents only a very small part of what the north and other regions need to stimulate economic development and growth and tackle their serious unemployment problems.
Clauses 1 and 2 are desirable and of considerable merit. We welcome them, but we are bound to see them against the background of unemployment rates that are extremely high and are growing all the time. In my constituency—in a rural area—the rate is 19 per cent. and over.
Clause 2 deals with the body upon which the north has to depend for the promotion of its needs and the attraction of new industry to the area—the North of England Development Council. The Minister will be well aware from earlier discussions that northern Members feel strongly that that body lacks the teeth available to the bodies in Wales and Scotland, where, although serious problems also exist, the level of unemployment is not as high as in the northern region. It was not until after a long battle involving many hon. Members in all parts of the House that the grant for the coming year was agreed. Indeed, we had considerable fears that it would be much lower. There is still a clear need to get the figure up to at least the £1 million which the NEDC argued was needed. It has a good basis for that argument and for arguing for powers that are far stronger than those it now enjoys.
It would be in some small way consistent with at least some parts of the Government's thinking to recognise that if they gave bodies within the north-east more resources they could get on with the job. Instead of trying to determine from Whitehall—central Government—how the problem of the north-east can be tackled, why not give north-east institutions such as the development council the money and the power to do more about it? They are engaged in a very competitive market trying to attract industry when not only other regions of the country but other countries are trying to lure internationally mobile industries. The development council has a difficult job to 95 do and it is doing it against a background of Government policies that are directly inimical to a solution of the unemployment problem.
I wish to deal particularly with clause 1, which deals with the Development Commission. It is a commission for which Liberals are bound to feel a warm affection since it was set up by a Liberal Government over 70 years ago. It has remained an extremely active body in the rural areas—now of course only in the rural areas of England.
Its work has been essential, made the more so by the fact that special assistance of various kinds has been withdrawn from many of those areas. Certainly in my constituency it is to the Development Commission alone that we now look for assistance and support. The Government have withdrawn assisted area status from an area with 19 per cent. unemployment. I cannot see or understand the supposed logic of that policy. The Government's intention is alleged to have been to concentrate help on areas where the problems are greatest and unemployment is highest, but they have crossed an area such as Alnwick and Amble off the list. I am glad to say that the Development Commission has certainly not crossed Alnwick or Amble or the Berwick part of my constituency off its list. It has continued to treat it as a rural area with serious long-term unemployment problems that require attention. I welcome what the commission has done.
The essence of the commission's success and promise is its flexibility—its ability to undertake a wide range of measures, to explore new ideas and to break away from the often stereotyped thinking of previous approaches to tackling unemployment. The commission has involved itself in a wide range of rural problems, including the promotion of small industry, the creation of opportunities for craftsmen and the retention and support of essential community facilities such as rural transport, and the provision of transport facilities to get people to hospital. Such facilities are an essential part of life in the countryside and without them it is impossible for people to stay and work there.
The commission has been pioneering and far-sighted in its approach, and its achievements would have been impossible without flexibility. I hope that the new arrangement for the Development Commission and the new pattern of its relationship with the Treasury and the Department of the Environment will guarantee its ability to act flexibly. I hope that Treasury thinking and Treasury narrow-mindedness will not move in to stifle the initiative for which the commission is known.
If the commission is to succeed in its difficult task of regenerating rural areas, it will do so by operating in an independent and adventurous way that is not hamstrung by traditional departmental constraints. It is a small body and in some ways its smallness contributes to its effectiveness. I hope for positive Government encouragement for its work, a positive Government approach to its funding and a better climate in which it can operate. All its good work will be undermined if we continue to have an economic climate in which small firms are under constant pressure and constant threat, and the essential industries of the rural areas cannot operate or compete.
§ Mr. Charles R. Morris (Manchester, Openshaw)
I do not wish to detain the House for long, but clause 2 seeks statutory authority to make grants out of money provided by Parliament to the four English regional development corporations. I am mindful of the reference to the North West Industrial Development Association, and concerned at the developing economic problems of the north-west.
The unemployment figures for Merseyside are appalling. The problem of unemployment in the former textile areas of north-east Lancashire is equally sad and tragic, and the city of Manchester faces a growing crisis involving the elimination of jobs generally. When the unemployment rate was hovering above 7 per cent. the Government withdrew assisted area status from Manchester and 20 other areas in the north-west. Unemployment is now 21 per cent. in Manchester generally and 44 per cent. for the male unemployed in Moss Side. Unemployment on Merseyside is equally appalling. Yet there is no sign that the Government are seriously concerned about attracting inward investment or promoting the economic needs of the area.
Clause 2 also shows no concern on the part of the Government about the inadequacy of grants to the English regions compared with the decidedly more generous grants that Scotland, Wales and Northern Ireland attract. I am mindful, too, that those areas have appreciably less unemployment than our region. I do not wish to have a competition about the misery of unemployment, but the Government should be concerned about the needs involved and those needs should be met.
I hope that the Minister will respond to the need for clarification of the whole question of development grants. At present, development grants are paid by the Treasury, but the policy according to which they are paid is determined by the Department of Industry. In the new towns, however, the Department of the Environment is involved. Greater co-ordination is required in this area of public expenditure. In the north-west there is a tragic and illogical competition between new town and regional development corporations to attract inward investment.
Nightly on Granada television one sees advertisements paid for by the Department of the Environment—to the tune of £750,000, I am told—to promote the economic development of one new town. That is all very encouraging for that new town, but the industry that it attracts with the help of money from the Department of the Environment is taken from other parts of the same region with even greater economic problems. Serious consideration should be given to making the allocation of public expenditure in promoting development more realistic and taking full account of existing problems.
Finally, the Invest in Britain Bureau does a very effective job in attracting overseas investment, but I wish to examine the situation from the other end. At present, the bureau finances offices in New York, Chicago and other American cities as well as in Tokyo. In the same cities, there are separate offices representing the Welsh Development Agency and the Scottish Development Agency, but none specifically representing the interests of the north-west, which has such major economic problems. How can public expenditure be justified to provide offices in Tokyo, New York, Chicago and elsewhere to promote Scotland, Wales and Northern Ireland in isolation from the United Kingdom as a whole? If the Treasury is concerned 97 about the efficiency and effectiveness of public expenditure I hope that it will examine that aspect very closely.
§ Dr. David Clark (South Shields)
I wish to confine my remarks to clause 2. We in the northern region are pleased that the Government are prepared to give almost £850,000 to the North of England Development Council. It would be silly not to welcome the money. However, as my hon. Friends have explained, it is completely insufficient. I had intended to say that it was like prescribing a couple of aspirins when someone needs antibiotics. The insult is greater. It is like offering someone a corn plaster after amputating his foot. That is what the Government are doing. It is an insult to the northern region to be offered this sort of money when action upon action has desecrated and decimated our region, our towns and our homes. Education spending has slumped. Housing starts and finishes are plummeting. Health care is scarred. Road and rail expenditure has been reduced. Added to that, the Government have directly taken action to reduce the number of jobs in the area by moving regional headquarters 100 miles south to Manchester and Leeds. That is not good. We find it regrettable.
I am, however, glad that the North of England Development Council is to receive the money. It is trying to do what it can to help. I wish only that the Government would provide the wherewithal for the job to be done properly. I understand the Government's difficulties. Hardly any Conservative Members represent constituencies in the north and north-east of England. There are about three Conservative Members representing constituencies in the north-east. One can understand that the Government are unaware of what goes on. Our region, like the older industrial regions of Lancashire and Yorkshire, south Wales and the Clyde, built Britain. It was our region that built the ships. It was our region that made the steel. It was our region that dug the coal. That industry now needs rebuilding.
It is ironic that the wealth of North sea oil, which should be used to rebuild the industrial infrastructure of the older industrial areas, is now being used to keep people on the dole. It is for these reasons that the Opposition find the Bill's provisions inadequate. There has been mention of the Hailsham report of 20 years ago. If one looks back 49 years, one finds that another Government were so concerned about areas such as the northern region that they set up a commission. It is incredible to read those reports and to see how the Government are taking us back to those days and to those conditions that the reports reveal. The comments in the reports are as true today as they were then. They refer to the fact that thepsychological effects of the depression are not confined to particular spots, but permeate the whole region.I give another quotation. It states:In the course of the investigation it has been impossible to avoid a strong general impression that the area as a whole is losing hope.That was written in 1934. It could be a prophecy for today. It is because of the experience of the region and because of statements such as that made by the Minister of State last week, when talking about unemployment in the north-east—We cannot win under modern conditions".—[Official Report, 8 February 1983; Vol. 36, c. 871.]—98 that we say that such defeatist talk cannot be tolerated, that we are not prepared to tolerate it, and that we expect better.
If we look at the needs of the region, we find that it is a peculiarly different region. A study of regional economics throughout the world shows that there is always a frontier region—the mezzo-giorno in Italy, parts of the eastern section of West Germany—that are far away from the centre and on the borders of another country or another semi-nation. One finds particular problems in those areas. That problem, I suggest, exists in the northern region. A basic weakness in the north is that there are few indigenous companies. We have few companies with headquarters in the region. That cannot, thankfully, be said to quite the same extent of Scotland. There are major problems in Scotland, and I do not want to enter any auction about unemployment, deprivation and so on, but there is a national feeling in Scotland, and there are national companies with headquarters in Scotland that have a national market. We in the northern region do not have that advantage. In fact, we have a disadvantage.
I have listened to a number of debates about the Northern region, and I have heard hon. Members talk about the wonderful infrastructure in the north-east. That is true if it is judged only in that context, because infrastructure in the north-east is not enough. It is all very well having an excellent infrastructure in a region, but it is important to get out of the region. In the northern region, our great disadvantage is that we have very good communications within the region and to the south, but communications to the north are deplorable and those to the west are not much better. We need an improved infrastructure because it is essential for us to export the goods that we are able to produce in the region.
In this respect, it is interesting to refer again to the 1934 report. The commissioner writes:My own impression is that the most formidable difficulty lies in the fact that Durham and Tyneside are geographically too remote from what is regarded as the largest market for the sale of those goods which the new light industries are Principally engaged in producing.That is the sort of need that we have in our region, and we cannot compete with stronger bodies such as the Scottish Development Agency and the Welsh Development Agency unless we have more power at our elbow. As my right hon. Friend the Member for Manchester, Openshaw (Mr. Morris) pointed out, Scotland and Wales have all the advantages of Cabinet representation and all the advantages of having offices overseas. In comparison, we get £850,000 to help our region, and it simply is not enough.
It is interesting that the Conservative Government of 20 years ago had sufficient social conscience and knowledge of the whole nation that they sent Lord Hailsham to the northern region whereas, like Pontius Pilate, this Government wash their hands of it. It is also interesting again to go back to 1934 and see that w hat was recommended was a small board or a single commission to co-ordinate the work locally. That is what we need. I am advocating not a Minister but a small board or development agency that will do the work of the tourist authorities, of the export agencies and of the planning authorities, acting as a complete development agency. Only in that way can we start to get the north going again to the point where it can compete with its neighbours.
§ Mr. Frank Dobson (Holborn and St. Pancras, South)
I am sorry to intervene in this regional debate, but some of my constituents are having problems with the Crown Estates Commissioners and, consequently, I am, too.
In the Book of Job, we read in chapter 31, verse 35Would that my adversary had written a book.The equivalent of that for Members of Parliament isWould that my adversary were promoting a Bill.In this case, the Crown Estate Commissioners are promoting a clause in the Bill which gives me an opportunity to air what is going on.
The proposition in the Bill is to extend from 100 to 150 years the maximum lease that the Crown Estate Commissioners may grant. I am much more concerned with their current leases. Some of their shorter ones cause me more concern than the prospect of extending the range from 100 to 150 years.
In my constituency, the Crown Estate Commissioners own a considerable amount of property around Regent's Park. Some of it is extremely elegant and well kept. Some of it is bordering on the inelegant and is badly kept. Some of it is run-down—so run-down that it is seen by the Crown Estates Commissioners as ripe for development or ripe for rehabilitation. I do not share that view. It needs some work and some money spent on it.
One terrace—Colosseum terrace—has been causing considerable concern to the commissioners, and even more concern to the benighted occupants of the run-down housing. Various companies and individuals have been given not long leases, but short leases by the Crown Estates Commissioners. The leaseholders have sub-let, although that is probably not the right description. The houses are in multiple occupation, often occupied by people whose command of English is poor and who, consequently, are more vulnerable than poor people with a command of English to exploitation by unscrupulous landlords. Some of them may be reluctant to raise their problems with anyone because their immigration status may be rather doubtful. I do not like anyone exploiting people because they are vulnerable.
Some of the rents are high. The property is becoming run-down and the companies want a quick killing. For example, one such company is Jay Estates, which has developed, or in some cases copied, a variety of devices to avoid the Rent Acts that Parliament passed to protect the interests of people living in such housing. Some years ago, at no. 11 Colosseum terrace, the firm tried to turn the existing units into what are known as holiday lets. Following intervention by the housing aid centre and the Camden law centre, that was stopped. Its next effort was to turn the flats into bed and breakfast accommodation. Breakfast consisted of packets of cereals, some of which were delivered weekly. That scarcely falls within the usual definition of bed and breakfast accommodation—even in Blackpool at the time of the Labour party conference.
That firm also pioneered what are now called nonexclusive occupation agreements. They are licensed agreements that allow the firm to avoid the provisions of the Rent Acts and remove the protection of those Acts from the benighted people living in the dwellings leased from the Crown Estates Commissioners. It is estimated that as long ago as 1979—about the time that I entered the House—No. 14 Colosseum terrace was raking in about £8,000 a year for Jay Estates.
100 When the Crown Estates Commissioners were approached by the housing aid centre, an official said that they did not wish to become involved in disputes between lessees and sub-tenants. That was a noble statement, full of social conscience. They also expressed some sympathy with the sound business practices of Jay Estates in seeking to avoid the effects of the Rent Act 1974—passed by the House and by another place—which was intended to be the law of the land and to apply to every piece of property.
More recently, I became involved—as was my predecessor—in the matter. I was approached by a number of tenants occupying No. 12 Colosseum terrace. They complained about scaffolding attached to the house which they believed was dangerous, about the general condition of the property, about defective lighting on the staircases, in common areas and in some of the flats, and about the filthy mess and rubbish both inside and outside the flats. They told me that the agents and workmen who came to the house posed a severe security problem because they did not have duplicate keys, and many of the doors were consequently not secure. Theft was common and difficult to prevent. Unqualified workmen had removed and changed electricity meters. [Interruption.] I do not suggest that there are any bones in the garden, but the same sort of deprived people who went to Muswell Hill were living in this property, which is owned by the Crown Estate Commissioners.
There has also been interference by the landlord, his agent and workmen with postal deliveries to the house. Moreover, there is evidence that the rents are very high, that deposits are required of would-be tenants, and that the flats are barely furnished.
I took up the matter with various people allegedly in authority, including the Crown Estate Commissioners. The registered rent of room No. 7 at 12 Coliseum terrace was £13 per week. Including rates and various other charges that are believed to be legitimate, this amounted to £69.18 per calendar month. The woman concerned had been asked for and was actually paying £121.33 a month. It came as no surprise to me to discover that her command of English is not very good, although I should add that she is perfectly entitled to be in this country. She is also entitled to £576.52 repayment from the landlord. Although the law centre wrote as long ago as December to ask the landlord for the money, none of it has been forthcoming. It gives the lie to what was said to me in a letter of 25 January from the Crown Estate Office about this property:In fact, it has provided cheap accommodation for a good many sub-tenants over the past few years with few problems until recently".More recently, the housing aid centre in Camden, on behalf of some other tenants or occupants of that block, wrote to the landlord to complain that the telephone, which is for the use of the tenants and for which they have paid, is at present cut off, that the lock on the front door is faulty, that the bells are not working, that there is rubbish outside the house, that something is wrong with the plumbing, and that there is often a great deal of noise at night from the landlord's agent who comes round and disturbs the occupants—whether he comes for the rent, I am not sure. The environmental health department is also looking into the standard of the property.
So why are the Crown Estate Commissioners letting such peculiar leases to private landlords? In my innocence, I wrote before Christmas to the Crown Estate on the assumption that any lease that it gave required that the 101 protection to tenants in various parts of landlord and tenant legislation would be sought from its lessees. I was, therefore, surprised to receive a reply which said:Indeed, so far as the Rent Acts are concerned our lease deliberately and explicitly disbars the sub-tenants from the protection of the Rent Acts".In my opinion, no public bodies should be issuing leases of that nature, even in the peculiar circumstances of these buildings. In particular, they should not let them to people who can profiteer from private property. This business should be stopped. I hope that as a result I shall not be executed because, if I turn to the original Act, to which this Bill proposes an amendment, I discover that section 1(5) says—and this is a quite amazing power that was granted to the Crown Estate Commissioners in 1961:The validity of transactions entered into by the Commissioners should not be called in question on any suggestion of their not having acted in accordance with the provisions of this Act regulating the exercise of their powers, or of their having otherwise acted in excess of their authority, nor shall any person dealing with the Commissioners be concerned to inquire as to the extent of their authority or the observance of any restrictions on the exercise of their powers".It seems to me that the House was a trifle remiss in granting such extensive protection—
§ Mr. John Home Robertson (Berwick and East Lothian)
Is my hon. Friend aware that I hope to introduce a Bill on 2 March affecting the Crown Estate Commissioners which would, among other things, repeal the subsection that he has just quoted? Would my hon. Friend care to act as a sponsor to that Bill?
§ Mr. Dobson
I gratefully accept my hon. Friend's invitation.
I should like tonight to propose that if the Bill goes to Committee—although I do not mind the time period of the leases being extended—we should change the law to limit leases of this nature. The Crown Estate Commissioners were letting such short leases with such peculiar provisions in them to protect themselves against the possibility that they would eventually either redevelop or rehabilitate the building. All sorts of public authorities are faced with the dilemma of whether to keep a building empty and thus fully protect their interests or whether to let it so that people can live in it. There are plenty of other ways around that problem without letting such properties to profiteering private landlords. One scheme, which has been adopted by many public bodies, is to let properties to, or reach agreement on their management and occupation by, charitable or other organisations which look after short-life housing for the benefit of the homeless.
I am glad to say that the Crown Estate Commissioners in their most recent letter to me have said that they are considering that approach and that is very welcome. However, it would be appropriate, when the Bill reaches its Committee stage, for the Committee to change the law to restrict short leases so that they can be given only to non-profit-making organisations. That would have merit for those who live in such properties and also for the Crown Estate Commissioners, since if they adopted that course of action their buildings would be better looked after because the organisations that I have mentioned have an interest in maintaining them to provide a decent and secure home for those who live there, unlike private landlords whose interests are served only by maximising the rents and minimising the money that they spend on the repair and maintenance of such buildings. I hope that we 102 shall have some benefit from this clause, which just happens to have crept into the Miscellaneous Financial Provisions Bill.
§ Mr. D. N. Campbell-Savours (Workington)
I wish to make an unashamedly local speech this evening, because the Bill has clear implications for localities and certainly for the locality in the northern region from which I am sent to Parliament. In doing so, I want to apologise to my hon. Friends, particularly those whose constituencies fall within the northern region, because they know that, although my heart remains with them, the administrative arrangements for the control of the county of Cumbria, in the main, including industry and employment, have been switched to Manchester, against, I may say, the wishes of many thousands of people within the county of Cumbria. I hope that one day a Labour Government will consider redressing the imbalances that have been created by that switch.
The debate is important, because it allows us to discuss the issues involved. The public should note that, despite the statements that have been, and will be, made from the Dispatch Box tonight, the Bill makes no additional moneys available throughout the United Kingdom. Under "Financial and Public Service Manpower Effects" it states:The Bill is not expected to have any material effect on public expenditure in the long term.We are tinkering with the administrative arrangements for the payment of forms of regional assistance to promotional bodies and with arrangements for the administration of the Development Commission.
During the past few months, as the economy has steadily deteriorated and unemployment has relentlessly increased throughout the nation, the public have waited with bated breath for a U-turn by the Government that would increase the resources made available from the Treasury for industrial development in the regions, but it has never come. The public cannot understand—and the Bill does not help—why, when manufacturing and industrial output is falling, when there is a reduction in the competitive position of British exporters and a declining exchange rate—from which the Government can produce little benefit—the Government are still unwilling to give additional money to companies that desperately need it to resolve their problems in competing with our overseas competitors, particularly in terms of investment.
In the Workington travel-to-work area the problem is acute. The Bill will do nothing to alleviate it, unless the Minister is willing to intervene to tell me that additional financial resources are being made available. Of 1,083 teenagers in the Workington travel-to-work area, 657 have been out of work for the past three months. They ask me a question which I can only refer to the Government: what will the Government do for them? Do they have to wait in the dole queue for the upturn in the international economy which the Government have persisted in telling us for the past two years is about to take place? Many of those young people are unwilling to wait. In many ways they feel a strong sense of hatred for the Government. I do not use that term lightly, but that is the language that they use when referring to the Government, and it is for the Government to respond. In addition, 46 per cent. of unemployed men in my constituency have been out of work for 12 months and the number of unemployed people has tripled since the general election in 1979.
103 The level of unemployment today in the small and famous town of Maryport in my constituency is as high as in the whole travel-to-work area, including a town in the Home Secretary's constituency, Aspatria, Workington and Cockermouth, and all the small communities that made up that area at the time of the last general election. The Government must be held responsible, yet they refuse to respond in any meaningful way that gives people the assurances that they need for the future.
We are crying out for a regional policy that works, yet we have not received one. The Government turn a blind eye to the problems. Let us consider the public expenditure White Paper and its implications for areas such as mine. In the section on regional development grants there is a reduction from £600 million in 1982–83 to £474 million in 1983–84. Further reductions are provided for in the future. If a general election were not in the offing, I am sure that the Government would have been even more honest in the White Paper and predicted an even more severe downturn in public expenditure on regional and general industrial support and on other forms of regional aid.
The problem is that the Government refuse even to consider the personal tragedy of unemployment. I often hear minor and seated interventions from Government Members which reveal an insensitivity about what unemployment means. Many of us who have never been unemployed will never understand. Those who have never suffered the misery of unemployment must make a special effort to understand what it means and not resist a solution to a major problem.
Many county and metropolitan authorities have set up their own industrial development promotion units. In my area the Labour-controlled county council has made valiant efforts to ensure that Cumbria's case is put in the international forums where decisions on manufacturing investment are taken.
We are on the limit of penalty. What we spend additional to our budgets today is subject to a tax imposed by the Government—the clawback arrangement which the Government have enshrined in legislation. It is a tax on the rates that we levy. It is that which in Cumbria prevents us from spending additional moneys on developing and expanding the industrial and promotion budget. Yet we know that unless we have the added resources in that budget it is with difficulty that we can sell our region where decisions are taken.
The Minister of State referred to a written reply and admitted that the north-west region had as strong a case as the northern region. If the Government had accepted that that was so, they would have ensured that the differential in the allocation to the North of England Development Council and the North West Industrial Development Association was not what it is. A clear principle is identified in that response.
In relation to the northern region, the Minister said:They have satisfied me that they—that is, the North of England Development Council and others—are capable of mounting a realistic and effectively co-ordinated programme of events on behalf of the region as a whole".Referring to the NWIDA, the Minister said:I have not, however, been able to satisfy myself that the requisite degree of commitment to a fully and effectively coordinated regional programme by all the local authorities and 104 new towns in the north west has yet been demonstrated to justify the higher option."—[Official Report, 19 January 1983; Vol. 35, c. 143–45.]That higher option is a higher level of Government assistance towards the budgets.
In accepting that, the Minister puts the north-west region in a position secondary to that of the northern region, which also feels aggrieved that other parts of the United Kingdom, through the Welsh and Scottish Development Agencies, are in a better position. The Government are dividing and ruling. They ensure that built into their calculations for regional support are differentials that will spark inter-regional arguments about allocations. The Government bear the responsibility for such stupid and insensitive decisions.
My constituents ask me why it is that the Government can find £1 million for every Falkland Islander to secure the development of a remote island in the South Atlantic where only 1,800 people live, but yet they can find only £474 million to cover all regional development grants paid throughout the United Kingdom in the current financial year. The Government have got their priorities completely wrong. We believe that charity starts at home.
The taxpayer demands that investment, if it is available, is placed in this country to secure jobs for our people. They demand an end to the principle that seems to dominate the Government's investment strategy, which is to export our potential investment in the greater interest of financial institutions and to minimise our financial and industrial investment at home, when clearly that is damaging the industrial infrastructure of our manufacturing base.
An interesting document was produced about a month ago by the Regional Studies Association, which carried out an inquiry into the regional problems of different parts of the United Kingdom. In a document entitled "The North in the Eighties", the northern branch in its submission, which all my hon. Friends will have received—it is very much at the heart of decisions that should be taken by the Government today—says in paragraph 22 says:A body should be set up at the highest level of Government, preferably attached to the Cabinet Office, charged with responsibility for supervising regional investment programmes. Its duties would include the setting of goals and standards for the regions, the maintenance of coherent strategic planning guidelines designed to achieve set objectives and the monitoring of the activities of all central Government Departments, nationalised industries and related agencies against these guidelines. This body should formally advise the Prime Minister and Cabinet colleagues, as well as Departments and agencies concerned, of any major inconsistencies between national and regional strategies. In the latter context it may be necessary to require Departments to prepare annual assessmentsI hope that the Treasury Minister will take note—of the likely regional impacts of their spending proposals and longer-term strategies as well as a statement on the extent to which their plans for previous years were realised.The document then goes on to refer to the need for the information of development corporations, along with a possible development agency—which is the policy of many of my hon. Friends—for certain regions of the United Kingdom.
The case being put forward is that in any decisions that are taken on the allocation of public expenditure there should be a built-in consideration of the regional impact. That would have a major bearing on our areas. The Government in their derelict land reclamation arrangements have now built in an incentive in favour of parts of 105 the United Kingdom other than the areas of high unemployment, such as the northern region. That principle should be reversed.
The derelict land grant is a formidable mechanism for channelling public expenditure into the regions. We believe that the Government have a duty to reverse the current arrangements under the development land grant and that in all further allocations of public money—apart from that for public transport—within the substantially reduced sums in the public expenditure White Paper they should ensure that there is a regional emphasis to help resolve and reduce the problem of unemployment.
Finally, I should like to refer to what is happening in another country, which should have some bearing on our debates. The system of regional aid in France is much better than ours. Industry and Treasury Ministers would do well to consider the publication entitled "European Regional Incentives 1982", which has been edited by two lecturers at a university in Scotland—Mr. Douglas Yuill and Mr. Kevin Allen. It is a formidable publication. It outlines the various arrangements that exist within the European Community for the payment of regional aid. What it shows is that—
§ It being Ten o'clock, the debate stood adjourned.
§ Question again proposed, That the Bill be now read a Second time.
§ Mr. Campbell-Savours
The publication shows that the French are in a substantially better position than we are in the United Kingdom. The French do not have a direct equivalent to rates, but they have what they call a local business tax, which is referred to as taxe professionnel. It appears to be their equivalent of rates. The concession against that tax payment is available in principle in an area covering 76 per cent. of the French population, whereas in the United Kingdom, enterprise zone status, which is our rate-relieving arrangement, is available in only 15 or 16 areas. That will be the position when the most recent tranche of money under the enterprise zone programme is made available which will be by June.
The French obviously believe that their local business tax is a successful way of helping their industry. The Government should consider the systems of regional aid that are available in France, especially as the form of relief which they employ is so widespread. It would be popular among British industrialists. It certainly would be very popular among supporters of the Development Commission, which is responsible for the development of industries in rural areas. I feel sure that if the Minister were to speak to that lobby, to the CBI and to other representative organisations throughout the United Kingdom he would find that they all favour such a measure.
I have no doubt that the Minister of State will be one of the Ministers representing the Treasury when we consider the Finance Bill in Committee. No doubt he will be with us for some months. I ask him to accept that the French system is a damned sight better way of spending Government money than handing back capital gains tax and capital transfer tax moneys to the better off in society.
§ 10.3 pm
§ Mr. Harry Cowans (Newcastle upon Tyne, Central)
The real tragedy of the debate is the mass of empty Benches on the Conservative side.
§ Mr. Cowans
Yes, it is extremely cheap. That is demonstrated by the mass of empty places on the Tory Benches. When we had a northern region debate Tories entered the Chamber and spent a long time discussing various items and prevented Labour Members, who had valuable contributions to make, from participating in the debate.
§ Mr. Cowans
This debate is a continuation of the regional debate in another guise. Where are the Tories tonight? In expressing this criticism, I make one exception. The hon. Member for Berwick-upon-Tweed (Mr. Beith) spoke in the regional debate and he is present tonight. He is the only exception that I can make. During the debate on the northern region, hon. Members who have no connection with it flooded into the Chamber. If they felt so deeply about the subject, where are they tonight? That is a reasonable way to stall the Bill. The tragedy is that—
§ Mr. Cook
I am grateful to my hon. Friend for giving way before he gets to the tragedy. Will he draw attention to the fact that four regional development organisations are mentioned in the Bill? One of them is an industrial development bureau for De von and Cornwall. My hon. Friend is aware that Opposition Members who represent the other three regions—the north-west, the north and Yorkshire and Humberside are present. We have not been favoured with the presence of one hon. Member for Devon and Cornwall, although that region is clearly implicated in the clause. Not one hon. Member from the Conservative or Liberal parties which are well represented in that area, or the Social Democratic party, has participated on behalf of that region.
§ Mr. Cowans
That is part of the empty seat policy. The Conservative party has the majority of seats down there, but, equally, the Liberals represent the area. What will their constituents think of their lack of attention when, increasingly, questions about Devon and Cornwall and its unemployment figures are asked? When there is an opportunity to speak on behalf of that area, the hon. Members who represent it are conspicuous by their absence. The public will recognise that their representatives were not present when it mattered and when they had a chance to speak on behalf of their constituents. It is not unreasonable for the public to be aware of that. Devon and Cornwall is suffering, not as badly as the north-east, I admit, but suffering, yet not one representative has deigned to come to the Chamber.
§ Mr. Bob Cryer (Keighley)
Does my hon. Friend agree that those Tory Members of Parliament and possibly 107 the Liberals from Devon and Cornwall would be among the first to deny water workers and manual workers the same wages—
§ Mr. Deputy Speaker (Mr. Ernest Armstrong)
Order. We are debating whether to give the Bill a Second Reading. Hon. Members should confine their speeches to that issue.
§ Mr. Cowans
I should hate to incur your wrath, Mr. Deputy Speaker, by pursuing that line. Nevertheless, there is some truth in what has been said.
The Bill is comparatively short. One could argue that it is a typical Treasury Bill in that it looks as though it says a great deal yet it misses much and ends up saying nothing. As my hon. Friend the Member for Workington (Mr. Campbell-Savours) said, there are no extra finances in the Bill. Opposition Members find themselves in the eternal dilemma in that the Bill provides a small number of crumbs—one could not argue that there is a crust—for which we must be grateful. It is sad to be faced with a Bill that provides crumbs when large loaves are required, especially in the north-east.
Nothing in the Bill does anything to solve what the Secretary of State for Employment described as an extraordinary problem in the northern region. Taking those words to their logical conclusion, I submit that the Bill is an opportunity to take some extraordinary measures to solve that extraordinary problem. No such measures have been taken. The Minister said that the Bill is purely financial. That is true. However, anyone with a grain of sense knows that the Treasury rules everything. The Minister may smile, but that is fundamentally true. Under the Bill he could not accept what the north has been lobbying for, demanding and arguing for—a development agency—but he could have written into the Bill the financial arrangements which, while not giving the power of a development agency, would have given the finance. That would have been half the battle. However, none of that is provided. The Bill is remarkable not for what it contains, but for what it lacks. It falls short in many ways of meeting the extraordinary problem highlighted by the Secretary of State for Employment. There are no extraordinary measures in the Bill to meet the problems of the northern region.
I am grateful for the crumbs in the increased budget of the north-east development council. However, that is a financial argument that still falls short of what that body requires to do the job that must be done. Wider financial powers are required to solve these extraordinary problems.
The finance has been increased, and we are grateful for small mercies, but the remit within that financial commitment does not equal that of the Welsh or Scottish Development Agencies. I appreciate that the development council's remit could not be spelt out in a purely financial Bill, but the financial commitment could have been. My hon. Friend the Member for Workington said that the Bill provides no new money. I go further and say that there is a reduction.
In their public expenditure White Paper the Government have reduced regional aid by 25 per cent. Therefore, this "extraordinary problem" which has been highlighted by Ministers is receiving 25 per cent. less than it did before they discovered that there was an extraordinary problem. Is it not extraordinary to solve an 108 extraordinary problem by reducing the financial commitment? If that is not the logic of the lunatic asylum, I do not know what is. The Bill will do nothing to help solve the problems in the northern region.
I make no special plea for my constituency, as other hon. Members in the northern region can match the figures that I am about to give and, in some cases, surpass them. There is 31 per cent. unemployment in Newcastle upon Tyne, Central. No doubt my hon. Friends the Members for Easington (Mr. Dormand), Jarrow (Mr. Dixon) and Workington can match that figure, but that only emphasises the size of the problem in the region.
Clause 2(2)(a) liststhe Devon and Cornwall Development Bureau".It is sad that there is no one on these Benches to speak for the area. It is not my remit to do so. People outside the House will take cognisance of the fact that there is no one here to represent that area's case. That cannot be said for the northern region, for Humberside or for the north-west. Representatives have been here. Not everyone might agree with the case, and the Government might take no notice of it, but representations have been made. Where are the representatives from Devon and Cornwall?
Paragraph (b) liststhe North of England Development Council".We have assessed the situation not out of fantasy. We have looked at the various bodies in the northern region. After a long debate and a lot of heart searching, we have decided that the best way to co-ordinate efforts and to use the available finance is through a northern development agency. It could co-ordinate the financial commitment throughout the region. It would have the same powers as the Welsh and Scottish Development Agencies. Nothing in the Bill provides that, and there is no extra finance. I hope that the Minister does not ignore that point when he winds up.
There is a wonderful and typical Treasury argument about the power tomake grants to any body within subsection (2)".Subsection (2)(e) states—this is wonderful; it may be the Minister's answer to the argument that I have just put about finance—any other body, whether corporate or unincorporate, whose principal object appears to the Secretary of State to be the promotion of industrial or commercial development in an area in England.It does not say "in the areas mentioned under (a), (b), (c) or (d). It saysin an area in England.Although apparently we are not to divide the House, I hope that the Minister will answer our questions.
§ Mr. Cowans
We shall find out when he replies.
Will the Minister cast his mind in this direction? Who qualifies? Is it a body of local authorities which combine together for industrial development and, to use the words of the Bill, promote "industrial or commercial development" in the north of England? Would they qualify for a grant? Does the Newcastle city council, which operates community workshops to promoteindustrial or commercial development in an area of England109 qualify? Does the Tyne and Wear council, which operates something similar and also has an advanced technology workshop, qualify? Is this the Minister's secret weapon to put more finance into the northern region or is it just gobbledegook—the Treasury laying down rules but making it impossible for anyone to qualify? That requires an answer.
Moreover, even if the northern region or some other region passes the Treasury test so that it actually reaches the starting gate and qualifies, what amount will be available under subsection 2(e) and what will be the determining factor? In an amazing statement earlier today, the Minister of State said that regional grants were based on "geographical position". Does that mean that, whatever the sum available, the organisations concerned will be considered in relation to unemployment in their areas or to the social needs of their area? There is no qualification in the Bill. Perhaps the Minister will answer that, as it may be—I suspect that it is—the case that a whole host of bodies in the northern region could qualify under subsection 2(e).
§ Mr. Jack Dormand (Easington)
I am delighted that my hon. Friend noticed that phrase, which was used in relation to a question from me at Question Time today. It is astonishing to say that one of the criteria should be geographical position. My hon. Friend asks the Minister what are the criteria. I think that one can guess. The main and sometimes the only criterion for the Government is market forces, and the chances of anything for the north of England are virtually nil. As we all know, everything goes to the south-east.
§ Mr. Cowans
By pure coincidence, I was sitting next to my hon. Friend when the Minister of State gave that answer. I noted the words used and spent the following three hours analysing the relevance of geographical position to regional policy in the determination of regional aid. Perhaps the Minister will tell us, as that reply is very germane to what happens under subsection 2(e). What does "geographical position" mean? Does it mean that those nearest London will receive most because proximity to London is a geographical advantage? Does it mean that the area with the head office will receive the regional grant? With the greatest respect to the Minister, all of those questions must be answered in this debate.
I hope that we shall not get a short, sharp answer from the Minister, because if the answer is wrong the whole Bill is nonsense. How can we talk about regional aid—I emphasise the word "regional"—if the aid is determined according to geographical position? It is not regional aid. All the money, albeit a small amount, that has so far gone to the north-east development council could be taken away under subsection 2(e). That is nonsense in anyone's terms. It highlights the Government's non-policy. It is nonsense to insert such a clause in a regional Bill without any qualification. I says nothing about who qualifies or what are the criteria for qualification.
I am attempting the impossible in trying to put into the Minister's head what clause 2 means. I am, perhaps, a super-optimist. Under clause 2, he could write into the Bill qualifications of high unemployment, social need and deprivation to permit grants to be paid. If the Minister did that, he would have some justification for saying that he had some sort of regional policy. If he does not do it, the clause becomes nonsense. It is possible that the bodies that 110 qualify under clause 2(2)(e) could include co-operatives in the north-east? If the Minister does not possess a copy of a document called "Co-operatives in the local economy" by the Northern Region Co-operative Development Association, I shall pass him a copy. If he read it, he would be better informed about how he could use that part of the Bill.
There are similar bodies in the constituencies of many hon. Members representing northern constituencies. I am sure that there are also such bodies in the north-west and in Scotland that would be able to qualify if this was written into the Bill. It would enable the Government to put their money where their mouth is. Is there new money available? Or is the Treasury, with its usual cleverness, dissipating the amount of regional grant? Does it see clause 2(2)(e) a means of rot paying anything? This needs to be clarified.
One day, when a shaft of light appears, the Government will realise that it is only through a regional development agency and a co-ordinated regional policy for the northeast and other regions—it is a tragedy that other regions are catching up the north-east in unemployment terms—that the regions will be helped. We want parity with the Welsh Development Agency and the Scottish Development Agency rather than the hotch-potch of non-regional policy.
On clause 7, I give the Minister the good news first. I am delighted to see this clause. Much is stated about people going into local government as if they were reaping the moon and the stars. That is not true. Little is written about the other side of the coin. The clause is long overdue. I congratulate the parliamentary draftsman. Clause 7 is long overdue. But I am a little disappointed to discover that it is not retrospective. Before coming into the Chamber, I looked through my files, and I happen to have with me a copy of the amendment that I moved to the Local Government Finance (No. 2) Bill on 25 February 1982. I accuse no one, but if there were two mirrors in the House and one held up my amendment and clause 7 together, it would be difficult to find any difference in the reflections. I am pleased to see the clause, but I hope that the Government will not take credit for it as though it was the new Jerusalem and they had just discovered it.
It was not right to put my amendment into another Local Government Finance Bill, yet here it is in clause 7 of the present Bill. If my amendment had been incorporated into last year's Bill, a lot of people would have been helped a great deal earlier.
There is a problem here, and it is more acute under this Government. Before the start of the financial year, a local councillor has to choose between the financial loss allowance and the attendance allowance. But the financial loss allowance is payable only if the person claiming it is working. Obviously there can be no financial loss if he is on the dole, so it cannot be claimed by anyone who is on the dole. Under the circumstances which prevailed, a councillor had to make that choice prior to 31 December. But on 5, 6 or 7 January, he could be made redundant, and his financial loss allowance went. It means that the position was even worse than my hon. Friend the Member for Edinburgh, Central (Mr. Cook) suggested. Not only could that councillor not qualify for the financial loss allowance; he could not qualify for attendance allowance. Even worse, because he carried out his public duty and attended committee meetings, he could not claim 111 unemployment benefit. In that way, there was a three-way attack on members of local authorities who were giving their time to do a job of work.
Clause 7 redresses the balance, and I am grateful for that. However, I hope that the Minister will acknowledge that, if my amendment had been accepted in February 1982, a lot of people could already have been helped. Better late than never; better a death-bed conversion than none at all.
Subject to the House receiving the clarifications which have been asked for, I hope that the Bill—with clause 7 in mind especially—has a speedy passage through the House. Having said that, I am deeply concerned that no effort has been made in the financial provisions to name the regions that could be helped more. By putting some financial commitment into the Bill, we could have helped to solve that extraordinary problem. None of that has been done. Until that is done, there will always be a regional problem. It is made much worse by the Government's policies. They have put people out of work 20 times faster than any other Government. If they can do that, they must put the wherewithal into the regions to reverse the process that they began.
§ Mr. Don Dixon (Jarrow)
I shall confine my remarks to clauses 2(2)(e) and 7. My hon. Friend the Member for South Shields (Dr. Clark) referred to the 1934 Act. That was prior to the Jarrow march, when the president of the Board of Trade was a Mr. Walter Runciman. A deputation from the Jarrow council went to see him about the high unemployment in that area. They were told that they had to work out their own salvation. When the previous Secretary of State for Industry—now the Secretary of State for Education—attended a meeting in Newcastle a couple of years ago, he said that people would have to help themselves.
South Tyneside local authority is shared by my constituency and that of my hon. Friend the Member for South Shields. It has tried to help itself. It set up an industrial fair which, for the past four years, has endeavoured to attract industry to south Tyneside. It has been financed by the local authority. I hope that the Minister will say whether clause 2 will allow south Tyneside council to obtain finance to continue the fair, which has been successful and is accepted by the Department of Industry, the northern CBI and everyone concerned. Because of current restrictions on local government expenditure, it cannot produce the fair this year. I hope that clause 2(2)(e) will provide assistance for south Tyneside district council.
My hon. Friend the Member for Edinburgh, Central (Mr. Cook) referred to the number of vacancies in one area. In Jarrow, 6,068 people are unemployed, with only 78 vacancies—that is about 77 people chasing every job. The Government are cutting expenditure in the regions. They have given the North-East Development Council £850,000 to promote work, but they are spending £1,000 million on unemployment benefit.
My hon. Friend also mentioned the shipbuilding industry. Twenty per cent. of those working in that industry work and live in the northern region. Britain is going through a world recession, and the north is being hit hard. Last week it was announced that south Tyneside 112 would suffer another 1,400 redundancies in the ship repairing industry, with another 1,800 declared for the shipbuilding industry. It is absolute nonsense to confine British Shipbuilders to a loss of £10 million while it costs £5,000 a year for every shipbuilding worker on the dole. That is the economics of the madhouse.
My hon. Friend said that by 1990 about 800,000 people will have left assisted areas. They will be the young and active. When they leave—whether on their bikes, or whether they are going down to certain places to mend gates—they do not take with them the community centres, parks, libraries, hospitals or old people's homes. Those are left in the area, to be financed by an aged population. This Government's policy of cutting back local government expenditure places a tremendous burden on the people left in areas such as south Tyneside.
The northern region has always been top in the unemployment league, whether under a Tory Government or a Labour Government. We have suffered under regional policies, whether they be the carrot on the stick, or whatever. The best time we had was when the fellow came along with the cloth cap and did something for the infrastructure of the region.
Clause 7 was mentioned by my hon. Friend the Member for Edinburgh Central. Before I came to this House I served on a local authority for 20 years. When the attendance allowance came in in 1974, in spite of what the newspapers said—the local newspaper in south Tyneside still gives a league table of the amount of money that councillors claim in attendance and subsistence allowances—many people went on to the local authorities, and, in spite of the attendance allowances, lost money. They not only lost money in wages, but they lost chances of promotion and had their pensions restricted.
Clause 7 is welcome, because at present, if someone opts for the financial loss allowance and is declared redundant, he cannot claim an attendance allowance. As my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans) said, not only could he not claim attendance allowance, but he could not claim financial loss because he was not working, and he could not claim unemployment benefit, because he was unavailable for employment, as he was carrying out local government work.
I shall confine my remarks to those two clauses, so that others of my hon. Friends may speak.
§ Mr. Bob Cryer (Keighley)
I am keen to comment on some of the clauses—for instance, clause 2—that my hon. Friends have mentioned, particularly as there is a reference to the Yorkshire and Humberside Development Association. Naturally, that association requires Government grants whichThe Secretary of State may out of money provided by Parliament make",to put forward the claims of Yorkshire and Humberside to the various investment projects that are being made. It needs the money because, among other things, there has been a significant loss of jobs in this textile area. It has not been anything dramatic, but it has been a continuing erosion of jobs, as the latest news bulletin from the wool textile and clothing industry action committee for February this year demonstrates. For example, in 1979 in the textile clothing and footwear industries, centred largely on Yorkshire and Humberside, there was a job loss 113 of 30,000; in 1980 it was 93,000; in 1981 it was 112,500, and in 1982 it was 31,000. Naturally enough, the Yorkshire and Humberside Development Association is much needed to remedy the loss of over 200,000 jobs in the clothing, textile and footwear industries since the Government took office.
In my constituency the Conservative achievement has been to increase the level of unemployment from 4.5 per cent. in 1979 to over 14 per cent. There are some areas in Keighley with the level of unemployment mentioned by my hon. Friends. In certain areas there will be between 20 per cent. and 25 per cent. of male adults unemployed, many of them unemployed for one, two or more years. Another Conservative achievement has been that the number of people of working age in receipt of supplementary benefit paid from the supplementary benefit office at Worth House, Worth Way in Keighley has increased by over 200 per cent.
The Prime Minister is given these days to talk about Adolf Hitler. Let me remind the House that she has done more damage to British manufacturing industry than Adolf Hitler ever achieved in the years between 1939 and 1945. If the Prime Minister is to draw parallels between Adolf Hitler and the campaign in the 1930s and 1940s and the position today with regard to nuclear weapons, she will find herself up against a strong argument indeed.
I want to confine my remarks today to the damage that has been caused by the Government to British manufacturing industry and the need for a development association in Yorkshire and Humberside to counter that damage. One of the difficulties that we find in the legislation before us tonight is that several development associations are mentioned. Clause 2(2) (e) says that grants shall be made toany other body, whether corporate or unincorporate whose principal object appears to the Secretary of State to be the promotion of industrial or commercial development in an area in England.That is quite extraordinary. My hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans) raised the question of regional development assistance. That is not just something that appears necessary to the Secretary of State. It is fairly carefully defined by the Industry Act 1972 as amended by the Industry Act 1975. I am unhappy that the Secretary of State should have power to give grants toany other body … whose principal object appears to the Secretary of State to be the promotion of industrial or commercial development in an area in England".That is far too wide in its power.
In a recent Adjournment debate I raised the question of the ending of intermediate area status for Keighley, which was accompanied by the massive increase in unemployment that I have already described whereby roughly 4,000 people in Keighley are now chasing about 80 jobs a month. A letter was sent to the local paper by a gentleman who suggested that perhaps it was not good to mention the difficulties that were besetting Keighley and asked whether it would not be better for a few decent industrialists to get together and promote Keighley, to put on one side all the nasty comments about so many people being unemployed, and to promote the good side of Keighley.
A few months later that gentleman turned out to be not promoting industry for Keighley but promoting funds for the Conservative party to promote parliamentary candidates in Bradford. No wonder he did not want the 114 dark side of Conservative policy to be highlighted. He was up to his neck in defending the shoddy record of this rotten Government.
We certainly need some sort of organisation that will try to counter the difficulties that arise, but unfortunately it looks as though things will get worse rather than better. If the grant is made to a reputable organisation such as the Yorkshire and Humberside Development Association that is one thing, but the wide powers to give money to any organisation seem to me to be much less desirable.
Page 37 of the current issue of "Economic Trends" from the West Yorkshire metropolitan county council states:The Manpower Services Commission estimate that the number of long term unemployed will increase by up to another ½ million in about 18 months' time. In West Yorkshire, this could mean that about 65—70,000 people would have been cut of work for a year or more, compared with just 12,500 in January 1979. To cope with this trend, the MSC has suggested to Government that a special package of measures should be instituted to assist particular deprived groups within the long term jobless i.e. young adults, those with dependent families, ethnic minorities and older people.However, grants to the Yorkshire and Humberside Development Association and the other development associations simply are not enough. Of course, everybody in Yorkshire and Humberside wants his case for potential investment presented. The same is true of all those in the regions particularly hit by unemployment, which are mentioned in clause 2. No matter how large the grant, it will not be adequate. Millions of people, and particularly the 3.5 million to 4 million who are on the dole, want a complete change of economic policy, so that those regions particularly affected by unemployment are at the margin, and do not reflect the whole nation.
For example, we should stop the free flow of capital and restore exchange controls. We should get out of the Common Market so that we can run our economy without being subject to the decisions of Brussels and to the secret meetings of the Council of Ministers. We need massive injection of public funds into the public utilities to create jobs. The Government always accept that argument for defence expenditure, but not for anything else. However, when we come to the defence debate—and the Government will soon use it as part of their co-ordinated campaign against the peace movement—the Government will say that public expenditure on the defence industries will create jobs. But the same is also true of the civil industries. We need massive public expenditure to create jobs. At present between £10 billion and £12 billion goes on unemployment benefit, supplementary benefit and on lost tax revenue. That money should be spent on creating real jobs, because we must take people off the dole queue.
Although grants to the various development associations are welcome, they are simply not enough. There is a danger that development associations will go cap in hand to the multinationals, asking them to move to their regions. That is Government policy at work; setting man against man. They believe in competition and they like one region to compete against another, offering further inducements. When that happens, power is handed over to the multinationals. For example, American Hyster builds forklift trucks but is telling part of its Scottish work force that it must either accept a wage cut or the company will pull out and close the factory.
Under the Tories we are moving not forward, but backward to the 19th century, when the mill owner trampled on the rights of the work force. Who should turn 115 up speaking on behalf of the multinationals but a Minister from the Scottish Office. The message is "Take a wage cut lads, otherwise these people will move out of the country and take away your jobs completely." That is the danger of being subjugated by the multinationals. That is the danger of supplication, and of going round the world with a begging bowl, asking companies to invest here. Investment should be made on terms that are beneficial to the people as a whole, and not on terms that are beneficial to the multinational companies and their shareholders.
The Government constantly talk about the market place. At Question Time the Prime Minister utters clichéridden platitudes about competition and says that we are not making our way in the world because of our lack of competitive force. She does not mention the over-valued pound, the hidden import controls that other Common Market members use, but which we do not, even though the Government have investigated them. The Government seem to think that the end of civilisation would arrive if we acted on them.
For example, what about the outrageous suggestion that imported goods should be examined to ensure their safety? What would have happened if, instead of all those Polish light bulbs exploding when people put them in the socket and turned on the electricity, they had been checked before they were sold? What a ridiculous idea for the United Kingdom! What if all our imported factory machinery was examined for safety before somebody's finger is cut off because a guard or other design factor does not measure up to British standards? Of course, we do not make such examinations, but the Prime Minister ploughs on, speaking as she always does in italics, about how we lack competition.
What about the rural areas? Competition does not work there. If the Government are so worried about subsidies, let them stop subsidising the farmers. The principle that governs the Tories is greed, not competition. If their chums in the farming community can get their snouts in the trough, that is so much the better for them.
The rural areas do not allow market forces to depopulate those areas, although that is happening as people seek jobs because of the decline in rural communities. They set up, properly, development commissions to replace the development commissioners. They establish development commissions with powers set out in clause 1 to encourage industry to(a) make grants and loans and give guarantees … (b) acquire land … (c) provide or facilitate the provision of premises for occupation by industrial or commercial undertakings; (d) form, and hold controlling or other interests in, bodies corporate; (e) act alone or with other persons, either in partnership or otherwise.That is a package for detailed state intervention in the rural communities. Why not? If the Government are prepared to intervene in rural communities, what about the urban communities that are being laid to waste by the Government? The truth is that the Government are operating the pork barrel principle—they give money where their supporters are and hang the rest. The Government do not command many votes in the urban areas and they are not bothered about an urban development commission to help the people tomake grants and loans, … acquire land or other property116 or give them other enormous powers, which I welcome. Why do they not give the same powers to the urban areas? Why do they not encourage the development of real jobs, not just the training schemes—which, of course, I welcome because they help to alleviate the enormous problem caused by Government policy? It is interesting that the Government should have such comprehensive legislation for the rural areas which could be useful for the urban areas. I hope that the Government will change their mind and establish a development commission for the urban areas so that powers can be used when needed.
I know that my hon. Friend the Member for Berwick and East Lothian (Mr. Home Robertson) wishes to speak, no doubt about Scottish matters, but I am concerned that in a miscellaneous Bill of this nature the representations that I have made about including legislation to give grants in certain areas for repair grants to post-1919 houses are not heeded.
The Bill contains in the schedule at least two modifications to legislation which is the direct responsibility of the Secretary of State for the Environment. I have suggested to him that if there are any legislative problems—I do not believe that there are—to allow him to take up selected areas such as Stocksbridge in my constituency and to give post-1919 houses repair grants, he should seize the opportunity provided by the Bill. I am disappointed that there is no reference to this in the Bill. I have written to the Secretary of State asking him to use a miscellaneous powers Bill of this character to remedy any lack of power that he might claim prevented him taking action.
Stocksbridge in my constituency has been blighted from 1968 to 1982. Now, happily, the path of the Airedale trunk road has been decided and the blight has been removed. But for that period of time—14 years—almost 20 owner-occupiers have stuck it out. Because they were never sure that the motorway was to come through, they deferred repairs. But because the houses are immediately pre-1939, the owners find that they are not eligible for repair grants. It would be reasonable if the Government, who are supposed to be concerned about owner-occupiers that the houses have been blighted, though the fault of the Department of Transport's proposal made in 1968, and carried on by successive Governments until eventually, in 1982, a decision was made to fix a route that lifted the blight. Why cannot the Government give them repair grants because of those special conditions? It might also apply to other areas.
If other areas have the same deserving case, why should it not apply to those other areas? Why should owner-occupiers have to suffer if, as a result of a Government proposal, there is an accumulation of outstanding repairs for the perfectly proper reason that owner-occupiers felt, jutifiably, that it might not be worth spending money because they never knew the position from year to year? They should now be eligible for a repair grant.
I urge the Minister, even at this late stage, to contact the Secretary of State for the Environment to see whether an amending clause could be added to the Bill to get the powers. If there is any doubt—at one stage of the exchange of correspondence the Secretary of State said that he may not have the powers—let us have a clause added to the Bill to bring some relief to people who justifiably deserve help.
§ 11.2 pm
§ Mr. John Home Robertson (Berwick and East Lothiam)
This is a spectacularly miscellaneous Bill, ranging as it does from Devon and Cornwall through the north of England to Zimbabwe and indeed, on to the functions of the Crown Estate Commissioners in the Isle of Man. Perhaps my hon. Friend the Member for Keighley (Mr. Cryer), before he leaves the Chamber, will bear in mind the possibility of moving an appropriate amendment to the Bill in Committee, as I have no doubt that, having spoken on Second Reading, he is likely to be appointed to the Committee that will deal with the Bill. Such an amendment would have the effect that he has so eloquently suggested. I am sure that he can rely on the support of many hon. Members on the Opposition Benches.
I shall refer briefly to only three clauses in the Bill, starting appropriately with clause 1, which deals with the Development Commission. The Development Commission will replace the Development Commissioners, with the power to develop rural areas of England. It is of some concern to me that the writ of the new commission will not run in Scotland.
I understand that the Development Commissioners had power to undertake some promotional activities in the rural areas of Scotland. This is particularly relevant in the south of Scotland, which is not covered by the Highlands and Islands Development Board. I suspect that my hon. Friend the Member for Edinburgh, Central (Mr. Cook) is about to shoot me down in flames for making such a suggestion.
§ Mr. Home Robertson
It would be more appropriate if the Scottish Development Agency were to have overall power. In effect it has that power, but it has relatively limited funds and it has to reserve its funds for the disaster areas, for the areas with the very highest unemployment, where the Government have achieved the maximum in their endeavours to introduce deindustrialisation in western and central Scotland. The agency has relatively little money available for developing the rural areas of Scotland. I express the hope that the new commission will be successful in its operations in England. I am aware of the needs of many rural areas of England. As the new commission will not be in a position to carry out similar works in Scotland, I hope that the SDA will be given the funds and the encouragement that it requires to carry out the parallel function in deprived rural communities in Scotland.
It is understandable that clause 2 has attracted the most attention during the debate. It is an interesting clause. It refers specifically to the Devon and Cornwall Development Bureau, the North of England Development Council, the North West Industrial Development Association, the Yorkshire and Humberside Development Association and other miscellaneous bodies. There is one bureau, one council, two associations and goodness knows what else.
Many of us have been anxious to learn the nature of the Government's regional strategy. I suppose that it is set out in the Bill. It consists of a miscellany of quangos through which the Government want to operate. My hon. Friend the Member for Jarrow (Mr. Dixon) and others of my hon. Friends with constituencies in the north-east have made it clear that they are dissatisfied with the extent and the scope of the provisions that are before us, and rightly so. I have 118 more than a passing interest in the north-east, because from my house I look across the river Tweed to the northeast. If I have to live next door to the English, I could not ask for better Englishmen as neighbours than those of the north-east.
§ Mr. Home Robertson
They are right to be concerned about the parlous economic state of their region. They are right also to be concerned about the disastrous consequences of the deindustrialisation of Tyneside and the high unemployment in the area. I assure hon. Members with constituencies in the area that Scottish Members who have the benefit of the SDA would be more than willing to support them in their endeavours to get a parallel and similar agency for their region, which they need every bit as badly as many parts of Scotland need the SDA.
I recognise that I cannot go very far down the Scottish line while speaking on this Bill. I earnestly wish that we had a directly elected Scottish Assembly to administer the industrial development and other functions of the agency. I look forward to the day when there is a proper and positive regional policy for the regions of England. I applaud the fact that this has been articulated ably by my hon. Friends. We look forward—I fear in vain—for an explanation from the Government of what they regard as a constructive regional development policy. All they have done so far is do away with regional development status in many areas. We have a sort of fire-engine policy of setting up gimmicks such as enterprise zones, which do not appear to be an outrageous success.
Clause 5 was referred to by my hon. Friend the Member for Holborn and St. Pancras, South (Mr. Dobson). It deals with the powers of the Crown Estate Commissioners. My hon. Friend quoted from the Crown Estate Act 1961 and explained the problems that had arisen for some of his constituents as a result of the way in which the Crown Estate Commissioners exercise their powers in leasing property. The Bill will extend from 100 to 150 years their power to grant leases. I was disturbed to hear how that operates in an urban part of England.
The Crown Estate Act 1961 is interesting. It refers to Windsor great park, Regents park and various properties in London and other parts of the country. The House may be interested to know that the commissioners' writ also runs under water. They own the sea bed within three miles of our territorial waters. Anything that is moored or attached to the sea bed, anyone who wants to prospect for gravel or aggregates within that area or anyone who wants to start a fish farm in a sea loch may have to get a lease from the Crown Estate Commissioners.
The subject has recently come to my attention because of a licence that was granted by the commissioners to a company based in Kent to prospect for marine aggregates off the coast of my constituency. Indeed, it does not simply apply to the coast off my constituency. It covers almost the entire east coast of Scotland, for several miles off shore, including the whole of the Firth of Forth and the Firth of Tay from a point north of Stonehaven in Kincardineshire to a point off St. Abbs head in my constituency. It covers 300 square miles.
There has been no consultation with anybody. It is hardly surprising that the granting of this licence has caused some anxiety among the fishing community.
119 People who have made a living for many years from fishing for shellfish, lobsters, crabs, prawns and white fish could be considerably harmed if a company goes dredging in those waters. Nobody has consulted them about whether the licence should be granted. The development is not subject to planning control, as the commissioners have the power to issue a licence and, in due course, to grant a lease for 150 years if the Bill is passed.
I understand that there have been similar problems on the west coast of Scotland, where, in the deprived rural communities to which my hon. Friend the Member for Keighley referred people wanted to build up small businesses and employ one or two people in fish farming enterprises in sea lochs. What do we find? The Crown Estate Commissioners, without asking anyone, have in some cases sold the right to carry out fish farming operations to undisclosed persons. Goodness knows who they may be. There is no register of who has been granted leases. The commissioners have not sought permission from anybody. Nobody has been consulted and nobody can do anything about it. Therefore, some potentially useful developments have been inhibited.
Rather than extend the powers of the Crown Estate Commissioners to grant leases, we should amend section 5(1) of the 1961 Act and look for ways in which to subject such developments to the normal planning controls. At the very least there should be a publicly accessible register of who owns the rights to and holds the leases of the sea beds in the areas to which I have referred.
This is quite the most miscellaneous Bill that I have come across, and I have seen one or two miscellaneous provisions Bills. There is scope to talk about many issues, but I do not wish to delay the House. I hope that the Minister will reply to some of the constructive points that have been raised in the debate.
§ Mr. Austin Mitchell (Grimsby)
I shall concentrate on clause 2, particularly as it relates to the Yorkshire and Humberside development association, which covers Grimsby, and so is of interest to me. There is no doubt that bodies such as the Yorkshire and Humberside development association do a good job. That is because they are the only bodies available, because of the Government's folly in destroying regional policy, to promote the English regions. In doing that job, they are in an extremely difficult situation, first because they have to compete for development with organisations such as the Scottish and Welsh Development Agencies which have more clout in the sense that they can offer a more complete package of services and can go out with a more vigorous recruitment drive. More important, they have far more money at their disposal. The second inadequacy is the financial limitation in the grants that the Government make available.
An answer from the Minister of State, Department of Industry on 19 January 1983 specifies that the North-Eastern development council will get a grant in 1983–84 of up to £850,000. That is the option two grant in which the conditions for local authority participation will be relaxed, subject to review, because the Minister wants to see how effective the co-operation promised by the local authorities will be. The important point is that he is not offering the other three organisations, including Yorkshire and Humberside, the same substantial increase in grant, 120 nor is he offering them any relaxation of the pound for pound matching requirement, presumably to keep up the pressure on local authorities to participate in this fashion, which is all very well, but the sums produced by that technique are small.
Given the scale of the problem in those areas, particularly Yorkshire and Humberside, the sums are puny. In 1983–84, compared to up to £850,000 for the north-east, Yorkshire and Humberside will get only £163,000 to deal with an enormous area with enormous problems. That is an important point. Let us compare the unemployment figures of January 1979 with the current unemployment figures and the real or de-Tebbitised figures. In the north-east the figure for January 1979 was 112,000 while in Yorkshire and Humberside it was 115,000, which is roughly comparable. However, there is a difference in the most recent figures. I am talking about the de-Tebbitised figures, in other words the unemployment figures as they were before the recent attempt to fiddle the figures. Unemployment in the northern region is 235,000, which is an increase of 110 per cent., but in Yorkshire and Humberside, which gets a minute grant compared with the north-east, the figure is 303,000, an increase of 162 per cent.
In the face of an increase of 162 per cent. compared with 110 per cent. in an area that gets a better grant, there is clearly a need for more generous provision for the Yorkshire and Humberside development association specifically. It definitely needs an option two provision. It needs a relaxation of the conditions of participation for local authorities. Most of all, it needs, simply and straightforwardly, more money to do a job that is becoming increasingly important.
There are other points to make on the association and the relevant authorities as quoted in the Bill. It brings up the whole problem of regional planning. The English regions have never developed an effective framework for regional planning. Indeed, the framework was enormously weakened by the abolition of the regional employment premium, which was the most effective and sensible means to bring money to bear directly on the key problem—the creation of jobs in the regions. That is what the basis of regional planning is all about.
Given the fact that we have never effectively solved the problem or built an effective framework, the only way to go is forward to regional government, each region having its own development agency and each applying local and national money in combination. We need to set the regions free of the leading strings of central Government. They need to get out and attract the industries that they want in the way that they want them, providing the financial support which best fits that region's plans and which is the best inducement for the industries.
In passing, I am glad to welcome wholeheartedly the framework for regional planning proposed by my right hon. Friends on the Front bench for the consideration of the Labour party for its next election policy. This Government are extremely unlikely to develop the framework of regional planning, much as they need to. They have been loth to move in that direction. They have cut by 25 per cent. the financial provision.
So the Government's only regional policy is really a policy for the south-east, disguised as a policy for the whole country. Because of the policy of survival of the fittest and the fattest, development, such as it is, will concentrate on the south-east, an area that has always been 121 pampered and has drained the life away from regions like mine and others further north—the deprived and declining regions which suffer from the growth not only of the great wen but of the whole prosperous south-east. That essentially is the Government's regional policy: let the south-east go ahead, in so far as any region can in face of their economic policy, and let it drain the life from the rest at an even faster rate than it has been doing.
We are seeing increasingly intense competition in attracting industry, which is the important factor for regional policy. The amount of foot-loose industry available for attraction by bodies like the Yorkshire and Humberside development association is minute. We are involved not only in intense competition within the country with bodies like the Scottish and Welsh Development Agencies, which have superior clout. We are also involved in increasingly intense international competition. The regional organisations need to get out and compete internationally for the industries that they want.
Yorkshire and Humberside faces another problem. The inducements that it can offer, because of the vagaries of development policy, are in some respects less attractive than those of other parts of the country. Our instance, perhaps the most striking to the people in Grimsby, is the decision of Findus to establish a new fish processing plant in Newcastle, away from the centre of the industry and the focus on Humberside—in the Grimsby college of technology there is the food technology build-up associated with the industry—and away from the main landing port and market, which is Grimsby. It was lured to Newcastle by the fact that the area could offer superior incentives. That is why each area must be able to frame its inducements, attractions, subsidies and support in its own way to develop the kind of industrial nucleus that it needs. That flexibility is essential.
Considering regional policy in a wider sphere, the multiplicity and complexity of institutions to help and encourage the regions often dazzle local government officials. They include English Industrial Estates, the four bodies with which we are dealing today, including the Yorkshire and Humberside Development Association, as well as the Invest in Britain Bureau, the British Technology Group, në NEB, BSC Industry and the European Coal and Steel Community Fund. There are also the enterprise zones, although they are essentially just a means of trying to distract attention from the gravity of the problem by moving furniture around as vigorously as possible. That is the essence of the Government's economic policy. There, are also the local authorities able to offer a 2p rate.
In the document "European Regional Incentives 1982", for a copy of which I am grateful to my hon. Friend the Member for Workington (Mr. Campbell-Savours), the section on Great Britain and Northern Ireland is the longest, due to the complexity of the structures that we have developed. The same document shows that the French not only offer a more sophisticated and, in many ways, more attractive matrix of regional incentives, as the Timex experience shows, but industrialists taking advantage of the grants and benefits are tied to the targets to which they pledge themselves, and to enforce this there is an effective clawback of regional grant of up to 10 per cent. of the total available in any one year.
§ Mr. Campbell-Savours
Does my hon. Friend agree that if the European Community functioned properly it would have ensured that the arrangements were common to all member countries and that there were not such massive differences between one area and another that companies such as the one in Dundee could shift resources and investment from one part of the Community to another?
§ Mr. Mitchell
My hon. Friend is quite right. Moreover, the reason why the British Labour party and the British people reject the European Community is that it has never developed in ways that would favour this country. It has developed basically as an agriculture protection society—two-thirds of its expenditure is on agriculture—because that suits the needs especially of French but also of German agriculture. It has developed as an industrial free trade organisation because hat suits the needs of Germany, but it has never developed an effective common energy policy, which is what we want because we are energy rich, or an effective regional policy which we need because we face a more acute problem than most other EC countries in terms of regional disparities and regional decline associated with the decline of older basic industries. Until it develops those two policies it will never suit the needs of this country.
The structures with which we are dealing today are less than adequate, as I shall illustrate from my constituency. A body such as the Yorkshire and Humberside development association covers an enormous area which often has little in common with the needs of an area such as Grimsby, which has a very strong local pride, partly the result of isolation, and whose needs and aspirations are limited to the south bank of the Humber, which has been almost tacked on to the Yorkshire and Humberside unit simply because there was nowhere else on the chess board to put it. If we are to develop local pride and involvement and to mobilise the strong local feelings that still exist in Grimsby, though they have disappeared from other parts of the country, we need more local development agencies such as those that the Bill allows the Minister to support—bodieswhose principal object appears to the Secretary of State to be the promotion of industrial and commercial development in any area in England.That kind of body, if more limited in area and scope, is needed in Grimsby. We are linked to the north bank by the Humber bridge. However, in fishing, Grimsby and Hull have always been competitors. There is also intense competition for a limited supply of available footloose industry. The problems of Grimsby are the kernel of the problems associated with regional development. An approach on the basis of bigger and wider areas means that it is difficult to meet the specific needs of Grimsby. There is need for more immediate authorities having closer contact with the areas they serve.
Under the Government, unemployment in Grimsby has become extremely serious. It is part of a national crisis. In many respects, we are witnessing the strange death of industrial Britain. The policies of deflation, high interest rates and the deliberate use of depression as a means of disciplining the working class and breaking the power of the trade unions have hit Grimsby especially hard.
Our decline has been the steepest of any country in the advanced industrial world. Whatever the steps taken by the Secretary of State for Employment to conceal the disaster, the real figure of unemployed is between 4 million and 5 123 million. With the highest fall of industrial production, especially in manufacturing industry, in the advanced industrial world, our depression is the most severe.
It is no use arguing that, phoenix-like from the ashes, there will arise new industry—real jobs, as the Prime Minister has described them—and a dynamic economy, because growth tends to beget growth and decline to beget only decline. We are locked into a spiral of decline that hits particularly an area such as Grimsby—all for the sake of a policy that cannot work. We had a male unemployment rate in Grimsby in May 1979 of 8 per cent.—the overall figure was 6 per cent. That has now become, in January 1983, a rate of 20 per cent.
Grimsby is a hard-working town. It has always been concerned to get on with the job. It possesses a high level of skills and a high degree of involvement in work. Now, in a town that was proud of its traditions, the policies of the Government mean that one man in five is unemployed. That is a horrendous achievement. What is more, the overall unemployment rate is 15 per cent. The vacancies for every 100 unemployed, which in May 1979 were 19, are now 0.97. There is an increase in unemployment of 150 per cent. That is a tragedy, not only for young people but for older men who are strong of arm and back but for whom there is no industrial future.
It has all been so pointless and unnecessary. We are running the economy for money, not for people. It is like Goldsmith's "The Deserted Village". The same can be said of the deserted aluminium plant, the deserted fish dock, the deserted steel plant and the closed down coal mine:Ill fares the land, to hast'ning ills a prey,Where wealth accumulates, and men decay.That is what is happening all over the country, for no reason.
It is heartbreaking especially for a place such as Grimsby, because the essence of regional policy in Grimsby as operated by the local authority has been a consistent, wise and far-sighted attempt since the war to diversify away from the staple, basic industry of fishing into new industries to bring new life to the area and prevent disastrous consequences ensuing from any decline in fishing. After the war, the Grimsby council developed sites on the Humber bank and elsewhere to attract new industries and diversify what had been almost exclusively a fishing port in the period up to the war. That made Grimsby a very diverse industrial society.
The impact of this Government's policies and the failure to redress them by effective regional policies is that that diversification has been steadily and, in the last two years rapidly, undermined. We have seen one of the new industries, Laporte, shedding 330 people in 1980 and 500 people in 1981. We have seen the extremely efficient and competitive Courtaulds plant, employing more than 2,000 people, now reduced to a little over 1,100. We have seen the same pattern of redundancies at Norsk Hydro, Fisons as it was, 240; and at Lloyd Cars, which produced parts for Rolls-Royce, 25. We have seen the slimming-down of the food processing plants: Birdseye, Findus, and the closing down of the Ross No. 1 plant for processing fish. We have seen a long and tragic decline, undermining the wise and far-sighted efforts that the council put into trying to develop the area.
124 From the point of view of each firm it is not difficult to understand what is happening. To survive, each firm has to make itself more efficient and has to shed labour. That is the state into which the Government's policies have plunged them. There is no alternative for firms but to shed people to survive. The problem is that no one is taking any control or oversight of the overall position. No one is responsible for the jobs and the futures of the people who are shed in this way because no one is developing the new industries and bringing in the new jobs. No one is taking effective control or oversight of the regional consequences of the decline.
Each of the persons shed, for valid reasons, by each firm, costs £5,000 in terms of taxes no longer paid, benefits received and production no longer achieved. It is a crippling cost. It is interesting that people such as Baker and Eltis, who talked about the burden of Government spending and the so called non-productive sector in the mid-1970s, are not talking now about the burden of all those unemployed people on a shrinking productive base. Everything that has been done in that area has been rapidly undermined. Yet, at the same time, the original base—the fishing industry—from which the council tried to diversify in the post-war period, is itself now in decline because of the loss of distant water fishing. It is wholly uncertain about its position. It is no longer possible for firms to continue as they are not producing enough profits. The market prices are not high enough and the catches are not large enough to produce profits to invest in modernising the ageing fleet.
The fishing industry in Grimsby is of a crucial size. It is too small for the scale of facilities, the dock charges, the labour charges, the slipways and the engineering that it must support. The industry is rather like a house of cards. Recently it lost two firms—one in Grimsby and one in Hull. It faces the loss of vessels either through other firms going bankrupt or through vessels deciding to transfer elsewhere. The house of cards is threatened and becomes more precarious. It is impossible for the remaining vessels to carry the burden of charges that press down on the industry. So the base of the structure of diversification—fishing itself—is now threatened.
Industry in Grimsby, like industry throughout the nation, is leaner, trimmer, more competitive and more productive. But it has nothing to stimulate it, nothing to produce for, no incentives and no great drive. That is because the Government obstinately refuse to do the only thing that can now give British industry the go ahead, which is to expand the economy to provide a sense of buoyancy, expansion and an ability to increase and find demands for output to support and to increase profits and investment.
Grimsby is an area with peculiar problems. It has a strong local focus, to which the existing large institutions can offer little. If Grimsby is to develop and recreate that spirit of local incentive and an awareness of the development needs of the area, which it had in the postwar period, it must have a development institution with a more local focus that can attend to the needs of that unique area. Grimsby and South Humberside need more realistic units for development and incentive. Instead, we find a multiplicity of institutions. There is the story of Aneurin Bevan pursuing power from the parish council—when he found that it was not there—to the county council to find that it had moved on to Westminster, only to find that it 125 had gone from this Chamber. In the same way, any local organisation pursuing development must do so throughout the country because there are so many institutions.
Grimsby wants development. It wants to attract new industry. To get it it must, first, approach the EC and plead that it has special needs and a special claim to help because it is dependent on fishing and the treaty of Rome pledged to develop not only agriculture, but fishing. Fishing has had a cruel fate, while agriculture has had a rich and prosperous fate. A community that depends on fishing has a claim to development. It could turn to the social fund. It could turn, as we are doing, to a regional study of the needs of Hull and Grimsby together. It could turn to the national Government. It could turn to the Department of Industry and ask for help under the Industry Act. It gets help through regional policy. It gets help through the Yorkshire and Humberside development association. If we are to attract a factory such as Nissan—we hope to do that, because we are the best site that is available—it will be through the blandishments and the efforts put in by the Yorkshire and Humberside development association and the county council.
We can turn to other Government Departments for specific help for the fishing industry. For that we can also turn to the British Transport Docks Board. We have to turn to the Ministry of Agriculture, Fisheries and Food for aid, and to the Common Market for restructing the policy on fish.
The sources of such help are scattered, numerous and confusing for a local authority that has wide responsibilities and for which the task of attracting industry is a tremendous burden. There is a multiplicity of help for local government, but it is often difficult to get. Grimsby is applying for inner urban aid to tackle the problems in the centre of the town, where the social problems are as acute as they are in many of the big city centre areas. Because Grimsby's area is more localised, it finds it more difficult to produce the statistics for aid or to show the scale of the problems. The contrast between the poorer parts and the richer parts of Grimsby is as stark as in many other cities. The need may be more difficult to prove, but it is as great.
We also turn to central Government for help in the Pyewipe reclamation scheme. We are running short of land for industrial development, and there is the possibility of reclaiming up to 1,000 acres. That reclamation will be valuable for the whole region, but it is beyond the resources of a local authority such as Grimsby. It needs wider planning and wider participation.
We want help from central Government for MSC grants and for training facilities. We need the help of Associated British Ports in releasing land from the docks for development in Grimsby.
I have catalogued the directions in which a town such as Grimsby, anxious to build its future and control its own destiny, has to turn. The same is true all over the country. There is a confusing complexity of authorities to which towns that are proud of their area have to turn for help. That multiplicity is beyond the resources of small towns to cope with, but wider bodies such as the Yorkshire and Humberside development association are directly relevant to it.
The result of the inadequacy of regional policy in a time of economic decline, as under this Government is the 126 generation, not only of despair in a place like Grimsby, but of a feeling of inadequacy, even impotence, in coping with the problems that the town desperately wants to solve.
The result of regional policy here, as in so many other places, is not to develp the regions but to generate in those regions a begging-bowl mentality in which the trains to London are full of deputations and delegations going to different Government Departments for different forms of help rather than having the organisations and the framework through which they can help themselves. That is a particularly tragic weakness for a town such as Grimsby which had such a proud tradition of developing its area and which wants to fight back. It does not want to sit down and suffer the kind of decline that is happening. Local pride wants to encourage new industry to the area but does not have the facilities through which to do so.
Regional policy should set areas such as Grimsby free to help themselves. The Bill is inadequate because it does not do that. It does not provide Government backing to areas to help themselves. It does not set them free to build up their strength. That is a particularly tragic gap in the face of all that the Government have done to British industry, to areas such as Grimsby and to the declining parts of Britain. In the light of that, the Government should at least have had the sense of responsibility and the sensitivity to provide areas with the framework, strength and financial backing to fight back and rebuild destinies which the Government have ruined.
§ Mr. Wakeham
This was a wide-ranging debate even before the hon. Member for Grimsby (Mr. Mitchell) made his speech, and I make no complaint about that. The Bill is about a rather narrow range of subjects. It makes changes in the law applicable to several aspects of public expenditure and financial management. What it does not do is to make any significant change in the levels of public expenditure.
§ Mr. Wakeham
There is a considerable degree of agreement about the principle and there is substantial disagreement about the levels of public expenditure. I understand that. However, that is not what the Bill is about. We shall have substantial debates on the public expenditure White paper in the near future. [interruption.] No doubt the Opposition Chief Whip will assist if extra days are required. We shall also have a Budget introduced by my right hon. and learned Friend the Chancellor of the Exchequer, and there will be a debate on the Finance Bill, which will cover many of the subjects dealt with this evening.
I shall do my best to answer many of the points that have been raised. The hon. Member for Edinburgh, Central (Mr. Cook) welcomed the Bill and said that it would have the Opposition's support, subject to the many points that he raised. I am grateful to him for that. He raised several matters, one about Zimbabwe and the two out of the five loans which he identified which are not written off in clause 3. The other two loans were made by the International Bank for Reconstruction and Development to the Central African Power Corporation.
When the Rhodesian Government failed to service those loans, the Government honoured the guarantees and paid the International Bank for Reconstruction and 127 Development. However, during the period of UDI the Central African Power Corporation paid the interest on the loans into a non-interest bearing blocked account with the Reserve Bank of Zimbabwe. From May 1980 the money was invested in Zimbabwe Treasury bills, so it was available when the independence settlement was reached and it was agreed that Her Majesty's Government should be repaid. After a period of two years' grace from 1980 the repayments were rescheduled over a period of eight years at an interest rate of 8 per cent. payable on the amounts outstanding from the time of the settlement. To date, we have received £9 million.
The hon. Member for Edinburgh, Central said that the Treasury guarantees should not be treated as public expenditure. I understand that they are not so treated, except when the guarantee is called and that guarantee falls outside the public expenditure. In the normal run of things, the guarantees do not form part of public expenditure. As the hon. Gentleman will know, discussions are taking place between the Public Accounts Committee and the Government on that matter. I understand that the PAC has put forward a contrary view. The Government will reply to its observations, but at present, if Treasury guarantees are not called—that is, if the liability is not called—they do not form part of public expenditure.
The hon. Gentleman also mentioned the annuities and cast doubt on whether they should not have been dealt with long ago. The Labour party has had since 1973, when the original arrangements were made, to do something about them. It has had a reasonable period in government—many of us might think rather too long—and probably had a chance to deal with them. However, the Government have introduced a Bill to deal with that matter.
The 10 per cent. cut in manpower at COSIRA was part of a general drive to improve efficiency in Government and quasi-governmental organisations. COSIRA was able to find the 10 per cent. savings from its central administration and has also been able to redeploy some staff in the field. Therefore, it is both the organisation's and the Government's view that COSIRA is now more effective as a result of the savings.
§ Mr. Wakeham
I have no doubt that agreement on the figure was reached after negotiations. It is in the nature of such things that at the beginning of such negotiations there may be some differences. However, I have no details of the negotiations, although I congratulate COSIRA on its achievement in reducing central costs and thus making itself more effective. That is to its credit.
I think that all hon. Members have welcomed clause 7. The hon. Member for Newcastle upon Tyne, Central (Mr. Cowans), who made an interesting speech, claimed more credit than most for it. I do not complain about that. The Government are not even denying that he is entitled to his share of the credit, but we have introduced the clause and I am glad that it has been welcomed by the House.
128 The Bill is not about regional policy as such. Clause 2 is about regional development organisations. Hon. Members have expressed concern about the effectiveness of regional policy, just as the Government have. Our main aim is to concentrate on the areas most in need.
The Government are reviewing the effectiveness of regional policy. As the Prime Minister told the hon. Member for Easington (Mr. Dormand) recently, the purpose of the review of regional policy is to see how we can best help effectively and in the longer run to build industries that will have a future. We are aware that some industries that went to the regions—I suppose that Linwood is a classic example—did not have a future.
We have concentrated our help on the special development areas and we shall continue to do that. When the review of regional policy is complete, appropriate announcements will be made.
The hon. Member for Newcastle upon Tyne, Central and others asked about clause 2. The main purpose of the clause is to regularise payments to existing bodies. We think it right to provide for other similar bodies to be supported in the same way, for the benefit of other regions in the future. There is no commitment at this stage to do that, but we thought it right to include the principle in the Bill.
§ Mr. Campbell-Savours
Is it possible to talk of extending the provision when the part of the Bill dealing with public sector manpower says that it will have no material effect on public expenditure? That and what the Minister says cannot both be correct, unless the Minister is misleading the House.
§ Mr. Wakeham
I am certainly not misleading the House. The Bill sets the framework for future arrangements. The financial arrangements for any future organisations will be made, not under the Bill, but by way of Votes on the appropriate Department. The Bill makes it possible for the Government to set up additional bodies if they are needed.
§ Mr. Cowans
Clause 2(2)(e) makes that possible, but it does not say what qualifications are needed for the Treasury to pay out the money. It does not say whether social need will be taken into account. If the Treasury is to pay out, it must have some qualifications. What are they?
§ Mr. Wakeham
We are talking about organisations to promote development in a region. We are talking, not about organisation or payment, but about promotion. Negotiations with the local people concerned will have taken place and the organisation will have to be such that it can promote the region effectively. Each suggestion will be treated separately. Each area that comes up with proposals will be considered sympathetically. We are anxious for the regions to be promoted. I cannot go further than that, because whether a body is set up will depend on the region and the Government.
§ Mr. Cowans
Surely, under clause 2(2)(e), anyone may apply to promote a region, because no qualifications are set out. The Secretary of State will have to decide. Would it not be more fruitful to set out the qualifications? Would it not make sense to specify social need as a priority? If Uncle Tom Cobbleigh and everyone else applies, it will make nonsense of any regional policy that the Government have, if they do in fact have one.
§ Mr. Wakeham
The hon. Gentleman is still confusing regional policy with a regional development organisation. The Bill deals with a body to promote the region in other parts of the world and so on. The Government's regional policy is under review and will at the right time be announced, but it is no part of the Bill to deal with it.
The regional development organisations, the sums of money available and the division of those sums between the organisations are not strictly within the province of the Bill. The Bill is about the principle of making these grants. That principle is not in dispute. My hon. Friend the Minister of State, Department of Industry, in his written answer of 19 January, set out quite firmly the reasons behind the allocation of grants to each of the four regional development organisations.
§ Mr. Wakeham
It is not a matter for me, but I would say almost certainly not, because a northern regional development organisation covers that region. It is that organisation which deals with that area. Clause 2(2)(e) deals with providing regional organisations in those parts of the country that do not have them.
§ Mr. Campbell-Savours
I thank the Minister for giving way, but clause 2(2)(e) does not say that. It does not say "either, or". Clause 2(2)(e) is not presented as an alternative. It appears to us to be additional. In no way can it be said that clause 2(2)(e) precludes the right of any organisation within the northern region or any other part of the country that wishes to do so to promoteindustrial or commercial development".Will the Minister come clean at the Dispatch Box and tell us what we want to know? Can our individual industrial development promotional units, on the basis of clause 2(2) (e), go to the Government and be provided with additional money under a separate heading in another Bill? That is all we want to know.
§ Mr. Wakeham
The hon. Gentleman is asking questions the answers to which are not in the Bill. Of course, there is nothing to stop any organisation from going to the Government and asking for money. No Bill of which I am aware has been passed to do that. Whether an organisation would be successful would depend upon negotiating something with my hon. Friend the Minister of State. We are speaking in theory. I am saying that my hon. Friend is not likely to agree to a regional development organisation that will undercut the existing ones, some of which are doing extremely well. It is not the best way to promote a region to have two competing regional organisations in this fashion.
§ Mr. Cryer
The Bill does not refer to any regional body. It refers toany other body, whether corporate or unincorporate, whose principal object appears to the Secretary of State to be the promotion of industrial or commercial development in an area in England.The word "area" is not defined. It could be a region, a town or a county council area. It is available to the Secretary of State to use his discretion to decide whether to make grants to a town association or a county council association. It does not necessarily have to be a region.
§ Mr. Wakeham
I was not saying that it was. I was giving my understanding of how my hon. Friend would use the clause. I am not saying that it is not possible for him to use the clause to introduce two competing regional organisations in, for example, the northern region. I am saying that in my view my hon. Friend's likely decision is that that would not be the most effective and efficient way of using such organisations. If the hon. Gentleman thinks that there is a case to be made for using two competing organisations, or if his hon. Friends take that view, it is up to him or his hon. Friends to advance the argument to my hon. Friend.
A number of questions have been raised about the North West Industrial Development Association. The complaint of the right hon. Member for Manchester, Openshaw (Mr. Morris), who courteously told me that he had to lease the Chamber, is that there is a lack of co-ordination and other related difficulties. The right hon. Gentleman is to see my hon. Friend later this week to discuss these issues. It would be inappropriate for me to deal with details that will be discussed at the meeting. The matters which the right hon. Gentleman raised are exactly the same sort of items which my hon. Friend mentioned in his report to Parliament on 19 January. I have no doubt that there is every likelihood of a useful and constructive meeting later this week.
§ Mr. Cook
I am glad to hear that my right hon. Friend the Member for Manchester, Openshaw (Mr. Morris) is to have a useful and constructive meeting later this week. I am sure that he will welcome that assurance. The difficulty arises from the wide terms of the Bill. The clauses provides thatThat Secretary of State mayimposesuch conditions as he may … think fit.One of the conditions that he has imposed for three of the organisations is that local authorities must match Government grant pound for pound. NWIDA applied to be treated in accordance with the more generous formula applying to the North East Development Council. It believes that it met the same test that was set for the development council. If the Minister wants the Opposition to accept the clause—obviously we shall return to it in some detail in Committee—with such a wide and sweeping power for the Secretary of State, he must give a more convincing explanation to the House and the Committee than his hon. Friend gave when he made his statement on 19 January.
§ Mr. Wakeham
It would not be appropriate for me to add to my response other than to say that it seems that the complaints of the right hon. Member for Openshaw covered the same areas that my hon. Friend mentioned in his statement. My hon. Friend said:I have not … been able to satisfy myself that the requisite degree of commitment to a filly and effectively co-ordinated regional programme by all the local authorities and new towns in the north west has … been demonstrated."—[Official Report, 19 January 1983; Vol. 35, c. 145.]That is the sort of issue that can be best handled at a sensible discussion with my hon. Friend and not in debate on the Floor of the House tonight.
The hon. Member for Sheffield, Hooley (Mr. Heeley) expressed concern about Zimbabwe and the development there. The aid to Zimbabwe made or pledged by the Government amounts to about £113 million, plus £15 million guarantee on export credits. My right hon. Friend the Member for Aylesbury, (Mr. Raison), the Minister for 131 Overseas Development, was in Zimbabwe earlier this month. He pledged an additional £20 million. There will be £15 million of export credits and £5 million of additional aid.
The hon. Member for Holborn and St. Pancras, South (Mr. Dobson) referred to Crown Estate property. I am in no position to answer his detailed questions. The Bill extends leases to 150 years, which, as I said, is an important means by which the commercial property of the Crown Estate can be dealt with. No doubt the hon. Gentleman will pursue what he said. I have no idea of the detail or scale of what the hon. Gentleman said, but what he said was of little comfort to me.
The Crown Estate leases set out the rights and obligations of the lessees. The Crown Estate Commissioners are bound by the Rent Acts. The commissioners can intervene only if there is a breach of the lease. I have every reason to believe that the Crown Estate conducts its affairs properly and deals with problems that are brought to its notice when obligations that it has power to deal with have been broken.
§ Mr. Home Robertson
I have just noticed that clause 5 extends to the Isle of Man. I have not noticed a Bill in this Parliament that extends there. I realise that the Minister cannot reply off the top of his head, but will he give us some idea whether there are any precedents in this Parliament of Bills extending to the Isle of Man? Is that not normally the function of the House of Keys?
§ Mr. Wakeham
I have no idea whether other Bills have extended to the Isle of Man. I am sure that this one does.
§ Mr. Wakeham
I shall write to the hon. Gentleman, with the greatest of pleasure. I was about to answer the other points that he raised. He asked about the Development Commission in Scotland. The Scottish Development Agency and the Highlands and Islands Development Board took over the Development Commission's functions in 1975 and 1976. Most hon. Members who I have heard discuss these matters believe that the Scottish Development Agency does not do too badly. Most of the complaints seem to be on the other footing.
I have done my best to answer the points that have been raised. Some of them went wide of the Bill's main provisions. I do not complain about that. There is general agreement that the Bill does several useful things, and I commend it to the House.
§ Question put and agreed to.132
§ Bill accordingly read a Second time.
§ Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).