THE SPECIAL AREAS.

HL Deb 12 March 1936 vol 99 cc1013-51

LORD PORTAL rose to ask His Majesty's Government what steps they are taking in connection with the Report on the Special Areas by the Commissioner for England and Wales; and to move for Papers. The noble Lord said: My Lords, since I put this Question down in your Lordships' House there has been an important debate on the subject in another place, where the Government's answer was given by the Lord President of the Council, and one learned from that reply of certain steps they were prepared to take in these Special Areas. I cannot help thinking that the debate to-day may be useful and that one may have the opportunity in the course of one's speech, not only to ask for further information, but to make certain practical suggestions which may be helpful and prove a contribution to this very important question. When I had the honour of addressing your Lordships' House in July of last year I craved the indulgence of the House for the reason that my remarks must be on the question of South Wales as it was in South Wales where my investigations took place. Anything I may say to-day I feel certain will be applicable to the other Special Areas, but I must confine my practical suggestions to the Area of which I have first-hand knowledge. I know that a noble Lord who is going to follow me in this debate will be able to tell you the position, much more clearly than I can, in regard to the North-East Coast, but I think you will find, as was found in the debate of July last, that the same parallel cases exist in most of these Special Areas.

When I last addressed the House I drew attention to the work His Majesty's Government were doing, and tried to point out the necessity of appointing a Minister in charge of these Special Areas. I would like to draw their attention again to-day to the necessity of this. While saying this I wish to express gratitude for the great work which the present Commissioner, Mr. Malcolm Stewart, has done in these Areas during the last year and a half, and also for the work Sir Arthur Rose has done in Scotland. If you read the Report of Mr. Malcolm Stewart, and read between the lines, you will see, I think, that a Commissioner kept within the confines in which he has to work will not be able to do the real thing which counts, and that is giving work to these men in these Areas. If you look at that Report you will see that though a great deal has been done in the way of what I may call social progress, yet the task of finding employment, permanent employment, has been a bitter disappointment. I say bitter disappointment, because you will find that only approximately 26,000 men have been found work out of approximately 350,000 in these Areas, and if you examine that figure of 26,000 you will find that the majority, practically the whole of this number, have been found employment through being transferred to other areas. That is why I again stress at the beginning of my remarks that His Majesty's Government should consider whether it would not be possible to appoint a Minister without Portfolio to look after these Special Areas.

As regards what the Lord President of the Council said on the subject of what the Government were prepared to do, I would first of all like to refer to what I consider is the most important development in South Wales, and that is the reopening of the Ebbw Vale Steel Works by Richard Thomas. Although the Commissioner points out the work that he has put in to help to bring this about, I should like to mention that in May, 1934, after I had been down there only five days, I put the following suggestion to the Minister of Labour: I consider the opening of the Ebbw Vale Steel Works would prove the greatest benefit of all to these distressed areas. This would provide work in the steel works and the neighbouring collieries for 4,000 to 5,000 men. I shall go to see Sir John Beynon, Chairman of the Company, and also the Chairman of Barclays Bank. One knows the difficulties of reorganising the iron and steel trade in this country; one knows the tendency to place works on the spot where ore is obtainable, or on the seaboard where ore is easily imported, which proves that this is considered the most important factor; but one is bound to visualise this case from a different standpoint. Here you have an area where men are without work, with poverty and despair facing them, whose morale must merely sink lower and lower. I spent the whole day yesterday visiting and speaking to the local bodies of Merthyr Tydfil, Ebbw Vale Urban District Council, Brynmawr Urban District Council and Nantyglo and Blaina Urban District Council. One marvelled at the courage and the good faith of these men who were out of work through no fault of their own. I can conceive of no gesture which would have a greater effect in this locality than an effort to open up these works; this would bring new heart to the men and stand as a lasting testimony to the Government of the day. If you consider approximately £5,000 a week in relief benefit, approximately a quarter of a million a year, all our energies should be concentrated on seeing these works re-opened.

After I had written these words to the Minister of Labour I had interviews with Sir John Beynon on several occasions, and also the Chairman of Barclays Bank, from both of whom I received help and support. I wish to say that by the opening of works by Richard Thomas and Company the locality has been benefited in a most practical way. As regards the promise to this locality on behalf of His Majesty's Government of placing a Government factory in that locality, I would say that that was one of the ideas or suggestions which was also put in my Report. The reason why it was put there was this, that at that time it was very difficult, and it is very difficult still, to get private firms and private enterprises to go into those Areas, and I considered that if it was possible for one of His Majesty's factories to be put up in that district you would find that other factories would follow in its wake. I suggest to this House and to His Majesty's Government that there is a great opportunity to-day, arising from the force of circumstances and the big rearmament programme, to help these Special Areas. As we know—and most of us I think approve of it—there is a great rearmament scheme which His Majesty's Government are proposing to carry out which will benefit most of the heavy trades in this country. I should think it would be possible—and I am sure that His Majesty's Government are alive to the fact—that this will afford a great opportunity to help these Special Areas.

If your Lordships read the speech made by the Chancellor of the Exchequer in another place on Monday night you would see that the plant of certain sections of factories where Government orders are to be placed are going to be controlled by His Majesty's Government, and I do ask them in this connection to bear in mind these Special Areas. Though one must not discriminate between the Special Areas. I would like to put in a plea for South Wales from a strategical point of view. I suggested that in my Report at the time, and I wish to emphasise the point now. If there is war—and I hope there never will be—the question of strategical places must be taken into consideration. You can find no area that is better placed or positioned for factories of this kind than South Wales, and when the question of Government work and Government factories in South Wales is being considered, I would like to ask His Majesty's Government to consider the question of the old Dowlais factory at Merthyr. Merthyr district is one which is suffering more acutely than any other, and if any use could be made of that factory at Dowlais it would do an enormous amount of good and would bring fresh hope to the people who live in the district.

Your Lordships have read no doubt of an appeal by the Prime Minister, in a speech which he made, and by the Commissioner. Mr. Malcolm Stewart, to employers of labour to try to help in these Areas. The Prime Minister asked those employers of labour who had benefited by the tariffs which had been put, on in this country since the advent of the last National Government to show their goodwill for what had been done by putting their factories in some of these Special Areas. Most of your Lordships have also probably received and read the questionnaire which was sent round by the Commissioner and of which some criticism had been made owing to the poor response. I want to put this point of view and to make this suggestion. Your Lordships must realise that at the present time it is difficult for an employer, who is only part of an industry, to place hi s works in a Special Area which is probably not so economical as other areas he could choose because it is rated highly. To place his factory in such an area may be rather a sacrifice for ore employer when the rest of the industry does not act on the same lines. I suggest that it might be possible, instead of making an appeal to individual employers, to appeal to the trade federation of an industry to put factories in these Areas. Nearly every industry in this country to-day is organised and helped by its trade federation, which is the parliament of the industry itself, and it would be quite possible, where an industry has benefited enormously by tariffs, to ask its trade federation to see if it were not possible for every section of that industry to help pro rata to start a factory in a Special Area. That would be very much easier to do than applying to one individual employer to do it.

Take as an example the iron and steel trade, which has been helped enormously by the tariff that it has been given, and which has been reorganised and guided by its federation so ably presided over by Sir Andrew Duncan. That is one of the industries to-day which will benefit more than any other. It is benefiting at the present time enormously, and if this armament programme is carried through it will benefit as much as, if not more than, any other industry. It would be a great help if the Iron and Steel Federation could see its way in these difficult times to help in these Special Areas. Then there is the aircraft industry, to which, as your Lordships know, orders are being given more and more. The same thing might be done in regard to them. If a trade federation put up a factory in a certain Area it might well ask, first of all, what orders were going to be placed there. The answer would be a simple one. Where you have Government orders you can pool those orders among the members of the trade federation and run the factories in that way. When I was speaking to your Lordships' House at the end of July I suggested, in order to get factories in these Areas, that the Government should give out contracts on a ten-year basis provided someone would put up a factory. You might then get people to live there. The aircraft trade is unique with the orders that are being placed with it, and therefore I humbly bring this to the notice of His Majesty's Government for them to consider in allocating their orders.

When you get back to the question which was debated here in July last year of what is causing distress in these Areas, one really great cause of it—and I again speak of South Wales—is the coal industry. As most of your Lordships know, South Wales suffers more possibly than any other Area because it has relied so much on the export of coal. When I dealt with this question in July last year in your Lordships' House I mentioned various countries with which the coal trade of South Wales had suffered. This afternoon I only want to point to one most prolific market for South Wales, the Italian market. When the Scandinavian Trade Agreement was made and the North-East Coast benefited to the tune of about a million tons a year, the result was that the North-East of England pushed out Polish coal from the market in which it had previously been sold. The Poles sought another market, and went into Italy, and took from South Wales an identical tonnage to that which the North-East Coast had gained.

Then I come to the present position in regard to the Italian market. When we in this country applied sanctions against Italy, South Wales was again hit. This is not the time to discuss the wisdom of sanctions, but I do want to point out that while it is bad enough for South Wales to lose trade in open markets, when trade is lost by putting on sanctions it is twice as difficult to regain it. In any event, men, through no fault of their own, are put out of work again. The contraction of trade in South Wales through the loss of exports has hit very hardly the docks in that Area. The Great Western Railway Company have expended over £20,000,000 in developing docks in South Wales, and at present those docks are practically non-revenue producing. Any fillip which can be given to the export trade in South Wales would have a very beneficial effect in the resuscitation of those docks.

I would also like to ask His Majesty's Government if they can give any information—this again relates to the coal trade—on the subject of hydrogenation of coal. That also is a question on which I spoke in July last year. We know that the plant put up at Billingham has been carried on most successfully by Imperial Chemical Industries. Would it not be possible to develop hydrogenation in South Wales? The question of the supply of oil in this country is of greater importance to-day than it has ever been. I know that it is suggested that oil may be got from my own native County of Hampshire, but if oil could be got from coal in South Wales it would help that Area very much.

I am not going to take up much time to-day, because there are other speakers to follow, but there is another question I should like to put to the noble Lord who is going to reply. I should like to ask if he can tell me what steps are going to be taken in regard to the question of rating which presses so hardly on the Special Areas. One must realise, of course, that the Government give block grants which help in these Areas, and the question of the public assistance rate is perhaps one more for the Unemployment Assistance Board, but I would like to know what the Government are going to do because rates bear very hardly upon people and make the position in the Special Areas very difficult in comparison with other areas.

I would like also to say a word upon the question of the transference of labour from these Areas. A speech was made in another place by Mr. Arthur Jenkins and there was an interjection, and a very good interjection, made by the Prime Minister as regards the efficiency of labour from South Wales. I would like to appeal to employers of labour to do something to help the Special Areas in this way. If they cannot put up factories in these Special Areas, then, if they are carrying on business in places where unemployment is not so great as in the Special Areas, I would like to ask them to try to get some of their labour from the Special Areas. For certain developments which have taken place in my own business I have got all my labour, men and women, from the Special Area in South Wales, and I am glad to be able to tell your Lordships' House to-day that those men and women who have come from South Wales are both industrious and efficient. I cannot speak too highly of them.

This is the second time I have addressed your Lordships' House on this question and I crave your indulgence in speaking of it because I think that any one who has seen the state of South Wales—and I know it is the same on the North-East Coast—and who has seen what these people are going through, would not have a heart and would not have a soul if he did not, when occasion presented itself, stand up to do what he can for them. I have not conic here in any way to criticise. I have come here rather to try to help find a solution to this very difficult problem. If it is found necessary—as everyone realises it is necessary—to organise and plan so that this country shall not be unprotected if war ever comes, then, in fairness to those who have been out of work so long, this question should be treated as also one of major importance. I hope that the Government will do what they can, so that it may stand as a tribute to them that they helped people in these Areas, who are worse off than people in other places. I beg to move.

LORD FARINGDON

My Lords, we on this side of the House are grateful to the noble Lord who has put down this Question. We consider this to be a subject which cannot be excessively aired. I am afraid that speaking from this side of the House one is unable to keep a certain tone of criticism out of anything that one is likely to say about it. Indeed I am afraid that when speaking upon this subject it is practically impossible, whatever one says, not to make an indictment of the Government. The Government last year produced a little scheme. We protested at the time about its littleness. But even though it was produced by the Government I think we on this side may take some little credit, because I feel that in this matter we, in. the Socialist Party, speak with the voice of the conscience of England. We think that on this subject at any rate practically everybody in the country is with us. I am sorry to say they do not all vote for us.

The Government spent years doing nothing and when they did begin to do something they did it, as people do when they do something against their inclination, half-heartedly and inadequately, The Commissioner whom they appointed, and of whose work I think one cannot speak too highly, seemed in his Report—though it was not, I presume, intended to be a criticism of the Government—to produce an indictment. The Government have, of course, produced other schemes in the same manner. Their attitude to education and agricultural labourers' insurance has been the same. Both these subjects have been treated in the same half-hearted, gingerly way, and the Government have been forced to act only by the real feeling of the country. That is not the way to work that kind of scheme at all. Have a little generosity, and have a big, broad idea about it! It is necessary, it is essential. This problem is not insoluble, by any means. It is perfectly soluble; our Party would have solved it ages ago. It is, moreover, not a problem to be treated in this small, niggling way; it is a problem of the utmost urgency, and it is a problem on which we ought—in my opinion, and in Our opinion on this side of the House—to be ready to spend our last penny.

There is the moral decay which you do find and must inevitably find in young men—no longer now so young, some of them—who have never had a job in their lives. There is the misery caused by malnutrition—and malnutrition, my Lords, is only a new word for slow starvation. Your Lordships do not require to be reminded again of the various figures that have been produced by various non-political and authoritative bodies on this question of nutrition, but I should like to remind your Lordships of the death-rate figures for children under twelve months. I have them here. There is a town in South Wales, I believe, called Blaina, which appears to have the unhappy pre-eminence of the worst figures—118.8 per 1,000. Durham and the Tyneside have 80. The figure for the whole of the rest of England and Wales is 59, and the figure for South Wales, by the way, is 78.3. The doctors have left us in no doubt whatever as to the reason for these figures. The deaths are nearly all in the houses of unemployed men where the mothers have denied themselves in order that their families may cat and where, harassed and ill-fed, they are unable to bear children or to nurse them. The noble Lords whom I see on the Front Bench opposite are, I am sure, models of personal probity and of kindliness of heart, but I cannot help the suspicion that, in order to belong to this Government and also to have any humanity in one's system, one must also have some strange blind spot.

Various things have already been tried in this half-hearted way. I do not want to make this an entirely critical attack on the Government; I wish to make some suggestions in the manner of the noble Lord who asked this Question. The land settlement which has been done is, of course, admirable, but I think everybody admits that it is extremely costly. Public works are a method of giving employment for which we on this side of the House have been much attacked but which is now being used; it is only a temporary way of dealing with the problem. There is, of course, the school age, and I hope that the Government are not going to say that they have raised it, because, quite honestly, I do not think they have. Then there is a way of coping with quite a certain amount of this unemployment which will cost nobody anything—and that, I am sure, is a great attraction to His Majesty's Government: why not lower the age for old age pensions You would save the money you paid out on the smaller unemployment benefit that you would pay to the younger men. You would also be doing a humane act. That these old men should be allowed to retire is from every point of view desirable—we should, I am sure, all wish it for ourselves—and that the younger men should get jobs is possibly even more desirable.

Then there is a question which I should particularly like to ask the Government, and that is in connection with the reduction of the hours of labour. I should like very much indeed to know exactly why the British Government have persistently and consistently opposed this step at the International Labour Office. What is the explanation of this extraordinary attitude, an attitude which I am quite certain has hardly any support in the country at all, and an attitude which, in my opinion, is doing a great deal to aggravate this particular problem of the Special Areas? It stands to reason and it is obvious that, where you rationalise an industry, you are going to throw men out of employment. You get greater production for less labour. Surely the only excuse for all machinery is to give greater leisure to everyone; it is not only profits, I hope.

But again I should like to ask: Will the Government please, when they reply, tell us why it is their policy to oppose this reduction of hours of labour, of which, incidentally, two-thirds and rather more, I think, of the Powers represented at Geneva were actually in favour? Moreover, I do not think that the employers themselves need oppose this extremely desirable reform, because there is no doubt whatever—and it has been proved—that you get far greater efficiency of labour with shorter hours and have far less loss from men going sick. Messrs. Boots have made an interesting experiment, and I expect all of your Lordships have seen the result. It is the easiest way in which both these points can be shown. It appears to have been a tremendous success, and we ought all to be grateful to them for giving us an example.

Naturally, from this side of the House you would expect me to say, and I shall say, that I consider that the first step towards the salvation of those Areas would be the nationalisation of mines. I shall not go into the matter in detail, because it is perfectly obvious that the Government. will not do that, but I do venture to hope at the same time that it is just possible that the Government might be induced to set up some kind of selling agency for coal. I am convinced that such an agency would enable the price of coal to be lowered for the consumer and the consumption of coal thereby raised, because there is no doubt whatever that the consumption of coal, were it a cheaper article, would be raised enormously. There are far too many families in this country who go without coal in the winter. Such a large proportion of the price of the coal con sumed is kept by middlemen between the pit and the fireplace that even a National Government might be induced to see whether this robbery of the public and of the producers could not be reduced to some extent.

I should like to add one word to the remark of the noble Lord, Lord Portal, who pointed out the strategic advantages of placing our industries in remote, or remoter, areas. That is that it is dangerous to place your industries all round London. It is obviously going to be far more difficult if London is indefensible, as we are given to understand, and even if it is not, to evacuate your Capital if it is surrounded with factory areas and always growing. To my mind the most hopeful, and in fact the only, line to take is the creation of new industries in those Areas. The noble Lord, Lord Portal, said that the Government had tried to persuade our capitalists, employers, factory owners, to put their factories in those Areas. I do not consider that the Government ought to be in a position only to ask. They ought to be in a position to insist. They are in a position to insist. They have given every kind of industry which has come near them every kind of subsidy and tariff, and if no response were made it would be perfectly easy to withdraw these subsidies. Moreover, I would suggest—I am told that this system has been tried or is being tried in Ireland—that new factories might only be allowed to be put up with a licence. You would then be able, when anybody wanted to build a factory, to say: "Yes, you can have your licence, but your factory must be built here or there." I think that is merely reasonable.

I do not see personally, I admit, very much hope that industries will react to the Prime Minister's appeal. The evidence is somewhat against it. There have, I find, been only seven factories erected in the Special Areas, and there have been some 478 erected elsewhere. It does not look as if the appeal had been very successful, or as if it were one which would be successful. In reply to the letters sent out to members of the Federation of British Industries on this subject, 4,100 out of the 5,800 letters sent out were ignored completely. They were not even replied to. It does not look as if requests are going to be very helpful with people like that. I would suggest that even His Majesty's present. Government might consider the erection of Government factories in these Areas. The Government are bent on spending vast sums on armaments—they apparently are going to enable factories to increase their size—and I suggest that instead of doing that, if they cannot get these people—private enterprise—to put up these factories in the Special Areas, the Government, instead of giving them orders, should themselves build their own factories and do their own work.

In that way you will get your factory where you want it, and also get your finished article a great deal more cheaply. I would only remind your Lordships of the figures given before a French Committee with regard to the private manufacture of armaments. They showed that about one-third of the cost of a battleship went in profits. I do not know what is the cost in this country; but on the lines that I have suggested the Government might effect economy, and at the some time relieve the distress of these Areas. I beg to make one last appeal to the Government on a ground which, since they are not moved very deeply by humanitarian motives, may move them rather more. They are making an appeal for recruits. In these Areas, owing to starvation and insufficient diet, you will find that your unemployed are not fit for your Army. Might I suggest to the Government that it will need more fodder for its cannons, and might spend a little money in making the fodder of good quality?

VISCOUNT RIDLEY

My Lords, the noble Lord who moved for Papers spoke with great experience of the Special Areas, and in particular that of South Wales, which he personally investigated for the Government over a year ago. He has very clearly put the conditions that existed there at that time, and the conditions which prevail at present. I can only speak from observation of the Special Area of the North-East Coast, which includes Durham and Tyneside, and I do feel that since the last debate, which was held in this House on this subject about six months ago, the attitude of the Government has never been very clearly explained. A question was asked at that time, and the answer which was given was very non-committal. I would like to emphasise this, that those who are interested and concerned in the matter are very much left in the dark, and are very anxious to know whether the Government's policy is really to support the Commissioner in what he wants to undertake, or whether it is the fact, as one certainly gets a feeling from reading the Report, that the Commissioner has great difficulty in getting the Government to support him in any measure that he wants to set going.

I would like to discuss a little this question of the bringing of new industries into these Special Areas, which has been referred to by noble Lords who have spoken. It seems to me that the first thing to be done is for a Government Department, or the Commissioner, or whoever takes the responsibility, to decide in a definite way which part of which Areas you are going to revive in an industrial sense, and which parts on the evidence before you you must allow to change character and possibly revert to rural areas. There are parts of the Special Areas on the North-East Coast which vary widely, and I think that before anything constructive can be clone that policy must be made clear, as to which part of those Areas is to remain industrial and which part it is better to recondition as a rural area.

In all the attempts which have been made to analyse the reasons why new and more modern industries have tended to be established in the South and the Midlands, the reasons which have emerged are curiously similar, from all the investigations undertaken—the original investigation in the Durham and Tyneside area by Captain Wallace, the First Report of the Commissioner for the Special Areas and all the bodies interested in the problem. There seem to be several reasons, which can be stated in this way. First of all one gets the impression that those who are interested in, or intend to set up, a new factory, or branch of a factory, are frightened by the fact that rates are high and costs too heavy. In that connection it must be remembered that a manufacturing business only pays 25 per cent. of the rates paid by other ratepayers. I believe myself—and others think with me—that this fear of the rates being high is very largely an imaginary one. It is more a fear than an actual detriment in practice.

There is also a fear that a factory, say in South Wales or on the North East Coast, is too far from the railways and that distribution of goods is difficult. It must be remembered that the trades one is trying to encourage there are those which would not be exporting trades, but trades which distribute their goods throughout the country and attach particular importance to the availability of markets. On that account there seems to be no apparent detriment to the North East Coast. Take Newcastle as a centre. That has as good distribution facilities as could be wished. There is, in fact, as large a population within 125 miles of Newcastle as there is within 100 miles of London. So I think it can be said that that reason would be inoperative if only the facts were made more widely known.

Again there is the fear of labour troubles and a prejudice against labour on the North East Coast, which is highly organised and very efficient. It is feared that that organisation of labour would lead to strikes and trade difficulties. That, I believe, is a prejudice due to the history of the past, when there were strikes and difficulties, but I believe that at present that does not operate. In fact, in the Report of the Commissioner, Captain Wallace, figures were included which showed that the percentage of days lost through labour disputes was lower in this particular Area than in the rest of the country.

Another reason, one of those most frequently given why new industries are not being established in these Special Areas, comes under the very vague heading of "amenity." It is rather difficult to assess exactly what that means. I think it means that the Areas are in some cases dilapidated. There are old and disused works, old and unsightly buildings all over the place, and there is no general atmosphere of encouragement. What can be done to remove that? I think that the first step which should be taken—and which I may say is being taken by the Commissioner—is the clearing of some of these old sites, the removal of ruined buildings, so that the place may be made new and respectable. The Commissioner in his second Report has also announced his intention of setting up a company to operate a trading estate in the Area. This estate is to own land, build buildings, and let factories to any intending manufacturers in the district who will employ a quantity of labour. I believe that is a step iii the right direction, and I would like to ask Isis Majesty's Government to make some provision whereby this undertaking may be continued as a permanent entity. It is not a policy which will obtain quick results, it can only take a very long time to mature, and it is most essential that very careful provision should be made that this undertaking may be carried on as long as it may be found necessary, which I venture to predict will be a very long time.

Another reason quoted for the tendency of modern industries not to be attracted to the district was the difficulty of obtaining financial support to invest in new companies. That is mentioned in the first Report of the Commissioner, and again in his second Report. It is a question on which there is almost complete unanimity amongst the representatives of the different Special Areas. It seems apparent that there must be some organisation set up, which will almost certainly require a Government guarantee, prepared to invest money in likely undertakings, or to lend money on short term to businesses contemplating expansion, and prepared to take a small return on its money, and possibly to incur losses on some occasions. The need for this is apparent when one considers how easy it is for any sound and promising business to obtain financial support for investment if the right people are approached. One finds that the people to approach for this purpose are always located in the City of London, and naturally the result is that the businesses which are encouraged by the investment of capital are also located within easy reach of London. I believe that His Majesty's Government have given a nominal approval at any rate to a proposal of this sort. I know that this has been before them in some form or another for over a year, and I would ask that there should be some definite decision taken. I believe, as many others with me believe, that this is one of the most important things that can be done to make a Special Area attractive to industry.

It seems to me that there are two methods of encouraging new industrial developments in an Area such as this: either to make it attractive, to make if worth people's while to go there, or else to adopt the alternative suggestion which was made by the Commissioner in his first Report, that is, the introduction of a system of licences for the establishment of factories. It surely does seem wasteful when one considers that the whole of a Special Area is built up, occupied with houses, and supplied with all the necessary social services, and the people there are unemployed and the land wasted whereas another entirely new industrial community grows up in such places as the outskirts of London where social services, the making of streets and the provision of lighting have to be undertaken. I am glad therefore to see that in the debate which took place in another place the Government accepted the principle of encouraging industries to go to the Special Areas.

Another question is that of armament factories. The present condition of the Special Areas is almost entirely due to their having concentrated in the past on one type of manufacture only, such as the coal trade, heavy engineering, and shipbuilding. The sudden cessation of armament building soon after the end of the War had a profound effect on the organisation of industry in the North-East in particular. If the policy of the Government is to be to spend a large amount of money on armaments, there is this danger, that unless this expenditure is to be continuous—which one hopes it will not be—there will again be a sudden diminution in work provided by this type of expenditure. There is the possibility, in fact the likelihood, of the present situation repeating itself in, say, two or three years time if the armament expenditure is the only one which the Government are inclined to contemplate. In any event, I suggest that if any analysis is made as to the parts of the Areas which are to be industrialised and which are not, they will have to be re-organised in a way which will involve a. considerable amount of expenditure. There are old buildings to be pulled down, old pitheads to be dealt with, roads to be repaired and so on. There are parts of these Special Areas which are literally dilapidated and dangerous. Whether the policy is to encourage industry in particular parts of an Area or whether that particular part of an Area should become rural again, in either event something will have to be done about clearing up these eyesores.

The Commissioner has made a beginning on this, bat I should like to ask His Majesty's Government whether they contemplate having any plan of this sort, or whether they are content to leave it to the Commissioner to do a little cleaning up where he can and where he is enabled to do it by his powers. The Commissioner makes the recommendation, the very serious one, I think, in his Report, that those who are trained in Government employment centres should be guaranteed at least a year's work. He says that the training, and the money spent on training, are very largely wasted if men are allowed immediately to go back to unemployment-, and he follows that up by saying they should be given work of a national character. I do not suggest that national expenditure on relief works is the only cure of this problem, but I do believe it is essential for two reasons as a temporary expedient while the long-term efforts are maturing. It is essential that something should be done to improve the physical aspects of certain parts of the canary, and it is essential that employment should be given so as to improve both the health and the standard of living of the people, and also to improve their purchasing power. Supposing any industries are attracted, they must rely on the local market to some extent, they must rely on local purchases of their products.

One of the most important questions to which the noble Lord, Lord Portal, referred was the question of rates. It is really extraordinary when you realise that in Durham that part of the county rate applicable to public assistance for the year 1934 was 8s. 6d., towards which there was a grant of 7d. from the special Distressed Areas grant, whereas the average for the whole of England and Wales for the same year, 1934, was 2s. 11d. That is a very striking difference, and I do not see how any Area can be expected to help itself towards recovery in those circumstances. As I have said this question of high rates is a detriment to industrial enterprise. There is also the fact that any local authority that has to pay up to 8s. 6d. for public assistance cannot properly and fully exercise its functions to the extent of providing the services which are required. It has been said that any effort to level the public assistance rate throughout the country, such as paying the difference from the Exchequer between the average for the country and that which would be chargeable in any particular district, would reduce local responsibility and reduce the effectiveness of local government as such. I find it rather difficult to understand how that can be said. For one thing, under the present system, where a local authority has very little left to spend after the public assistance rate has been raised, it necessarily follows that its functions for local government are rigidly curtailed because expenditure otherwise must be very limited.

I think it is right to point out that those areas which have the highest burden of public assistance rate to pay have at the same time, in the very nature of the case, a greater need for local services, because, as there are more unemployed, more services are required. It is very doubtful whether the present block system of Exchequer grants can be modified as has been suggested to operate in a way which would be fair to the Special Areas. It is a fact that in one particular case the proportion payable to the local authority has been reduced in the second period as compared with the first period, so that even in spite of the weighting of the grant, as it is called, in an area where unemployment has increased, the net result is that the Exchequer grant has been reduced. That is the result of an experimental formula which is being reviewed, and which does not seem to be achieving the effect intended. Another method should be adopted, and that is a direct grant should be paid to make up the difference in the public assistance rate.

What has been the effect of the Special Areas Act which was passed in December, 1934? The noble Lord who spoke first to-day said there has been a reduction of only 26,000 in the unemployment figures for all the Special Areas, of whom 21,000 have been transferred to employment elsewhere. That is a very insignificant effect. I think that the reason for the comparative failure of this Act lies very largely in the wording of the Act itself. There are limitations on the actions of the Commissioner whereby he is not allowed to make a grant to any local authority in respect of anything towards which a Government Department could make a grant. He cannot make a grant to any local authority without the assent of the appropriate Government Department, and the procedure is very complicated. An application for a grant for any purpose has to go first of all to the District Commissioner, it may be in Newcastle or in the corresponding centre in South Wales. It has then to go to the Commissioner's Office in London; it has to go to the appropriate Minister, the Minister of Health or the Minister of Transport; it has to be approved by the Ministry of Labour, who are responsible for the Commissioner's work; and very often it has to be approved by the Treasury. That seems to be a very complicated and very long way round.

In his first Report the Commissioner complained that these limitations made his work more difficult. He complained that while in the words of the Act he is free to make suggestions and proposals to Government Departments, in practice these limitations were enough to prevent him from carrying many of them out. In his second Report the Commissioner makes no such complaint. I do not know whether the Commissioner finds it is hardly worth his while to reiterate what he has complained of before, or whether he assumes that the two Reports will be taken together, but I do think the Government should seriously consider modifying this Act. If the intention is that this problem should be tackled in an energetic way and on a major scale, it must be done through machinery less cumbersome and more powerful than is being used to-day. The Report which is the subject of this Question states that a total of £3,500,000 has been spent or promised in the year's work. If one considers the limitations imposed by the Act of Parliament, that is a very creditable result: not that it represents the total of what might have been done, but I think it represents a great deal, considering the limitations under which the work is carried on.

There are in the second Report two main proposals as such. One of these is on the question of providing finance to be invested in new industries to be established in these Areas; the other is the question of juvenile employment after training. As well as that, there is a good deal of description of social service schemes, voluntary labour schemes, agricultural small holding settlement schemes, and so on, which, though excellent in themselves, are only on a very small scale, and can only be on a very small scale. There has been considerable criticism of the Commissioner's action in limiting the agricultural settlement schemes to the small ones, but it appears from the argument of the Report that he is justified in so doing.

The effect of a grant from the Commissioner to a local authority which is in financial difficulties must also be considered. It has been the policy, I think I am right in saying, on the North-East Coast, that on no occasion of any scheme has a grant of 100 per cent. of the cost been made. I say that subject to correction, but I do say that in the majority of cases the grant has been anything up to 75 per cent., and very often it has been something like 50 per cent. The effect of this is that the local authority concerned, supposing it wishes to undertake a sewage scheme or a hospital scheme or something of that sort, is very likely not in a position to obtain the consent of the Ministry of Health to a loan for that purpose. The Commissioner paying a 75 per cent. grant means that the remaining 25 per cent. has to be met by the local authority. The result of that is that the expenditure of the local authority is increased. I think it should be seriously considered whether such schemes should not be either adjudged to be unnecessary or unworthy of money being spent upon them, or should be paid for entirely by the Commissioner in cases where it is found the local authority is not in a position either to borrow money or to pay for the work from the rates.

It is, I know, very difficult to criticise the operation of any scheme such as the Commissioner has undertaken, and indeed it is true to say that on every occasion the Commissioner himself has shown very great sympathy and keenness in endeavouring to meet the needs and troubles of the Area. It is only with the intention of trying to persuade His Majesty's Government to take a longer and a more serious view of the situation that I have criticised as much as I have. It is not true to say, I think, that it is an easy problem, or that any Party could have solved it at any time, but it is certainly true, in my belief, that much more could be done and a larger and bigger view could be taken of it. I hope His Majesty's Government after to-day's debate will give us some idea of their policy, will give us some idea, as indeed they were asked to do six months ago, of how they view the actions of this Commissioner, and whether they propose to back him up in his Report in a much more energetic manner.

THE LORD BISHOP OF WINCHESTER

My Lords, I am very glad the noble Lord, Lord Portal, has brought this matter one again before the House. There is, I think, a real danger that in the increasing prosperity of the country the tragic lot of these Areas may be overlooked, and that the Government, naturally absorbed in the present problem of the Continent, may not be able to give sufficient thought to the very grave difficulties in which these Areas still are. The Report, if it shows a great deal of active work which has been done by the Commissioner and gives an account of a large number of most valuable experiments, also shows that the position is fundamentally the same as it was when we discussed this matter over six months ago. You still have a vast amount of unemployment. These districts have not shared in the increase of employment which is found elsewhere in the country. You find in many of these communities that fifty, eighty and I believe in one or two cases ninety per cent. of the population have been out of work not only for months but in some cases for over a year, and a sense of hopelessness steadily creeps over the people who are living in these Areas.

I think it is possible to adopt two logical attitudes towards this problem. You can say that the position is hopeless, that there is no future for the district, and if that is the case all that is left to be done is to pension off as far as you can the older people there and to transfer, if need be compulsorily, the younger men and the able-bodied. That policy would be as disastrous as it would be impracticable. The other policy is to say that there is a hope of restoration for these districts, that we are convinced they can be restored, perhaps not to the full prosperity they enjoyed in the past, but restored to a large amount of prosperity, and that we will do everything we can to help them on the way towards this. I am quite certain that members of the Government feel as deeply about this matter as anyone else. It would be deplorable if this became a mere Party question. It would be a tragedy if people tried to take Party advantage out of the misfortunes of the community. But where I think the Government have made a mistake is that, while they have been very sympathetic, while they have allowed a large number of interesting experiments to be tried, they never seem to have really made up their minds that these districts can be restored to prosperity and to have planned and worked accordingly.

Let me take for an illustration certain recommendations—I shall speak very briefly—which are made at the close of Mr. Malcolm Stewart's first Report. He ends his Report by summing up the general principles on which he thinks these districts might be restored and by which industry might be directed to them. He says that, firstly, it will be necessary for the Government to make financial grants to influential and widely representative development councils in order to give them every opportunity of planning reconstruction; secondly, the Areas must be relieved of all excessive burdens; and, thirdly, resident District Commissioners are essential to watch over the interests of these Areas. These are three lines of advance suggested by Mr. Malcolm Stewart, and I am doubtful if the Government have as yet pledged themselves to advance on one of those lines. Undoubtedly there is some question of considering, and considering very carefully, giving certain grants, but so far no definite statement, as far as I know, has been made. Although a number of very useful ameliorative reforms have been put into action, there is no sign of any comprehensive planning dealing with the matter. I cannot state this better than by quoting a few lines from a leading article in The Times. It says that these projects are seen rather as tentative experiments than as bold and confident steps towards recovery. They have the character of departmental measures, and do not bear the stamp of a concentration of the resources—legislative, administrative and financial—which a Government of determined mind could bring to bear on a problem both complicated and obstinate. Passing from these rather general observations I want to refer to one special matter on which the Commissioner in both his Reports has laid great stress—that is, the problem of the adolescents and the younger men who are without work. From the schools in these districts, year by year, there come a number of children whose parents have not been in work for a considerable time and they find themselves also without work. Between the ages of fourteen and eighteen you have a number of these adolescents who are simply roaming the streets without work and without any possibility of work. Of course, as the Commissioner points out, these children ought to be dealt with under the Unemployment Insurance Act, 1934, which allows junior instruction centres to be set up, and if that Act was fully applied this difficulty would be very largely met. But he goes on to say that many of his proposals may be brought to nothing because local authorities are not using the powers which they have in this matter.

May I quote a sentence or two: I regard it, therefore, as most unsatisfactory that, up to the present, not a single centre has been opened in West Cumberland by the Cumberland education authority, although in that area there were on an average throughout 1935 some 1,100 boys and girls registered as unemployed. In South Wales also, insufficient progress has been made…it is most regrettable that so little progress has been made in Monmouth-shire. We must all recognise that there are special difficulties in all these districts in providing these centres, but I hope the noble Lord who replies for the Government may be able to give us some assurance that the Minister of Education will do his utmost to press these localities to support these centres. Mr. Stewart then goes on to say that even greater is the problem of those between eighteen and twenty-one. There are 11,000 of these. Most of them have had no work and have no prospects of work. They are open to all kinds of demoralising influences and may eventually become a real danger to the nation.

Then, coming to instructional centres, he points out the weakness that after young people have been to a training and instructional centre they find there is no work waiting for them. Having had their training, they go back to their homes and months follow without any work. His recommendation is that the Government should guarantee a year's work to any of those who have passed through these instructional centres. That, no doubt, would mean the establishment in certain cases of national work. I know the strong objections which can be raised against such work, but quite exceptional circumstances call for exceptional remedies., and I think it would be worth almost anything to secure work for these young men who otherwise will grow up to be probably a drag upon their country and quite unable to do it any service. I hope the Government will be able to make a statement showing that they are prepared in every kind of way to apply economic, industrial and social measures so that these unhappy districts may be set on the highway to recovery.

EARL GREY

My Lords, the noble Lord, Lord Portal, to whom we are indebted for introducing this subject, said that he spoke from knowledge of South Wales. He praised the action of the Special Commissioner. The noble Lord who spoke from the Labour Benches praised the Special Commissioner. I have no knowledge of any district except of Durham and Tyneside, and I think it would be less than fair in your Lordships' House if somebody did not say that the expectation that five men could be found on Tyneside or in Durham to praise the work of the Commissioner would be optimistic. I am perfectly sure they would not be found. We have had a great deal of rather polite criticism of the Government this afternoon, but I was delighted to hew my noble friend Viscount Ridley finish his remarks by appealing to the Government to change the Act under which this scheme is operated. This Act was produced with a great flourish of trumpets and was held out as one of the means of reintroducing hope into the Special Areas, but if you go there you cannot see that anything has happened.

The Special Commissioner himself has spoken of the importance of bringing hope to these people, but the Special Commissioner's visits have not been so frequent that they are calculated to bring hope. In the whole of 1935 the Special Commissioner paid only two visits to Tyneside and Durham. He was there for a few hours in January, and he went to lunch there with the noble Viscount, Lord Ridley, in December. On that occasion he caught the afternoon train back to London, as I know because I saw him on the train. When that sort of thing is going on in the North it is perfectly obvious that the Special Commissioner has no good friends there and is quite obviously losing a great deal of prestige for the Government. I am sorry to appear to attack the Special Commissioner. The Special Commissioner is the victim I believe of circumstances. He is just one more instance of a man who has done conspicuously successful and able work in re-organising an industry, who is then put to work with a staff exclusively drawn from the Civil Service and finds that the different methods employed in the Civil Service render him completely powerless to work his plans. I believe that is inevitable if you borrow staff from Departments who have been overridden, and your staff is going to be reabsorbed by those Departments at the end of two years. The success of the Special Commissioner's work must depend on how far he succeeds in overriding the ordinary work of those Departments. As a result it is quite clear that delays have prevented him doing anything.

I believe that my noble friend Viscount Ridley is perfectly right. Unless you succeed in changing the Act under which these operations are done, you will not do anything which will cut any ice. I do not believe it is possible to find anything which has been done in Northumberland and Durham during the last fifteen months which could not have been, and would riot have been, done by the Departments themselves if there had been no Special Commissioner. I think it only right that your Lordships should realise that that is the opinion generally held on Tyneside and in Durham. We regret it, and we deplore it very much. My noble friend Viscount Ridley said in much more tactful language that it is rather disheartening sometimes to wait for decisions. I think I may gather from that that he agrees with me that there is no clear evidence to anybody living in these Special Areas that there is a determination to push on with this extraordinarily difficult work, and in consequence all hopes of seeing real good come from the efforts of the Special Commissioner are rapidly disappearing.

LORD ELTON

My Lords, this has been a long as well as a very instructive debate, and I have no intention whatever of inflicting on your Lordships a formal contribution to it. I do, however, venture to hope that I may be allowed, for about two minutes, before the representative of His Majesty's Government replies, to make three comments which have occurred to me in the course of the remarks to which I have been listening, which have fallen so eloquently and so instructively from four or five members of your Lordships' House. It has been most remarkable that the contributions have all been so constructive. Even the noble Lord on the opposite Benches, although he made a few pugnacious gestures at the outset of his speech—during which I could not help being surprised that he regarded it as a defect in His Majesty's Government that they should introduce the Special Areas Act in response to a wide public demand; it seems a very good and democratic reason for introducing an Act—soon allowed his natural constructiveness to get the better of him, and, except for a few reversions to the earlier manner, I agreed, if I may say so, with a great deal of the latter part of his speech.

The first comment I wish to make on what has been said—or, what is more instructive, on what has not been said—is that I hope we shall remember that this is a very long-term problem. Obviously what troubles us in the immediate present is the short-term problem, but I venture to remind your Lordships that there is inextricably involved in it a long-term problem as well: the problem, of course, of seeing that the present prosperous areas do not in their turn become the Special Areas of the future. I think that any proper policy of rescuing the Special Areas at the moment must combine with it some policy for ensuring that the prosperous areas do not in their turn share the fate of the Special Areas. I think I am right in saying that The Times newspaper, between 1896 and 1898, published a series of articles on the Industrial North which contained, prophetically, many of the reasons which we are now, this afternoon in your Lordships' House, discussing, for the distressing state of affairs in the Special Areas to-day. I think that any alert reader of those articles forty years ago would have been able to derive from them the lesson, which we have not yet put into practice—among other lessons, at ally rate—that a reserve fund and the spreading of risks is a good policy, not only for individuals and individual firms, but also for areas.

My second point is this. I suggest that unemployment is not the sole test or the sole evidence of poverty. Naturally it is the one that forces itself first and most acutely on our attention. It is an easy stick with which to beat a Government, and it is an easy calculus by which to measure the progress of prosperity. But I venture to say that, if every unemployed person in England to-clay were to obtain to-morrow the employment which he is seeking, the South of Wales and the North-East Coast would still be relatively Special Areas. The reason for that is that, as statistics show, they possess, relatively to the country as a whole, an astonishingly low earning capacity; and that in turn is primarily because, being areas of heavy industry, they are areas in which a relatively small proportion of members of the family are income-earners. The result is that a low income relatively to the rest of the country is being earned even when the Area is prosperous.

If I may give an example (I am only-going to be another couple of minutes): in the Census of 1931, if you had compared the state of affairs in Rhondda and in Oldham, which I believe are places of almost the same population—at any rate within 10,000 persons—you would have found that the unemployment figure in Rhondda was 13,500 and in Oldham 18,500. At first sight you would have said, taking the accepted test, that Oldham was very considerably worse off than Rhondda because it had a considerably higher percentage in its unemployment rate. But, if you had looked further, you would have found that the employed in Rhondda were only 42,000 while the employed in Oldham were 63,000—very considerably higher. The fact is that South Wales and the North-East Coast are suffering, quite apart from the unemployment rate, from that characteristic malady in an area of heavy industries: the small percentage of members of the family group who are bringing income into the home. Consequently, all through those Areas there is less earning power and therefore, naturally, less spending power and less attraction to outside businesses, outside renderers of services, to come into those Areas, take their risks and spend their money. That points to the necessity, in any planning for those Areas, of not merely thinking in terms of more heavy industries, such as armaments, but also of thinking very largely in terms of diversifying the economic picture, the industrial structure, of those Areas and introducing new types of industry, preferably light and subsidiary industries, which do not suffer from that characteristic of the heavy industries (in which, of course, a woman or a child is not normally capable of taking part) that it is such a small percentage of the family group who take part.

My last point is this: Would it not be possible for the Government to press on farther with the policy of decentralisation? It looks as if London were becoming almost dangerously the Capital of the country, not only because of the industries which it attracts, but also because of the enormous proportion of the country's talent and earning power in the higher grades which is attracted there. Cobbett—I have never been able to understand exactly why—used to refer to London, you will remember, as "the Wen"; and if that metaphor was meant to represent the exaggerated growth of the head of the country in proportion to the rest of the body, I think we are beginning to see its force to-day. I believe there are very few salary-earners earning over £1,000 a year in public employ outside London—relatively extra-ordinarily few. Now an example of decentralisation was begun by the Post Office not long ago, and decentralisation is being undertaken to a very considerable extent, I understand, by the British Broadcasting Corporation. These are devolving more responsibility on their regions, and are sending out there highly-paid, responsible officials, who not only bring earning power into other parts of the country but also give a lead in civic enterprise. That example has also been set by a number of industries, and I hope that His Majesty's Government will find it possible, when they are planning not only the increase of armaments but other Government enterprises, to bear in mind the necessity of decentralisation. Those are only a few disjointed remarks, my Lords, which have occurred to me in the course of the debate. I hope it is not too much to ask that His Majesty's representative may deal with them shortly in his reply.

THE EARL OF KINNOULL

My Lords, I have long suspected—and the course of the debate rather confirmed my suspicions when I listened to the contribution which fell from the noble Lord, Viscount Ridley—that the truth about this matter is that the Government have never been really whole-hearted in tackling the problem. It is rather difficult to see, even to-day, after reading through the debate which occurred in another place a few days ago, what they intend to do. It is true that the right honourable gentleman the Lord President of the Council did throw out some hope that in their new rearmament programme they were going to try to establish aircraft factories in these Special Areas. If, however, one examines this proposition it is not so good at second sight, because in order to construct aero-engines and aeroplanes you need mechanics who are extremely skilled people. I very much doubt whether you would be able to find such skill in sufficient quantities in those Areas, and if you could not, it would mean drafting the necessary skilled people into the Areas. Then, though naturally a certain number of highly-skilled local workmen would be able to find jobs, the Government's plan could not have quite the same effect as it might have had if all the necessary skilled labour were available in the Special Areas.

The noble Viscount, Lord Ridley, talked about the broken-down and tumbled-down factories that are there, and said they should be cleared away, and that the present Commissioner was working to that end. I am glad to hear it, but I would go further. I would say that the factory owners and manufacturers, when they decide to clear out and leave their factories derelict, should be compelled to pull them down and tidy up the place before they leave it. As my noble friend Lord Faringdon said, the Government have subsidised industry in every way for years, by quotas and tariffs, and in 1929, under the Local Government Act, they gave enormous sums to industry by reducing rates by 75 per cent., quite irrespective of whether a firm was prosperous or not. Four million pounds per annum were given to the railways, and a similar sum to agriculture. Three million pounds per annum were given to coal, and upwards of two million pounds per annum to engineering. I say that, giving all that, the Government have a right to demand that industry shall now set up factories in those Areas. Populations are not mobile, and it is not practicable to move them from one area to another. People dislike leaving their homes and associations. On the other hand capital is entirely mobile. I believe, as has been suggested in this debate, that by a form of licensing locality sites for factories, firms can be forced into building these factories in the Special Areas.

I think it was Lord Ridley who referred to the question of rates. He quoted figures, and as his figures correspond with those which I have, I do not propose to read them, except to point out that the general rate of Durham amounts to 18s. 3d., whereas a South coast town only pays 7s. as its general rate. That is manifestly unfair to theratepayers of these Special Areas. It simply comes down to a question of the poor having to keep the poor. Cannot this question of rates be adjusted by means of a special grant? Small holdings have been proved useless, and I want to ask the Government to what extent they have examined largescale farming. Production has, in the last few years, increased, as the noble Lord has said, and it has increased very largely, while employment in the same industry has decreased. More coal has been produced by miners, but fewer men have been employed in getting it out. Yet the Government have consistently opposed a forty-hour week. I want to know why they have done so. Again, I would suggest that the Government could have raised the school-leaving age at any time during the last five years, instead of producing a Bill at long last, the practical effects of which appear, at the moment, to be extremely doubtful. The age of being eligible for pensions might have been reduced, but nothing has been done. I suggest that any of these things would have helped towards solving the problem.

I repeat that the Government can, and have the right, to demand that industry shall rehabilitate these Areas by building factories there instead of around London. This can easily be done by licensing sites for new factories. This is not only a Socialist proposal, but is in force, so I understand, in a capitalist country, the Irish Free State. Although I believe that the fault lies in the system, I further-more believe that when a person has something wrong with him and the illness expresses itself by boils coming out in the neck, it is of no use merely to treat those boils. I suggest to the Government that, even hampered as it is under capitalism, it can do a lot to mitigate the appalling state of these Areas by first of all equalising the burden of the public assistance rate throughout the country, and by controlling the location of new factories. Is it too much to expect the Government, who are so ready to control the whole of industry in case of war, to use a measure of control of industry to bring back prosperity to the inhabitants of these Special Areas?

THE PAYMASTER-GENERAL (LORD HUTCHISON OF MONTROSE)

My Lords, I am sure no one can complain of this question being raised in your Lordships' House, and no one is more ready to welcome discussion than the Government. We are always willing and anxious to receive views from noble Lords, and I think that the views expressed to-night, in the speeches of Lord Portal and Viscount Ridley especially, have been of the greatest value in enlightening this subject. We are all beholden to Lord Portal, who for the second time has raised this question, and whose work in South Wales, when he produced his Report, attracted the attention of the Government to the needs of these Special Areas. His special knowledge and the energy with which he follows up that knowledge have been of great advantage in the consideration of the problem.

It is well to remember that this question of the Special Areas has been debated again and again, not only in this House but in another place, and I am glad indeed that the right reverend Prelate has referred to the fact that there is no one who takes a more serious and anxious view of the situation than His Majesty's Government. We are not complacent at all. The Government are doing everything they can to try and alleviate the condition of these people, with whom we have the greatest sympathy, who are out of work not owing to any fault of their own, and who are largely dependent upon single industries in these particular Areas. It is just as well to remember that the Act of Parliament passed last year to deal with the Special Areas specially provided that it should not include What I call pure relief work—that is, a short-term policy. All Government effort towards solving the problem has been towards securing that whatever work is produced in those Areas may be long range and permanent because of the possibility of people slipping back again into the abyss which would make the position worse than it was before. I am glad that Lord Elton reminded your Lordships that the work done and the progress made in the Special Areas cannot be judged by the number of unemployed now remaining there. It is necessary, in having a long-range view, to try to plan ahead for work. Therefore it is not quite fair to say: "Oh, but your unemployed have only decreased by some 24,000, largely owing to transferrence," when really in fact the work that has been done will, I am sure, have a beneficial effect at no very distant date.

I would like to refer to some of the points made by the noble Lord, Lord Portal, because of his special knowledge of South Wales. He spoke about the Government factories. Since he has handed over his work to the Commissioner, Mr. Malcolm Stewart, I am sure he has recognised with pleasure that the Ebbw Vale works are going to be opened. In South Wales also you have the Severn Bridge, which the Minister of Transport is doing his best to push along, and you have, I understand, a certain movement going on as regards Port Talbot, where it is hoped that a private company will take on the estate formed there with the idea of attracting new industries to that district. It is very well known in regard to Wales that a great deal of work has to be done in the way of site clearance and the fitting of sites for new industries, before we can expect those new industries to come in from outside and take a financial venture there.

The difficulty is that in an area like South Wales, which is largely dependent on two industries, coal and steel, large blocks of the population, when a time of depression comes, have no alternative occupation. We hope that the action of the Commissioner, backed by a Government willing and anxious to help, will have the effect of widening the group of industries in these Areas. I think a good deal has been done in advertising to the country as a whole, and especially to various firms that might be interested, the advantages that might accrue to industries which are brought into those Areas. The noble Lord referred to what was said by the Lord President of the Council in another place to the effect that a Government factory was to be put down in the South Wales Area. He suggested that the site should be at Dowlais. Of course that will be brought to the notice of the Government, but I am not in a position to say where that factory will be. At any rate, it will have the effect of providing work for the unfortunate people in that Area.

Owing to the circumstances of the moment, the Government have been forced into a re-examination of our armaments and of the various Service requirements. In consequence there will undoubtedly be new aerodromes, and perhaps construction in these rather remote districts-, which will probably be selected for strategical considerations. All I can say on that point is that the outlook for that particular Area at any rate is more hopeful than it has been for a great many years. The noble Lord asked why the Government could not go ahead with the hydrogenation of coal in that Area.

LORD PORTAL

I only asked if you could give me any information on the progress of the experiments at Billingham.

LORD HUTCHISON OF MONTROSE

I have no particular information at the moment on the success of that experiment. I know from private information that the Imperial Chemical Industries in connection with three other companies have got the patent rights of that process, and if it proves to be a success it will undoubtedly be extended to other areas; but until it is proved to be a success you cannot expect the Government to go further in the matter.

But I think the difficulty of establishing new industries has been fully recognised by your Lordships. The noble Viscount, Lord Ridley, referred to Tyneside. As he knows, a certain amount of work has been started and also planning done there as regards the conditioning of sites, reconditioning of waterways, deepening the river in order to bring suitable vessels alongside, the provision of power and the making of roadways—all in order that new industries may be successfully established. Further than that, the general policy of the Government over a period of years has undoubtedly been to help the heavy industries in the North-East. Fault has been found with the trade agreements with the Scandinavian countries for reducing the coal exports from Wales. As I know full well, our part of Scotland has certainly benefited from those Scandinavian agreements, and I think Durham too has benefited to an extent. Of course that is always the danger that if you concentrate upon a particular area and try to make it successful, you may damage other areas. Therefore the Government have to be very careful and consider what will be the effect of what they are doing on the country as a whole.

The difficulty of setting up light industries in an Area and preventing them from congregating in the neighbourhood of London is very great. Light industries naturally try to locate themselves where there will be a large market. But in order to be of help in that direction, as the noble Viscount, Lord Ridley, knows. the trading estates are beginning. There is an experiment now on the North-East Coast and it is going to be followed up, in South Wales, where we shall try, on the lines of Slough, Trafford Park and the West of London, to encourage industries to settle. The Government also have in mind the desirability of trying by some means to help to finance the small industries, by guarantee or in other ways, in order to encourage them to go there. I know that the Minister of Labour is particularly anxious to help in those directions.

With regard to the question of transference, which has been raised by almost all the noble Lords who have spoken, it is a very sad thing to think that these young people, who have been associated with particular areas since their childhood, should be taken away to other areas in order to get employment. Yet it seems only right and proper that this means of giving a livelihood to the rising generation should be pursued with the greatest vigour as well as with the greatest consideration. The Commissioner refers to that matter in his Report, and shows that more attention has been paid to the question of allowances and to the reception of these people in a new area, thereby helping to make them feel at home in their new surroundings, and also giving them a reasonably long time in the new occupation which they take up. A good deal can be done in this direction, and I am quite sure that my right honourable friend the Minister of Labour has this question keenly in view when contracts are placed for Government orders in: various parts of the country. The right reverend Prelate referred to the question of the younger boys coming from training centres and instructional centres. The complaint is that from the training centres they are absorbed after training up to about 98 per cent., but in the case of instructional centres the position is not so good. Discussing that very point my right honourable friend pointed out that he had been in touch with the Minister of Transport with a view to overcoming that difficulty. It is receiving close attention, and it may well be that in future possibly some direct employment from the Ministry of Transport may take place. At any rate the situation is recognised and is being closely looked into.

There is one thing to which noble Lords have not referred to any extent and that is the question of land settlement and afforestation. This has been examined, and although it cannot absorb a very large number of families, yet if the plan for afforestation is carried out, whereby the Commissioners are proposing to take 200,000 acres and combine small holdings and work in the planting of trees, they hope to absorb in a reasonable time something like 1,000 families and give employment to about 2,000 individuals. That is beginning. It is a Continental system which I have seen and studied in Germany, and the Government recognise the value of it. There is one difficulty which the Commissioner reports in regard to the plan, and that is the question of getting the necessary land. As he says in his Report, he is prepared to use the powers given to him under a certain section of the Act to take land compulsorily if he cannot get it any other way. At any rate that particular type of employment is being pursued, and I hope it will give a certain amount of relief. Then there are questions such as the draining of land other than draining in catchment areas, particularly in parts of derelict coal areas which, before they can be fitted for the use of other industries, must be drained and looked after. That is attracting a good deal of work. The sewage reconstruction of these areas is necessary largely owing to local authoiities having had to spend so much money in other directions in the Special Areas and not having enough to spend on this work. That is being tackled, and a certain amount of useful sewage and drainage work is being undertaken. It ought to be remembered of course that the Commissioner. Mr. Malcolm Stewart, is a very successful business man and looks at these things from a business point of view. It is a great advantage having that type of brain dealing with the Special Areas rather than having civil servants doing so. No doubt what your Lordships have said to-night will emphasise his continual remark to Departments that these things must be tackled quickly and with determination, although your Lordships will have seen that in his Report that Commissioner acknowledges that he has had the greatest help from all the Departments—Labour, Health, Transport, and Agriculture. He also says, which I think has been forgotten by some noble Lords who spoke: At no time anal on no occasion have I refused any grant on the ground that the necessary funds would not be available, nor has the sanction of the appropriate Department of the Government at any time been withheld because of the amount of the expenditure involves; by any recommendation made by me. That is a change from the first Report. It shows that the Commissioner is being backed up financially and is being helped in every possible way by the different Departments. I think that the whole outlook on this situation is developing more rapidly, and with more understanding and a greater desire to clear it up.

Another question affecting these areas was referred to by the noble Lord, Lord Faringdon, and that is the question of housing and slum clearance. There the Minister of. Health has been most helpful. He has come along and helped in the work of tackling the rather poor conditions of housing and overcrowding in some of the Special Areas. Here may I say that his own County is beholden to the noble Viscount, Lord Ridley, for the active assistance he has given. He is giving his time voluntarily as Chairman of a Housing Association in the North-East of England which comes along and helps local authorities to take advantage of Government grants for providing houses and removing slums, and at the same time gives, or is going to give, a grant to take the place of the money which would have come from the rates but which the local authority is not able, from financial difficulty, to give. It is well to remember that any housing carried out gives a tremendous amount of employment in other directions. I venture to say that housing generally in this country has been responsible for a good deal of the revival of trade. It affects so many different trades. Housing in these Special Areas will undoubtedly help employment. The revival is of course a slow business. It must necessarily be slow, because if you are going to get a long-range policy you have got undoubtedly to build surely so that it will not all tumble down on your head again. I might be able to cheer up some noble Lords by pointing out that Mr. Malcolm Stewart himself is hopeful. He says that lie does not expect quick results, but he is hopeful that the general amelioration of conditions in these Areas will go slowly ahead. As your Lordships know, this question has beaten Government after Government in their attempts to deal with it, and for that reason I might perhaps ask noble Lords to give us a small bit of recognition for the work we have done and are trying to do.

There is another point to which the noble Lord, Lord Faringdon, referred, and that is the question of the short week, which Lord Trent has brought into use. He suggested that that might help unemployment. I do not quite see how it would help in the Special Areas. It might help unemployment taken as a whole throughout the country, but it would not help much in the Special Areas. I know Lord Trent's scheme and I welcome it. I think the short week is a very good thing in certain industries, especially industries that use a lot of machines, because there you get an extra day for cleaning the machines and you do not really lose the time that the extra day means. But I do not myself see how that could help very much in the Special Areas. The noble Lord, Lord Faringdon, also talked about the provision of selling agencies for coal. That is exactly what the Government are trying to do. May I say that if you start raising the price of coal through various agencies, then you are going to cripple your export market. I would point out that coal abroad is governed by the world market and the quota in the various countries to which the coal goes. I am sure the noble Lord, who is associated with coal, knows and appreciates that it is a very difficult thing, when you begin interfering with the home coal and thereby causing a rise in the price, to export coal.

LORD FARINGDON

I did not suggest that.

LORD HUTCHISON OF MONTROSE

The noble Lord advocated selling agencies, and I am only informing him that the Government are moving on those lines. At this late hour I do not think there is any other point to which I need reply. If I have not answered any particular point raised I hope noble Lords will forgive me. This debate will undoubtedly have the effect of drawing attention to the Special Areas and to the work done in relation to them, and I thank the noble Lord, Lord Portal, for having raised the matter. If I have failed to answer any question he put, I can only hope he will forgive me.

LORD PORTAL

My Lords, I beg to thank the noble Lord for the courteous way in which he has replied to the questions put to him, and I would ask leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.

The LORD CHANCELLOR acquainted the House, That the Clerk of the Parliaments had laid upon the Table the Certificate from the Examiners that the Standing Orders have not been complied with in respect of the Petition for additional provision in the following Bill:

Birmingham Corporation [H.L.].

The same was ordered to lie on the Table.