HL Deb 29 April 1937 vol 105 cc72-84

Order of the Day for the Second Reading read.


My Lords, I beg to move that this Bill be read a second time. The Bill is drawn very closely on the lines of the Financial Resolution which was passed in another place, necessarily so because of the close link between finance and the actual provisions of the Bill. Before turning to the conditions laid down in the Bill, I would like to call your Lordships' attention to what has been done already under the 1934 Act and under the general policy of His Majesty's Government in regard to these Special Areas. The first thing I would like to comment on is the large number of orders which have been placed under the re-armament policy in those Special Areas and also in areas where there has been acute depression but which are not included in the First Schedule of the Special Areas. A White Paper was issued in March of this year which showed that contracts had already been placed in those combined areas for about £41,000,000, and of that amount about £24,000,000 had actually gone into the Special Areas. Since the White Paper was produced the figure has risen to £57,000,000 of contracts placed in those two types of area, of which £35,000,000 has gone to the Special Areas.

Then, under the 1934 Act, we have advanced considerably in the matter of land settlement. In the White Paper it was pointed out that 2,000 families had already been more or less arranged for. I cannot say that those families have actually been in occupation, but arrangements involving a commitment of about £2,000,000 have been made for 2,000 families to be placed on the land. Since then an addition has taken place to the expenditure and another thousand families, making altogether 3,000 families, are in process of being settled upon small holdings at a cost of about £3,000,000. One cannot say that that is a very large settlement on the land, but it does show that we are moving in the right direction. In regard to Scotland, the land settlement comes under a different heading. There powers were originally given to the Minister of Agriculture to settle families on the land, and that has been going on for some time. In Scotland we have 450 families being settled at a cost of £200,000.

The Special Commissioners have up to the present time, under the 1934 Act, reached commitments to the amount of £10,500,000. That is for England and Wales. For Scotland the figure is £2,000,000. I venture to say that that is no mean effort. As regards the effect of the policy of His Majesty's Government and of the 1934 Act, I may point out that unemployment has been reduced by a net figure of 119,000. That is the figure given in the White Paper in March, but since then we have had a further improvement of another 10,000 more persons at work. I think those effects themselves show that there has been a definite improvement in these unfortunate areas. In passing, I would like to refer to the fine work that has been done by various societies which are working in co-operation with the Commissioners, and especially to the very generous gift from Lord Nuffield. Lord Nuffield's Trust is working in co-operation with the Com- missioners, and by this means a movement is going on in the right direction towards providing not only new industries in the Special Areas but employment in those industries. Lastly, I would like to refer to the action that has been taken in the local government sphere. Under the Local Government (Financial Provisions) Act of 1937, special efforts were made to equalise the burden of rates through block grants, and when that Bill came before your Lordships' House in February last it was shown that a big advance had been made in helping by means of these block grants those areas which were feeling the effect of the depression. I am not one who tries to over-state a case, but I do think that the Special Areas have improved, and that, generally speaking, the policies promoted by His Majesty's Government are at least bearing some good results in those areas.

Coming to the Bill itself, I may explain that its main feature is to provide new industries, not only to give additional work but to provide for the establishment of additional forms of industry in the Special Areas and particularly in those areas which hitherto have been confined to one type of industry. If that policy can be successfully carried out it will be a great boon and benefit to the people who work in the Special Areas. We all know the unfortunate effect of the closing down of the only form of employment in a particular area. That is especially true of the coal industry, and more particularly so in South Wales. The first clause in the Bill continues the duration of the present Act until 1939. The second clause gives powers to the Commissioners to let factories in the Special Areas at economic rents to those undertakings that are working for gain. Under the 1934 Act Commissioners were not allowed to provide financial assistance to such undertakings. This Bill not only allows trading estates to let factories working for gain, but it also allows the Commissioners themselves to do so if they so desire. Clause 3 refers to the assistance which can be given to those various undertakings in the way of meeting rent, Income Tax and rates. If your Lordships will look at Clause 3 you will find that this financial assistance can be given by the Commissioners as a contribution. The only limitation is that this contribution shall not extend longer than five years, but the total amount which may be found by Parliament will be unlimited.

Clause 4 deals with two small matters. In the first place it deals with the question of grants to local authorities for the repair and maintenance of certain streets and roads. Those streets and roads have to be certified by the Minister of Transport and are not to be roads used for through traffic. The clause will allow money to be used to help local authorities in those areas which have been hard hit and which have not been able to get money from the Minister of Transport. Although the Minister is allowed to advance money for the use of these particular roads, he has not in fact been able to give these grants, and the Commissioners will be able under this Bill to give the necessary assistance. Subsection (2) of the clause deals with the matter of drainage of agricultural land. This matter largely concerns the Border area and it cropped up in Cumberland where complaint was made that across the Border the Department of Agriculture for Scotland was allowed to advance money to occupiers and owners for the draining of agricultural land. This will now be extended to England and Wales. The only condition is that the Commissioner should be satisfied that drainage would not only be for the benefit of the land but would be useful in giving employment.

Clause 5 ought to be looked at in connection with Clause 6. The two clauses are interlocked. Clause 5 permits the Treasury to provide financial assistance to a site-company in an area to which Clause 6 applies. It enables assistance to be given by way of subscription to the capital of a site-company in one of these areas in order to enable the company to get under way. There is one limit and that is that the amount to be subscribed shall not exceed one-third of the subscribed capital of the site-company, not taking into account, of course, the amount that the Treasury will find. This clause may be applied to particular areas which are defined in subsection (2). They are areas where there has been severe unemployment and where if financial assistance is provided there is likely to be a substantial increase in employment. A further condition is that employment in the area is mainly dependent on one or more industries which are unable to provide sufficient employment by reason of general depression. Those areas have to be recommended by a Committee which will be appointed by the Minister of Labour. The Minister of Labour is not entitled to schedule these areas unless so recommended by the Committee. Once the Committee has scheduled these areas they will be treated, so far as this matter is concerned, in the same way as a Special Area under the First Schedule of the 1934 Act.

Clause 6 provides that on the recommendation of a Committee to be appointed by the Treasury—and we already know the names of those who will serve on that Committee, of which the noble Lord, Lord Portal, is to be Chairman—the Treasury may give financial help to those site-companies which start after the passing of the new Act by way of loan. That specially refers to the industries which will come into being under Clause 5. This assistance is limited only to the extent that at no time can more than £2,000,000 be advanced by way of loan to these site-companies. I think this meets the complaint that certain areas outside the Special Areas were deserving of help. Instead of re-drawing the original Schedule of the Special Areas His Majesty's Government decided to help in this way any additional area which, in the opinion of the Committee appointed by the Minister of Labour, is suffering severe depression. I believe it will do a very great deal of good in certain places outside the Special Areas. Clause 7 is purely interpretative, Clause 8 deals with the application of the Bill to Scotland, Clause 9 deals with the duration of the Act, and Clause 10 with the short title, construction and citation.

Such is the outline of this Bill which has been very exhaustively discussed in another place. The Government do not pretend that these proposals are a panacea for all the ills in the Special Areas, but I venture to think that they will go a considerable way towards starting new industries and the revival of old industries in those Special Areas which have suffered so severely under the depression. The Government hope that the attractions offered in this Bill to new industries will induce those new industries to go to the Special Areas rather than come under the lure of London and the South. I think it is very desirable that the overcrowding of industrial works in and around London, and in the South of England generally, should not be allowed to go on increasing. The Government approach this very difficult problem with hope. We certainly are doing what we can to assist the revival of the old industries and the arrival of new industries in these areas and, supported I think by public opinion, we earnestly hope and conscientiously believe that along these lines an ultimate solution will be found. I beg to move.

Moved, That the Bill be now read 2a.—(Lord Hutchison of Montrose.)


My Lords, I should first of all like to apologise to the noble Lord opposite for my absence from the House during the first part of his remarks. I had important public business to transact on the other side of the river, and that prevented me from being in my place as soon as I should have liked to be present this afternoon. We on this side of the House are extremely glad that the Government have decided to speed up their existing measures for improving the situation in the worst-hit areas in the country. In so far as this Bill is a contribution towards this entirely laudable purpose, we welcome it, and we anticipate gladly the help that it will afford when it comes to be administered. At the same time it is impossible to be satisfied with the removal of the ban on assistance to private enterprise from public funds, which in fact this Bill effects, as enough to alleviate to any considerable extent the plight of those who live in these Special Areas. We are glad to hear that there will be some degree of assistance out of public funds, for companies that erect factories in these areas to help them to meet certain costs such as Income Tax, rent and rates. We are also glad that it will be possible for them, whether working in these areas or in other hard-hit areas, to obtain loans from the Treasury at a reasonable rate of interest. That, however, is really all that this present Bill achieves.

I am perfectly certain that those noble Lords who will speak later in the course of this debate, and who have a special acquaintance with the situation in these areas owing to their proximity to the people there, will share my dissatisfaction that more is not being done. Look, for instance, at the actual position of the unemployed in these areas. I take unemployment as the criterion by which one may to some extent judge the plight of those who live in these areas, because it is presumably the worst symptom of the economic decay that has set in owing to the inability of our present economic system to provide all those who have to work it with a decent means of livelihood. There are still no fewer than 300,000 unemployed in these areas, and this represents a figure of about one-fifth of the total unemployed in England and Wales. The Commissioner in his third Report points out that there has in fact been no appreciable reduction in unemployment in the last two years in spite of what the Government have done under their first Bill. On page 3 of his Report Sir Malcolm Stewart says: Nevertheless it has to be admitted that no appreciable reduction of the number of those unemployed has been effected. One very deeply hopes that when this Bill comes into operation it may attract companies to these areas and lead to the erection of factories that will absorb some small proportion of the 300,000 unemployed. I cannot, however, help feeling that it will go a very short way in this direction.

This is due primarily to the fact that the Government have not taken into account by any means all of the recommendations made by Sir Malcolm Stewart both in his first Report on the Special Areas and in the most recent Report that he has produced. I should like to refer especially to his proposals in regard to the attraction of industry to sites in the towns of these districts. He suggests that there ought to be some sort of obligation on industrialists seeking new sites for their factories, not to go to any Special Area but to refrain from establishing their factories in the area of Greater London. Surely that is an extraordinarily sound proposal both from the point of view of the present inhabitants of London, who are undoubtedly suffering in health and well-being at this moment from the excessive size of the City and its suburbs, and from the point of view of the inhabitants of other areas in this country who ought to share as far as possible in any revival of prosperity that may be due to the Government's measures or to a speed-up of private enterprise in a general industrial recovery. In the year 1935 no less than 40 per cent. of the new factories started in England and Wales were located in the area of Greater London. I suggest that the Government ought to have implemented the proposal of Sir Malcolm Stewart that this London area, at any rate, should be put out of bounds.

The second suggestion of the Commissioner for England and Wales which the Government have ignored is a suggestion that would go, not perhaps very far, but some way towards reviving the one basic industry that does not seem to have recovered to any appreciable extent as a result of the general industrial recovery, and that is the coal industry. Everyone realises now the importance of being able to extract oil fuel from coal by the hydrogenation process. This process is still at an early stage of its development and many experiments are going on in different parts of the world to make it as effective as possible. Surely the Government should have taken steps to provide funds for experiment and research in the perfection of this process, and have spent those funds on research that might have been carried out in the neighbourhood of the coal-mining areas. Later on, when the Government had found what they considered to be the best method of extracting oil from coal, they could surely have taken the further step of establishing a plant for that purpose in South Wales or in Durham or in any of the big and most afflicted coal-mining areas. I say this, not merely from the point of view of relieving unemployment in these areas, but also from the point of view of general policy. The Government are embarking on an enormous Defence programme. At present we are depending upon foreign sources for the great bulk of our supply of oil, an essential commodity in time of war. Therefore from a Defence point of view it would be consistent for the Government to insist that we should have, as far as possible, a supply of oil which would be within our own boundaries.

The third proposal which has come in previous debates before your Lordships' House, and which again is a proposal that the Government have neglected, is one that is primarily a matter of adminis- tration. The Commissioner complains that there is delay in the implementing of schemes that he desires to promote because he has to work not through one Government Department but through two. His proposals have first of all to go to the Ministry of Labour, and then, if they involve the expenditure of money, they have to go to the Treasury. This means a very real obstacle, which is entirely due to the ineffective character of the machinery set up for the administration of the previous Act, which will continue to work in case this Bill becomes law. The tentative proposal of the Commissioner is that there should be a Minister directly responsible for working out the Government's policy in the Special Areas, and surely it would be possible for some Minister without a Department to assume that special responsibility. In view of the national character of the work there could be nothing more urgent, and it would expedite whatever plans the Government thought fit to put into operation in those areas.

Those are three recommendations—moderate, common-sense recommendations—of the Commissioner, after his two years experience in those areas, which the Government have ignored, and I should be very much obliged to the noble Lord opposite if, at the end of the debate, he would explain the reasons that the Government may have had in mind for not adopting those recommendations in their Bill. But there is, I think, a more far-reaching complaint that we can justifiably levy against the Government. In the first Report, produced I think it was in the summer of 1935, Sir Malcolm Stewart said that these urgent problems of unemployment and poverty were not problems which could be solved on a small scale and locally—that they were intimately connected with the whole industrial system prevalent in this country, and nothing more effective could be done unless national measures were adopted, to operate on a national scale. I should like to point out that this opinion, expressed originally by Sir Malcolm Stewart in his first Report in 1935, was endorsed by him in his third Report, on which the present Bill is based. He says, on page 5: I am still of the opinion that the principles then stated hold good to-day. The principles referred to are the recommendations of a general nature which he made at the end of his first Report.

At bottom it is impossible to tackle unemployment in such a piecemeal fashion. The Government should consider the possibility of procuring a later entry of young people into industry by raising the school-leaving age, first of all to fifteen and ultimately to sixteen. We have expressed the view that the Education Bill, with its immense loophole for exemptions, will in fact mean that most children who have any chance of getting a job in industry will be taken away from school. It is common knowledge that employers like labour between the years of sixteen and eighteen, because it is more cheap, and there is no doubt that children of that age working in factories are keeping out a number of adults, who might be doing the jobs while the children were profiting from a longer spell of education at school. In the second place there is the question of the limitation of working hours. The Government are at present passing through Parliament a Factories Bill, but this Bill does not touch the question of the working hours of adult men. On the Continent there has already been a limitation of the hours of adult workers, both male and female, to forty-eight hours and in some cases even forty hours a week. I cannot believe that the time has not come when some degree of limitation should be imposed by Statute in this country. I know for a fact that very excessive hours of work are in operation in certain factories that find a great demand for their products at the present moment, owing to the rearmament programme, and I am perfectly certain that there could be a reduction of a reasonable kind imposed by Statute without necessitating any lowering of the wage level.

The third proposal again made by Sir Malcolm Stewart in his original Report was that the employed population could be increased by bringing about an earlier age of retirement from industry, and this is clearly to be done by increasing the old age pension, so as to make it a subsistence income from the age of sixty-five, and making it a condition of receiving this money from public funds that the recipient should retire from industry. These are measures which would affect the whole country and not the Special Areas alone, but I am perfectly certain that there will be no real degree of industrial recovery, and no very considerable diminution of unemployment in those areas unless bold measures of this kind are adopted by the Government. Sir Malcolm Stewart himself says that there has got to be something "unconventional" in the measures that the Government should adopt if they wish to meet the growing need of the families living in those stricken areas. I feel perfectly convinced that that is the case, and that all noble Lords who are acquainted with what is going on there, and who may speak later in the debate, will bear out what I have said.


My Lords, I can speak again only with the leave of the House, but in reply to what the noble Earl opposite has said, may I first of all thank him for his blessing of our efforts so far as they go? I quite understand his desire for more, but I might point out that our efforts so far have not been small, because the reduction in unemployment, as I pointed out, and as is stated in the White Paper, is quite considerable—119,000 up to March and now another 10,000 up to the latest date of which we have figures. It is a movement in the right direction. As regards the noble Earl's criticism that the Commissioner found it difficult to get at the fountain-head for money, or to get necessary proposals carried out, I would point out that this Bill specially eases that situation, and makes it more easy for the Commissioner to go direct to the Treasury through the Committee that advises the Treasury; that is dealt with specially in Clauses 5 and 6. Further, with regard to the additional areas to which the noble Earl would like these conditions to be applied, that matter is really provided for in this Bill, because the Minister of Labour, under the Committee which advises him on that particular subject, is able, under certain conditions laid down, to schedule areas outside the Special Areas, which is an advance on what was in the 1934 Act.

What the noble Earl suggested with regard to things like oil from coal will certainly be taken notice of by my right honourable friends who carry on this particular work. The Government are anxiously looking at experiments that have been carried out, and are examining as to how far one process or another can be extended. Speaking personally, I have a great belief that much more can be done in that direction. As regards employment in South Wales, I can only say what my information is, and it is that it is extremely difficult in many of our mining districts to get miners. I do not know why that is so, but I think it is because a great many of the older men have ceased to be expert miners, and it is only the young men who come in now who are able really to fill the job. I do not know how far the Commissioner may examine those conditions, especially with the object of reconditioning those unfortunate people who have been out so long; but I am aware that in three fields that I know intimately it is very difficult to-day to get miners, which is always a sign that at least there has been a large absorption of unemployed since the very bad days.

Two other points raised by the noble Earl—the question of raising the school age and of retiring the workers rather earlier from their employment by means of pensions—are hardly matters really touched by the Bill. Those are propositions which, I know, are being continually examined as to what they mean and as to how far they affect the nation and the workers. They do not directly concern this Bill, but I am perfectly certain that the noble Earl's remarks will be examined by the Minister of Education and the Minister of Labour. I will, indeed, call their attention to those remarks. Finally, the noble Earl dealt with working hours. That is a problem that has been before the political world in this country for a considerable number of years, and it is undoubtedly true to say that there is an opinion moving in the direction he suggested. I cannot, however, on this Bill say more than that. It is a point that deserves the very closest attention by those who have to consider those matters. I am very grateful to the noble Earl for his helpful speech, and I hope that this Bill may do something at least to improve the conditions.


My Lords, I intervene only for a minute or two to indicate what the attitude of my Party will be to the present and subsequent stages of this measure. First of all, we should like to acknowledge the courtesy of the noble Lord opposite for the way he has met my noble friend's criticism of the Bill. It is a misfortune that no one on these Benches has had intimate recent experience of these particular areas, but I personally knew them well in better times, and I am dreadfully anxious about their present state. I only wish to remind your Lordships that it is not our habit to resist the Second Reading of a measure that has passed the representative House, and we shall not attempt to divide the House against this Bill to-day. What our attitude to future stages will be I cannot for the moment definitely say.

This Bill has been the subject of long discussion. It has aroused deep feeling, and it comes to your Lordships' House with a host of enemies and very few friends. The Tories themselves in the other place, in the proportion that they have not been terrorised by their Party Whips, hate this Bill and are ashamed to have to commend it to their constituents—not for what it contains but because what it contains is so inadequate to the issue with which the Bill pretends to deal. My Party in another place tried to improve it, but it was found both useless to appeal to the Government and unprofitable to argue, and no single Amendment was accepted. The Government had closed what it called its mind, and that seemed to be the end. Well, we do not resist the Second Reading, and it may be entirely useless for us to attempt to modify the Bill in the Committee stage. We can only register our deep disappointment that in an issue so great and widespread as this this Bill is so painfully inadequate.

On Question, Bill read 2a, and committed to a Committee of the Whole House.