HL Deb 05 April 1949 vol 161 cc951-65

2.35 p.m.


My Lords, I beg to move that the Special Order as reported from the Special Orders Committee on Wednesday, March 16 last be approved. Under Section 7 of the Distribution of Industry Act, 1945, this Order, which was foreshadowed during the debate in your Lordships' House on the Motion raised by the noble Lord, Lord Rochdale, a few weeks ago, requires the approval of your Lordships. It is proposed, first to make minor boundary alterations to the South Wales development area by adding to it a few parishes which have hitherto been just outside the existing boundaries but which form part of the same natural economic and social unit; and the Order brings within the development area the Carmarthenshire side of the industrial Amman Valley. The effect will be to extend the development area by some 30,000 acres and to increase its population by several thousands. This minor boundary adjustment has been made after consultation with all the local authorities whose area includes any land to which the Order relates. It has been welcomed by them all, so I do not think it is necessary for me to trouble your Lordships further with it.

Secondly, the Order proposes to add the Merseyside area to the schedule of development areas. The Government have long been watching very carefully the special circumstances of the Merseyside area, and its unemployment record, and have recognised that its employment needs are likely to be best served by development area facilities. It is true that the Government have been able to do quite a lot to help the area without scheduling; but post-war unemployment in the area has risen sharply, and since 1946 has persisted at a level comparable with that of the other development areas and some two and a half times as great as the average for Great Britain as a whole. I would point out to your Lordships that the industrial economy of Merseyside has a special character, differing from that of the other development areas, in that primarily Merseyside is a commercial rather than an industrial area.

I do not wish to worry your Lordships with a mass of figures, but three, I think, will illustrate the consistent heavy unemployment suffered by the Merseyside area before the war. In 1932, some 109,000 were out of work. The average unemployment in the years 1932 to 1938 was approximately 97,000. As a result of the depressed conditions in the area, almost 90,000 people migrated between 1931 and 1939, and although this reduction in the population was approximately balanced by the natural increase, it shows a very sad state of affairs. During the war, through the activity of the port and the munitions factories built in the area during that period, unemployment fell to a very low level; in fact, in June, 1945, the total unemployment was down to 3,400. The war-time development at Speke, Fazakerley and Kirkby provided the nucleus of industrial development of which the local authority have been able to take considerable advantage. Both the Government's policy of steering industrialists to areas of special need and the post-war factory building programme have contributed to the area's industrial development.

By the middle of 1948 the total numbers in employment were 433,000, and some 60,000 more men and women were employed than in 1939. To-day there are more people employed on Merseyside than at any time since records have been kept. In spite of this, the hard core of Merseyside's unemployment problem remains. Employment in the war factories converted to peace-time production has inevitably fallen below the war-time peak. The effect of new development is offset to some extent by the serious war damage which the area suffered. By June, 1946, the unemployment figures had reached 28,700, and to-day they are approximately the same. This is represented by unemployment, particularly heavy as regards men, at 7½ per cent. of the insured men workers compared with the average of 4 per cent. for the other development areas and 2½ per cent. for Great Britain as a whole. A special feature of the position on Merseyside is that female unemployment, particularly on the north side of the river, does not present a serious problem. Merseyside is a large, compact community, offering a wide range of jobs for women, although this substantial surplus of male unemployment still remains to be catered for. The estimated employment arising from the post-war factory building programme would still leave some two-thirds of the unemployed men out of work.

My Lords, that is the picture of Merseyside as it is to-day. It is proposed that this new Merseyside development area shall include the industrial centres of Liverpool, Bootle, Litherland and Birkenhead, Huyton-with-Roby and the parishes of Netherton, Aintree, Kirkby and Simonswood, which contain existing training estates and land scheduled for industrial development, and Wallasey and Bebington, where there are also projected industrial estates. The Merseyside development area will comprise approximately 112 square miles, and has a present population of some 1,197,000. All local authorities affected by the Order, including the Lancashire County Council, have been consulted, and all now concur that the area should be scheduled as a welcome aid to the solution of Merseyside's economic and unemployment problems. Within the scheduled area the development plans of the local planning authorities show an adequate amount of land available for industrial development, and the Board of Trade have under consideration questions of the proper siting of new industrial building and the scale of development required in relation to the zones of greatest need from the employment point of view.

A preliminary survey of a number of possible sites has been made with a view to the selection of those most suitable for industrial development. It is proposed that some part of the future factory building should be on industrial estate lines, in co-operation with, and in extension of, those trading estates, both on the north and south sides of the river, which the local authorities have already established. The North Western Industrial Estates Limited, already responsible for Government factory building in the existing South Lancashire development area, will undertake similar work on Merseyside. It is intended to reconstruct the board of the new company so as to include directors, possibly forming a majority of the board, who have special knowledge of Merseyside's needs and problems. The remaining part of the future industrial development will take place on individual sites, and the Board of Trade are, of course, continuing their former endeavours to steer private projects to the Merseyside area, especially those which would employ men.

In case it should be thought that this Order will act as a magic wand, I would point out that the formal act of scheduling will not result in any immediate large-scale industrial development; the greater likelihood is that the road will be both a hard and a slow one. Apart from any preliminary site development work that needs to be done, it is not by any means certain that an extension of industrial estate activities, or the building of standard factories on the lines usual in other development areas, will do more than help in the solution of some part of the unemployment problem.

The present capital investment policy does not permit of construction of "advance factories," and all still largely depends on the number and type of projects which happen to come forward. Very few new developments are, in fact, coming forward at the moment with a predominantly male labour demand, or such as might absorb a large proportion of the semi-skilled and unskilled workless, which is the main problem in this area. The resources that can be made available for new factory building remain severely restricted, and must be limited, here as elsewhere, to projects of importance to the export trade or to import saving. Other desirable, but less essential, schemes, though in the long term they might make a contribution to employment on Merseyside, may still have to be deferred until conditions are easier. It is certain, however, that even if scheduling cannot immediately perform miracles it helps to some extent in the short term, and very considerably in the longer term. Moreover, the act of scheduling provides the earnest, if one is needed, of the Government's firm resolution that the intractable problem of unemployment in this area shall be tackled by every means at their disposal. I beg to move.

Moved, That the Special Order as reported from the Special Orders Committee on Wednesday, the 16th of March last, be approved.—(Lord Lucas of Chilworth.)

2.48 p.m.


My Lords, the noble Lord who has just moved that this Order should be approved has described it as no magic wand. It is indeed correct to say that. We may perhaps regard the Order as a useful walking stick, but not as one having magic properties. It arises, as the noble Lord has explained, under the Distribution of Industries Act which was introduced by the last Government, and which laid down that there should be a review at the end of three years to see whether any areas should be added. The Order provides, as the noble Lord has stated, two things—minor boundary alterations in Wales and a large new area in Merseyside. As to the Welsh proposals, without endangering my reputation by attempting to pronounce the names of the parishes (I notice that the noble Lord himself did not embark upon them, though he spoke with freedom of the parishes in Merseyside) I would like to welcome the inclusion of the new area in South Wales. It is topographically a sound proposal that it should be brought in and that the Amman Valley, so far as it is industrialised, should be brought into line with the district round about which is already in the development area. This, as I say, is a sound proposal.

The second part of the Order is of wider significance. A new area will be formed which will be large and important, and will comprise well over a million souls. It is an area which has been hard hit in the past. It was hard hit in prewar years by the unemployment which occurred largely by reason of its dependance on shipping. When world trade suffered a recession, that area was seriously hit in the matter of employment. But during the war period, war-time industry mopped up a large part of this pool of unemployment. The war—artificially it is true—brought something like prosperity to this part. Now there are signs that unemployment is rising again and it is well that the Government should take note of it. To the extent that this measure will alleviate unemployment we welcome it, but we should analyse the problem before expressing too rosy a view as to the effect this order will have. The noble Lord himself advanced that point in his speech.

Unemployment on Merseyside is largely of unskilled men over forty years of age. This is the type of unemployed for which it is difficult to provide. In other development areas experience has shown that the factories erected tend to give employment to women and young people rather than to middle-aged unskilled men. Many of these men found work in circumstances created by the war. Some of them can still be employed on building schemes, but while this is a likely source of employment, it must have its limits. Public works, such as road construction, may also be necessary, though here again I am aware of the desirability of keeping such public works within bounds. The Government should explore every means of employment and not lay too much hope on these men being readily absorbed in the type of factories which are likely to be attracted to the development area. That is not to say that such factories will not be required or are not desirable. It is important, however, to keep a balance between the classes of labour which can be found in these areas, and I hope that in providing factories the Estates Company will keep this constantly before them.

The President of the Board of Trade, in another place, suggested that there should be established a joint organisation—a development board or something of that character—in the new area, to assist in directing industries to Merseyside. He urged that local authorities should come together and form such a body. Such a board would clearly be useful and would be representative of local authorities and industrial interests. I would remind your Lordships, however, that there is already in existence a body known as the Lancashire Industrial Development Association, whose President is Sir Thomas Barlow. As your Lordships probably know, this Association has already contributed valuable research on the problem of unemployment. Of course, this body may not be in a position to do what the President of the Board of Trade wants the new body to do, as it covers a much wider area than the new development area. None the less, I trust the Government are keeping fully in touch with the Development Association because it is a valuable source of information and research.

Your Lordships will recall that distribution of industry was debated in this House about two months ago on a Motion by my noble friend, Lord Rochdale, and at that time certain dangers were pointed out in applying too closely the policy of special treatment for special areas, unless the future balance of industry in other parts of the country was also borne fully in mind. Your Lordships spent several hours on a very useful discussion on that occasion. While, therefore, we welcome the Order, it will not be out of place to remind the Government of the facts of the situation which affect the country as a whole. For three years there has been little unemployment. In fact, ever since this Government came into office they have had the good fortune to be borne along on a tide of full employment, brought about by the operation of the law of supply and demand filling the great gaps caused by the years of destruction in the war. That was also true after the last war, but in 1919 the gaps were perhaps smaller and certainly competitors put out of business were sooner restored to a position in which they were able to compete with British exports; therefore the period of artificial prosperity which followed the last war was considerably shorter.

We hope that this time our prosperity rests upon a better basis. None the less, some of the circumstances that told against employment in 1922 and the years following are likely to reappear and it will require more than Special Orders of this character to deal with them. It is important that the Government should encourage the free play of the forces which create employment. Some of those forces are actuated by private enterprise, and some by local authorities and the State. It is important that those who seek to give employment should be disturbed as little as possible by vexatious regulations, such as development charges under the Town and Country Planning Act, or other factors of that kind. It is proper also to bear in mind that where the State is the employer as flexible a system of employment as possible should be devised. I welcome this Order as a useful if small contribution to the problem in the Merseyside area, and hope that it will pass your Lordships' House.

2.58 p.m.


My Lords, may I take a few moments to deal with the position of the trading estates already formed? As the noble Lord opposite has said, this is not going to be an easy road for anyone, and I point out these details in the hope that he will be able to give some encouragement to the industries now operating in these estates, with a view to preventing unemployment, which is already growing. I think it may be taken for granted that it will not be the big industries, but the medium and small industries which, in the long run, will have the biggest scope on these estates. Some three years ago they were promised a number of things. They were promised that they would get Government contracts. The noble Lord probably realises better than I do that these contracts have failed, because no system has been evolved whereby tenders for them are narrowed down to these firms. I can give one example, in which a contract for £7,000 was lost by a well-known company by a matter of £300, and forty men were immediately put off work. These industries were also promised that they would get controlled materials; but they cannot get controlled materials. They were then told they could get supplies; but they cannot get supplies. They are getting into a very precarious state, and the banks are becoming anxious about the future of the new industries that have been started on these estates. I ask the noble Lord whether anything can be done about materials and supplies.

These firms were also told that they could get grants and loans; but the machinery is so involved that practically no grants or loans have been made. I rise only to lay stress on these serious aspects of what is going on at the present moment. I would like to make one further point. A well-known industry on the trading estate wants further capital of £20,000. They can find it, but only if there is hope of some of these promises being fulfilled. Otherwise, they will have to shut up shop, and that will be still more serious for the plan of increasing the industrial trading, estates in that particular area. I trust the noble Lord in his reply will be able to give them hope that in some of these matters an easement will be made, which should result in the creation of more trade and the avoidance of unemployment.

3.1 p.m.


My Lords, reference has already been made this afternoon to the Motion that I introduced in your Lordships' House two months ago on the Government White Paper, Distribution of Industry, which dealt with the development areas. On that occasion, while attempting to give the fullest credit to many individuals who have worked so hard, and with a great measure of success, in the various development areas, I could not avoid a certain amount of criticism of the extent to which the policy was being taken—an extent which I thought was being overdone, because I foresaw that there was a danger of it swinging too far and creating a lack of balance. And that, after all, was the very thing which the original distribution of industry policy was aimed at redressing. On this occasion I do not want to repeat any of the points I made two months ago, though I believe many of them to be as pertinent to our discussion on Merseyside as they were then. There are, however, one or two further points that I would like to make. I will confine my remarks to Merseyside and will not refer to the minor alterations to the South Wales development area.

Like other noble Lords who have spoken to-day, I welcome any concrete step which will do something to overcome the very serious problem that confronts Merseyside. Like the noble Lord, Lord Lucas—I was particularly glad to hear him say this—I feel that we should be deluding ourselves, and misleading those we are attempting to assist, if we were to suggest that the passing of this Order would in any way herald the opening of a new era there. I have no doubt whatever that the present step we are taking will help. But this problem of Merseyside is a very difficult one, for which there is no short cut or easy road to solution. It is in a way far more difficult than any of the problems that have confronted other development areas.

It has already been pointed out that the size and wealth of the economy of Merseyside was built up during the last century on the fact that the whole area was, in effect, a port area. One has only to look at the principal activities there to realise the enormous proportion of the employment which is attributable, either directly or indirectly, to the fact that Merseyside is a port. Not only do we find shipbuilding, shipping and port facilities, transport, distribution and all the local services that are essential to the smooth running of any large community of people, but even in the case of the productive industries, such as flour milling, sugar refining, oil crushing and so forth, the industries that developed on Merseyside, starting in the last century and developing further in this century, were dependent to a large extent on the fact that their raw materials were imported through that port, and therefore, on the prosperity of the port as such. That being so, and with Merseyside serving so much of the industrial north of England, and dependent on the prosperity of the industrial north of England, it is not surprising that, with the drift of industry to the south, and particularly to areas around London, with the consequent growing importance of London as a port—and, of course, with the growing problems that the textile industry of Lancashire was meeting in its markets all over the world—the problems that began to confront Merseyside took on a very serious aspect indeed.

That happened at a time—at any rate, up to 1930—when the population of Merseyside was still increasing. The noble Lord, Lord Lucas, referred to the fact that subsequent to that year there was a considerable degree of migration from Merseyside, though by the end of the 'thirties that had, to a large extent, cured itself. The fact is that, at any rate up to 1930, the population was increasing, and in order to maintain the prosperity of Merseyside it was necessary not merely to continue the level of international trade as it was but to achieve something considerably in excess of it. That made the problem all the more difficult. It has already been mentioned that the war temporarily solved Merseyside's problems; but they have returned since the war, and other new problems have now presented themselves. Not least of these new problems has been the urgent need to cut down imports to the maximum extent possible, particularly in regard to agricultural and food products. All that has contributed to the present position in which Merseyside finds itself.

Attention has been drawn this afternoon to the attempts that have been made in Liverpool, with its trading estates, to overcome the problem and provide fresh employment. But the difficulty there—which will be a difficulty that will occur throughout Merseyside—is that many of the new industries which have been introduced have been of the lighter type, and, as has been said, employ a high proportion of female labour. The estimated figure of female employment, when all these new projects are completed, is 45 per cent. The noble Lord, Lord Lucas, said that the problem of unemployment of females was not a serious one. I am not at all sure that he does not underestimate even that. Talking to a number of industrialists in that area, I gained the impression that even now they sometimes have considerable difficulty in obtaining for their work the women they require. Merely to provide industry which will give a high proportion of female labour does not get to the root of the problem of Liverpool or Merseyside.

The real problem, as Lord Clydesmuir pointed out, is this large core of middle-aged unemployed and unskilled men. It is difficult to see any immediate advantage that the passing of this Order will give in that respect. In the long run, I have no doubt, it will be possible to do something. I hope that it will be possible to introduce certain of the heavier industries there, because the heavier industries, employing a high proportion of men workers, would be able to offer some employment, at any rate after training, to those who are now unemployed. Nevertheless one must admit with regret that there may be a number of men at present unemployed who, even with training, would find it difficult to take full advantage of the new employment that might be available.

If we look at the shorter term programme, no doubt it would be possible to introduce further light industries. I understand that Liverpool, Bootle and Birkenhead have had special facilities for getting priority for raw materials, although I understand that that has not in fact been of great assistance to them. Therefore, even with the passing of this Order, it would appear that not much immediate advantage can be looked for, at any rate in that direction. Perhaps new light industries can be produced. As I have already pointed out, that would require a higher proportion of female labour, and the question is, where is that labour coming from? I do not know whether there is any possibility in the suggestion that I, and no doubt many of your Lordships, have heard, that something further should be done to reduce the number of women employed in football pool offices. It would represent only a small addition, but it might help. I am inclined to think that the inducements to industrialists to move into the development areas in general, and into Merseyside in particular, are less attractive than they were some years ago. The question therefore is: Can anything else be done about it in the immediate future? I hesitate to suggest it, on this occasion particularly, but it is difficult to see how some further extension to the public works programme (which has already covered much ground in Merseyside since the war) will not be necessary.

I have mentioned a few, but by no means all, of the problems as I see them. I hope the Minister will not think that I am being unduly pessimistic about the future, or unduly critical, but I feel that these problems are so difficult that one must mention them in order to underline their importance. Undoubtedly, to have the area dealt with as a whole is a real step forward. The only doubt I had about the speech of the noble Lord, Lord Lucas—and I am still in something of a haze—was regarding the central authority which is to co-ordinate this development area. I think that some central authority is vitally important if the full advantages are to be obtained. In any planning in this area, it is essential that a proper balance in all respects should be arrived at: a balance as between male and female labour, a balance as between heavy and light industry, and a balance as between industry for export and industry which is producing consumer goods. To go to either extreme must at all costs be avoided. May I give just one example of what I have in mind? If the swing went too far in the direction of goods for export, it would only be piling up diffi culties for Merseyside in the future, because, as your Lordships fully realise, that area is already very susceptible to fluctuations in international trade. On the other hand, to go too far in the other direction, in the production of consumer goods, would surely be only to repeat what many of us feel are mistakes which have been made in some of the other development areas.

It is not only within Merseyside that a balance must be achieved for planning. There must be a balance as between Merseyside and the surrounding industrial district. Already one hears unpleasant rumours from the South Lancashire industrial area that workers are being attracted from the already undermanned textile industries to the new industries in the North. That sort of thing can so easily happen on Merseyside, unless great care is taken to avoid it. The subject of Merseyside is an immense one, fraught with every sort of complexity, and it is impossible, in a speech in your Lordships' House, to touch upon more than a few of the points. Undoubtedly the authorities who have to deal with it will have a very difficult task. I wish them every luck that is possible; and, in saying that, I hope they will approach their task with an open and not too parochial outlook. I hope they will be prepared to learn from the mistakes of other development areas and, as has already been mentioned, from the research that a great number of other bodies have made in connection with this district during the past years. I hope they will not feel that the same solutions which were applicable to development areas in the 'thirties are necessarily applicable to a development area in 1949 and 1950. Above all things, I hope they will go out of their way to see that no Party political influence is allowed to enter into any of their calculations in any direction.

3.17 p.m.


My Lords, it only remains for me to thank noble Lords for their almost enthusiastic welcome of this Order. May I thank the noble Lord, Lord Clydesmuir, for the implied compliment which he has paid us in having a Scotsman to accept an English Order for an English Mersey side? One day we may have the temerity to put up an Englishman to accept a Scottish Order! I am very grateful to the noble Viscount, Lord Long. If I read his remarks aright, they were so well chosen as to act as a spur to His Majesty's Government to make this scheme even more successful. May I ask the noble Viscount whether he will be good enough to let me have one or two specific examples of the type of trouble, obstruction or difficulty which he is experiencing, so that we can better see what the problem is, rather than try to understand it from generalities? If the noble Viscount will be good enough to let me have those examples, I will see that they are thoroughly investigated.

I am grateful to the noble Lord, Lord Rochdale, who as usual spoke fluently and with great knowledge. He asked me one specific question which I think I should answer, because the noble Lord, Lord Clydesmuir, asked me the same question. It was: Who is to be the co-ordinating authority? As regards the co-ordination required under the Distribution of Industry Act, all the points which the noble Lord, Lord Rochdale, mentioned—including the balance between one type of industry and another—will come under the Board of Trade, and will be exercised through their regional organisation. Other than that, as the noble Lord pointed out, it is desirable to have other forms of co-operation—for instance, in publicising the area, and ensuring that there is not needless competition. It may well be that the organisation to which the noble Lord, Lord Clydesmuir, referred would be appropriate, but my right honourable friend the President of the Board of Trade has suggested—and I repeat the suggestion—that the local authorities might get together and see what can be done. My right honourable friend would like to hear any suggestions from any responsible authority in Merseyside as to the best way of going about this particular problem of co-ordination, other than what is called for under the Act. I am grateful to noble Lords. I am grateful because they have appreciated that His Majesty's Government are not going to have the charge made that they are not doing everything that it is practicable to do in order to cure what all noble Lords have agreed is this very intractable problem of unemployment on Merseyside.


My Lords, I did not have the pleasure of hearing the noble Lord's first speech. May I ask whether, by chance, in the list of things that His Majesty's Government are going to do to cure this "intractable problem" there will be included the reopening of the Liverpool Cotton Exchange?


I did not mention that because I thought it was outside the scope of the Order which we are debating.

On Question, Motion agreed to.

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