HL Deb 03 March 1953 vol 180 cc893-904

2.45 p.m.

LORD MANCROFT

My Lords, I rise to move the approval of an Order made by my right honourable friend the President of the Board of Trade on January 22 of this year, and reported to your Lordships' House from the Special Orders Committee on Wednesday, February 11. This Order was made under Section 7 of the Distribution of Industry Act, 1945, and requires the approval of each House of Parliament. Speaking quite generally, the purpose of this Order is to add one more area, a small area about thirty miles north of Manchester, to the eight areas which have already been designated as special areas under the Distribution of Industry Acts. It is an important Order, and as this matter has not been discussed in your Lordships' House for two or three years, I feel it my duty to try and explain the purpose of this Order to your Lordships as best I can.

It will probably be remembered that under the original Distribution of Industry Act, which was passed in 1945, four areas were scheduled as development areas. Those areas were the North-Eastern, the West Cumberland, the South Wales and Monmouthshire—about which we may hear more later this afternoon—and the Scottish development areas. Those four areas were scheduled in the Act itself. From the time of the passing of the Act to the end of 1952 the following areas have been added: Wrexham, South Lancashire, Merseyside and the Highlands. Briefly, the improvements and benefits that can be appreciated under the Acts are as follows. The most important powers, I should imagine, are those which enable the Board of Trade to build factories for letting to industrialists, and those which enable the Treasury to make loans to firms already established or proposing to set up new factories in a development area. A few statistics of what has already been done may not be without interest to your Lordships. Up to and including the end of 1952, 1,650 new factories and extensions, of a total area of nearly 52 million square feet, have been completed in the development areas which I have just mentioned. Of these, the building of about 650 projects, of a total area of over 20 million square feet, was financed by Her Majesty's Government. Nearly 300,000 people are employed in new developments of all kinds undertaken since the end of the war in these development areas. Furthermore, under Section 4 of the 1945 Act, the Treasury have approved loans amounting in all to over £5 million to a number of firms.

There is one other advantage under these Acts—namely, the power given by Section 3 of the 1945 Act to make grants for basic services to the various local authorities. There has, unfortunately, been some misunderstanding concerning the policy of Her Majesty's Government about these grants to local authorities for basic services under Section 3 of the 1945 Act. I imagine that this misunderstanding has arisen from a circular issued by my right honourable friend the Minister of Housing and Local Government, known as Circular 54/52—and also by somewhat more familiar hostile nomenclature by those who do not fully understand it. This misunderstanding was well evidenced in a debate in another place on February 25, when it was alleged that this circular to which I have just referred meant that there was a complete ban on further grants except for prior commitments. Now the position is this. Owing to the need for economy, Her Majesty's Government have to restrict to a bare minimum any new grants made under Section 3 of the 1945 Act for improvement of basic services, although, of course, schemes of quite exceptional industrial urgency can still be considered.

I now turn to the actual area which is to be scheduled. The area is defined accurately in the Order which is before your Lordships, but, as your Lordships will see, it is an extremely difficult area to describe accurately in words. Therefore I took the liberty of having a small sketch map drawn (which I think is already in the possession of some of your Lordships), showing in detail the boundaries of this new area and its geographical relationship to the other areas and, of course, to the rest of England. Roughly speaking, the area is that portion of the north-east of Lancashire which contains Burnley, Nelson and Collie amongst its three biggest towns, and that portion of the West Riding of Yorkshire which numbers Barnoldswick amongst its bigger towns. It is an area which lies, as I say, roughly thirty or forty miles north of Manchester. The area covers about sixty-seven square miles.

Now I will deal with the reason why this particular area has been chosen. The statutory requirement for choosing a development area like this is set out in Section 7 of the 1945 Act. Perhaps, for convenience, I may read it to your Lordships. It is as follows: Where at any time it appears to the Board that the distribution of industry is such that in any area not specified in the said First Schedule"— that is the Schedule to which I referred just now, in which four principal areas were defined— there is likely to be a special danger of unemployment, the Board may by order direct that the area shall be added to that Schedule. That is the statutory authority under which the President of the Board of Trade has acted in this particular case. The area which I have just described—the new development area—is part of the traditional weaving belt of north-east Lancashire. Over 44,000 workers in the area are engaged in the textile industry; or, to put it another and, I think, more realistic way, 46 per cent. of the insured population of this area earn their daily bread in the textile industry. Almost all of these workers are employed in the weaving section of the textile industry. On an average 46 per cent. of the workers are employed in the textile industry, but in individual districts in the area the proportion is, of course, higher. The history of this area has unfortunately been a chequered one, following the chequered history of the textile industry. In the inter-war years the area suffered severe unemployment, as indeed did many other textile areas, and in the recession of last year this area was, I am sorry to say, hit particularly badly. At one time there were over 16,000 people—that is nearly 17 per cent. of the workers in the area—actually out of work.

Thus, the reasons for scheduling this area are that it is abnormally dependent on a single section of a single industry, and experience has shown that it is particularly liable to severe unemployment when that industry is badly hit by a trade recession. It is, I am very happy to say, true that unemployment in this area has fallen. In January of this year it was just over 3,000, which is a rate of about 3.3 per cent. of the insured population. But in deciding whether to schedule an area one does not of necessity consider the unemployment figures at any particular moment of time. Rather the reason is, as I wish to emphasise, the abnormal dependency on a single section of a single industry; and a third and subsidiary reason is the fact that this area happens to be geographically somewhat remote and not over well served by public transport.

Looking over a wider field at the whole question of development areas, one finds there is one point which has to be borne in mind. When this area was considered, my right honourable friend the President of the Board of Trade looked over a very wide field and considered the claims of a number of different areas, and I may here add that the claims from other areas were numerous. But as my right honourable friend said in his statement on October 29, 1952, in another place (OFFICIAL REPORT, Commons, Vol. 505, col. 1939): …what is given to any new Development Area is, in fact, at the expense of the rest of the country; there is not an endless reserve of special advantages to be extended, and, if those advantages are spread too widely, they become meaningless. In those words, with which I am certain your Lordships will agree, my right honourable friend was echoing the words of one of his distinguished predecessors, Sir Stafford Cripps, when he said in another place on March 18, 1946 (OFFICIAL REPORT, Commons, Vol. 420, col. 1574): The House will appreciate that it would be idle to try and extend the Development Areas over the whole country as that would mean cutting down the value of the service which can be given to particular areas if we made it too wide in its cover. I should add that my right honourable friend has had a very large number of consultations, not only, as he is statutorily bound to do, with the local authorities within the area directly concerned, but also with a large number of individuals, bodies and organisations who are directly or indirectly concerned or whose interests might be affected.

I want to end by emphasising this particular point. The distribution of industry—which is the object of these orders and of this legislation—as a policy, is only one part of the Government's policy of securing full employment. The first aim of Her Majesty's Government must be to place our whole economic life as a trading nation on a sound basis. The economic problems of the country will not be solved merely by scheduling new or further areas. When Her Majesty's Government assumed office they had to take immediate measures to deal with a serious balance of payments crisis and a serious inflationary situation. Unless the country's economy was put on a sound basis this distribution of industry policy which we are discussing this afternoon would have been completely ineffective. The mere formal act of scheduling a new area does not, of course, mean that new factories will be established overnight; nor does it mean that vastly increased prosperity will break with the next dawn. Nor, indeed, have the Government power to direct industry to a particular place or site, but every effort is being made by my right honourable friend, and by the Board of Trade, to steer new industry to this area where it can be offered the special advantages of the Distribution of Industry Acts. I am happy to say that in that respect my right honourable friend has received a considerable number of inquiries although, of course, it would be premature to discuss the details at the moment. This order has met with a cordial reception in the area to which it directly applies, and I hope that I have succeeded in putting the matter sufficiently fully before your Lordships to ensure that it merits your cordial approval, too. I beg to move.

Moved, That the Distribution of Industry (Development Areas) Order, 1953, reported from the Special Orders Committee on Wednesday, February 11, be approved.—(Lord Mancroft.)

2.49 p.m.

LORD LUCAS OF CHILWORTH

My Lords, we on this side of your Lordships' House do not intend to register our dissatisfaction with this Order by asking your Lordships to divide, but it is only fair to say that we are dissatisfied with it—for one or two reasons. Those reasons I will give your Lordships in as brief a time as I can. First, we do not think this Order takes into consideration all the proper factors which it should. The noble Lord has said that it affects a single section of the Lancashire textile industry. That is quite right. But the Lancashire textile industrial belt stretches far wider than the confines of the area which is scheduled in this Order. I do not know whether Lord Mancroaft's experience stretches to the Lancashire textile industry, but that of certain noble Lords on the Government side of the House does; and they must know that when a slump hits the Lancashire textile industry, it hits every section of it—not one alone. In my view, this Order is ill-conceived, because it is likely to do—though I hope it will not—considerable harm by "milking," if I may use the term, the areas contiguous to this one. That is our first complaint: that it doesnot take into consideration the whole of the requirements of the Lancashire textile industrial belt. The next reason for complaint is on the ground that the noble Lord himself expressed, when he said that at the present time anything that is done by way of extending a development area can be done—to use his own words: I wrote them clown—only "at the expense of the rest of the country."

Now, my Lords, we on this side of the House feel that the time has arrived when we should know more of what is the overall industrial policy of Her Majesty's Government The Distribution of Industry Act, 1946, was an exceptionally good piece of legislation, which has done a tremendous amount of good in the circumstances in which it was conceived. But I believe that the time has now arrived when the whole of this country has got to be considered as a development area. This kind of treatment, good as it was as a palliative, as first aid, immediately after the war, is not going to be—as I think Her Majesty's Government will be the first to admit—any solution to the long-term industrial difficulty of this country, a difficulty which we have got to face during and within the next two or three years.

My noble friend Lord Ogmore, later on this afternoon, will be drawing your Lordships' attention to a serious crisis which has happened in another development area—that of South Wales. Is it not a strange thing that within recent history, even within the last twelve months, we were clamouring for steel, and that our exports of certain commodities were being cut down for want of steel, and of the particular type of steel which is now in over-supply in South Wales? We now see, in this area and that, sporadic outbursts of unemployment. Is it not a tragedy that we have to reconcile ourselves to the fact that one of our greatest export industries, the motor vehicle industry, is scheduling for next year a production of only 50 per cent. of its capacity? Very soon, perhaps, we shall have an outcry to schedule Birmingham as a development area.

However, a great deal can be done for other parts of the country without a Development of Industry Order. I repeat the words of the noble Lord, Lord Mancroft, that what is done in this direction to-day is done "at the expense of other areas." There are plenty of areas in this country which are dependent upon one single industry, but which would not call for scheduling under the Distribution of Industry Act. I cite one to which I drew your Lordships' attention a little while ago, Southampton—the blitzed town of Southampton, the gateway of this Empire, starved of capital investment, in a year, this Coronation Year, in which we are hoping to have many thousands of tourists coming into this country; starved because there is no money to enable the rehabilitation of Southampton to take place. I am grateful to the noble Lord. Lord Lloyd, who came down with me, visited the town and viewed the area. And thanks to his good offices, and the good offices of his right honourable friend the Minister of Housing and Local Government, an improvement has been made. The improvement, however, is not nearly enough. Here is an area which is going down and down because it cannot cope in the proper way with the amount of traffic that is coming in.

These are areas which, although they are dependent upon single industries, will never be scheduled under a Distribution of Industry Order. I would ask the noble Lord to consider this problem seriously. I repeat, once again, that anything that is done for any area scheduled under the Distribution of Industry Act to-day can be only at the expense of some other area, such as Southampton; and there are plenty of others that I could name. What I am afraid of—and I choose my words—is that the scheduling of these areas to-day will be done more in response to political pressure than should be the case. That is a very sad thing. Members of Parliament cannot be blamed for it: they have to look after the interests of their constituents. And one has only to read the Report of the debate on this Order in another place to see how well and truly that function was carried out. Her Majesty's Government must withstand these political pressures. They must look at this problem as a whole. Therefore, at some time we intend to ask the House to debate the whole subject of the Government's industrial policy for this country, apart from first aid; what they are going to do to try to treat the festering sores of these pockets of unemployment. It is no good trying to treat them by piecemeal measures such as the one that is before the House this afternoon.

I do not intend to widen this debate any more. What we say, for what it is worth, is that we do not like this Order, because it will not fulfil the noble Lord's hopes. It may be detrimental to those areas in the North East of Lancashire immediately outside this area. This area seeps into part of Yorkshire, which is not touched by the textile industry. Skipton is more of an engineering centre than a textile centre, I believe. It is not worth while our debating the point today, but, as I say, we shall at some future date put on the Order Paper a Motion to discuss the whole of the Government's policy on this matter. In the interim, I would express the hope that the noble Lord will persuade his right honourable friend the President of the Board of Trade, and Her Majesty's Government, to have some thought, outside the Distribution of Industry Act and the scheduling of particular development areas, for those many areas which are struggling to rehabilitate themselves after the devastation of the war and which are deserving of far more consideration than they are receiving to-day.

3.10 p.m.

LORD LLEWELLIN

My Lords, when the noble Lord who has just sat down started his speech, he said that he had five reasons why he did not like this particular Order. I am not sure that I heard one effective reason, but I certainly did not hear five. I heard him say that the scheduling of these areas was often done as a result of political pressure, which I gather he rather deplored. I should imagine that this Order does not have its origin in political pressure, because I fancy that not the most popular Member of another place with Her Majesty's Government is the honourable Member for Nelson and Colne. Moreover, the noble Lord opposite seemed to be doing a little bit of political pressure himself. We all know his valuable connection with Southampton, but I hardly think that Southampton itself would claim to come in as a development area. One of the main difficulties about Southampton is that the local authority there had an ambitious development plan under which they proposed to buy up practically all the blitzed area of Southampton and attempt to develop it. They then thought that they would let it to the shopkeepers and others. That plan did not work out and has now been abandoned, as I understand, or largely abandoned; but I hope that normal development will go on in Southampton.

It seems to me that, when an area of this county such as that which we are discussing to-day has had an unfortunate period of unemployment, and rests entirely on one specific industry, there is a case for making it into a development area. That, as I understand, is what is being done by this Order. But, obviously, the scheduling of an area is not a cure for the ills of this country as a whole. It is only a remedy to be applied to particular areas. And, of course, it is true that, if you spread the butter too far, the butter is so thin on the toast that there is no object in putting it there at all. So it becomes necessary to restrict the areas which are scheduled as development areas.

I think it is remarkable that so far in the last year or two, this country has stood up to the vast competition which its industries are now suffering from overseas. That is a credit to our industrialists, management and workers alike. Everybody has to realise that, with Japan back on the world markets, and Germany back on the world markets and producing a number of things more cheaply than we do, we are now coming into a very competitive world, and that the sellers' market has now virtually ceased. That is the lesson which not only the Government but everybody, management and workers, engaged in industry has to learn: that unless we can get our goods produced, either by better methods or by harder work, more cheaply than those of our competitors abroad, we in this country are in for a very difficult time. After all, there is no reason why the consumers overseas should buy our goods just because we happen to have been one of the main peoples to win the last war. We cannot expect that good will to last for ever, and we must compete in what is going to be a very competitive world. The only way in which the Government can help is by trying to put a restraining hand on the increase of prices generally in this country, which the Chancellor of the Exchequer is trying to do, and by making such bargains as they can, such tariff arrangements, perhaps, as they can, with countries overseas, so that where we are buying their goods in large quantities they will take ours.

When I had the honour of being in Canada last autumn, I found there rather a lack of appreciation of the fact which many of us tried to impress on our Canadian friends, that if they would not take our manufactured goods we could not go on taking their agricultural goods in such quantities as we had taken them before the war. I saw an announcement yesterday, or the day before, in one of the newspapers. I think it was a statement made in another place in answer to a Question, that we could not take any Canadian canned salmon this year. That used to be a very popular dish. In the days when I went to Territorial camps my men always liked for their supper Canadian canned salmon. It was the most popular dish one could provide for summer in the men's messes. We cannot get it now, for the simple reason that unfortunately too few Canadians are buying the goods that we could send to them. It may be, in some cases, our fault that we do not provide sufficient services to follow up those goods, or something of that sort; but it is no good anyone thinking that the problem which this country is facing to-day is an easy one to solve, or that it can be solved by any Government by a stroke of the pen. I am quite certain that the present Government—after all, the Chancellor of the Exchequer and the Foreign Secretary are doing something of the kind this coming week in Washington—are pursuing this vital matter in as good a way as any body of men could do.

3.18 p.m.

LORD HAWKE

My Lords, I should like to say, in two or three words, that we welcome this Order. I have had some connection for some considerable number of years with the Lancashire cotton industry, and deep thought has convinced me that it can never be a completely steady industry, from the very nature of the things it turns out. People do not go regularly to buy clothes in any country in the world. They go at seasons when they feel like it, or they go on special occasions, such as marriages and so on. It is not a regular and completely steady trade. Therefore, any area completely and absolutely dependent on this industry is extremely vulnerable. The industry itself I believe to be contracting, because the first item of industrialisation upon which any country starts is always the making of its own clothes. Therefore, I can see no future in any country, except possibly in Japan, on account of her very cheapness, for an expanding export industry in cotton goods. For that reason it is all the more important that other industries should be introduced into those areas of Lancashire which are so dependent at this moment on textiles. For that reason, I support this Order.

3.20 p.m.

LORD MANCROFT

My Lords, I am sorry that I have not been able to awaken much enthusiasm for this Order amongst noble Lords opposite. I think that much of the general argument advanced by the noble Lord, Lord Lucas, in his very reasonable criticism has already been answered by my noble friend Lord Llewellin, in the excellent speech to which we have just listened. There are one or two points which the noble Lord, Lord Lucas, made with which I should like shortly to deal. The first is the question of political pressure. The noble Lord felt that the Government of the day (perhaps even the Government of this day) would be, or might be, or had been, subject to political pressure in regard to any particular area. With regard to this little area, thirty miles north of Manchester, all I can say is this. If my right honourable friend the President of the Board of Trade had been subject to any political pressure, he would naturally have made it a very much bigger area—almost as big as the one the noble Lord himself rather suggested. I should like to draw the noble Lord's attention to one fact, in particular, with reference to the doubts in his mind as to the correctness with which this actual area had been selected. My right honourable friend, in interpreting the statutory requirements laid upon him by Section 7 (2) of the Act, had regard to the criteria in paragraph 86 of the late Administration's White Paper on the Distribution of Industry, published in 1948. So there has been no change in that respect. The noble Lord, Lord Lucas, made another interesting point. He talked of the neighbouring areas being harmed by the selection of one specific area such as that which we are discussing to-day. Let me give one example to indicate that experience shows us that these development areas do not injure their neighbours. There are already two development areas in Lancashire, but 67 per cent. of the factories and extensions built in the North West region since the end of the war are outside those development areas.

I will detain your Lordships no longer. If I may say so, with respect, many of the points that the noble Lord, Lord Lucas, made, interesting though they were, were a little wider than the field covered in this Order. I know that at one time we were considering through the usual channels whether or not we should follow the example of another place and debate the whole subject. For domestic reasons, that did not prove possible, but the noble Lord, Lord Lucas, has given us notice to-day that in due course he will raise the whole matter; and that, perhaps, might be a more suitable occasion to deal with the whole question of development areas and Her Majesty's Government's industrial policy. I hope then that I shall be allowed another attempt to convince the noble Lord, Lord Lucas, not only that this particular Order is right but that the whole of Her Majesty's Government's policy with regard to development areas is completely right.

On Question, Motion agreed to.