DISTRIBUTION OF INDUSTRY

HL Deb 27 March 1957 vol 202 cc818-60

3.55 p.m.

Debate resumed.

LORD LAWSON

My Lords, may I support my noble friend Lord Macdonald of Gwaenysgor in congratulating the noble Lord on raising this question today in your Lordships' House. While, with my noble friend, I certainly would not agree that the time had come for a review of the Schedule, I think there is something in the suggestion which the noble Lord made for having what one might call a kind of permanent Commission for dealing with the industrial side of this country. I think, as I have always thought, that it was remarkable that we could go nearly two centuries after the advent of the Industrial Revolution in this country before being forced into appointing a great Commission to inquire into the effects and impact of that Revolution. It is worth noting, too, that the noble Lord himself played a not inconspicuous part, if I may put it that way, in trying to deal with the effects of the depressed areas when we arrived at that lamentable position.

When we are considering this question of the Schedule, particularly, we have to ask ourselves what was the real reason underlying the fact of the depressed areas. I think there was general agreement that the depression occurred on a large scale in the heavy industrial areas—areas where there were mining, heavy steel production and heavy engineering. The reason why I should not agree with the need for a review of the areas that are within this Schedule at the present moment is that I am sure that, as things are to-day in the heavy industrial areas, they could not take up new employees coming into industry.

Why was it that the depression hit these areas? It was due to the simple fact that new forms of power had come into operation. The internal combustion engine, with its use of oil for factories, made it possible to establish industries in areas where they had never previously had a chance of being established. Before the First World War, oil for that purpose had hardly been known. The use of electricity had scarcely begun, as compared with what happened a few years after the First World War. These things made it possible for industries to go to other parts of the country. They established themselves on a big scale in the London area and in all parts of the South. Employers simply said, "We are not going up to these barren, wild parts if we can establish light industries here." While I am loyal and patriotic to my own part of the country, I understood their position. In fact, there was one gentleman who, in giving evidence, told the Commission, "If we can get theatre ' first nights ' in London, and the Oxford Street sales, we are not going to Durham or Wales or places like that." In a crude and blunt way, I think he was stating what was really the truth.

Fortunately, there was a Coalition Government during the First Great War, and whatever had or had not been done, everybody in the country was moved in this terrible time of depression described by my noble friend. I once heard a Conservative Member in another place say, with a wealth of feeling which it is impossible to carry to your Lordships' House, "It is a terrible thing to see a whole family unemployed." Of course it was still more terrible to see whole communities unemployed. Those of us who lived in the midst of that situation during those long years saw the state to which our old work friends, whom we knew to be fine men and fathers of fine families, were brought. That was one of the most painful experiences of my life. Now it is delightful to go from one end to the other of the county in which I live and to see the state of industry and family life, the pride of being and dress—all the differences between heaven and hell. It is delightful to go again to these places, and to see what is being done. I confirm what my noble friend says: it would be dangerous to encourage a review of the Schedule, because the heavy industry areas would not be able to pick up the slack of their employment unless there were some definite direction of light industry into those particular parts.

But let no-one in your Lordships' House have the impression that that is the end of it all so far as the Act is concerned. The Act is most clear. It makes it possible to expand to other parts of the country. I do not know what the Board of Trade are doing about this matter, or how they are working. Section 7 says that: The Board of Trade may from time to time, and shall on the expiration of the period of three years from the passing of this Act, take into consideration the question whether any area should be added to, or removed from, the First Schedule to this Act. Taking it by and large, I think the effect of this Act has been most encouraging in regard to the method proposed at that particular time, and I hope that to-day your Lordships will give no encouragement whatever to the rough handling of this First Schedule. As I have said, there has been only one real Commission sitting upon this matter. Indeed, the Government were baffled at the time as to what to do and how to meet this new development. But it must be evident to your Lordships that other great changes are taking place in the country. While the noble Lord has pointed out that there are overspills which create the need for new towns and that sort of thing, the great heavy industrial areas could not, of their own accord, or their own volition, keep pace with their own overspill—that is, new employees coming into being—unless there is some definite direction into those areas of light industry.

I myself should not be greatly averse to setting up a Commission to deal with the general industrial state of the country. About a fortnight ago, I pointed out that practically a new industrial Revolution was taking place in the country through the prospective application of atomic power. I confess to your Lordships that I am astounded that this new state of affairs is being conducted with little Parliamentary control. I read in the newspapers this morning about a new atomic power station that is to be established in order to create power for the electricity grid running to another part of the country. On one occasion we were told that twelve new stations are to be established, and before we could digest that fact we were told that there will be twenty new stations. But except by way of complaint from people in different parts of the country, or from the newspapers, your Lordships' House and Parliament generally have nothing whatever to do with the direction of this great new Industrial Revolution which, ultimately, will be far wider in its range and speedier in its power of application than the old slow-moving Industrial Revolution.

I want to ask the noble Lord whether the Board of Trade have anything to do with this matter. Do they not deal with the trade of the country? Are not these atomic station sites dealing with the trade of the country? I say that it is time that the Board of Trade, or at any rate the Government and Parliament, in some way or another, came to grips with this new form of power. Certainly it gives force to the noble Lord's plea for the establishment of a new Commission, though not, I would stress, a Commission to settle this question of the Schedules, because, as I have tried in my own rough way to point out, that will remain a factor which will require the direction of light industries by the hand of the State and its representatives. I believe that the noble Lord, Lord Bilsland, has done your Lordships' House a service by introducing this Motion to-day. I have said as well as I can what I feel about this matter, to which I have long given attention, as have both noble Lords who have spoken, the noble Lord opposite as well as my noble friend below me, and I only trust that this debate will not be as fruitless as the recent debate in your Lordships' House on atomic power.

4.10 p.m.

LORD ROCHDALE

My Lords, I should certainly like to express agreement with the noble Lord, Lord Lawson, that my noble friend, Lord Bilsland, has again done a very real service in introducing this subject for discussion in your Lordships' House this afternoon. Perhaps in this respect I should declare a small interest. As the noble Lord, Lord Macdonald of Gwaenysgor, knows, I have the responsibility of being chairman of a company which has a subsidiary company not only in one of the development areas but in one of the so-called "Board of Trade factories," but I hope that that will not prejudice anything I may say here this afternoon.

As my noble friend, Lord Bilsland, has said, this is not a subject which easily provokes great excitement in this time of full employment. It might well have done so, and should have done so, in the nineteen-thirties, when there were the great areas of dreadful unemployment to which all noble Lords who have spoken so far have referred. But to-day, with full employment, that sense of urgency, important as it may be, is not easy to create, except perhaps in a few of the small areas to which reference has been made, where from time to time there are really bad cases of unemployment, either potential or existing. Yet, for all that, any failure to look at this matter now and perhaps to take amending action in some form might well be the cause of serious, and I would say justifiable, recriminations in ten, twenty or thirty years from now. That is why I personally welcome my noble friend's Motion and, like the noble Lord, Lord Lawson, hope that it will not end in a futile way but will achieve something.

It seems to me that there are really two ways in which one can consider the question of the distribution of industry. There is the approach whereby one merely considers the introduction of new industries into development areas with a view to relieving excessive unemployment and so relieving hardship. Or there is the wider approach—I think one might call it the "long-term approach "—the approach of town and country planning in its wider aspect, where one would attempt to bring some degree of coordination to the location and use all of the nation's resources to the best advantage; and under this heading of "resources" I include the men and women who do the work, industrial capital, agricultural land, housing, communications, social capital of one kind and another and other such things. In that context one has always to bear in mind very closely three considerations which, to me, are vital: first, the fact that there is a diminishing acreage of agricultural land; secondly, the absolute necessity for industry to be so sited that it can produce most economically, and thirdly, the strategic considerations, which were very much to the fore in the terms of reference given to the Barlow Commission.

Whilst I cannot say that I have completely re-read the Report of the Commission recently, I have looked through it during the last few weeks and, as I understand it, its terms of reference were rather on the wider aspect. On the other hand, the post-war distribution of industry policy, as enunciated by the 1945 Act, was really confined to the question of the development areas, attempting to cure the extreme unemployment in particular areas where basic industries had been so tremendously damaged by lack of orders during the inter-war years. One thing which I feel requires emphasis and which perhaps has not come out quite as much as it might have done is that the 1945 Act did not start something; it really carried forward the 1934 and 1937 Special Areas Acts. It tried to give what were at first called special areas, which were scheduled as development areas, the same chance of continuity and variety of employment—and, therefore, of course, of prosperity—as the rest of the country. The 1945 Act attempted to do that—no less and no more. That is a very important point.

I am going to try to steer a middle course between the rather narrow aspect of the Act and the wider background of the Barlow Report. Reference has been made to the success of the working of the 1945 Act. It has had success, but I believe it would be fair to say that in some respects it has had a good chance of achieving success. The immense demand for every form of industrial production after the war, both for home and overseas consumption, urged industry as a whole to go out of its way to acquire new premises and tap new pools of workers; and it helped the Board of Trade to implement the policy that was set before it. In retrospect, we must admit that some of the choices that were made by industry in putting factories here or there, as a result of that urge to find new opportunities to produce more, have not proved to be as entirely selective as they might have been in different circumstances; but, broadly speaking, the main areas of unemployment were filled.

The noble Lord, Lord Macdonald of Gwaenysgor, suggested that we must recognise that the apparent success of the policy was perhaps due more to the increased activity of the basic industries, themselves situated in these development areas—a degree of activity which I am sure we are all glad to know persists and is still expanding. That is a broad statement and there may be those who, in regard to certain particular areas, would challenge me upon it. But, taking the development areas as a whole, the noble Lord, Lord Bilsland, quoted a number of figures of factories and areas of factory space which had been provided under the Act. I should like to quote just one figure which I believe is reasonably correct and gives a measure of what has been done: the new employment achieved or provided in the so-called "Board of Trade factories" in the development areas amounts to barely 5 per cent. of the total insured population in those areas. That is, to my mind, a very important factor as indicating the fringe form of this introduction of new industries into these areas. It may be barely 5 per cent., but it is a very important 5 per cent.

This raises another point. You may provide an area with substantially all the employment opportunity it needs, but it does not by any means follow that you achieve a perfect, or even an adequate, degree of diversification, and certainly not one that can be relied upon to be enduring. To expect that you could do that—certainly to expect it in a mere ten years—would be, I think, to expect the impossible. It would be like chasing a will-o'-the-wisp. I would go so far as to say that we should never forget that the development areas, like any other industrial areas, whatever we do, are bound to have their ups and downs. Indeed it would not be healthy if they did not, because it would show that they were being cushioned more than the rest of the industrial country against the changes about which I wish to say something very shortly.

There are those—I do not know whether anyone speaking in your Lordships' House to-day will take this point of view—who have felt that the development areas have, in fact, been pampered. We must remember that whilst, as other noble Lords have mentioned, there have been successes, these areas have been up against difficulties and frustrations which the original policy did not intend at all. For instance, in the Act, Section 3 (2) laid it down that assistance could be given for the improvement of basic services in those areas; but, in fact, that provision has been little used, for reasons that I think were pointed out by the noble Lord, Lord Bilsland. Hardly had the Act been passed and the policy started when the economic climate worsened and balance of payment difficulties, inflation and consequent cuts in capital investment came to interfere with the excellent intentions that had originally been put forward.

Then, again, the growing insistence over these ten years on rapid—and I want to underline the word "rapid"—increase in production for export at economic prices, and, in 1950, the insistence on rapid increase of armaments production, tended to encourage industries which might have moved part of their plants into the development areas to say: "No, we can do this much more quickly and much more economically at our own location than in the development areas." So there has been a great deal of frustration for those who were anxious to see the distribution of industry policy go ahead as originally intended. None the less, it is fair to say that the policy has achieved a considerable measure of success. Important new opportunities for employment have been created in those areas, particularly, I should like to emphasise, opportunities for female employment, which existed hardly at all before. I do not think I should be wrong if I were to describe it as a piece of first-aid; and as a piece of first-aid it must be counted as effective.

Having got so far, I think we can rightly ask: "Where do we go from here?" All noble Lords who have spoken so far have posed that question. I should like to put it this way. The conditions that existed in the 1930's—and, after all, the whole policy was based on an assumption that the conditions of the 1930's would return again after the war—were, I think we can say, conditions of static depression, whereas those that exist to-day in 1957, I suggest (and I hope that I am not using too extravagant language) are conditions of dynamic change, expansion and discovery right through industry. And both sets of conditions may have their dangers for particular localities. Therefore I say that, whilst the medicine on the shelf for the 1930 conditions may have been all right, the medicine we may need to have available for quick use for the 1950 and 1960 conditions may be rather different.

I should like to mention one way in which, in my view, the 1945 Act has not worked so well. I do not think this is necessarily a criticism of the Act, but perhaps rather of the difficulty of implementing it. It was clearly in the minds of those who framed the 1945 Act—this is shown in Section 7 (2)—that the Board of Trade should be allowed to schedule an area where there was likely to be a special danger of unemployment ". The three words I want to underline to your Lordships are "likely to be". I suggest that this applies in the case of areas where employment at the time may be quite good—may even be very good—but where too much dependence on one industry or on a group of kindred industries carries obvious dangers in the event of any recession in that industry or those industries. So this was a very important provision. It gave the opportunity to take precautionary measures. I recognise that it is not easy to implement this provision. I have in mind, as an example here, particularly the case of North-East Lancashire. North-East Lancashire has been scheduled now, but had Section 7 (2) been acted on sooner some of the present difficulties might have been obviated, and some of the thousand potential workers who are now leaving that area every year could possibly have found employment there and need not have gone away. So I would say that this particular aspect—that of being able to take action in a locality where there is likely to be danger, even though conditions at the moment are good—needs further consideration. And I should like to class that with a further consideration—namely, the question of concealed unemployment.

The conclusion to which I have come is somewhat similar to the conclusion which has been reached by other noble Lords. I also want to see a review of this distribution of industry policy. I should like to make it clear that my review would not by any means be with a view to winding up the policy, nor would it be with a view to having something like what the Barlow Commission recommended—a continuing national authority. I do not want that. What I want is this—and here I do not quite agree with the noble Lord, Lord Macdonald of Gwaenysgor, when he said that perhaps ten years was not soon enough; I think one does not want to regard it as taking steps after ten years. I should like to look at it after twenty years—and, after all, it is practically twenty years since the Barlow Commission was set up.

LORD MACDONALD OF GWAENYSGOR

My Lords, my point was that ten abnormal years was not the right period to take, but ten normal years might have been.

LORD ROCHDALE

They were certainly abnormal years and I want to say more about that abnormality in a moment. The reason why I want this review is that, just as the pattern of industry as we know it to-day is singularly and significantly different from what it was twenty years ago, so, if we are to continue, as we must, as a leading exporting country, that pattern must constantly change; and the change would not be at the rate these abnormal ten years have shown but at a much greater rate. One has only to look at some of the changes which are going on now. The noble Lord, Lord Lawson, referred to the atomic power stations. Can anyone assume that the arrival and locations of these stations are not going to make considerable changes in the distribution of industry? To take another matter that is very much in our thoughts at the moment: if the European common market is established and we are associated with the free trade area, can anyone assume that that is not going to make profound changes in the pattern of our industry? One other example—one need only look at the schedules of our exports to see that the all-over range of exports in the 'thirties was vastly different from those of to-day, and that change will continue. Obviously these are changes we are going to pursue because we think that they will do the country as a whole considerable good.

It is unlikely that there will not be some small factories and localities that will be temporarily afflicted with hardship of one kind or another, and that is what we want to be in a position to meet, and to meet quickly. To my mind, we need a machinery which is quick, flexible and decisive in action, and I think that no-one here could say that the present scheduling process for development areas is either quick or flexible. We want some organisation that can deal with the kind of difficulty that might occur in a small locality but which the larger area could not be said to suffer. To my mind there is a great deal to be said for having smaller development areas—I could expand on that point—but the whole of a large area cannot be given the same treatment, and your Lordships know from experience that if one part of an area is helped and not another, local animosities arise.

That brings me to a point that has already been raised: namely, the question of de-scheduling a development area. The Select Committee on Estimates for 1955–56 include among their recommendations that there should be a review of the development areas with a view to de-scheduling any area or part of an area no longer in special danger of unemployment. I should have thought it not unreasonable to suggest that the addition of new development areas, however small, is a less probable process, even an undesirable one, unless some of those at present scheduled are de-scheduled. The de-scheduling of any area is bound to be most ill-received and unpopular in the area. And, although provision is made in the Act, de-scheduling is bound to raise considerable administrative problems. I suggest that these problems are not insuperable if de-scheduling proves to be necessary. Do not let us forget that three of the largest development areas were originally designated as special areas in 1935 and were amongst the original development areas in 1945, and I think it is not unreasonable to ask how long their problem is to remain unsolved.

I want to see a high-powered committee appointed to review the whole position and to make suggestions for the future. Reference has been made to the fact that the whole of this subject is completely non-Party, and it is very pleasant to be able to take part in a debate of such importance where no question of Party arises at all. By the same token, we want to deal with this problem on a national, and not merely on a local, basis. Decisions will take time to bear fruit; therefore I hope that action will be taken immediately.

4.37 p.m.

LORD POLWARTH

My Lords, there are certain subjects that can be relied on to fill the Benches in your Lordships' House and others of which almost the opposite can be said. If this subject should come into the latter category, I do not think that it is because of its lack of importance—far from it—but because of its complexity and specialised nature. I assure your Lordships that I should not venture to embark on this complicated subject but for the fact that a year ago I had the honour of succeeding the noble Lord, Lord Bilsland, who moved this Motion, as Chairman of the Scottish Council. Noble Lords who have heard him expound this subject this afternoon will agree that to succeed him is no easy task.

I do not propose to follow the line of other noble Lords regarding development areas. I would rather look at a different problem, though one closely connected with it, which arises from one of the lines developed by the noble Lord, Lord Bilsland, in his opening speech—that is, the trend of the movement of population. The noble Lord gave us figures which show that, while the population of Great Britain is increasing, it is increasing at different rates in different parts of the country. It is increasing much faster in the Midlands and South of England than in other parts, and in this respect the worst loser is Scotland. The same sort of thing is happening inside Scotland. We hear constantly of the depopulation of certain areas, in particular, the Highlands and the Borders. That this is no mere parrot cry is borne out by the statistics.

The figures produced by the Registrar-General of changes in population over the six years 1949 to 1955 show that, while the whole population of Scotland increased very slightly—something of the order of one-half of one per cent.—it increased much faster in the central belt and in the south-west. It did not increase at all in the north-east; it decreased in the Borders and very substantially in the Highlands. So we have the repetition in Scotland of the pattern of movement of population in Great Britain as a whole. When we look at the statistics for the building of new factories that has taken place over the same period we see that there is something in common with that pattern. It is in areas where most factory building is proceeding that the population has been increasing most rapidly, so I think it is clear that it is opportunity of employment which is the mainspring of this migratory movement. I believe that the consequences of this movement are bad. They are bad, first, for the towns and the countryside from which the people are going: these places are being drained of their lifeblood, and a process of decay is setting in. They are bad, too, for the great concentrations of population to which these people are being attracted. This movement is aggravating the existing overcrowding and concentration of industry which is already causing considerable anxiety to the authorities.

Other noble Lords have mentioned that horrible word "overspill", of which we hear more and more. We are faced with the problem of decanting some part of these great concentrations of industry and population into new areas outside, new towns and so on. But while the planners may talk glibly of "overspill", I wonder whether they appreciate the difficulties involved in this process. Take a great industrial concentration like Glasgow and Clydeside, which has grown up over decades and, indeed, centuries. There is the whole interconnected relationship of supplies of steel and coal, engineering works, shipyards, transport services and housing, and the lesser industries which make the parts and components for the basic industries. It is all very well to talk about moving a substantial portion of that industry; but surely it is only the lighter and more mobile industries that we can contemplate moving, except at prohibitive cost. At the same time, we have the picture of completely new industry growing in and around these very concentrations, encouraging, and at the same time encouraged by, the inflow of working population from the remoter towns and the countryside.

I am not suggesting that there is any merit in maintaining our present distribution of industry or of population, but I submit that this present constant drift of working population to the already congested areas is leading to a position that is unacceptable. Very large sums will have to be spent to relieve this congestion. Would it not be better, in this case, to go for prevention, rather than cure? Would it not be better policy to spend a fraction of all this money on inducing new industry to go to these very areas which are suffering from depopulation? It is not only a question of finance. Much can be done in this direction by the local authorities in these places, by the chambers of commerce and other bodies, to show the facilities and attractions that they can offer to industry, using the powers which they already have. But there is no doubt that one of the most potent forces for the attraction of industry, as has been shown in the development areas, is the availability of factories to rent—initially at a low rental, though this need not continue: they can soon be made economic. I believe that we should now be turning to the new areas which have inherited these former troubles of the greater concentrations of industry.

It will probably be asked: Can these areas, and Scotland, in particular, absorb a migration of industry of this kind away from the concentrated and congested areas into areas which are not traditionally centres of industry? I believe firmly that the answer is, "Yes". In the first place, look at the unemployment figures quoted by the noble Lord, Lord Bilsland, some of which I hope may have shocked your Lordships: figures of the order of 10 and 20 per cent. of unemployment in particular places. These figures show that the labour is there. One company in northeast Scotland, in a town where the level of unemployment shown by the figures is comparatively low, recently advertised thirty vacancies; and they received 1,300 replies. Nor are the brains and the skill lacking. It is a sad reflection to me, as a Scotsman, that of all the engineers leaving Scottish universities to-day more than half are having to move out of Scotland to find employment. Certainly the opportunity is there for industry, if it cares to take it.

I do not want to give the impression that nothing has been achieved in this direction. Far from it. The flow from Scotland, if not halted, has at least been stemmed by the inflow of new industry in the last ten years. If I may say so, few people have been more responsible for that than the noble Lord, Lord Bilsland. It may surprise some of your Lordships to learn that in the past ten years, since the war, of all the new North American branch factories established in Great Britain, 75 per cent. have been established in Scotland, which has only 10 per cent. of the British population. Within Scotland there are also some striking examples of industry moving to the smaller towns: companies of the calibre of Consolidated Pneumatic Tools at Fraserburgh; Coventry Gauge and Tool, at Brechin and Arbroath; Airscrew and Jicwood, making chipboard at Annan.

There is still, however, a great deal left to be done. I believe that if the problem is properly handled we in Scotland—and this applies also to other areas of Great Britain—may well be on the threshold of a great new development of industry based on the hidden potential of a large number of towns not previously used to industry: county towns, towns in the Highlands, the new towns, towns in the newly developed mining areas, of which we have heard, old fishing towns and so on. The noble Lord, Lord Rochdale, spoke of a period of dynamic expansion in industry—I am not sure if those were his exact words. I believe that we are on the threshold of such a period, and the industries that hold out the most promise in this period are those based on scientific research and knowledge. Many of these industries have, in fact, just the qualities that are required for these towns. They have, in the first place, a high conversion factor—in other words, the value of the finished product is high in relation to its weight and bulk, so that transport costs, that bugbear of the outlying areas, do not enter seriously into the problem. Many of these products can be made in factories employing comparatively small numbers of highly skilled workers—they do not require vast numbers. Moreover, many of them would employ a high proportion of women, which is most important, because I am sure that unemployment figures for female labour do not give a real indication of the numbers of women available for work.

At the start of his speech the noble Lord, Lord Bilsland, quoted the words of the Barlow Report about "a reasonable balance of industry and population throughout the country" as being a desirable objective. That can be maintained, I believe, only by guiding new industries away from the crowded areas in the Midlands and the South, and away from the already congested areas in Scotland. The problem is: how is that to be achieved? The noble Lord, Lord Bilsland, and other noble Lords have made certain suggestions to that end, which I hope the Government will take to heart; and I should like to throw in one more—or, rather, to develop one that has already been mentioned by the noble Lord, Lord Macdonald of Gwaenysgor.

He spoke of the work of the Development Commission, set up, I believe, under an Act of 1909 for a very different purpose. We in North East Scotland have a striking example of the work of that Commission, just as the noble Lord has in North Wales. I think that that body is too inclined to hide its light under a bushel. As a result of its work in the area of Buckie and Peterhead, what was a state of decay has been arrested and reversed. Two of the projects there—one already functioning, the making of electric lamps, and another, under construction, the making of precision tools—are excellent examples of the type of industry suited for those communities. I wonder whether the work of this Commission could not be extended, and the interpretation of its functions broadened to include not only areas of unemployment, but also those places suffering from loss of population and from under-development—those smaller areas which the noble Lord, Lord Rochdale, submitted might be worthy of attention.

As I said earlier, there is an ever-growing awareness of this problem among those on the spot, among local authorities, chambers of commerce and other voluntary bodies, who are putting more and more effort into attracting new industry to the places where it is most required. That is something from which we must take heart. At the same time, I believe that in this matter we must have a firm lead from the Government, in the form of a clear statement of policy on distribution of industry, preceded, if need be, by an inquiry such as that suggested by the noble Lord, Lord Bilsland. Without such a lead, all our efforts may be at cross-purposes or in vain; and, with the rate of development of industry at the present time, unless we do this very soon we may well be too late.

4.52 p.m.

LORD BENNETT OF EDGBASTON

My Lords, like my noble friend Lord Rochdale, I have to admit a connection. I believe that one of the companies with which I am connected rents a factory from the Government. In fact, I think it has now been taken over by them, but there may be one which they are still renting. I should like to make certain that I do not have to go to prison for having failed to make that clear. I know nothing about that matter, but I have made the statement. So, having cleared my mind, I will come to the subject. I agree with my noble friend Lord Rochdale that there is need for a high-powered committee, and I agree with the noble Lord, Lord Bilsland, that this should not include the areas which we tend to overlook and say, "This matter has been dealt with", and, "Matters are now straight", because we know that there are still areas (and they have been mentioned this afternoon) in Scotland, North Wale; and Anglesey, and also—although nobody has mentioned it—the eternal problem of Northern Ireland, which have not yet been cleared up. I agree largely with the position taken up by the noble Lord, Lord Macdonald of Gwaenysgor, that we must not just look at the outstanding parts that are left and the failure, so to speak, of the policy; we must look also to the success of the policy, and I hold that its success far outweighs the residue of the problems which have unfortunately remained with us.

I was concerned in this matter at the early stages. I had to give evidence before the Barlow Commission. This problem is one that we have been considering for twenty-five to thirty years, from the time of the early troubles in industry when we began to feel the problem of unemployment so badly. In the evidence we gave before the Barlow Commission—and if you remember, our minds were then upon preventing more industry drifting into London, so that the Great West Road did not become factories all the way to Bath—we recommended that the Government's attitude should be one of persuasion. The legislation which was enacted in 1945 and modified in 1950, and the Town and Country Planning Act, 1947, all worked along those lines. I should like to remind my old friend Lord Lawson that there is no direction. Direction is not part of the Government policy, either for industry as to where it should go, or for the worker as to where he should work. It has been done by persuasion, and it is a marvellous testimony, I think, to what has been achieved.

Three lines were put forward: first, to introduce new industries into distressed areas; secondly, to discourage companies from going to congested areas which were over full, and, lastly, to steer, by persuasion, companies who had a choice, to go into new areas, trading estates and new towns. I believe that that policy has on the whole proved very successful. It has not achieved all we hoped. Not being an ordinary Englishman, I can look at the successes in the South, but I can sympathise with anyone else. I was in the other place long enough to have heard the story of the depopulated Highlands. I know that there are those areas, and I know that there are areas in Wales and in Northern Ireland where they have a much higher proportion of unemployment than the average of which we talk so glibly. But, taking it generally, I think the policy has been successful, and that there have been enormous changes since this policy was started.

A little while ago I was reading some articles about visits to South Wales just after the First World War. The womenfolk were lamenting the fact that there their men had to leave the mines and go to work elsewhere because there was no work for them, and that the girls could not get married to miners and had to go to London. It was a great hardship that the traditional employment in the mines was no longer being adopted. After the Second World War, those same women, or their daughters, were lamenting that their men had to go down the mines, which was a horrible life. Of course, the whole coal industry will remind us that there were too many miners and there was too much coal. We could not get rid of it, we had troubles, and there was great unemployment. Now there is a shortage of coal, there are not enough miners, and we are having to import coal. That has all happened since the end of the First World War. So there are areas which had labour to spare and to-day they have not got any.

Industry was asked to go into some of these areas—I am not talking about the North of Scotland, but about areas in England—where there was plenty of labour. Some of us went to them and started little factories. We found that other people had been told the same story, and to-day there is a shortage of labour or a shortage in sight. We were asked to put light industries into certain areas where there was plenty of woman labour. To-day we find that that is drying up. I am only saying that there has been an enormous change since the end of the First World War and the end of the period when we were investigating the location of industry, and to-day. The labour available is drying up, although the Government have done what they could.

The noble Lord, Lord Bilsland, referred to London. There has been a big effort to stop factories from being re-established in London. Permission has had to be obtained from the Government. But, in spite of that, it has been shown that the Board of Trade have not turned down, firmly and finally, expansions in London where it has been shown that that was the only place where it could be done. The same thing happened in the Midlands. There was great difficulty in obtaining permits for expansions, but it is sometimes quite clear that it is impossible to move part of the industry. The only way in which to get the output which is necessary for export and the export industries is to have a slight extension. But it has been very difficult to get those building permits. The Government have been very keen in suggesting that industry should go elsewhere. I maintain that industry has played the game and gone elsewhere. The result is that to-day I am sometimes staggered when I read reports of companies that I had no idea had branched out and gone to the North of England or Scotland with branch factories. It has worked.

On the unemployment question in the so-called distressed areas, I am aware that in those pockets it is very high, but, on the average, according to the latest reports, there is only 1 per cent. difference between the figure for the distressed areas and the figure for the insured population, The national average is 1.2 per cent. I know how misleading averages can be, but those are the figures taken as a whole. Therefore the problem cannot be a great one, taken as a whole, but it is very acute where it arises. My noble friend Lord Rochdale referred to places where there was "likely to be" unemployment—that is the note I have here. The Board of Trade have to consider the future, but, in considering the future, it is difficult to know where unemployment is likely to be because we do not know what will happen in the next few years as industry develops.

But the day has passed when special aids are necessary to induce people to go into some of these areas—such things as special building permits, special facilities and loans from the Treasury. The Select Committee on Estimates, to which reference has been made, recommended that this matter should be looked at again. The Board of Trade promised to investigate it. I know that the noble Lord opposite is most anxious that the Schedule should not be altered. I think that if a measure has reached a stage when the general spread is proved to have been conquered, it would be as well to look at the special cases mentioned by the noble Lord, Lord Bilsland. I do not want to see anything clone to make the matter more difficult, but there are some cases which do not need help to-day, and, as they should not have it, the help should be concentrated where it is needed and where it is proved to be needed. Industry is everywhere.

My noble friend says that some of these districts have been a little pampered. For instance, in the placing of Government contracts, firms in the development areas have been given preference when tendering, even when the prices were not favourable. They have been given a second chance and part of the business, in spite of the fact that their prices were wrong. I feel that what was understandable and perfectly natural in 1934 when we started on this problem is not necessary to-day. I agree that conditions have changed so materially that it would be as well to look at them again. The Government and the Board of Trade should give their consideration to the question whether help should be given in places where it is proved that help is not needed.

5.3 p.m.

LORD GREEN HILL

My Lords, if there is one great advantage about your Lordships' House, it is that now and again we can have reviews of the kind that we have had to-day from the noble Lord, Lord Bilsland, which in themselves are a call to the nation at large, without introducing any Party political question at all. Indeed, one sometimes feels that if it were possible to have the kind of objective and scientific approach to a problem that we have had to-day from the noble Lord, Lord Bilsland, we should perhaps arrive at sounder results than we sometimes have done. If there is one thing with which we are all concerned, irrespective of the Party to which we may belong, it is that our country should prosper. If there is to be a division of opinion, that division may take place over the shares which each section of the community would be able to divide among themselves. So the problem is one that concerns all of us.

Lord Bilsland's contribution to-day was, I thought, particularly interesting, because, although the terms of his Motion appear to confine themselves to the effects of the Distribution of Industry Act, he introduced this enormously important question dealt with by the Barlow Commission about the distribution of population. That raises not merely economic but social problems, too. The little that I want to say to-day may be divided into two parts, one of which is that in 1952, at the time when the noble Lord was himself Chairman of the Scottish Council (Development and Industry), that Council set up a Committee to deal with local development in Scotland. It is not my intention to emphasise merely the Scottish aspect but rather to remind your Lordships that the Committee set up by this unofficial body went into the kind of problems which have been so ably discussed to-day. They drew up a Report indicating the kind of evidence on which they based their recommendations. One assumes that the Committee pased on those recommendations to the Secretary of State for Scotland; but since then, if my information is correct, nothing more has been heard.

The composition of the Committee was interesting because its membership was confined to four individuals—the chairman, Professor A. K. Cairncross, the well-known economist, and three other members. There were six assessors, who were members of departments of the Scottish Office. They delved into the material, and brought the facts before the Committee. The members of the Committee and these assessors then discussed the implications of the facts that they had brought up. If I do not myself stress the importance of the Distribution of Industry Act, it is because, as the Committee's Report indicates, in paragraph 70: The priority that has been enjoyed by the Development Areas has usually been justified in terms of the unemployment figures for those areas. Unemployment, however, cannot be the sole criterion of policy. Apart from the overriding need to promote the growth of new industries in suitable locations, there may be a greater volume of concealed unemployment in other areas; or the danger to the community fabric may be in greater jeopardy in areas where unemployment is not at present high but where a steady drift of population has already set in. I would add the first sentence of paragraph 71: In any event, the areas of heavy unemployment no longer coincide with the Development Areas but occur in pockets,"— a remark which has been heard in the course of this debate this afternoon— some of which are within and some outside the Development Areas. There is the balanced view of the Committee, who considered this problem of unemployment in relation to the development areas and found that the development areas were mainly the outcome of the need to cure the problem of unemployment.

In Appendix II of the Report, there is a summary of the powers of this Distribution of Industry Act, which I would strongly recommend your Lordships to read. I will not trouble noble Lords by reading much of it, but I will quote one or two extracts. The Appendix says: The Government affects the distribution of industry in a great number of ways, but in general there are five types of control or influence which may be brought to bear. Then it sets out the five types of control as follows:

1. "(a) Development Area Policy.
2. (b) Planning Control.
3. (c) Building Licensing.
4. (d) Consequences of other Economic and Social Policies.
5. (e) Factory Building.

All these factors, I think, have been touched upon by one or other speaker in the course of this afternoon's debate. There is one small correction, of atmosphere rather than of fact, that I should like to introduce, because of what the noble Lord, Lord Polwarth said in reference to unemployment. If one examines the Command Paper entitled Industry and Employment in Scotland, 1955, one reads at page 6, paragraph 11, these words: Between January and September unemployment in the Development Area fell from 38,703 (3.3 per cent.)—comprising 25,919 men and boys and 12,784 women and girls—to 28,213 (2.36 per cent.)—comprising 17,975 men and boys and 10,238 women and girls… I hope your Lordships will pardon my introducing these figures; they will probably look better in print than they sound. Then paragraph 13 goes on in this way: Throughout the year, as in recent years, there was a persistent shortage of skilled men of various classes, particularly in the engineering, the shipbuilding and ship repairing and the printing and publishing industries "— and so on. So that the picture of unemployment in Scotland is not, one hopes, too bad at the moment, although there are those pockets of unemployment to which the earlier Report refers.

Now, my Lords, if one considers a large city like Glasgow, with its large population constricted within a small area, in which it is agreed that there are something like 300,000 people in excess of the available accommodation for housing within the city, that raises an enormous industrial, economic and social problem, and one which must be tackled Unless the Government take care to examine the implications of that situation, and do not leave it to the play of economic forces to settle themselves. I think one might find oneself, in a comparatively short time, again faced with the kind of problems that have been discussed in general terms this afternoon. Some kind of authority to plan the distribution of this excess population (I hate to use the word "overspill"; let us remember that these are human beings), must be set up and some kind of plan devised whereby the excess population within this large city can be found not only housing accommodation but places of work, of amenity and culture, of open air and so on, within more or less easy access to their homes. That is a most difficult problem, and one that needs careful consideration.

There is one other matter which arises out of the remarks of the noble Lord, Lord Bilsland. I am optimistic enough to believe that we have got past for ever the possibility of unemployment, in the sense in which we knew it in the 'thirties. I believe that what has come to be known as "full employment" is not merely a political cry, but, if you like, an economic discovery which will ensure that no longer do we have unemployment in excessive numbers, so that the kind of problem which led to the passing of the Distribution of Industry Act is of no great importance in these times. Nevertheless, there are other problems.

Mention has already been made of the development in the kind of industries which are now coming forward. In my view, it is not merely that the nature of industry is changing. What is also of immense importance is the rate at which it is changing. No sooner do we adapt ourselves to one system of production, to one system of energy, than another begins to show itself. Already we have to begin to think of how to bring up the new generations of workers who will be able to deal with the new kinds of products, machinery and ideas necessary for the development of these new things. That, I think, raises a very serious problem. It is not merely a question of the number of our population, but of their quality. Can we now afford to face a situation in which the great majority of our population are insufficiently trained to apply themselves to the higher skills which in the near future will become the normal characteristic of industrial production?

I wish I could believe that all the emphasis now being placed on the importance of encouraging technological education is as successful as we should like it to be when one thinks of the general level of education of so large a section of our population. Is there anything we can do, either by educational methods or by some process of selection, whereby we can encourage these young men and women to apply themselves to the new kinds of scientific problems—problems which, I do not hesitate to say, demand not merely clear thought but a new kind of thought. What is there that we can do in order to encourage this new kind of mentality which the near future suggests is the kind of mentality we shall require in our coming populations? I should like to end by once again congratulating Lord Bilsland on bringing forward this immensely important matter. He has not pretended to provide solutions. All he has asked is that these problems, which affect not only this country but every industrial country, should be considered seriously by us in order to see whether, by some means or other, we can arrive at some course of action which will redound to the prosperity of our country.

5.19 p.m.

LORD LUCAS OF CHILWORTH

My Lords, it was seven years ago—in point of fact, on June 13, 1950—when the noble Lord, Lord Bilsland, made his maiden speech in your Lordships' House, upon the Second Reading of the Distribution of Industry Act, 1950. After seven years, he has come back to his first love. I remember the occasion so well, because then I was standing at the Government Dispatch Box piloting that particular Bill through your Lordships' House. It was then what we called the second phase of the 1945 Act, and it gave the Board of Trade added powers by which to help the Distribution of Industry Act, 1945.

The noble Lord, Lord Rochdale, has said that the 1945 Act was a first-aid Act; and I think he is right. Until we calmly think about it, as my noble friend Lord Greenhill has done, as he showed in an outstanding contribution to this debate, many of us may not have realised that we have revolutionised this country since 1945. I will give your Lordships two figures, one of which surprises me, while the other staggers me. The 1945 Act contemplated coming to the rescue of what were originally known as distressed areas—latterly, more respectably, called development areas—to the tune of just under £60 million; and from 1945 to 1950 that is what the State contributed. Then, for four major industries in this country—power, gas, coal and transport—the taxpayers of this country will be finding, in about the next seven years. £3,000 million.

The noble Lord, Lord Mills, comes to your Lordships' House, and in a speech of about five minutes earmarks nearly £2,000 million for his atomic power stations and other electrical energy. That is what we have to think about, and I confess that it frightens me. The noble and learned Viscount on the Woolsack will recall that I made a speech in your Lordships' House when we were discussing the railways' plan to spend £1,200 million. I then said that what really affrighted me was that we were making heaps of the taxpayers' money and shovelling millions of pounds into the development of our industry, without, so far as I could see, any sensible appraisal or correlation of the size of any one heap with the others. I am afraid that in this country to-day we are facing a position where industrial development is getting rather like Topsy—and she "just grow'd".

The noble Lord, Lord Rochdale, asked: "Where do we go from here?" I would not do anything to disturb the 1945 Act, though, with my noble friend Lord Greenhill, I hope that the days of distressed areas are gone from our ken for ever. But we shall always have pockets of unemployment—and what a gigantic problem this is!—because unemployment can be created overnight by the fiscal policy of any Government. Birmingham, Coventry and Dagenham are three examples. Credit squeezes can compress the economy and literally force unemployment. And let us be quite blunt about it: that was the declared policy of the credit squeeze: to create unemployment in a certain industry where there was too much employment. What are we to do on that? I would respectfully suggest that we are facing now, and shall face for the next five or six years, a problem vastly different from that which we faced in 1945, when we had a desperate situation on our hands. Look at South Wales, West Cumberland, and the North East. Would your Lordships call West Cumberland a depressed area to-day? In the 1930's, I gather, that was one of the most depressed areas, with 85 per cent. unemployment. Yet to-day, I understand, there is not a man there unemployed.

My noble friend Lord Macdonald of Gwaenysgor, who, as he usually does, kept up the high standard of speeches on industrial subjects from this side of the House, pointed to the position in North Wales, where 10 per cent. of the employable population are unemployed. But what are we doing about that? The real development that we are going to bring to Wales in the next five or ten years, so far as I can see—huge industrial development that will attract millions of pounds of capital—is in Pembrokeshire, where there is hardly anybody unemployed. Why? Because to bring our oil supplies to this country we shall require deep draft tankers, and right round our coast there is only one available port where we can bring in an 80,000 ton oil tanker; and that is at Milford Haven. Once the docks and refinery are built there, other industries will be attracted. That is forced upon us. Evidently Southampton Water is now getting outmoded and, because of the draft of these new tankers, I doubt whether any huge refinery will now be built there.

I do not know whether it is so, but it does not seem to me that in all this expenditure there is any planning. My noble friend Lord Lawson, who is not now in his place, saw in The Times to-day a paragraph which I saw stating that the Central Electricity Authority are now prospecting the southern coast of this country from Kent to Wales with a view to putting up atomic power stations. Who said that the Authority could do so? To-day, our planning is so badly organised that, while we have a Board of Trade who are supposed to be responsible for industrial planning, and a Ministry of Housing and Local Government, who are responsible for another type of planning, the Minister of Power is a law unto himself. He bows the knee to nobody. I am not going to develop this theme because to some extent this will be severely challenged, but if Government policy follows this course (and Her Majesty's Government say all these power stations have to be built in the South of England and in remote places) it will not be towns like Southend on Sea, Margate or Brighton that will have those power stations but the best and prettiest part of our coastline. Unless something is done, it is there that there will be pockets of industrial development. But for what purpose, and according to what plan?

These are some of the things that worry me. We are now living in an age of scientific revolution and, as my noble friend Lord Greenhill has said, one cannot set up committees and wait for Commissions to get to work, because the very technique of production or power changes overnight. I feel very sorry for those who, like the noble and learned Viscount on the Woolsack, have Cabinet responsibility, for the trouble is that we are blinded with science from scientists, and the only people who can contradict them are other scientists. It is the scientists who lead us into these things—to what end none of us knows.

That is our position as I see it to-day. I do not think there is any comparison between the industrial position of this country to-day and the position that existed in 1945. At that time we had to legislate for the future, or what we anticipated the future would be; and in 1945 we were afraid that we were going to be faced with depressed areas. I do not think that we need entertain such a fear now. But I am certain—and I hope that the noble Lord who is going to reply for the Government will agree—that we have got to do some very sensible planning.

As I listen to ministerial speeches (I will not mention individual Ministers by name), I note that when a Minister wants an alibi for not doing anything he says, "Of course the trouble is that this country is so small." Sometimes this is said in such a way as almost to give the impression that if some of us took a step backward without looking where we were going we should step right off this land of ours altogether. When roads are mentioned, we are told that we cannot have this, that or the other thing, because: "The trouble is that the country is so small and it has got so many people in it." All the more reason I say—and again I hope the noble Lord will agree—for us sensibly to plan our industrial resources of every kind, human and material. And unless we do so we are going to waste a great deal of them. As I have said, we are going to spend—and the taxpayer will contribute the money—£3,000 million on four industries, which I think works out at somewhere in the region of just under 20 per cent. of what it is anticipated will be the total investment of this country in the next eight years. We cannot afford to waste that. We cannot afford to make mistakes when we have such a gigantic project as that of atomic power in hand. At the same time, we have to look after these pockets of unemployment.

I was very much interested in the speech of the noble Lord, Lord Polwarth, because when this was my particular care, at the time when I was a member of His Majesty's Government and connected with the Board of Trade, we experienced great difficulty with moving labour. We learned one lesson: that in carrying out a policy of industrial development, to be successful you must take the work to the worker, for the worker will not go to the work. I remember a classic example of that in Scotland. The Lanarkshire coalfield was worked out; the Fifeshire coalfields were being developed. Houses were being built at Kinross and we waited for the miners to go from Lanarkshire to Fifeshire. But they would not do so. Roots to them meant more than houses. That, I suppose, was why that huge trading estate at Hamilton was developed, that estate which now contains what I suppose is one of the finest electrical equipment factories in Britain. It was created to absorb that labour. Let us remember and do not let us theorise too much. We had some very good lessons with regard to labour and the movement of industry during the time when we built all those estates on development areas.

I would not do away with the Act of 1945. I would agree with nearly everything that Lord Bilsland said, except that I would not follow him in the matter of committees. I do not think you want another Barlow Commission or a Committee. What I think we must have in this country—I do not suppose that the noble Lord, Lord Mancroft, will say "Hear, hear" to this suggestion—is a central authority, a Minister, who will be responsible for the industrial planning of this country. We must have a high-ranking Cabinet Minister who will be Minister of Industrial Development, because at the present time our industrial development—the thing upon which we depend above everything else in this country—is the plaything of various Departments The Board of Trade is supposed to have responsibility; but look at the expanse of the interests of the Board of Trade. We had a Minister of Town and Country Planning—my noble friend Lord Silkin was the first to hold that office. I always thought it was a mistake when that Ministry was absorbed in that of Local Government and Housing. I think we have to get back to something like that Ministry of Town and Country Planning.

How can we allocate our scarce resources unless we have some overriding authority? I should not like to say whether £2,000 million is sufficient for atomic energy power projects, £1,200 million for the development of the railways and £600 million for the coalmines. I do not know what is going to be the shape of our industries if we have European free trade, on which one noble Lord has, I think, raised a question. Undoubtedly one of the most important things we shall have to do then is to look to our costs. I have noted a very interesting suggestion about one of the things we shall have to do if we are going into the European Free Trade Scheme—that will be to build a Channel tunnel. The only cheap way we can get our goods into Europe will not be by sea or over the water at all. There will have to be huge capital development in that connection. Therefore I should not tie myself to a suggestion of either resurrecting the Barlow Commission or having a committee. I think this matter has to be under constant review. The whole fit-up of our industry, financial, material and human, must be under constant review, and there must be one overriding authority. As my noble friend Lord Lawson has said, Parliament must play a greater part.

I am very worried about the way some things are going on behind the scenes. Enthusiasts rush in, and before we know where we are we shall have to spend thousands of millions of pounds on putting up atomic power stations and not on the sensible basis of the right places to put them. As the Minister admitted to your Lordships in this House, they are to be put in the South of England because the public think it dangerous to have them in the North. He was careful to add that the Government are satisfied that there is no danger, but the public thinks that there is. Is that a sensible way to plan the expenditure of thousands of millions of pounds? Suppose it turns out that these atomic power plants are as safe as the Government think they are, what are we going to have? Are we going to have industrial development around every power station because it will be possible to get cheap power there? Are we going to build power stations down on the South Coast, losing millions of pounds worth of heat by putting up the temperature of the sea 15 degrees and letting it cool again, just because somebody thinks that there may be radioactive effluent? I should like to see these things tackled by a Department of Industrial Development presided over by a Minister. In my view, that is the way to meet the case which the noble Lord, Lord Bilsland, so admirably made this afternoon.

5.40 p.m.

LORD MANCROFT

My Lords, it is nearly four years since we last debated this subject, and I think that the periodical exchange of views on such an important subject as this is very welcome. The Government indeed welcome this debate, and I should like to thank the noble Lord, Lord Bilsland, as other noble Lords have done, for having brought this matter forward. It has given rise to a specially interesting debate, with contributions from noble Lords who speak with authority and knowledge on this subject. Your Lordships have criticised and praised. Criticism was only to be expected, for this is a controversial and difficult matter, and it is easy to find room for criticism. If I have not the answers to all the questions which have been put to me to-day, I claim it for a virtue for this reason: that it would be silly for me to come to your Lordships and say that the Government have made up their minds finally on this point and that we shall listen to no further arguments on it. This matter changes from day to day, and there is no finality in our policy. The mind of the Government is certainly not closed to any possible improvements that might be brought about in the working of this Act. Therefore, we shall look with great care at the suggestions which noble Lords have made and if we can possibly carry out your Lordships' wishes we shall do so.

As I say, criticism is easy, but I was glad to hear the almost unanimous praise for the general working of the Act. I think that the distribution of industry policy has certainly yielded most beneficial results. I must do justice to my noble friend Lord Rochdale, who pointed out, in all fairness, that the dice has been rolling the way of industry in the course of the last ten or twelve years but, nevertheless, the results of this Act have been strikingly successful. Nearly 350,000 direct jobs have been provided in development areas, and the figure of indirect employment has been much greater. I think that the success of the Act has been evidenced by the new openings for employment which have been created and by the impressive statistics of new Government factory building, which the noble Lord, Lord Bilsland, mentioned. The Board of Trade are responsible for factory accommodation of nearly 45 million square feet, of which 26 million square feet have been built since 1945.

The noble Lord, Lord Macdonald of Gwaenysgor, drew attention to the startling success of steering new enterprises into hitherto vulnerable areas, such as South Wales. He made the interesting point that, looking back on it, South Wales could have got along without the Act because of the most welcome success of the heavy industries. I must say that, to those who knew South Wales in those terrible days, it must be a heart-warming sight to see such enterprises as the John Summers Works in the North, and Richard Thomas and Baldwins, and the Steel Company of Wales, in the South, whose great furnaces are working day and night, and not forgetting, also, the coal mines. But I think that the noble Lord would admit that, by bringing diversity of labour into these areas, we have provided work not only for the menfolk but for the daughters of the miners; and this, of course, encourages the miners to stay in the mines. To those like the noble Lords, Lord Hall and Lord Macdonald of Gwaenysgor, who knew South Wales before I was born, it will be an astonishing sight to see factories like those of the Anglo-Celtic Watch Company at Ystrad-gynlais and of British Nylon Spinners at Pontypool—a factory which, incidentally, is vivid proof of the fact that factories need not necessarily be eyesores.

As noble Lords have said, North Wales is in a different category. It is a problem with which I am familiar, and I should like to thank the noble Lord, Lord Macdonald of Gwaenysgor, for his kindly reference to my work in Wales during the last two and a half years. North Wales presents a problem to which I do not see the answer at the moment. Under the Development Fund, four factories have been put up, and we have done everything in our power to attract work to the area. I have gone down on my bended knees to manufacturer after manufacturer, pointing out the beauties of Penrhyndeudraeth and Anglesey. They admit the beauties of North Wales, but they will not put their factories there. One can take a manufacturer to North Wales but one cannot make him erect his factory there. The figures are bad in North West Wales, and I agree that it is no good comforting ourselves by saying that it is only a small matter. The percentage of unemployment is high, yet it is not very high when we consider the country as a whole. That, I know, is precious little comfort to Dai Jones who is unemployed in Caernarvon. I would assure the noble Lord, Lord Macdonald of Gwaenysgor, that we are most anxious about the problem in North Wales and we want to do everything we possibly can to improve the situation. I do not think that scheduling would improve it. That has been suggested, but if we did schedule the area it still would not make manufacturers build their factories there.

I revert to the labour problem. The improved conditions elsewhere have been closely linked to the welcome effects of full employment. The maintenance of the policy of full employment is a primary feature of the Government's economic policy. I was glad to hear the noble Lord, Lord Greenhill, emphasise that, although he went a great deal further—and I would not disagree with his view. The importance of the welcome recovery of the basic industries, particularly coal, iron, steel and shipbuilding, has been mentioned by all noble Lords. The noble Lord, Lord Lucas of Chilworth, will remember that when the Act of 1945 was launched it was about heavy industry that there was most anxiety. In point of fact, that anxiety has not been fulfilled. It is the remarkable stability of the heavy industries, to which attention has been drawn this afternoon, which makes the present strike situation all the more sad. The problem has been that of the more volatile secondary industries, and that brings us to the importance of diversification. The noble Lord, Lord Lucas of Chilworth, mentioned West Cumberland, where we have factories making fashion silks and chemicals; and, of course, there is Calder Hall. There could not be a greater diversity. Before the war, light industries occupied only one-tenth of the total; now the proportion is about one-third.

Mention of Calder Hall brings us to the important question of power stations, mentioned by the noble Lords, Lord Lawson and Lord Lucas of Chilworth. The siting of these is a very difficult point. I will not go into the matter to-day, if your Lordships will forgive me, because there is to be a debate on the whole question in the near future, but I will certainly make it my business to draw the attention of my noble friend Lord Mills to the rather fanciful picture which the noble Lord, Lord Lucas of Chilworth, has painted, in which he described the finding of sites for power stations rather like a game in which a child who is blindfolded at a party tries to pin the tail on a donkey. There is certainly far more to it than that, as my noble friend will reveal to your Lordships next week. I admit that my noble friend has a free hand. He does not need to get planning permission, or an industrial development certificate; but there is the closest link between the Minister of Power and the Board of Trade and other Ministers concerned, and I assure the noble Lord that the difficulties he has in mind are not regarded in any lighthearted or complacent manner.

Several noble Lords have mentioned the hard core of unemployment and special pockets of unemployment. We have had an unacrimonious debate this afternoon, and I do not propose to introduce a note of acrimony now. The noble Lord, Lord Lucas of Chilworth, referred to the credit squeeze. If I may use the language of the public house, I would say to him, "If he will come outside and repeat those remarks, he will learn something to his disadvantage."

I was delighted to hear my noble friend, Lord Bennett of Edgbaston, refer to Northern Ireland, which is, of course a problem of its own. As in the case of North Wales, the figures are disproportionately high. Your Lordships know that Lord Chandos has been doing valuable work there. However, it is a matter of teamwork: the Government of Northern Ireland, Lord Chandos, industry and the Board of Trade are all trying to solve the difficult problem of Northern Ireland.

LORD LUCAS OF CHILWORTH

Perhaps I might say to the noble Lord that I was not trying to make any Party point when I mentioned the credit squeeze. The fiscal policy of any Government, because of the great control they have over the economy, can create unemployment far more quickly to-day than it could years ago.

LORD MANCROFT

I recognise that. It was the next point to which I was taking exception. To get back to Northern Ireland, as your Lordships know, the Government are doing their best to steer industry there, and I think we are having some success. We are continuing our efforts. That goes for other parts where there are small pockets of unemployment. North Lanarkshire and Dundee, to which the noble Lord, Lord Polwarth, referred, are two areas that come to my mind. I would, in passing, remind your Lordships of one successful by-product of all this, and that is the Remploy system. I do not think the public are aware of how much success has been achieved by the Remploy system in finding work for people who would otherwise, due to some physical defect, be unemployable. That has had a great moral effect among a small but important section of the community.

Conversely to all this, there is the need to discourage new industrial development in the congested areas, to which the noble Lord, Lord Bennett of Edgbaston, referred. It is an important part of Government policy not to permit new factories to be put up in the central Midlands, Birmingham, or the London area. Since the war no new permits have been granted in these areas other than for extension. It will continue to be a firm part of Government policy to try to keep down factory development in the London area, so that factories do not stretch down the Great West Road as far as Bath. I think a great deal has been achieved, and industry has played its part well. It has been helped by the natural desire of firms, which are providing their own money, to go where labour can be found.

I turn now to an important point made by the noble Lord, Lord Bilsland—that is, the question of overseas investment applications. These are very welcome when they are suitable, but they are not always wholly suitable. Over 600 United States and Canadian investment projects in the United Kingdom have been approved since 1950. That includes a large number of factories, particularly in Scotland, as was mentioned by the noble Lord, Lord Polwarth. Apart from the examples he gave us, there was the announcement two or three days ago that the Euclid people were to have another factory for earth-moving machinery in Lanarkshire; and Burroughs Office Machinery have planned a large extension which will help the new town at Cumbernauld.

The noble Lord, Lord Bilsland, if I understood him aright, complains that the machinery for American firms investing here is too complicated and a little cumbersome. I hope that is not so, but I should be grateful if he would let me know of any cases that are worrying him, so that we may see whether the machinery can be improved. The Board of Trade co-ordinate this and fully appreciate the importance of attracting this type of business to the country. Indeed, my right honourable friend the President of the Board of Trade recently issued a booklet called Make it in Britain which contains all the information that American, Canadian or, indeed, other employers might wish to know about the prospects of setting up a factory in this country. The pamphlet, which I should be glad to send to noble Lords who may be interested, even goes so far as to try to define the Board of Trade itself on the back cover, which is a very brave thing to do. Applications are welcomed; they will all be examined on their merits, and, I hope, speedily and tidily. But they must have this overriding qualification: they must be to this country's advantage. What we do not want is American businesses coming here merely to assemble American-made components in a British factory. Quite frankly, they are not at all welcome.

That brings me to the question of the suitability of location, a matter on which several noble Lords have touched. Despite Government prodding, some places—and we know about Wales—are inevitably unattractive to industry. Therefore, there must be a generally recognised need for a mobility of labour to some degree. I agree with the noble Lord, Lord Lucas of Chilworth, that one can easily be too hopeful in that respect. Excessive migration, as the noble Lord, Lord Polwarth, pointed out, is very bad. Birmingham seems to be full of young Welshmen who have gone there and who spend their time writing angry letters to the Western Mail complaining about the conditions of their fellow countrymen whom they have left behind. That is undesirable, in whichever country it occurs.

The noble Lord, Lord Bilsland, referred to overspill, and said that it was necessary to provide for the overspill from Glasgow. I think he probably knows that this special problem is one of the reasons for the Housing and Town Development (Scotland) Bill, which is now being considered in another place, and which I think will facilitate not only the re-housing of families, but also the re-location of industries outside Glasgow. Her Majesty's Government agree with the noble Lord, Lord Bilsland, as to the need to ensure balanced employment. That is the whole point of bringing the light industry into the heavy industry areas.

Several noble Lords have commented upon the recent Report of the Select Committee on Estimates. I rather understand that the noble Lord who moved the Motion, and one or two others who support him, do not wholly agree with their recommendations. Here I am in some slight difficulty, because I cannot with propriety anticipate the Report of the Select Committee to Parliament on the Board of Trade's replies to that Committee; but one or two ideas occur to me, having listened, as I have, to the speeches of noble Lords. The noble Lord, Lord Lucas of Chilworth, and my noble friend Lord Polwarth both drew attention to the problems of the European free trade area. I readily agree with them that a lot of careful thinking is needed before we get this matter into proper perspective. The Government have, I think, already announced in another place that the problems put forward by the noble Lord, Lord Lucas of Chilworth, are being studied carefully, so that they can make a final decision with the full knowledge of all the difficulties as well as the advantages. The process of the removal of tariffs will be spread over about twelve to fifteen years from the start. Perhaps I might remind the noble Lord, Lord Lucas of Chilworth, because it is important, of what the White Paper said on this subject. It said: Her Majesty's Government believe that the establishment of a free trade area would in no way prejudice the high level of employment which Europe generally has enjoyed, and that it should be an objective of member countries to maintain a high and stable level. This would be an essential condition for the working of a free trade area. Therefore the Government are fully aware of the problem to which the noble Lord, Lord Lucas of Chilworth, quite properly referred.

The noble Lord, Lord Rochdale, talked about the smaller black areas. But the Distribution of Industry Act is concerned with areas as a whole, not with small black spots. I think if we start considering smaller districts of trouble we shall run into a basic disadvantage. Your Lordships will remember George Orwell's Animal Farm: All animals are equal, but some are more equal than others. If we have all areas special, and some more special than others, we shall wreck the whole purpose of the Act. There is a real danger if we break away from the initial and fundamental purpose of the Act: we shall find ourselves whittling away the purpose of the Act until it is ruined, because every area has become a special area. That is implicit, I agree, in the question of varying the Schedule to the Act. All additions and all subtractions—people are a little chary of talking about subtractions—automatically cause lobbying, agitation and pressure. There have been four additions since this Act came into being: Wrexham, Mersey-side and South Lancashire, the Highlands and North-East Lancashire. I have not heard anybody speaking about the de-scheduling of an area—nobody seems very eager about that. The noble Lord, Lord Rochdale, flirted with the idea, and suggested that the time had now come for South Wales to come out. I would not recommend him to go down to South Wales for two or three days after making that remark. It seems to me to be clear that if one is talking about additions, then subtractions must be implicit.

LORD GREENHILL

What would the Govenment lose if there were a subtraction here and there?

LORD MANCROFT

I quite agree; but I want those who are suggesting additions to realise that they should consider subtractions as well, and very few people do that. I quite see the noble Lord's point.

The next matter with which I should like to deal is the question of the slowness of the procedure. I do not think it is particularly slow when one bears in mind the need for Parliamentary scrutiny and the need for consultation with local authorities and with other bodies who know all the facts upon which decisions are to be made. Indeed, with South Uist in mind, I should hate to stand at this Box and suggest in any way at all that consultation should not be as full as one can possibly make it. There is, as we know, less money now available for Board of Trade factory building—that is part of the general economy. I think it is most important, therefore, that the butter should not be spread too thin. I think also that it is most important that we should be certain that we have taken everything into consideration, and that we do not have to go back afterwards and make a plan over again.

The noble Lord, Lord Bilsland, asked for greater autonomy of industrial estate companies. There has been a certain amount of devolution, but we must remember that the Board of Trade are responsible to Parliament for the administration of the public funds involved. We have had trouble recently with razor blades, blanco, heavy duty vehicles, chairs and certain underclothes for the women's Services. We do not want to have further trouble over the industrial estate companies. I think it is right that Parliament should retain a proper degree of financial control. As much as can be left to the companies must be left, but I think there is a limit.

The last point with which I wish to deal is the need for a new formal review. That is what I think all your Lordships have spoken about this afternoon. The request for a review presents an odd situation. It is usually the other way round. The Government, faced with an awkward problem, say, "Let us have a Royal Commission, a review, a departmental inquiry, or another Barlow Report," and everybody gets up and says cynically, "That is because you have not an answer. You want to shelve the thing for another couple of years." The Barlow Report involved two years—remember that. We now have your Lordships suggesting the need for a review. But I suggest that the Government have all the information they want, and can carry out that review from the information already available.

Policy is reviewed when any request is made. This Act does not live on a dusty shelf, to be taken down from time to time; it is a constantly working process. I have not been convinced by anything I have heard this afternoon that we should, from another review, get any information that we do not possess already. I accept the point of the noble Lord, Lord Lucas of Chilworth, that the question must not be looked at through blinkers, and must be given a wide examination in the same way as nuclear development, European free trade, and so on. But that is being done already. I will discuss the matter with my right honourable friend, and he will note what your Lordships have said, but at the moment I should have thought that the Board of Trade had all the information they wanted and all the power they needed.

LORD LUCAS OF CHILWORTH

The noble Lord will accept my point that the reason why I am not in favour of a review is because any review that takes place must, as he said, be going on every day and in all the contexts which must be so wide as to be outside the scope of any Committee. It can only be within the whole scope of the Cabinet.

LORD MANCROFT

The noble Lord is perfectly right. There is constant consultation with other Ministries, with the regional controllers, who are the ears and eyes of the Board of Trade in this respect, and with the regional organisations and various other voluntary bodies, such as the Scottish Council, with which the noble Lord, Lord Polwarth, and the noble Lord, Lord Bilsland, are so closely linked. I would suggest that the procedure is flexible and adaptable enough.

We will readily consider any improvements your Lordships have suggested this afternoon, or care to suggest in the future. I do not wish to shut the door, by any means, upon the suggestions that there should be a formal review. I agree with my noble friend Lord Bilsland in his dislike of direction of industry. I think one of the essences of the success of our policy is that there has been no direction of labour. It has been a question of co-operation and not coercion. I think that must go on as being a successful pattern for the future as well. I suggest, therefore, that the policy upon which the Government are now working is, by and large, the right one, and that it is working well. Just because at the moment it may be suggested that there is no need for it in an area like South Wales, where there is full employment, or in the other areas which have been mentioned, that is no reason whatever why the Act should be scrapped or the policy and principles abandoned. We may well want them in the future.

This debate has been valuable in showing the problems which this Act and those who administer it may have to face in the Future under new conditions of European free trade, nuclear development, and so on. It does not in any way detract from the fact that this has been a most important feature of the Government's policy of economic, industrial and national well-being. God forbid that we should ever return to the starvation, the dole, the bread queues and the unemployment of twenty and thirty years ago! This Act is one facet only of the means by which we hope to prevent those days returning. We have to use all our resources efficiently, and I think none more so than by the application of this great Act. We shall do everything in our power to continue making it work as efficiently as we possibly can.

6.8 p.m.

LORD BILSLAND

My Lords, the debate on the Motion before your Lordships this afternoon has been a useful and interesting one. Many points have been made by noble Lords on both sides of the House which are well worthy of consideration. I shall not follow the noble Lord, Lord Mancroft, in these points, but I would reiterate what my noble friend Lord Rochdale said: that the situation as it is is unsatisfactory, admitting as we all do the progress which has been made. What we want to know is, where do we go from here? My noble friend Lord Mancroft has made what I may term an interim reply to the discussion this afternoon. He has said that the policy of Her Majesty's Government on distribution of industry is the right one. But I put down this Motion for your Lordships' consideration because I am not sure what the policy of Her Majesty's Government is, and that fact has, I think, been borne out in the speeches of many noble Lords on both sides of the House this afternoon. The real fact is, so far as I can judge, that Government policy has come to a standstill on this subject at the present time. The noble Lord admitted that he glossed over the difficulties of the small special areas.

I am grateful to the noble Lord, Lord Mancroft, for offering to go into questions of cumbersome machinery and the slow working of machinery when dealing with applications for factories. I shall certainly be happy to supply the noble Lord with information upon that subject. We have had, as I have said, an interim reply from the noble Lord this afternoon, and I hope that the Government will give full consideration to the points which have been put from all sides of your Lordships' House, and give before long a full reply. I beg leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.

House adjourned at ten minutes after six o'clock.