PUBLIC FUNDS FOR MOTOR INDUSTRY EXPANSION (Hansard, 6 December 1960)

§ LORD LUCAS OF CHILWORTH
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

§ THE EARL OF DUNDEE
My Lords, Her Majesty's Government are committed to provide assistance, in the form of grants, loans and building of factories on amortisation terms, to the value of £31 million towards the expansion plans of the motor industry. They have also indicated that they would be prepared to give assistance for certain other projects, but the amounts have not yet been determined. The terms on which assistance is given are settled with individual firms. It would not be proper for me to disclose details of such arrangements. This assistance is given under the Local Employment Act, 1960, which is the only relevant enactment.

§ LORD LUCAS OF CHILWORTH
My Lords, I thank the noble Earl for his reply, but may I ask him why it is considered wrong to disclose the individual allocations of money and the terms, when Her Majesty's Government have set a precedent in giving Parliament the full disclosure not only of the mortgage arrangements but also of the loan arrangements in connection with the Cunard Company? Why does this procedure vary from that, and why cannot we have this information? Secondly, I should like to ask the noble Earl to be kind enough to tell the House whether these loans are irrevocable. In other words, if the Government come to the conclusion that the economic conditions are such that the products of these expansion plans will not be able to be sold, will they make every effort, first, to see they are sold or, secondly, to see that public money is not wasted in building capacity which is not necessary?

§ THE EARL OF DUNDEE
My Lords, in reply to the first supplementary ques- 10 tion, I can only say that it has always been the practice under the Distribution of Industry Act not to make individual disclosures of what is done, and I do not think we can debate the reasons for that at Question Time. With regard to the second supplementary question from the noble Lord, I have always been in the habit, all my life, of hearing Governments criticised for not doing nearly enough about the distribution of industry, and it is a little odd to me to hear them criticised for doing too much.

§ VISCOUNT ALEXANDER OF HILLSBOROUGH
My Lords, may I ask the noble Earl whether, as a matter of fact, the loan which was made on very favourable terms to Colvilles was not out of relation to the objective of the Distribution of Industry Act, although it may not have been done exactly under that Act; that is to say, there were other claimants in the steel industry for such grant, but Colvilles were given it because it was thought that employment would benefit more from it in Scotland than in other areas? In that case Her Majesty's Government gave the full facts—the most favourable rates of interest—and disclosed it all to Parliament. Why not in these cases?

§ THE EARL OF DUNDEE
My Lords, this was a loan to Colvilles, not a grant and as the noble Viscount rightly says, it was not made under the Distribution of Industry Act. It certainly is related to the general policy of Her Majesty's Government of trying to create more employment and a better distribution of industry in that part of Scotland, but it was not done under the machinery of the Local Employment Act, and, as I have said, it is the practice of the Board of Trade not to make disclosures of individual grants under that Act.

§ LORD LUCAS OF CHILWORTH
My Lords, then may I ask the noble Earl whether I am to take it from his reply that these advances are on straight mortgage, amortised in the usual way, carrying the usual rate of interest, and carrying the usual security with which mortgages are commonly endowed? Secondly, may I ask him if he misunderstood my second supplementary question —because he did not reply to it. I was not criticising the generosity of Her Majesty's Government or their policy. I asked him a plain question: are these 11 advances irrevocable, or can they be withdrawn by the Government at any time the economic state of the industry does not warrant going ahead with these expansion plans?

§ THE EARL OF DUNDEE
My Lords, may I take the second part of the noble Lord's question first? The loans are repaid by the people to whom they are made. There is no question of withdrawing them. If a grant is given, I do not think that that can be withdrawn. It is given to persuade an industry to go into a Special Area. The reason why a grant is given is that the industry is presumed to suffer some loss by not going somwhere else—,into a conurbation. With regard to the noble Lord's first supplementary question, I believe that I have already answered it: the assistance is in the form of grants, loans and building of factories on amortisation terms. There are all these different methods under the Act of inducing industries to go where we want them to go.

§ LORD LUCAS OF CHILWORTH
My Lords, the noble Earl would agree, would he not, that this is a very serious and important thing. And while we are given to understand that the reason for this assistance in these expansion plans is to "mop up" pockets of unemployment, if the industry cannot go ahead with those plans it will not "mop up" the pockets of unemployment. I was suggesting to the noble Earl—and perhaps he would give me the assurance that Her Majesty's Government will take this point into consideration—that it might be as well to see that the restrictions which the Government have placed on this industry, preventing its expansion, might at the same time be relaxed to allow these expansion plans to fructify.

§ THE EARL OF DUNDEE
My Lords, this rather sounds as if we are getting into a debate on the Local Employment Act. I would not accept the noble Lord's statement that the object of the Act is simply to "mop up" a few pockets of unemployment. Its purpose is to achieve a better distribution of industry in such areas as Scotland, South Wales, the North-East of England and Merseyside.

§ LORD BARNBY
My Lords, the noble Earl in his first reply to the Question 12 mentioned a very substantial sum as being granted out of public funds to this one industry under the Act. Could the noble Earl indicate what is the character of the tribunal or committee who decide the competing claims of different industries to the distribution of public funds under this Act? Secondly, would the noble Earl indicate whether these contributions are confined to buildings and land only or extend also to equipment?

§ THE EARL OF DUNDEE
My Lords, the Advisory Committee set up under the Act to advise my right honourable friend, as the noble Lord may perhaps remember, is the Board of Trade Advisory Committee for this purpose, and the grants or loans which may be made under the Act may take the form either of the building of a factory by the Government or of a loan or grant to enable the industry to set itself up. I think these are all questions which, if I may respectfully say so, could be answered by reading the Act itself.

§ VISCOUNT ALEXANDER OF HILLSBOROUGH
My Lords, may I take it, from listening to all the answers that have been given, that the Government have no proposals at all to deal with either the short time, or in some cases the unemployment, in the motor industry in the factories of those firms which are to expand in these areas under the Distribution of Industry Act? It seems to me to be completely illogical unless the Government can do something to see that the towns in which they are at present producing are properly employed.

§ THE EARL OF DUNDEE
My Lords, I should think it is a very encouraging thing that, in spite of the recession in the motor industry, they are nevertheless going ahead with the fullest confidence to build their new factories in the West of Scotland and Central Scotland and elsewhere.

§ LORD LUCAS OF CHILWORTH
With £31 million of the taxpayers' money.

§ THE EARL OF DUNDEE
They are, nevertheless, in spite of this depression, going ahead with these plans in the confident expectation that the industrial results will justify them.