LOCAL EMPLOYMENT BILL

HL Deb 23 February 1960 vol 221 cc213-80

2.56 p.m.

Order of the Day for the Second Reading read.

THE EARL OF DUNDEE

My Lords, I beg to move that this Bill be now read a second time. The Bill has now been before Parliament since the beginning of last November, when it was introduced in another place. I think that the most general comment that has been made about the Bill, both by its supporters and by its critics, is that the contents of the Bill are much less important than the use which will be made of the Bill by the Government, and I am sure that that is what will be of most interest to your Lordships.

Some redistribution of industry has been the aim of every Government since 1934, and most of the powers contained in this Bill have been possessed by every Government since 1945. We have always had the power of prohibition. We can prohibit a firm from building a new factory or adding to an old one in any place where we do not want more industry by refusing to grant an industrial development certificate. On the other hand, we have always had certain powers of inducement. A firm which agrees to go into a development area may be helped, sometimes by a loan and occasionally by a grant, although grants are given only in exceptional cases. But by far the strongest inducement is the building of the factory by the Government, so that the firm to whom the factory will be rented is relieved from the necessity of raising the capital to pay for it, Since 1945, the total amount of money spent by the Government on factory building in the development areas amounts now to £83½ million, compared with only £17 million in the issue of loans, of which £9 million are loans under the original Act and the other £8 million under what is called the D.A.T.A.C. Act of 1958.

The effectiveness with which these powers can be used must always depend, in some degree, on the economic condition of the country. When industry is expanding rapidly and there is a high rate of industrial investment, it is not so difficult to steer a new industry into the development areas as it is when expansion is slow or when there is a trade recession. An industrial development certificate may be refused to a firm which wants to expand its business in Birmingham and it may be told that we will build a new factory for it on Tyneside instead. If the firm replies that it would prefer not to expand at all rather than go so far away from its own neighbourhood, we may still refuse a certificate on the ground that it is undesirable anyway to add to industrial congestion in the Midlands. But, of course, Tyneside will not get its new factory; and your policy will have a better chance of success when the industry is so keen to expand that it would rather do so a long way off than not to be allowed to expand at all.

I think the greatest challenge to our modern economic policy is the difficulty of reconciling full employment with stable prices, and certainly the greatest curse of our post-war economy has been our all-too-frequent failure to check inflation. If British prices become inflated in a highly competitive world, we shall not be able to earn our living by trade and we shall then have heavy unemployment, not only in the development areas but everywhere. All the recurring balance-of-payments crises, each of which has carried with it a threat to national solvency, have made it difficult to do as much as we should have liked in the development areas. One of the measures taken in 1956 to combat inflation was a temporary reduction of Government building, and progress has always been handicapped by the fear that high Government expenditure as it often does, would add to inflationary pressure. But although our progress has not been so rapid as we could have wished, it has been considerable.

Perhaps I may be allowed to quote to your Lordships the example which I happen to know best—namely, the industrial estate at Dundee. At the beginning of the 1950's, Government-financed factories there were already employing 3,000 people; a year or two ago the number had risen to 6,000, and it is now just on 7,000. The new factories now under construction will, it is estimated, employ nearly another 1,000, and under plans which have already been approved, but on which work has not yet begun, it is estimated that a little more than 1,000 additional workers will be employed. There is also one of the largest firms which, without any new licence, is expected to employ a further 700. So that it looks as if, before long, about 11 per cent., or more, of the insured population of Dundee will be employed in Government-financed factories. If we take the country as a whole, the number actually employed now in Government-financed factories in the development areas amounts to 190,000; and the number of people employed or estimated to be employed in privately financed factories which have received industrial development certificates during the same period is a good deal higher—probably about 260,000.

But now, at the beginning of 1960, I think we are entitled to hope that the economic climate is a little more favourable to our purpose. For two years prices have been stable, and for one year industrial production has been rising at a record rate. And while, of course, it is true that the danger of inflation can never be far away, and we have always to be on our guard, as your Lordships know the recent rise in the bank rate was a measure of prevention rather than of cure, and there are reasonable grounds to hope that our economy can now stand, without undue inflationary pressure, not only a fairly high rate of Government expenditure, but also the greatly increased amount of industrial investment in the private sector which is expected. Surely in these circumstances we ought to be able to direct and guide a greater proportion of our new industrial building into the development areas.

The Welsh strip mill at Newport; the Scottish strip mill at Ravenscraig, on which work has begun, and the proposed graving dock at Greenock, on which we hope that agreement may be reached before long, are valued not so much, perhaps, for the direct employment which they will provide as for the ancillary industrial development which we hope will follow them. Of all the larger industries of Great Britain the one which is expanding most rapidly at the moment is the motor trade, and it seems to be doing so with every confidence in its future. If the project which was published a short time ago—although it has not yet been decided upon—to extend Ford's motor works on Merseyside, should be realised, that would be a major contribution to the industrial balance in that particular area. The plans which have been decided on now by the British Motor Corporation to build a double factory at Bathgate, in West Lothian, for the production of tractors and heavy commercial vehicles, and the Rootes Group's plans to establish a branch factory at Linwood, in Renfrewshire, taken together, ought to employ between 8,000 and 9,000 people. Whilst that is only a small step towards fulfilling the need of Scotland, the motor trade is paying high wages; it adds to the purchasing power of any district where it goes and that all helps to persuade other trades to go there, too.

This Bill, my Lords, is not intended to introduce a new policy, but is intended to bring the instruments of our present policy which we already possess more up to date, so that we may be able to take better advantage of the economic opportunity which now presents itself. If I were to explain everything in this Bill I should be reciting a long catalogue of legislative provisions with most of which your Lordships are already familiar, and I think it would be more acceptable to your Lordships if I referred only to the changes which are proposed by the Bill, such as the new building grant, proposed in Clause 3; the new methods, contained in Clause 1, for selecting the development districts, which will no longer be permanently fixed by Statute; the transformation of the industrial estate companies into Management Corporations, in Clauses 8 to 13; and the tightening up in Clause 19 of the conditions under which an industrial development certificate may be refused.

I think that the provision in Clause 3 enabling the Board of Trade to make a building grant amounting to 85 per cent. of the difference between the estimated cost of building a new factory and the estimated selling value of that factory when it is complete, both of which estimates will be made by the district valuer, is perhaps the novel feature of this Bill. For the first three years or so after the war, most of the Government building done in the development areas consisted of advance factories, built to some standard design, without knowing who was going to be the tenant or what kind of machinery was to be put inside them. Since it was almost impossible at that time to get any building done at all, these advance Government factories were very popular, and they went very well. Later on, when building became easier and quicker, the prospective occupiers naturally preferred that the Government should provide them with factories built to their own specification and designed to suit their own particular needs. And that is almost universal practice now.

The year before last the Government were strongly pressed by the Party opposite—and, perhaps I ought to add, in a much more humble way by myself before I was a member of the Government—to start building more of these advance factories. Our argument was that it would put the Government in a stronger position if they could say to a firm: "Look, if you agree to go to that development area we have there a new factory that is all ready for you, and you can have it to-morrow if you will do what we want." As your Lordships may remember, the argument against that idea was that the time it takes to build a factory now is about the same time that it takes for the firm to order its machinery and to put it in, so that you do not save so very much time. But the Government agreed last year to build three advance factories as an experiment—one is at Coatbridge, another is on Merseyside, while Anglesey was chosen as the site for the Welsh one. These factories are being built, I should say, mainly for psychological reasons, in much the same way as you may put a china egg into the nest of a henhouse—not because you think the china egg is ever going to turn into a chicken, but because you think it will have a good psychological effect on the hen, which will think that this is obviously the right place to start operations. These three advance factories are now nearing completion, and I am afraid that so far there is not the faintest sign of anybody wanting to occupy them. But I am glad that they are being built, and I hope that they will eventually prove to be more fertile than the china egg.

Factories built by the Government are either let on a long lease to the occupier or sold by instalments over a long period, like a building society house. We now think that there are some firms who would prefer to be given a third choice by having the chance of building their own factory with the aid of a Government grant. We have therefore put this provision in the Bill, because we want to cater for the preferences of all kinds of industries who are willing to take the risk of going where we want them to go. The extent to which this provision is likely to be used cannot be estimated, I think, until we have seen how it works in practice. Suppose that the current rent of a factory in a neighbourhood happened to be 3s. 6d. a foot, and suppose that the district valuer's figure of a reasonable economic cost for building the factory was one which required a rent of 5s. 6d. a foot, to meet all the charges we would presumably then value the selling price of the factory at about two-thirds of the cost of building it, and 85 per cent. of the remaining one-third would be rather more than 25 per cent. of the building cost. But that is only a guess. No doubt most firms, after they have obtained estimates from the district valuer, will want to work out very carefully, before they make their decision, the financial results of both alternatives.

I rather doubt whether the changes proposed in the first clause of the Bill on the selection of development districts are quite so far-reaching as they are sometimes supposed to be. Up to now the geographical frontiers of the development areas have been fixed by Statute under the Act of 1945. When the last Distribution of Industry Act was introduced in 1958, there had been some changes in the pattern of industry. There were some places—maybe a large area like Cornwall, or a small town like Stranraer—outside the development areas, where the percentage of unemployment appeared to be abnormal and a good deal above the national percentage for Great Britain as a whole. On the other hand, there were some sections of the development areas—not very large, but appreciable; places like Middlesbrough, for instance—which no longer appeared to need special treatment under the Act.

The Government dealt with that situation by leaving the frontiers of the development areas alone—the Board of Trade, of course, was under no obligation to use the Act, and was not, in fact, using it in areas like Teeside, where it seemed no longer to be necessary—and a supplementary list of places was introduced which became eligible for certain advantages. These are known as D.A.T.A.C. areas, because the loans for industry were given on the advice of the Development Areas Treasury Advisory Committee. Quite a lot has been done under the 1958 Act, but it has also created a great deal of confusion, even in the minds of well-informed people who have to co-operate locally in administering the Act and who find it extra-ordinarily difficult to grasp the distinction between a development area and a D.A.T.A.C. area. Certainly there seems to be no very good reason for preserving this distinction.

The Government have felt that it would be simpler and more realistic not to have development areas permanently defined by Statute, but to empower the Board of Trade to use the provisions of the Act in any place in any part of the country where unemployment is high, or where unemployment is expected to become high, and also in places which are within "travel to work" distance of such areas. In the last resort, the selection—that is, the interpretation of this clause—must depend upon the opinion of the Board of Trade; and, therefore, Parliament is naturally concerned to define its intentions very carefully, so that the Board of Trade should be in no doubt about them; and a great deal of time was spent in another place discussing Amendments to Clause 1. I think we know pretty well what we all want. We all want to get as many industries as possible, of any kind, into the industrial belt of Scotland; into Tyneside; into South Wales; and into other places with high percentages of unemployment. In the Scottish Highlands, we want to get as many industries as may be suitable and acceptable to conditions there. We all want to bring in as many places as need help, hut, at the same time, we all realise that if we make the list too wide then the butter will be spread too thin.

We want, of course, greater diversification of industry in these development areas. That has always been a prime object of our policy, and after very long discussion in another place an Amendment was introduced inserting the word "diversification" in Clause 1 (1) of this Bill. But I hope the Board of Trade will not take that too literally, because if they did it might mean they would feel bound to refuse to allow an industry to go into a development area on the ground that another industry of the same kind was already there and Parliament intended them to wait until they could get some different kind of industry to come along. That is not what we want the Board of Trade to do at all, and it is an example of the possible dangers that may attend over-definition. I would suggest to your Lordships that the present wording of this clause as it has left another place is probably the best definition we are likely to get of the intentions which we all have in mind.

The administration of our policy under this Bill will now be a matter entirely for the Board of Trade. The Treasury will no longer have any part in it, and the Development Areas Treasury Advisory Committee will now become the Board of Trade Advisory Committee. As for the industrial estates, which are the agents of the Board of Trade in carrying out our policy, they are at present limited by Statute in their work to the existing frontiers of the development areas. Now that the Board of Trade is seeking powers to acquire property in any part of England or Scotland or Wales, we have to alter the character of these agents of the Board. It is proposed to convert them into Management Corporations. In England the three existing Industrial Estates Companies are to be merged into one Management Corporation. In Scotland and in Wales there is only one Estate Company in each, so that they will not have to be merged with anything. There will be one Management Corporation for Scotland and one for Wales. I am very glad to say that Sir Robert Maclean, the present Chairman of Scottish Industrial Estates, who has done such very good work as Chairman, has agreed to be chairman of the new Management Corporation into which the old Estate Company will be converted. In England, Mr. Sadler Forster has agreed to become Chairman of the English Corporation. He is at present chairman of the North Eastern Industrial Estate Company which manages our policy in Tyneside. In Wales, the Chairman will be Captain H. Leighton Davis, who has previously been on the Board of the Steel Company of Wales, and who is also Chairman of the Welsh Board for Industry. I am very glad that these gentlemen have accepted the work, which is of such very great importance. They are all people of very long experience, and I should like to thank them and all their colleagues for the work which they have already been doing in the different capacity of the Industrial Estate Companies.

The industrial development certificates are dealt with in Part II of this Bill. At present it is not necessary to apply for an industrial development certificate unless the proposed extension is more than 5,000 square feet, and it is possible to evade the necessity of making any applications if you are able to make a large number of additions each a little less than 5,000 square feet which go on cumulatively time after time. Clause 19 of the Bill closes this loophole, and it also provides that it will in future be necessary to apply for an industrial deve- lopment certificate if you wish to convert a non-industrial building into an industrial one. We are often asked whether we now intend to be more tough in administering these industrial development certificates, and some critics have even suggested that we should make a rule not to allow any new industrial building at all in great congested areas like the London conurbation. We cannot go quite so far as to say that, but it is our intention to use our powers under this Part of the Bill is such a way as to ensure that as many new factories as are reasonably practicable will go into the development areas.

A number of minor changes are made by the Bill, such as the widening of the definition of derelict areas (which appears in Clause 5), the power to erect buildings on land not owned by the Government (which is in Clause 2), the relaxation of the conditions under which grants and loans may be issued (which have previously been rather rigorous), and a few other provisions with which I do not think I need trouble your Lordships at the moment. As I shall be replying to the debate, I shall have an opportunity of hearing any questions on which your Lordships would particularly desire to have further information.

I am very glad indeed that I am being followed from the Front Bench opposite by the noble Lord, Lord Macdonald of Gwaenysgor, who has taken a lifelong interest in the subject before your Lordships, not only in this House but for a long time as Member for Ince in the other place. Many of your Lordships, including myself, often debated this subject there with the noble Lord more than twenty years ago. In those years, unemployment in the country as a whole was usually somewhere between 12 and 20 per cent., and in the special areas, as they were called then, sometimes 30 per cent., and sometimes 40 per cent. I remember one place where at one particular time it went as high as 70 per cent. Now, the average for the country as a whole is a little under 2 per cent. It is unusual when it rises above 5 or 6 per cent., even in development areas. But that does not mean that the problem has been solved or that its solution does not deserve our highest endeavours.

I should be very surprised if the noble Lord in his speech were to express unqualified satisfaction with the rate of progress which has been so far achieved. Nor, indeed, should anybody express satisfaction so long as it is possible to do better. The term of this Bill is seven years. That does not mean that we think nothing more will have to be done after seven years. It means that we think it probable that before seven years have elapsed we shall need to review our legislation once more. The problem may not be solved, probably will not be solved, in seven years. But although we may not finally achieve our objective in that time, I think it is possible that before the term of this Bill has expired the new standards of industrial prosperity which have been evident for some time now in the Midlands and in the south east of England may be visibly, and, I hope, rapidly, extending themselves into all other industrial parts of Great Britain. I beg to move.

Moved, That the Bill be now read 2^a.—(The Earl of Dundee.)

3.30 p.m.

LORD MACDONALD OF GWAENYSGOR

My Lords, may I at once express my appreciation of the fine reference that the noble Earl made to myself. He and I have dealt with this question for well over a quarter of a century. We have oft-times agreed, but there have been occasions when we have disagreed. I was pleased that in his presentation of this Second Reading he has shown a little enthusiasm for the Bill. That was as he used to be in another place. I have looked word for word through the debate in another place, and I have been amazed at the lack of enthusiasm for the Bill on the part of the supporters of the Government. Let me add at once that I was also, not amazed, but I did notice that even the Opposition did not show any raging, righteous indignation against the Bill. I began to wonder why there was this lack of enthusiasm on the part of Government supporters and lack of indignation on the part of the Opposition. What kind of a Bill was it? I looked at it most carefully. This is really a machinery Bill—to hand over machinery to the Board of Trade to utilise in the way that they think best from their point of view in the interests of the country.

I wonder now why there is this lack of enthusiasm for the Bill. If there is such great faith in it, why has no keenness been shown about it? I found an explanation which I think your Lordships will be pleased to hear, in looking at a statement made as far back as September 14 of last year by the then President of the Board of Trade. We were not just at that time in the Election period—we had not quite got there, but we knew it was very close. Here is the statement as quoted from the Daily Express of September 14. It was referred to by an Honourable friend of mine in another place, but I think it ought to be on record too in your Lordships' OFFICIAL REPORT. If I read it, it may give your Lordships some idea of the disappointment, as I see it, of the supporters of the Government. It says: Sir Davis Eccles, President of the Board of Trade, will to-morrow reveal full details of a 'revolutionary' Tory plan for tackling unemployment. A new Bill embodying it is already drafted. If the Tories win the Election, this will be the biggest and most important measure they will put through in the opening Session of the next Parliament. Sir David will announce the plan in a speech at Heywood, Lancashire"— that was quite a good place to choose— He told me last night: 'It brings a totally new approach to the problem. We intend to tackle unemployment with the methods of mobile warfare'. The chief need, said Sir David, 'was no longer to provide aid for large development areas. Unemployment was now mostly concentrated in small pockets. 'Our aim is to bring them quick remedies—and in particular to attract the really big firms to the spot. You can't do that by bullying or direction. I believe our plan will make it really worth while for big concerns to come in and stay in'. Inducements to the firms to open up in the black spots' will, I understand, include subsidised rents and big capital grants. That is what the Tory Party put out before the Election. One can understand the lack of enthusiasm of the Tory Party in the House of Commons. What comes along is this Bill—a tame, timid, tepid attempt to deal with a most difficult problem. That is what they got as a "revolutionary Tory plan". That brought forth something very strange when I saw this Bill. I could well understand how it achieved its purpose, in that speech and in other speeches. The Tory Party were returned, and now we are dealing with this difficult problem. I am not one to minimise the magnitude of the problem. It is a most difficult one.

With regard to the lack of indignation on the part of the Labour Opposition in another place. I tried to explain that to myself also. I did not consult anybody in the other place; I simply came to my own conclusion that they said to themselves, "If this is the best they can do, whilst it may be a feeble, futile effort, why should we do anything to hinder it? Let us wish it luck and let them go on with it." That is what they did to a large extent—just hoped for the best. Before I deal with some of the principles in the Bill there are one or two small matters I would refer to, including one which the noble Earl mentioned. Why this period of seven years? What is there in the figure seven? Why make it a temporary Bill? Why not leave it as one leaves an ordinary Bill? Why not remove the seven and leave it alone? Then Parliament, in its wisdom, can decide whether or not it ought to continue. I cannot understand why the figure is put in. It may be that it should be less than seven. It may be that it will require a longer period. Why make it a temporary measure? Leave it alone, and leave it to the Government to decide whether or not it is worth continuing.

The other point concerns the list which has now been published. I should like the noble Earl to tell me why the President of the Board of Trade was so reluctant to tell another place what the districts were to be. The moment the Bill was brought from another place the President gave them. The list is here—and a very big list it is. England, Scotland and Wales are all here. Yesterday in Cardiff I had not had the list, so I asked somebody to contact the Board of Trade in Cardiff and to inquire whether they could supply me with the list then available. This they did, and I was told that it was a more extended list than that given to the House of Commons a fortnight to-day. That list had not lasted long; it had now been added to within the fortnight. I noticed that the only place mentioned in North West Wales was Rhyl. In the new list we have Rhyl and Prestatyn, which is where I live. Looking over my shoulder my friend said, "There you are; they are spiking your guns straight away. They have put in Prestatyn." I do not think that that place would be inserted in that way, but I am anxious to know why Rhyl and Prestatyn are the only places mentioned in North West Wales. There is much discontent in some parts of the North West because they are not included. A deputation from Wrexham will be seeking to be received by the President of the Board of Trade, to know why they are not included.

I should like to know why the Minister did not make this list known earlier. What was he afraid of? Was he afraid that each Member of Parliament would look at the Bill and say, "This place is in my Division but it is not on the list", and that they would all make speeches and thus prolong the debate in another place? The House of Commons were entitled to know before in fact they did. What is happening now? To-day there is another debate on this issue of the list, and we in your Lordships' House can now deal with the question, including the list. We can comment on this list, but our colleagues in another place could not do so. I do not quite understand why the President was so reluctant in making the disclosure to another place. But here we are, and we have the Bill.

What do we expect from this Bill? We have had legislation since 1945, when there was a National Government, and this Bill was largely sponsored in the House at that time by a noble Lord who I am sorry is not present here today—my noble friend Lord Dalton. He could have spoken on this Bill with more authority than any of us. We are told in the first sentence of the Explanatory Memorandum what the Bill does: The Bill repeals the Distribution of Industry Acts, 1945 to 1958, Earlier in his remarks the noble Earl referred to the need for efficient administration. I would submit that had the Acts of Parliament now on the Statute Book been administered efficiently up to date, we should not need this Bill; and this Bill will serve no useful purpose whatever if it is administered in the same happy-go-lucky way that previous legislation has been administered. We depend entirely upon administration, and in fact the whole Bill is arranged in that way.

What is the problem? We have in different parts of the country, as the noble Earl has said, numbers of unemployed, men who have spent their lives in certain areas and who are today out of work and with no prospects of getting work. Someone has to help them to find work. How are we to help? We are to say to industry: "There are these hard-hit areas in North Wales. Is there a chance of your going over there to help them out?" What is the first question the industrialist will ask? It is the first question that I myself would ask if I was in industry: "Is it worth it?" Is it worth my while? Do not forget that remote places in North Wales are a long way from my market, and that means that the cost of carriage and my general costs are increased. What about it?" I am not blaming the industrialists for saying that, and the first essential is to convince them that it will pay them to go there. If we fail to convince them they will not go. What will be the result? The areas specified in this list vary from centres of populous areas to the remotest areas, and the cost is greater the further industrialists move away from their markets, so that the last places to get attention will be those which are likely to cost the most.

Her Majesty's Government say they will try to persuade industrialists to move. I noticed that the right honourable gentleman the Minister for Welsh Affairs (Mr. Henry Brooke) who was in Cardiff yesterday (though I did not meet him there) told people in Cardiff that Her Majesty's Government wanted to see more industry coming into the Cardiff area; but Cardiff is not on this list at all. We outside our capital city in Wales have no objection whatever to industry going to the Cardiff area, but we say that this Bill is to help areas outside the Cardiff area and that it is not to help that type of area at all. There is no need for the right honourable gentleman the Minister or anyone else to urge industry to go to the Cardiff area because industrialists will go there for the same reason that they will go anywhere else—because it pays them to do so.

It is very difficult indeed to attract industry to some of the remote areas and I do not believe that this Bill is going to do it. One does not want to make gloomy forecasts now. I want to give this Bill a perfect chance, and if and when it is in operation I will help it on its way if I can do so, so as to get factories in remote places, in North Wales in particular, but throughout the United Kingdom. We should not try to make this a Bill to serve the interests of particular local authorities except in areas hit by local unemployment.

The £5 2s. a week that is paid to thousands of unemployed men, covering themselves, their wife and two children, means 4 very substantial lowering of their standard of life, as we should bear in mind; and I have always thought it unfair that so much of the burden of unemployment should fall on a certain section and that the rest of us should not carry much. We carry some of the burden in taxation and insurance contributions, but we put the heaviest burden on those few hundreds of thousands. I am hoping that the day will dawn when their share of the burden of unemployment will be no more than ours. If we can find them work, well and good; if not, the burden of unemployment which they carry—a very heavy share—should not be as heavy as it is.

Those men are not only deprived of £5 or £6 a week but they have many undertakings, with television and various gadgets bought for the house. One cannot blame them for that, because they got them when wages were good. When there are no wages they cannot keep up the payments, and so back must go the television and other things, when there is only £5 2s. a week for a man and his wife and two children. What in the world is that amount worth in these days? The noble Earl referred to the importance of stable prices. Ask these men—they will tell you how important stable prices are.

I am certain that the money going to keep thousands of men on that amount of pay could be utilised to better advantage than it is. There is a personal friend of mine, a man who worked shoulder to shoulder with me underground, who came out of work months ago. He is in his fifties and has no chance at all of getting a job. We must consider whether this Bill will bring work to the areas where the unemployed workers are, or will persuade those workers to go from where they are to where the work is. It must be one or the other. There is one noble Lord who could have spoken from past experience with great authority on this—the noble Lord, Lord Adams. He made a great contribution during his work in the North West, and in Cumberland in particular.

We must find some way by which work will go to these people. I do not want to see remote areas in Wales, areas of beauty, with nobody there because it does not pay industry to go there. But I am afraid this Bill is not going to do what we want. I hope that it does. I must say I welcome the provision for getting the worker to areas where work is available, if we cannot bring work to the workers in their own districts. But, speaking for Wales—and others will speak for other parts of the country—that means that thousands must leave their native land in order to get a job. Thousands have done that before, of course. In the last century my parents landed in Lancashire from North Wales for the very same reason—there was no job in North Wales but there was a job waiting in Lancashire, so my father went there, and there we stayed. There are times when the choice has to be made but I want to ask: to what extent does this Bill make provision should that removal have to take place?

There are those who sometimes say that the Welsh people are being driven from Wales. I know that the noble Lord, Lord Brecon, whom I am very pleased to see with us to-day, has tramped Wales, north, south, east and west, trying to find out the problems and to discover any solution. He has had a very difficult job. I remember when the predecessor of the present Minister for Welsh affairs—now the noble and learned Viscount on the Woolsack—also tramped Wales. In the last ten years there is no part of Wales that has not been seen or heard of by Ministers responsible for Welsh affairs. Their knowledge of Wales cannot be added to. There is no need for any more tramping to get knowledge, for they have the knowledge.

I want to ask: How far will this Bill help them deal with difficult problems in the quarry areas of North Wales? In North Wales are some of the finest men in Britain, out of work; and they will remain out of work—except for some electricity works on which a number of them are employed at the moment. I do not believe that young Welsh men and women are being driven from their homes. We may try to force them out, but circumstances in these areas are such that something has to be done if we are to keep them there. I am not going to refer to the Bill in any detail in that sense. That will be done later on, I expect, on Committee or Report stage. But I am sorry that the Bill at the moment seems to reveal the thought that a little playing about here and there is going to solve the problem.

I believe, as I have said already, that it is no use appealing to industrialists and saying, "Will you take a part of your industry to Anglesey?" We tried that. I went with a deputation to meet the Mayor of Birmingham and others to find out whether they would come and help. They came and dined in Anglesey. There were a lot of inquiries. We were turned down. Why? For the same reason that most people turned us down: because there was no security for their investment. I do not expect a man to invest labour or skill or money in industry without the likelihood of a return. I do not expect it, and no one in his senses would. But the Government have a responsibility outside all three.

What I feel is this. If the Bill is necessary, I want something more drastic than this. And I would ask the noble Earl, Lord Dundee, for a definite undertaking that the administration of this Bill from the time when it becomes an Act will be different from the administration of the previous Acts. We are talking about going forward seven years. Look back over the last seven years. Acts have been in existence the whole of the time and have not been used. They will go; they will be replaced by this Bill. The only hope is that the administration will be more effective and more efficient.

Do remember those who are unemployed. Though they may be few in number, they feel unemployment keenly. I agree with the noble Earl: when he and I were on the job 25 years ago the position was terrible. I remember in those days going to the South Wales valley. A man met me at the station to take me to a meeting place. I said, "Are you working?" He said, "No." I said, "Are you married?" He replied that he was. I asked him whether he had any children, and he said he had two. I said, "What was your job?", and he replied, "I have never worked since I left school". That was the position then, and the noble Earl says that it has improved. Indeed, it has improved; it has improved immensely. But there are still thousands of unemployed people. And do not let us forget that unemployment is a dreadful experience. I was very fortunate; I never experienced it; but many of my friends did. I was at a coalfield that did not close and kept me going. But the feeling of a man who is unemployed is that he is not wanted. It is a dreadful feeling. I want work for all. I do not think this Bill will provide it, but I hope that it will be used in the best possible way to try to provide it. We on these Benches have no intention of dividing on the Second Reading of this Bill.

3.54 p.m.

LORD BEVERIDGE

My Lords, as this Bill comes to us from another place it seems to me not inappropriate to look at one or two of the things that happened to it in the other House. To me, the most surprising thing was to discover that on Second Reading there were no fewer than four maiden speeches, and all were consecutive, so that each maiden speaker after the first had to start by congratulating his predecessor. There should have been three maiden speeches to-day. I may say that I came here in the hope of listening to my very old friend Lord Dalton. But as we have only two maiden speeches, I am glad to see they are not consecutive, and so the maiden speakers will not have to congratulate one another.

VISCOUNT ALEXANDER OF HILLSBOROUGH

My Lords, may I explain that Lord Dalton, unfortunately, will be absent for a few days with an infected throat. His absence is due to indisposition.

LORD BEVERIDGE

My Lords, I am glad that that has been explained. I knew it, but I am very glad that the noble Viscount has made that clear.

I came here to-day to hear others speak on this subject, and therefore I shall be very brief. I am going to concentrate upon one question, which was raised also in the other place and which has in fact been raised by my predecessor in the debate in this House. This Bill repeals the Distribution of Industry Acts of 1946 to 1958 and replaces them by a Local Employment Act. In all the world, why not amend the old Acts? And may I say, why not keep the old, much better and less narrow name? The old Acts were introduced with two very distinct and definite purposes. One aim or purpose of this Bill is to secure a proper distribution of industry over the country, especially in areas where there is a special danger of unemployment. The Bill is directed against unemployment, but that is one purpose only. Another aim has been stated—the aim not of developing industry but of controlling industrial development where that seems to be desirable for economic, social or strategic reasons.

What I want to suggest to this House is that bad distribution of industry has two possible evils, not one only: not merely the fear of local unemployment, but the fear of congestion and conurbation of the great cities into which the citizens move from the places where there is unemployment. This Bill, by its Title—the Local Employment Bill—is obviously aimed at preventing unemployment and not at the prevention of congestion and conurbation. I am going to suggest that conurbation, when it means workers spending endless time as straphangers, is almost as demoralising as unemployment. After all, the straphanger can do nothing except push his elbow into his neighbour. The unemployed man can look after the baby; he can do the garden; he has something to do. Nobody in this House will think that I underrate the evils of unemployment. But I want to say that I rate much more highly than some people do the evils of conurbation and endless travelling to and from one's work. And this Bill, by its Title—by its very Title—suggests that it is to deal with one thing only and not both things.

What I should like to ask on that question, among other things, is this. A good deal of play has been made of the enormous powers of the industrial development certificate. May I have an assurance that that certificate will apply to the erection of offices; will be able to lay down conditions for the making of more and more offices in the heart of London, or any other great city, which is going to cause more and more congestion and conurbation? I hope that is what is intended, and I ask for that quite explicit statement. That is really the one point which I want to make. I hope that the Government will, in practice, make this Bill, which looks like a Bill for clearing up pockets of unemployment, effective against unemployment and congestion alike, as the repealed Acts were intended to be.

One of the things I was most delighted to hear from the noble Earl who introduced the Bill was the statement that there was to be no change of policy because of the change of name. Can he get that into the heads of the officials of the Board of Trade? Because I know officals: I have been an official of the Board of Trade myself. Let there be no change of policy. Under this new name (which, for some strange reason, this Government prefer to the other name) let them do exactly as they could have done, and would have done, under the old Acts. My Lords, this is a tiny island with a large population, and with appalling facilities of travel and traffic. We should not allow the location of industry, and so the living places of our workpeople and their dependants, to be determined by a free play of forces and irrelevant interests, irrelevant, that is, to their real happiness.

4.1 p.m.

LORD CLYDESMUIR

My Lords, I rise to address your Lordships for the first time, and I would crave your indulgence. I wish to speak on this Bill as it affects Scotland, and with particular reference to the industrial belt, of which I have an intimate knowledge, where, in spite of the efforts of successive Governments, of local authorities, of voluntary bodies and of private individuals, the overall figure of unemployment still stands at double that for the United Kingdom as a whole.

Since the war I have been engaged in heavy industry, and during these thirteen or fourteen years I have seen for myself the extent to which Scotland depends upon heavy industry for her prosperity. At this stage I must declare an interest in this Bill as a director of a company which is receiving a Government loan to widen and increase its activities by the building of a new strip mill at Ravenscraig in Lanarkshire. Being aware of Scotland's dependence on heavy industry, I have seen how the pattern of these industries is changing, and why there is a particularly pressing need to diversify existing industries and to attract new ones of a different type altogether.

I do not wish to create the impression in this House that the future of the heavy type of industry is gloomy, but one must take note of facts. To mention only two, the shipbuilding industry is facing a period of very intense competition, and the pattern of the coal-mining industry is rapidly changing. The many firms which are suppliers to these two great industries are looking to their future, and are naturally considering ways and means of broadening the scope of their own operations; and they are doing this in order to keep their factories and workpeople fully occupied. It is true that in the last ten years great strides have been made in Scotland to build up a pattern of new industries, but even now only a small number of these are producing goods for the private consumer.

Last summer the third Scottish Industries Exhibition since the war was staged, and, as vice-chairman of the committee running that exhibition, I had the opportunity to meet many industrialists and Government representatives from at home and overseas. They were unanimous in expressing surprise and pleasure at the increase and the variety of goods displayed which were made in Scotland. Those who had visited the two previous exhibitions especially remarked on the progress that had been made in this direction in recent years. The pattern is therefore obviously changing, and there is now, as never before, an awareness in all quarters that the future prosperity of Scotland depends on making a still greater effort to widen the range of her industries. The steady rise in the standards of living of the people at home, the challenge of new markets in Europe and the development of overseas territories, mean that vast new markets are being created for domestic and consumer durable goods. Up until now, Scotland has not produced her share for these expanding markets. That is why to-day her industrial capacity is not being used to the full and she is not sharing to the same extent in the prosperity of the United Kingdom as a whole.

A completely new range of possibilities will shortly be opened up when steel sheet and strip become available from the new plant at Ravenscraig. Now, however, is the time to interest and attract companies which can establish manufactures based on this material; and in this task of attracting new industries we must not be put off or discouraged by those who magnify the disadvantages of manufacturing in such a far-off place as Scotland. While I should be the first to admit that there are certain cases where there are difficulties, these are not insurmountable, and they can to a considerable extent be offset by suitable Government action and assistance. The fact that, in the last few years, a very considerable number of new firms have set up in Scotland in the industrial estates and elsewhere, and have made a success of their operations, shows clearly that Scotland is indeed an economic base for successful productions and for export trading.

It is because of these developments, and because there is a mood ripe for further exploitation, that I welcome this Bill in general terms. I hope and believe that, with certain alterations and modifications, and provided that it is efficiently administered, it will supply a powerful instrument in the hands of the Government to encourage the setting up of new factories and the creation of new opportunities for employment in those areas which are most in need of them. It would be inappropriate for me, as a maiden speaker and as one who is only too well aware that there are many noble Lords in this House with great experience in such matters, to deal with the Bill in detail. It has been framed as a single instrument to replace a number of earlier measures in the light of the changing economic situation of the country. It is designed to concentrate specifically on the problem of high-level unemployment, and in that it may be too limited as it stands just now—although, of course, this may be amended, and no doubt will be the subject of further discussion.

However, the point which I wish to make—and I am speaking as an industrialist myself—is that the Bill seems to me to be lacking in the definition of the facilities available. In general, it does not recognise that selling is an essential factor in the attraction of new industrial development to particular areas. By that I do not mean that it is desirable or even necessary to present an exaggerated or inaccurate picture of the facilities offered, or of the economic attractions of the areas concerned, to possible investors. However, I know from my own experience of meeting with manufacturers who are planning new development that it is essential to provide for them a positive and precise statement of all the advantages which in fact exist. This must be done in terms and in a manner which carry conviction to the prospective investor. Manufacturers, like others, have more demands upon their time than they can readily satisfy. They therefore respond most favourably to those who take the greatest trouble in presenting the facts of the case, and to those who are able to state these facts specifically and in a form in which their financial value can be quickly measured. To overlook this essential element of selling is to ignore facts and, to my mind, to endanger the value of the facilities which are being provided by this Bill. It seems to me that, as present drafted, the procedure for determining rent levels and grants is too cumbersome and is not in accord with the best practices of salesmanship.

The Government are continually urging, and with justification, manufacturers to sell their products vigorously in the world markets. The situation in respect of attracting industry to those areas in which it is desired it should exist is precisely analogous. As your Lordships are aware, this Bill is designed to make it attractive to manufacturers to set up new plants in the areas where there is high unemployment. It is not only firms from this country for which we wish to create these conditions; it is also to attract investment from abroad. In Scotland, we are only too well aware that we are not the only country which is likely to be considered by potential manufacturers from overseas. The element of competition in this field is increasing constantly. In the United States, for example, vigorous compaigns to attract manufacturers are now being prosecuted on the greatest scale by most of the European Continental countries, by countries of the British Commonwealth, by the South American States and by many others.

In circumstances such as these, only energetic initiative in the presentation of the precise advantages that Britain can offer, and willing service in pursuing these offers, will achieve for us an appropriate share of the market of potential investors. I am concerned lest this Bill fail to have the desired effect, not because of the facilities which, in its final form, it would offer, but because I feel that there may be lacking a sense of urgency and an element of salesmanship in the presentation of these facilities. I hope that more consideration may be given to this point.

4.13 p.m.

LORD POLWARTH

My Lords, I am particularly glad to speak in the debate at this moment because it enables me, on behalf of your Lordships' House, to congratulate the noble Lord, Lord Clydesmuir, on a lucid, well-informed and interesting speech. Many of your Lordships will remember his father in this House and others will remember him in another place as John Colville, one of the greatest Secretaries of State for Scotland we have had. He was a man who gave himself selflessly for Scotland, for his country and for the Commonwealth, and his son is following in his footsteps, both in business and in service to his country. He modestly referred to the part he played in the Scottish Industries Exhibition last year, but I know how very great that part was. I hope that his business and public duties will allow him to come and make many more speeches to us.

While endorsing everything that my noble friend has just said, I should like to say a little more about the question of local employment. As the noble Earl, Lord Dundee, told us in introducing the Bill, there are a few parts of the country which have not shared fully in the prosperity which the past fifteen years has brought us. Those of us who are deeply concerned with these parts of the country must surely be grateful to the Government for taking a new look at this problem. I think that we should remember that the greatest credit must go to the former President of the Board, Sir David Eccles, for the work he did in laying the foundations of this measure in the last Parliament. For a long time some of us have been pressing for a new look at the policy for the distribution of industry. But some of the credit must undoubtedly go to the electorate in the areas concerned, which last October gave an unmistakable hint that it was time for something new to be done.

There are, on one extreme, those who believe that industry should be free to develop exactly when and where it wants, without any restraint or encouragement: the workers would have to go where there is work and not the work to the workers. In this small and crowded island, as the noble Lord, Lord Beveridge, so aptly put it, we cannot afford such a policy. Through lack of work, some areas would decline to a point where the communities were no longer viable and living standards there would decline disastrously.

On the other extreme, there are those who would direct industry to places where it is needed. In this small island, which has to maintain a highly competitive position in world trade, I do not believe that that is possible. I think that there is a point to be made here on the question of the competitive disadvantages of certain areas. I think that too often these are exaggerated, either through ignorance or through prejudice through ignorance of the advantages which exist, and which could be made available to industry, or through prejudice against moving into a strange and unknown part of the country.

I consider that the right course is a middle one between these two extremes, one of encouraging industry in these areas by dispelling the ignorance and prejudice, and by giving enough inducement to overcome such genuine disadvantages as there are, though often they will be only initial disadvantages. This is a task not for Government alone or for industry alone. The Government have big responsibilities, but so have industry, the local authorities, the trade unions and many others. I think that we are fortunate in Scotland in having a body which focuses the opinions and efforts of all these, in the form of the Scottish Council, of which I am privileged to be the chairman, and so are other parts of the country fortunate in their respective development bodies.

The most significant part of this Bill, I believe, is its Title and the Title of the Acts which it repeals. It is the Local Employment Bill, and it repeals the Distribution of Industry Acts. Other noble Lords have fastened on this point. While the noble Earl who introduced the Bill said that it implied no change of policy, all I can say is that I sincerely hope that it does imply some change of policy. I also am not entirely satisfied that the Bill is going to achieve all we hope. The Government's efforts have to be concentrated on ambulance work for the employment "black spots." That is something of which we must unreservedly approve. But this alone is not going to get rid of the economic malaise from which some of these parts of the country are suffering. There are many other problems—declining industries, towns that have only a single industry and parts of the country that are suffering from a steady drift of population to bigger centres.

In the seven years between 1951 and 1958, for example, Scotland lost by migration to other parts of the United Kingdom no fewer than 54,000 insured workers. Wales lost 33,000, and the North East area of England lost 27,000. At the same time, London, South, South East and East England gained a total of 163,000 insured workers, all by migration from other parts of the country and not by the increase in the total working population. I am certainly not against migration. It has enabled the Scot to exercise a much greater influence on the world than if he had stayed at home, and I think that probably the same goes for some other parts of the country. But if this migration is all in one direction there is no question that it saps the vitality of the place the people leave. To concentrate blindly on figures of unemployment is inevitably a short-term measure and can lead to trouble.

We must all congratulate the Government on their firm stand which has led the motor-car industry to plan to expand in new and untried parts of the country, which I am sure will be for the good of the industry as well as for the good of the place they are going to. But, not surprisingly, there is trouble already. We hear to-day that the Ford Company, not unnaturally, are disturbed at the prospect of finding themselves in the centre of a new Coventry upon Merseyside. It is no good just looking at the number of jobs which these new companies will create and putting them alongside the figures of labour available. You have to look at the highly complex new industry that is bound to be started and built up when you move a major sector of industry into a new area. The Bill does nothing to face these wider problems. Some of them are, as yet, imperfectly understood. We in Scotland set on foot a thorough inquiry into the factors affecting the location of industry in general, not just in Scotland. I do not think that that has been done before. We are grateful to the number of busy men, Englishmen as well as Scotsmen, who are voluntarily giving their time to this research, as well as to the Government for the help they are giving us to carry out this inquiry.

Within its narrower scope there is much in the Bill that I welcome. First must come the fact that all forms of Government help will be available equally in all the districts covered by the Bill. This will make life much easier for those of us who have to deal with this problem. Then there are the arrangements for defining the new development districts, which will be a great deal more flexible than the old development areas. Unlike the noble Lord, Lord Macdonald of Gwaenysgor, I think it is a good thing that already some new areas have been added to the schedule, because it shows that it is possible to be flexible and to meet needs as they arise. Then the availability of grants for industrialists who want to build their own factories is, I think, a progressive step and will be welcome, subject to one qualification to which I will come later. The provisions for dealing with derelict and unsightly land are valuable. More and more industrialists are realising the value of working in pleasant surroundings. This is a wonderful opportunity to clear up some of our worst industrial eyesores and at the same time to give employment. I also welcome the fact that it will be possible for help to be given to the improvement of basic services, such as transport. I particularly hope that the Government will not be slow to use this power—indeed, that they will use it speedily, because a firm assurance of basic services is needed by an industrialist in an early stage in the planning of any new development.

Having said all that, I must add that there are two matters which cause me some concern. The first is the division of responsibilities and functions which is implied in the Bill and was expounded by the President of the Board of Trade when the Bill was in Committee in another place. He said, first of all, that the question of trying to get firms to go to particular areas by the use of industrial development certificates, on the one hand, and by the use of the inducements in the Bill, on the other, was clearly the responsibility and duty of the Board of Trade. Secondly, he said, he thought that what he called the general promotion and virtue of a particular district was exactly the function of the development councils and development organisations, such as the Scottish, Welsh, Cumberland and North Eastern Councils. At the same time he expressed the hope that these organisations would continue to do their work—and, so far as one of them is concerned, I can at any rate reassure him in that respect.

The third function, he thought, was managing Board of Trade properties in these areas. He added that when the Board of Trade had got industrialists and induced them to consider certain areas, the people running the Board of Trade factories in these areas would be selected by the Board of Trade and could talk to these industrialists in terms which they understood. But he made it clear that the third function was solely to manage these projects. I think this is a grave limitation. I do not propose to go into it further, because my noble friend Lord Bilsland will take it up later on in the debate from a long personal experience of the matter. It does seem to me, however, that the precedent of three categories, while it may look nice and tidy on paper, is a purely theoretical conception and one that could lead to trouble. Do the Board of Trade in fact "get industrialists", as the President of the Board of Trade expressed it? So far as I can see, the Board of Trade can deal only with firms who go to them with a plan to develop and who are already considering development. I do not think they make any attempt to promote the idea of expansion in the minds of industrialists. That is one thing which bodies like ours can and do accomplish.

We go not only to firms in Scotland and England, but to firms in America and on the Continent, seeking out likely firms to expand, encouraging them to do so and suggesting that they come over here. We urgently think about expanding, and we suggest that they should expand in Scotland. But if that does not suit them, we are quite happy for them to go anywhere else in Britain. The general promotion of the virtues of Scotland or anywhere else, I should have thought, was a waste of time and money. We have had a lot of experience, and there is really no such thing as a general selling of a particular area to industry. You can talk generalities, but you cannot sell generalities. You can sell only things which are known and specific; and, of course, as other speakers have said, only to customers and not in a vacuum. We have no intention of confining ourselves to selling generalities. We shall continue to go out looking for companies and trying to induce them to come to Britain and establish themselves. I hope that the President of the Board of Trade will abandon the idea of the division of functions and will agree that all parties to this plan should co-operate in the general effort of expanding industry where it is needed.

In some respects we of the private bodies are much better placed than the Board of Trade to seek industry. We probably have a wider range of connections, both here and overseas; we have a specialised knowledge, and also the means to use certain approaches which cannot be done officially. I think that should be encouraged and that we should all work together on this job. I feel that we must give some credit to the Government in this field—namely, on the appointment, which your Lordships may have seen, of an industrial development officer in New York for the attraction of American industry to Britain as a whole. We have been pressing this for a long time, because we have found many people in America expressing surprise that all the other European countries, and countries in other parts of the world, have offices in New York which give them, the American industrialists, all the facilities they can expect, and yet we have not. We are glad that this appointment has been made. I hope that it will receive rather wider publicity in America than it has received in this country, and that the Government will remember the little jingle: He who whispers down the well About the goods he has to sell Will never earn as many dollars As he who climbs a tree and hollers. The noble Lord who spoke before me mentioned the importance of being specific about what we can offer. Let us be quite clear about this. It is all very well to talk about grants for factory buildings of 85 per cent. of the difference between the estimated cost of construction and the district valuer's notional market value. Nobody other than the district valuer can know what that will mean in terms of money. The same applies to rents of Board of Trade factories at market levels, because here again, until the district valuer says what is the market level, nobody knows what he is going to have to pay in shillings per square foot, which is what he wants to know about the factory.

I must say that this involved method of determining grants and rents fills me with some alarm. We are not going to look very sensible going to, say, an American industrialist if we tell him that he can expect to get a factory at a cost of 85 per cent. of the difference between something and something else.

LORD SHEPHERD

My Lords, would the noble Lord permit me to interrupt, to get clarification? Is he suggesting that the aid the Government are now offering should apply to foreign investors who come to this country?

LORD POLWARTH

Yes, my Lords. I am not aware that Government aid has never been available to foreign investors coming to this country, and I think it is a policy which has been fully justified. Surely, it would be a great deal simpler and more to the point to give a sliding scale of land levels, based on remoteness from the centre. Let us have figures that can be published and made known, so that industrialists know what they can expect.

If I have been somewhat critical of some parts of the Bill, it is not so much because of the Bill itself as because of the limits of its efficacy and some of the thinking which underlies it. Despite this, I believe that it can be of real help in solving one part of this problem of the distribution of industry. As other speakers have said, it is not on the clauses of the Bill itself that it will stand or fall, but on the way in which it is administered. A very heavy responsibility lies, particularly, on the Board of Trade who now virtually control all the areas. They must apply the Bill's provisions, not to reject but with an open mind; not driving the hardest bargain they can, but with a measure of liberality. And they must co-operate openly with the rest of us who are active in this field. If they do so, then I believe the Bill can make a considerable contribution to spreading more fairly through the country the prosperity which the rest now enjoy.

4.32 p.m.

LORD RIVERDALE

My Lords, if I may venture to address your Lordships' House on this Bill, I do so with an industrial background, and with special knowledge of an area with which I am long familiar and, perhaps, naturally familiar. In listening to the debate, I find that I assume common ground on several points. One is the objectives of the Bill. Industry would certainly welcome its success in the sense that a proper, economically successful, industry, with no mass unemployment, in this country, would mean a wider home market and a more solid basis for export effort.

The point has been made more than once in another place that our competitive efficiency is vital to our survival, and the general health of the industrial economy is the broadest basis from which to achieve the objects of the Bill. It is also obvious that the administration of the Bill is the key to its operation and success. I am particularly concerned with the industrial development certificates and their administration. I have the greatest respect and admiration for the officers of the Board of Trade, but somebody must decide whether an industrial development certificate is granted or is not granted, whatever the anonymity with which that is done. It is a difficult task which I should hesitate to undertake myself.

Much attention has been paid, and naturally, in the debates on this Bill, to the areas of high unemployment, on the one hand, and, on the other hand, to what are loosely called overspill areas, where industry has attracted the population and congestion has increased. But little has been said about what I might call a strictly normal area. It seems to me that Sheffield, with which I am familiar, is at this moment a strictly normal area. It has greater diversification of industry than it had in the past when, suffering from too much concentration, mass unemployment was well known. Its present position in that respect is better, and it is not one of the areas adduced on either side of the employment figures. It is not, I think, an area which should attract industry in great volume. Indeed, there will be possibly some wastage owing to space for development problems. But against that wastage there must surely be normal development and the normal integration and growth of some rather specialised industries. I think particularly of the medium-sized firms—not the large groups that make the headlines, but the innumerable firms, often specialised, who contribute largely to the economy, to employment as a whole, and to the export trade. They also depend to a great degree on integration and regional rationalisation services with each other; and to leave an area, for an industry of that sort or a unit of the size I have in mind, is a very serious problem. You cannot split management, and you cannot re-create services which have grown up over many years.

It would be a bold man who would say that future development of such a normal area as I have outlined—and I think it is typical of others—would continue on that basis. Who can see what injection of new ideas is necessary to maintain industry in a healthy condition in such an area? Who can see what the long-term effect may be of indigenous manufacture overseas? Who can see what the effect may be of the uncertain outcome of the "Sixes" and "Sevens" in Europe? Whatever that may be, I think there will be many difficult problems in the administration of this Bill in such an area.

Examples are untrustworthy, but may I be permitted one? It is quite possible that a firm may in the past have looked ahead, perhaps for 20 years, in its acquisition of land. It may have developed with a view to future re-equipment, if not expansion, by constructing the nucleus of a new unit—levelling land, applying drainage, building sub-stations, bringing in power, gas or water, and perhaps building the services that a complete new factory will one day need, such as lavatories, wash-houses, canteens, and works offices. If that expansion depends on the future at a rate that cannot be foreseen, how can that expenditure be other than wasted unless the ultimate development in that area is permitted? I appeal, on broad economic grounds, that nothing be done in the administration of this Bill to damage or waste the resources that have been lodged in such a case.

I understand that there will be no appeal (or no appeal body) from the decisions on industrial development certificates, and I do not quarrel with that. I think it better that serious consideration should be given in the first place to the responsibility of avoiding causes céelèbres—headlines in the newspapers, Questions in the House. That is perhaps better than an appeal body which might provoke the attitude of mind, "What reason can we find for turning this down? It can always be heard on appeal." I think the practical work might be better without such an appeal body. In taking an instance of what I may term a normal area as against the publicised areas, nothing I have said detracts from the objectives of the Bill, and, with the last speaker, my noble friend Lord Polwarth, I appeal for flexibility and wisdom and broad economic considerations in its administration.

4.38 p.m.

LORD ABERDARE

My Lords, I know it would be the wish of all your Lordships that I should begin by congratulating my noble friend Lord Riverdale on the excellence of the maiden speech which he has just made. He occupies positions of great responsibility in Sheffield, which is itself a city with a very proud record, and he has brought a great deal of common sense and expert knowledge into this debate. I know that as a busy man we cannot expect to see him as often as we should like, but I hope that whenever there is an opportunity and we have a debate of this nature on which he has expert knowledge he will come and speak to us again.

I approach this Bill under two flags, the red dragon of Wales and the red ensign of commerce. In both guises I should like to give it a warm welcome. It seems to me that it goes as far as possible, without resort to direction of industry or of workers, in providing the Government with every possible opportunity for achieving a satisfactory distribution of industry. I was privileged, in seconding the humble Address in reply to the Queen's Speech at the opening of Parliament, to give a welcome to this measure as a Welshman, and I would repeat that to-day. I think it is a measure which we should welcome in Wales. I am not quite so lukewarm about it as I think the noble Lord, Lord Macdonald of Gwaenysgor, was. I very much hope it will be able to achieve something of value.

My noble friend Lord Polwarth quoted some figures for Wales which I was going to mention. My figures, I am glad to say, agree with his. We have, between 1951 and 1958, lost 18,000 men by migration from Wales, which is 3 per cent. of the total insured employees in 1951; and 12,000 women in the same period, which represents 5 per cent. This is a very serious loss. We treasure our manpower, just as I am sure Lord Polwarth does in Scotland, more than our minerals. We believe that our working people in Wales are second to none. I believe it to be true that the time lost through industrial stoppages in Wales in 1957 and 1958 was less than in the rest of the country. Moreover, behind these figures there is more than just the loss of manpower. There is the break-up of homes, the disturbance to children's education and the disruption of family lives.

Like other speakers in this debate, I believe that what benefit the Bill will bring will primarily depend on how it is administered. I would stress also, as previous speakers have, the merit of its flexibility; and especially in naming the various districts I would ask that this flexibility be used to the full. I am delighted, as my noble friend Lord Polwarth was, that already additions have been made to the list, and I congratulate the noble Lord, Lord Macdonald of Gwaenysgor, on having Prestatyn added to it; but so far, I regret to say, Aberdare has not been added to the list.

May I speak for a moment about that valley, because I happen to know it extremely well? It is in a situation which many other places must be in, as a kind of in-between area; it has certain difficulties because the valleys on either side, the Rhondda Valley and Merthyr Tydfil, are both on the list. Whereas we in Aberdare, I am glad to say, have fairly few unemployed at the moment, we are much too dependent on the coal industry, and we are striving so far as we can for the diversification which was mentioned by the noble Earl when he introduced this Second Reading. I do not think we have much hope of inducing an Indus- trialist at the present moment to come to us, when five miles either side he can get Government help to go to one of those other two valleys. I am not complaining about this. I recognise that in the present circumstances their needs are greater than ours. I merely use it as an instance to ask that the flexible power of naming other districts, and, just as important, taking off districts where the Bill has already had an effect, should be used to the full.

Much as we in Wales welcome the Bill, I do not think any sensible Welshman would want it to put any obstacles in the way of the normal development of British industry as a whole; we are aware that Wales would suffer as much as any other part of the country were we to do so and were British industry to lose its competitive efficiency. If I may, therefore, I should like to lower the Welsh flag at the moment and speak as an honorary secretary of the Association of British Chambers of Commerce. Certain serious apprehensions have been aroused amongst the Chambers of Commerce owing to the way in which industrial development certificates have sometimes been withheld. On the whole, I am sure I am right in saying that industry and commerce welcome the Bill. We all agree that new industries should be sited yin areas of above average unemployment. We all agree that every possible effort should be made for major development; where a whole factory is to be set up it should be steered into such areas also. But in the granting of these industrial development certificates there is equally a need for great flexibility if industry is not to be badly affected. I would suggest that every application must be most carefully considered individually, and that it is most unreasonable that small firms which are growing gradually should be prevented from doing so by not being granted an industrial development certificate in the area where they have sown their roots.

May I detain your Lordships for one moment on a specific case to show you that I am not talking generally on the subject and that there is indeed ground for serious concern? It is the case of Fox's Glacier Mints at Leicester. This firm is a family business, born and bred in Leicester; its work people come from Leicester, and it had no intention of leaving Leicester. But a new ring road which was very wisely provided for in the town plan is cutting into its factory; and, very wisely, one would have thought, the directors decided that they would replace that part of their factory which was being destroyed by a new building just opposite to their factory where there had recently been a slum clearance scheme and there was land available. Now that they are going ahead with that project they find they cannot get an industrial development certificate.

It is alleged by the Board of Trade that they are expanding. In fact they are not expanding; they are moving into premises which are larger, but they are larger for very good reasons. The first is that the whole of the ground floor is going to be devoted to parking space. I am sure none of your Lordships would quibble with that, in view of the debates we have had in this House on the situation with regard to parking. Secondly, if you are going to build a modern factory nowadays and modern office accommodation with modern welfare services, you must have a bigger area than the area occupied by your old factory, which may be 40 or 50 years old. So in this case it seems to me that by withholding an industrial development certificate the Board of Trade are preventing this firm from providing better working conditions and more efficient output. At the same time they are causing a great deal of disturbance, not only to the firm concerned but to many other firms in the Leicester area and even further afield as this case comes to their notice. I would ask the noble Earl to exert any influence he has to try to get this case satisfactorily solved. I believe that there is plenty of goodwill in commerce and industry and that only by working closely in co-operation with commerce and industry can we get the best results from this Bill.

May I ask the noble Earl one or two specific questions on the Bill itself? I hope he may be able to give me some answers, if not now, perhaps at a later date. I would ask first 'whether there will be a Welsh representative on the Advisory Council. Then I would ask whether, under Clause 3, building grants cover the acquisition of previously erected buildings which were under repair and modification—in fact, a kind of rebuilding; or would such a rebuilding be covered under Clause 4. Then, in Clause 5 (2), dealing with derelict land, these words appear: The Board may acquire the land by agreement or, if so authorised, compulsorily. I would ask the noble Earl who authorises the compulsory acquisition, and what is the position of the landlord of such derelict land if in fact he has plans for its further development.

With regard to Clause 6 (2), concerning payments for removal and resettlement of key workers, may I ask whether, under Section 5 of the Employment and Training Act, 1948, these payments to key workers are to be tax free—I presume they are—and whether any account is taken of possible loss to the worker on hire purchase. Many people are nowadays involved in hire purchase through building societies, and I should hope that any lasses incurred by them would be taken into account on these transfers. Then, under Clause 7, which deals with financial provision for the improvement of basic services, may I ask whether the basic services are to be taken to include adequate recreational facilities? That, again, is an important question from the point of view of the people who are going to have to work in the particular area. Finally, I would reiterate my support for this Bill, and say that I am sure 'that if the machinery is properly worked it will be successful in its objects.

4.52 p.m.

LORD BILSLAND

My Lords, this is clearly a most important Bill, framed to deal with a most persistent problem. In moving the Second Reading this afternoon the noble Earl said that the Bill brings earlier legislation up to date. But I feel that many of the changes which it makes are not for the better, and I view it with some disappointment and disquiet because I feel that in certain respects it fails to face the needs of the situation, and also that it disregards much of the experience gained in this matter in the past.

Before I make a few comments on the Bill I should like to explain to your Lordships the background against which I view it. In 1937, the Commissioner for the Special Areas in Scotland invited me to set up the first Industrial Estate there, to form the organisation, to manage and promote it and to bring together a board of experienced businessmen to direct the undertaking, all in accordance with the special areas legislation of 1937. I held that position as Chairman for eighteen years, and when I retired Scottish Industrial Estates had charge of 20 estates, 35 industrial sites, totalling 16 million square feet and with 355 tenants, giving employment to over 64,000 workers. I have also had a little experience of this subject from another angle, in connection with the work of the Scottish Council, to which the noble Lord, Lord Polwarth, referred. Notwithstanding all the activities in all these years of Scottish Industrial Estates, Ltd., the Scottish Council and other bodies, our unemployment in Scotland has persistently remained double the United Kingdom average, standing at the last count at 4.5 per cent., compared with 2.1 per cent. for the country as a whole. And, of course, in Scotland there are many places where there is a much higher rate of unemployment than 4.5 per cent. I agree very much with what the noble Lord, Lord Macdonald of Gwaenysgor, said, that this is a serious problem.

Distribution of industry policy has had a very chequered history since the 1945 Act was passed. In 1947, 1948, 1951 and 1952 the provision of factories on a lease basis was held up or postponed for long periods, and the noble Earl, Lord Dundee, reminded us that in 1956 the Government announced that the provision of factories on a lease basis would be sanctioned for only very few projects of an urgent and most important character. Now the promotion of employment is to receive a further impetus, and one hopes that it may not suffer the chequered, though impressive but quite insufficient, record of the previous legislation. But, as has been said by many noble Lords this afternoon, it is quite clear that much will depend on the manner and the spirit in which this measure is administered. I must confess to some apprehension in that regard.

When the 1945 Act became law, the late Sir Stafford Cripps was President of the Board of Trade. I should like to say that the success achieved in the distribution of industry policy at that time owed a great deal to him. He showed an understanding of the problems which the 1945 Act was designed to solve, and gave active and invaluable assistance to those who were endeavouring to operate the provisions of the Act. He was President for two years. Thereafter, the whole atmosphere seemed to change (I can speak on this point only for the position in Scotland), and that atmosphere of co-operation and understanding between the Board of Trade and Scottish Industrial Estates was never in my time restored. In place of it there appeared to be a growing desire on the part of the Board of Trade to draw everything in regard to administration down to the Board of Trade here in London. We in Scotland do not suffer that attitude. I do not speak in any nationalistic spirit, but I submit that that is bad administration. I record my experience in the matter to emphasise my belief that everything will depend on administration, and particularly on sustained interest, direction and understanding at the top—an understanding which I think is lacking in certain of the provisions of this Bill.

I should like to refer first to the proposal to remove the Boards and to replace them by three Management Corporations, one for England, one for Scotland and one for Wales. That is a radical change in administration, and in my judgment, drawing on my experience, is a major blunder. The right honourable gentleman, the President, has made it clear that the policy of trying to get firms into particular areas is a matter for the Board of Trade. I do not quarrel with that—so long as they get on with it. The right honourable gentleman has also explained that the Management Corporations will concentrate on the management of the physical assets alone. What is comprised in the management he envisages appears to be indicated by the qualifications he will require in members of these Corporations. As the Bill was framed, they were to include men experienced in accountancy, building or estate management. Now, under pressure in another place, a member experienced in the organisation of workers is to be included. The strange omission of such a member from the original draft reinforces my g feeling of a lack of understanding of the needs of the situation. When I was Chairman of Scottish Industrial Estates we had two senior trade union officials sitting on the board, and they made a most useful contribution.

In the qualifications required by members of these new Corporations, as defined in the Bill, there is no mention of what I regard as the most important qualification of all; that is, business experience. Management Corporations as envisaged by the Bill will be largely composed of specialists. In the course of a varied business career, including 36 years as a bank director, I have seen something of the ups and downs of industry and I have come to be a little distrustful of boards composed of specialists They are the essential servants of industry, but in my experience they have sometimes not proved to be very wise masters.

These Management Corporations cannot, of course, be regarded as boards in the accepted sense. They will operate only in a very narrow field for the management of physical assets. I would ask the noble Earl who will reply: who is to help the tenants to establish themselves? Who is to supply all the information they will need? Who is going to provide them with the essential contacts they will require? When I was engaged in this work over these eighteen years, management of the Industrial Estates was much the least part of the work which my colleagues and I directed. We were mainly concerned with the consolidation of our progress, which is a vital matter. I ask: Can a Management Corporation consolidate their progress? I think not—at any rate, not as they are to be constituted in the Bill.

I look at the position in Scotland today. Scottish Industrial Estates, Ltd., is directed by a board of experienced business men who are thoroughly conversant with business and with local conditions in Scotland. I was very glad to hear from the noble Earl the announcement—a fact which I already knew—that Sir Robert Maclean, the present Chairman, has agreed to continue. Sir Robert and I have discussed this matter frequently and I believe that he is very much in agreement with the points I am putting to your Lordships to-day. One of his lieutenants is the President of the Chamber of Commerce in Glasgow. Another, the Chairman of Jute Industries, Ltd., has special oversight of tenders regarding which the noble Earl spoke; and there are others of that calibre on the board. But the Board of Trade do not think such a board of experienced business men is appropriate now. This board, so well qualified to interpret and promote the Scottish interest, which has proved a most effective instrument in securing and (what is equally important) consolidating the success achieved, is to disappear; and, as I see it, they will leave a vacuum in relation to the most important functions they have hitherto undertaken. I see no justification whatever for such a decision, and I must repeat that I feel that the Board of Trade are showing a sad lack of understanding.

When, in another place, a case was made for the retention of the boards as at present, the right honourable gentleman, the President, undertook that his Regional Controllers, and all concerned in the Board of Trade, not only would be instructed to obtain advice but would seek it at all times from people who understand these things so well. I submit that that is no substitute for the present organisation which works so well. Without disrespect of Regional Controllers, I should like to make the point which has been so often impressed upon me: that a business man coming to survey a district to consider whether or not to set up a plant, or one who has set up a plant and is facing considerable difficulties, would much rather discuss these matters with another business man than with a Board of Trade official who has neither training in nor experience of business. I apologise for dwelling upon this matter so long, but I feel that it is so important. I am convinced that the plan to remove Industrial Estates boards and replace them with Management Corporations, is a retrograde one and is in every respect unsound.

I wish to raise briefly two further points. As the noble Lord, Lord Clydesmuir, said, to succeed in steering employment to areas where it is required, the Board of Trade must "sell" these areas to prospective inquirers and must offer adequate inducements to them. There is no real element of "selling" these areas in this Bill. I am sure I shall be told that that element will be seen in the administrative arrangements which will follow. If so, we must await these arrangements. But I wish to emphasise that they must make provision for a positive and precise statement of all the advantages which, in fact, exist in the development districts (as they are now to be called) in terms which will carry conviction to the inquirer.

I would also emphasise that the terms and conditions under which factories are to be available for approved projects, and other necessary inducements, must be clear and precise, and must be available, on request, without undue delay and in a form from which an inquirer can readily build up a table of costs to decide whether or not to go on with a proposition. In this connection, I should like to draw attention, as other noble Lords have done, to Clause 3 which covers the provision of building grants. There is nothing precise or specific in that: on the contrary, it is a masterpiece of obscurity. The proposal for an 85 per cent. grant on the difference between cost and current market value appears to me singularly unrealistic. I ask: who is to assess the difference? I assume the district valuer. On what basis can he assess it? Surely, a more simple, straightforward formula can be devised than Clause 3. I plead for simplicity in all respects and for precise, effective inducements which can be defined, so to speak, to the inquirer on demand.

I recall that soon after the 1945 Act was passed Sir Robert Maclean and I, on behalf of the Scottish Council, decided to spend six weeks or so in America visiting the various centres to interest businessmen in the possibilities of operating in Scotland. I went to see Sir Stafford Cripps to tell him about the project, and I said, "Unless we can offer specific terms, including the financial regulations which would apply, I do not think there is any use in our going." Sir Stafford Cripps immediately agreed and gave us all the information and authority required to make that visit effective. It has been followed by visits by others of my colleagues, including my noble friend Lord Polwarth. I mention that fact, my Lords, to point to the importance of a package deal when trying to sell an industrial location to any large business concern. I hope—indeed, it is essential—that the administrative arrangements to follow enactment of the Bill will offer the type of package deal to which I have referred. The Scottish Council have an organisation in New York and elsewhere in the United States of America, and in other countries abroad, and obviously its effectiveness in interesting people to consider setting up production in this country depends upon its ability to give clearly defined information.

My final comment on the Bill is that it leaves everything to the Board of Trade and makes no provision for consultation with the Secretary of State for Scotland. This point was put in a debate in another place, and was answered, I thought, most unconvincingly. Hitherto, the Secretary of State has been consulted, and I believe that his right to continue to be consulted as Scotland's Minister should be clearly stated in the Bill. My Lords, there is a major task to be done. In Scotland not only have we an average unemployment that is double that of the United Kingdom, but, as the noble Lord, Lord Polwarth, has said, we still have continuing migration of workers from North to South to an extent which I believe is not healthy. Twenty years ago the Royal Commission on the Distribution of Industrial Population, the Barlow Commission, said that … it is not in the national interest economically, socially or strategically that a quarter or even a larger proportion of the population of Great Britain should be concentrated within 20 to 30 miles of London. It is a sad commentary on this apparently forgotten Report that migration is still continuing and that the lack of balance in the industrial population remains. My Lords, I wish I felt more confident that the provisions of this Bill will restore the position.

5.14 p.m.

LORD GREENHILL

My Lords, it is purely as a statement of fact and not with the intention of paying any compliment that I say that the noble Lord, Lord Bilsland, is probably the best informed and most experienced noble Lord in your Lordships' House on this particular subject. If one could add one word it would be this. If Members on this side of the House were part of the Government, instead of being in Opposition, and they had attempted to take upon themselves the duties and the functions which the Board of Trade are now being given under this Bill, they would be accused, and rightly accused, of acting as dictators, because that is the position which it seems to me the Board of Trade is assuming in this very complicated situation.

I speak with my eye on Scotland, and I am wholly in agreement with the general attitude of other noble Lords who have expressed their views about the Scottish position. My noble friend Lord Macdonald of Gwaenysgor said that this Bill was not really a Bill; it was a machinery measure. In other words, it was a blueprint of an administration the Government intend to set up. The noble Earl, Lord Dundee, said that the Bill introduced no new policy. Indeed, it is not even perpetuating the old policy; and one wonders what it is that has persuaded the Government to take up this measure. The Bill is wrongly worded; it is wrongly named. This is not a Local Employment Bill; this is an Unemployment Bill, with a bearing upon certain pockets of unemployment which persistently have continued in Scotland and elsewhere. Surely, what we should be thinking of to-day is not so much the problem of attracting large motor-car manufacturers to certain particular areas—important as that is—but of trying to understand in the first place what it is that has placed Scotland in the unenviable position in which it now finds itself.

My own feeling is this—and it comes to my mind through the references which have already been made by several noble Lords to the proposals in this Bill to make grants or to grant loans for the purpose of clearing some of the ugly sites, some of the derelict areas, within our cities. It seems to me, my Lords, that in the evolution of industry in Scotland, as in this country, what we find is this. At one time, certain industries were developed which were very prosperous. We were able to depend upon our own natural resources, such as coal and ore, and, as a result of the possession of those natural resources were able to build up successfully ancillary industries. But now, unfortunately, through no fault of ours, and purely as a result of industrial development in other directions, the areas of those industries have become derelict. People live in them, not in affluence but more or less in penury, and those industries are now no longer able to support the people. The problem is this: what can the Government do about the position of the people in those particular areas?

I do not wish to repeat what I have said before in your Lordships' House. Some years ago a Committee set up by the Scottish Council of Industry, under Professor Cairncross, issued a Report dealing with precisely this kind of point but from a somewhat different angle, in the sense that what he said was that it is important from the point of view of public policy to ensure that the communities in certain different parts of the country should remain as communities and that the people should not be compelled to leave those communities because industry was not available for them. Scotland is, as your Lordships know, becoming depopulated in many of its areas. Even in a place like Glasgow, where one would imagine that the number of the population was keeping up—although it is a little lower than it was—a large number of people are leaving. If the figures do not make it apparent that the population is becoming smaller, it is because the fact is disguised by an influx of people from other countries who are filling up the vacuum which is created by the people who are leaving Glasgow; and the fact is disguised that this loss of industrial labour has gone for ever.

Apart from the points of view submitted by the noble Lord, Lord Beveridge, who emphasised the importance of the evils of congestion and conurbation, which are largely, but not wholly, matters of amenity and health and industry, there are problems of another kind to be considered, and they are these. In Scotland, owing to the disappearance of certain industries because of development in other directions, we are now emphasising the importance of the new industry of car manufacture as one of the vital channels for the export of our products. But we must not assume or take for granted that this new industry is for ever going to replace the industries which at one time were prosperous and successful but which are now no longer. We are bound to assume that even that industry will one day be replaced by some industry of which we perhaps see only the early beginnings at the present time.

We have also to remember that, apart from the fact that we ourselves are developing as rapidly and as efficiently as any other nation, America, Germany and France—friendly people—are keen competitors of ours, and unless we are permitted to use the whole of our employable population in the manufacture of our products we cannot hope to maintain the standard of living that we wish to enjoy. Let us also remember (and the country has not even been mentioned so far in the course of the debate) that, whatever our views may be about the political situation in Russia, as an industrial nation it is growing at a pace which should give us all cause for some concern. We ought therefore to see that in this country there remains no spot of preventable unemployment which we as a people can cure; and I venture the opinion that this Bill does nothing whatever to remedy that state of affairs.

In the course of his opening speech the noble Earl, Lord Dundee, gave us a very interesting account of the relationship between inflation and industry. I listened to it with care, but I confess that I found it hardly relevant to the purposes of this Bill. What we are dealing with here is not an increase in the employment of those already employed: what we are dealing with here is the position in those parts of Scotland and of England and Wales where the population is under-employed now and is suffering from unemployment and all the by-products that unemployment means to those people, through no fault of its own. But I believe that we ought to be doing something of a much more constructive nature than appears possible in this Bill. In other words, the emphasis ought to be not so much on helping the industrialist to bring his industry to the people, important as that is, as on seeing that the people of Scotland and England do not have to depend on the haphazard forces of industry for their livelihood and for their general happiness.

I do not know what should be done to the terms of this Bill in order to bring that about. It appears to me, from my reading of what was said during the debates, that there is nothing in the existing Acts which, if those Acts were carried out properly and adequately, would prevent something being done to remedy the position which we all agree is so deplorable. As many noble Lords have said, if the Acts we have already on the Statute Book were administered in the manner in which it was intended they should be administered when they were first introduced, there would be hardly any need for the Bill which we have before us. Along with my noble friend Lord Macdonald of Gwaenysgor, and with the noble Lord, Lord Bilsland, I hope that the Government, before pushing this Bill through, as they can because of their majority, will very seriously consider whether it is indeed an effective measure for the purpose of producing the results which ostensibly it means to produce—namely, an increase in employment in those parts of the country where unemployment is so big to-day.

5.26 p.m

LORD GRANTCHESTER

My Lords, I agree with the noble Earl who introduced the Second Reading of this Bill that it is the use that will be made of it rather than its contents which will be important. The chief topics in references to this Bill have been its possible application to particular areas or a desire for an expansion of its scope or powers. The noble Lord, Lord Macdonald of Gwaenysgor, has spoken of lukewarmness in relation to this Bill. I want to go a little further and question its value: to ask whether, on balance, it will not do more harm than good.

I know that, superficially, the purpose behind the Bill sounds attractive. It always sounds attractive to suggest doing something, particularly to legislators, who cannot resist the temptation; but, in the atmosphere in which we live to-day, there is a danger that the idea of Government exercising powers of overriding direction in fact, if not in theory, will be accepted. This, we know, is the aim of those who believe in a socialist economy, but it can only bring creeping paralysis to a free market economy, where the direction must come from consumer demand, and where the means of production must be influenced by competitive forces. Having regard to what has been achieved in Britain during recent years, I think we can agree that generally the outlook of management is not unintelligent. If labour is scarce in one area and is available in another, this is a factor which any intelligent management takes into consideration when planning expansion. Certainly a lot of consideration is given to-day to the wishes, convenience and welfare of the staff and workers in industry, and they are sometimes a good deal more difficult to persuade of the benefits of a country life than are their employers. Some further consideration might be given to that aspect of this problem.

The attitude of the present Government appears to be that if they can avoid compulsion and use only inducement, no great harm can be done. But, my Lords, some of us deplore the breaking down of the sense of individual responsibility by inducing too great a reliance upon props supplied by Government. This Bill carries the process just a little further by breaking down management responsibility for industry. By the holding out of inducements, management is to be induced to do something which it would not otherwise consider doing. I will come to the inducements in a few minutes, but this process seems to be a process which could gradually bring industry into a quite undesirable relationship to Government. If losses are made, and if firms are induced to set up under uneconomic and uncompetitive conditions there will assuredly be losses, the Government will be blamed. As I see it, the rôle of Government is not to exercise an overriding direction but to keep the ring clear in a competitive economy. If we believe in a competitive economy, and if a competitive economy is the most stimulating and beneficial, then Government interventions of the kind proposed under this Bill can only aggravate in the long run—and I emphasise "in the long run"—the problems with which it is designed to deal. That is always the effect of Governmental intervention and interference with economic factors.

Rather would I ask whether a solution of the problem with which we are faced would not be assisted by the removal of existing restrictions which have made the economy too rigid: for instance, nationally based wage agreements as compared with regional agreements. Our trade unions, I believe, might well consider whether a policy of area variations in agreements on rates might not be more helpful in bringing about a natural high level of employment. It is flexibility in the whole buildup of the economy which is essential. The greater the general prosperity—and that is what matters—the wider it spreads its effects. This Bill misses this point and moves in an opposite direction. Like the noble Lord, Lord Macdonald of Gwaenysgor, I should like to see more variety introduced by facilitating movement where individuals or families desire to move. I sometimes wonder whether Ministers are not somewhat misled by the desire of industrialists to be co-operative. Perhaps sometimes they hesitate to press their objections to suggestions made by the Government lest they be thought to be putting their own interests above the general interest, and sometimes, for that reason, they may not emphasise sufficiently strongly the views which they really hold.

If I may comment briefly on particular provisions of the Bill which I find disturbing, I would say that I am appalled by the rigidity introduced into the grant of the new industrial development certificate, which appears to bring bureaucratic control down to the last inch of space. If frustrations could be maddening, I think that this could be one of them. Speaking of frustrations, I would ask your Lordships to consider who are involved in the administration of this Bill. The Departments involved, which are referred to in different clauses of the Bill, are the Board of Trade, in Clauses 1, 2, 3, 4 and 12; the Advisory Committee, in Clauses 3 and 4; the Ministry of Housing and Local Government, in Clause 5; the Ministry of Labour, in Clause 6, and "the appropriate Minister", covering, I suppose, any Department, in Clause 7; the Industrial Estates Management Corporations, in Clauses 8 to 12. Then, as we know, district valuers are involved in Clause 3. I do not think that industry can be run like that.

The Bill extends the right of compulsory purchase, as one noble Lord has already mentioned. We must remember that every extension of compulsory purchase seems to arouse new bitterness. No doubt it will be said to be necessary, as it always is to any Bill of this type, but I cannot help remarking that Government intervention introduces at once an undesirable psychological factor, so I am not delighted when it is said to be necessary.

I can only describe Clause 3, perhaps a little more strongly than the noble Lord, Lord Bilsland, as posing a problem which perhaps would constitute a good question in an intelligence test for students taking the examination of the Institute of Valuers. But from a practical point of view it is quite unintelligible. I would agree with the noble Lords, Lord Polwarth and Lord Bilsland in this. From the point of view of practical application I should expect some extraordinary and certainly the most varied answers to the sum which the district valuers are called upon to do. I have had some experience of looking at valuations, and this clause seems to me to set an impossible sum. For instance, where there is no existing demand for a new factory in a development area in which it is to be built, or for the type of factory which is to be built, because the demand is artificially created—in fact, imported—could the market value be said to be purely nominal? In this case the grant would be large. I think that you might get an answer like that in some cases, or the answer might be no grant or a minus quantity because the market value is held to exceed the building cost. If this is meant to grant a concession, surely Her Majesty's Government must look at it again and try to make some sense of what they are trying to put forward.

I wonder also what the possible effect of this sort of action is likely to be on commercial practice—for instance, on commercial building and on borrowing. If a factory is to be put up in one area to-day, and another factory in another area to-morrow, and they are let at uneconomic rents, or the cost of building is subsidised and this goes on to any extent, nobody will know in time the value of a factory anywhere, and I think that many firms will find it a great deal more difficult to borrow money, as they are in the habit of doing on factories which they are putting up to-day. I should like to ask where the money is coming from that is called for under Clause 4. I know that it is unpopular in these days to ask from what source money is to come but, after all, the Government have to find the money from somewhere, and I should like just a little enlightenment about how, if money is to be provided under these various clauses which are so difficult to understand, it is to be found.

In introducing the Bill, the noble Earl, Lord Dundee, recalled the fact that no fewer than 190,000 people are now employed on Board of Trade estates. If changes are to be made in control by the Boards, which I think have done some extremely good work, instead of transferring freeholds to the Board of Trade and leasehold interests to new Corporations, would it not be better to make a start in disposing of some of these holdings, and so help to get the Government out of rent collecting and rent fixing, which can more appropriately be dealt with by those with commercial experience? Such a policy might find favour among some supporters of Her Majesty's Government. I am sure that this Bill is well meant, but I do not think that either its provisions or its implications have been sufficiently thought out, and I suggest that there is a great deal in this Bill that needs further consideration.

5.40 p.m.

LORD HAWKE

My Lords, I cannot be expected to subscribe to the doctrine preached by the noble Lord, Lord Grantchester, because he preaches the doctrine of pure Liberal laissez faire, undistilled from the last century, whereas I believe the Conservative doctrine of Disraeli and our leaders at that time was more correct: that it was a Government's business to step in where economic forces appeared to be likely to be detrimental to the community.

We have heard a lot in this debate about Scotland. Scotland has enormous advantages in this world. It has a great reputation all over the world for business acumen, skilled workers, a wonderful banking system and a great expertise in the movement of money; it has great companies registered in Scotland, and it has great overseas connections all over the world. But in spite of this, it has a heavy unemployment problem. I should have expected that decadent Sassenachs would have been the people unemployed, and it is one of the great mysteries in this world to-day how people like the Scots can be unemployed.

The noble Lord, Lord Macdonald of Gwaenysgor, rightly said that unemployment rots the soul. I regard it, as we all do, as a challenge to our social conscience, but also as a challenge to our ingenuity. We must obviously do all we can to stop it. We have local unemployment at the moment, and the first thing to do is to discover how it is caused. The causes would seem to be divided into fairly simple categories: dead or dying industries, insufficient growth to cope with the growth in population, or depressed but still alive industries. This Bill is certainly one means—and a very good one, too—of producing new industries in place of the dead or dying and to produce the growth that is otherwise insufficient. There are other means, too. Communications would be a great help. When the noble Lord, Lord Macdonald of Gwaensygor, was talking about Wales and North Wales, I wondered for a moment whether, if a miniature M.1 existed from Birmingham to Caernarvon, that would not have meant that by now satellite factories to the Birmingham industrial area would have sprung up all along that road into North Wales. I hope, with the noble Lord, Lord Beveridge, that this Bill can be used to relieve congestion by preventing industry from coining into places where there is already too much of it. One hears of factories moving out into the new towns, and so on; and one hopes that the factories they have vacated may not immediately be allowed to be used for industrial purposes.

But, my Lords, we need other means to deal with this disease. We want to help where the old industries are temporarily depressed—and my impression is that this often occurs with industries that are dealing with capital goods for export. There are perhaps special reasons why these may be depressed at the moment. Typical things that I have in mind are an over-expansion in a short space of time in oil, which leaves a gap, and also in shipping. At the moment there seems to be a reaction going on in both of these industries against a previously high rate of activity. That, of course, is the fault of the unevenness of the trade cycle. We are still learning a great deal about the trade cycle and how to ride it. We can encourage consumer demand with bank advances, hire purchase and so on and that leads to more imports. That, in turn, leads to higher prices for raw materials; and that leads to more exports; then the capital goods at home begin to be bought, perhaps stimulated by investment allowances; and then, last of all, the capital goods abroad begin to get bought.

There is a danger that we are running on such a narrow path between inflation and deflation, as my noble friend who moved the Second Reading of the Bill said, that we may have to try to damp down consumer demand just at a time when the trade cycle is beginning to exercise its influence on this Cinderella of capital goods for export. If we want to revive the capital goods export trade we have obviously got to try to think of some quicker method of doing it than through the trade cycle, which is altogether too slow (it is a year or two before it works round) because those are the last to benefit and the first to get cut back. Why should we not use the same sort of means as we use to give a fillip to business and the sale of consumer goods? Here we do it by hire purchase. In the world to-day there are many people who want to buy our capital goods but who just cannot afford to do so. Why should we not use our credit to help them to do it, letting them have goods on a pay-as-you-earn basis? It will not be the one-year or two-years business by which semi-durables are sold on hire purchase. I have in mind locomotives and other things being sold over a seven and ten years' period, to be paid for out of the savings that the modern machine can achieve as compared with the thing they replace. Why cannot we focus these particular credits on the places in this country where we want to see orders placed? The first idea is not new, but I have never seen this one suggested anywhere else, and I believe that it is new.

I can understand the reluctance of Her Majesty's Government to start what may be a sort of rat race in credit terms. I believe that there is some so-called gentlemen's agreement in existence to which gentlemanly people like ourselves are apt to adhere. But already there is provision for going beyond the five years to Commonwealth countries, and from an Answer given to me to a Question I put down a short time ago with a view to this debate I understand that the Government might be open to suggestions that these terms should extend outside the Commonwealth. That I believe would be important, because I suspect that many of these markets are in fact outside the Commonwealth, and many of them might well be in South America, where there is a great tack of means of payment. After all, we should be doing only what the Export Import Bank is doing for America, and I do not believe they have had bad experiences in these matters. I know the balance-of-payments argument, but if we can lend abroad why should we not lend on our own terms in such a way as to benefit the industries we particularly want to benefit?

What industries might benefit in this way? The ones that immediately occur to my mind—others will occur to other noble Lords—are those producing materials for railways, harbours and docks. All over the world there are rundown railways, ancient harbour cranes, and so on. They all need replacing, but the owners just have not the means to do it. Let us see whether we can put it within their power to place orders in our depressed areas for these things—materials, incidentally, which, by nature, tend to come from those very areas, Clydeside, the North-East of England and so on. Ships also are rather a special case, because the owners seem to have made some rather colossal "bloomers" with their sums, and the over-ordering has been great. As a result, orders for ocean-going tonnage are likely to be scarce for some time, and I presume that some of the unemployment in Scotland and the North-East is clearly attributable to that cause. But, of course, that industry will not be down for ever; it will come up again in a few years all right.

Meanwhile, is there any hope of getting orders from those shipowners of the world who have not over-ordered simply because they could not afford to do so—I refer to the owners of the ships that ply on the harbours, rivers and lakes of this world? Once upon a time I had something to do with steamers of this sort, and now, as then, I believe that many of these craft are obsolete; and now, as then, I believe that many of the owners are impecunious, and that the vessels need to be replaced. The question is whether the terms can be arranged; whether pay-as-you-earn would produce the orders. It obviously could not be done by individual shipyards. It would mean a collective effort, particularly by the yards who specialise in the smaller vessels: they would have to send a man to cover Asia, perhaps another to Africa, and perhaps another to South America.

When we get spots of unemployment, let us respond to the challenge with ingenuity. We can do a great deal by means of monetary policy to reinforce this Bill, so why not let us do it? If special rebates are offered to firms to set up business in special areas, why cannot special inducements be offered to their customers Ito place orders in those places, too? We have hire purchase to encourage consumer spending; we have investment allowances to encourage buying of capital goods in this country, so why cannot we use special credit to bring in orders to special places for the production of capital goods for export?

5.54 p.m.

LORD SHEPHERD

My Lords, on behalf of my noble friends on this side of the House I should like to offer sincere congratulations to the two maiden speakers who have spoken this afternoon. The first was the noble Lord, Lord Clydesmuir, who, the House will know, has played a prominent and energetic part in developing Scottish industry, particularly its export trade. I became conscious of the noble Lord's participation in this work when I was fortunate to attend a lunch which he gave in honour of the Burmese Commissioner. I was conscious of the fine spirit of the noble Lord's colleagues. The noble Lord, Lord Riverdale, also spoke with great experience and, what I think must have impressed everyone, great confidence.

This is possibly an occasion when we could congratulate the noble Earl, Lord Dundee. From reading Hansard last night, I understand that the noble Earl was responsible for the Second Reading of a Bill in another place to deal with special areas and Government grants to alleviate unemployment. Frankly, I sympathise with him this afternoon. I have read carefully the debates in another place, and listening to the noble Earl I felt that he knew he was not on the best of all wickets. Listening to the debate to-day, I must say that I thought the wicket became stickier and stickier. It probably reached its worst when the noble Lord, Lord Bilsland, was speaking. The noble Lord sits on the Cross-Benches, and certainly could not be accused of making Party warfare. I thought he spoke in the strongest terms condemning this Bill.

Noble Lords on this side of the House are in a difficult situation. We could not oppose any Bill which brought aid and comfort to the unemployed. But, in our opinion, this Bill is limited in scope and in time. My noble friend Lord Macdonald of Gwaenysgor spoke movingly on the heavy burden that far too many men and women and their children have to bear because, through no fault of their own, they are unemployed. I listened to the noble Earl when he was speaking about what has already been done, the difficulties that have been experienced in bringing aid to certain areas, and how carefully we must watch development and expenditure. I could not help wondering why we should put the burden on the shoulders of a considerable number of people, although a relatively small number when compared with the whole population. I believe it is totally immoral and completely un-Christian. Therefore, I would say to the noble Earl that we look to the Government to bring aid to these areas as quickly as possible and, if necessary, to take a calculated risk. They will earn credit in history if they do.

I believe this Bill is a bad Bill because it goes against the advice given to the Coalition Government during the war—namely, by the Barlow Commission. They stated that in their view the Government should develop and implement a national policy for the location of industry based on three criteria, economic, social and strategic. It was on that Report that the Coalition measure which is now known as the Distribution of Industry Act, 1945, was carried and was implemented with the greatest enthusiasm and drive by the Labour Governments from 1945 to 1951. The noble Lord, Lord Dalton, who I very much regret was unable to be with us this afternoon, as Minister gave his full energies to make certain that the misery and the poverty that existed in what were called the old distressed areas, and which became the development areas, should never return.

In the case of Scotland, I understand that under the 1945 Act, during the period of the Labour Government, seventeen industrial estates were started and have now been completed. What is the record of this Government? I understand that no industrial estates have been started in Scotland since 1951, and I must ask the noble Earl whether the Government has any intention of starting these industrial estates. I do not want to go over the old ground of Scotland again, but I believe that there are nearly 97,000 men and women unemployed in Scotland to-day. Many of them have been unemployed for many years. We know also that many young Scotsmen and Scotswomen are leaving their country and are coming south. This, I believe, is a great tragedy to Scotland, and it can be stopped only by the provision of employment for these young men and women and also the provision of services.

Wales is also losing its young men and women, and where are many of them coming? They are coming to London. During the last seven years I believe that over one million new jobs have been created by industry. Approximately 40 per cent. of those jobs were created in the London area, and the trend continues. The Government have failed to use the powers they had within the 1945 Act to prevent the growth of industry and offices in London. We do not need statistics to show the congestion that is in London to-day. I would submit that the Government are largely responsible for creating one of the largest antheaps that has ever been created or built. Millions of workers come to London every day in complete and utter misery, and complete loss of dignity. Where is it going to end? If the present trend continues, London will not be a place fit to live in. A halt must be called. And yet the Government have discarded the powers they had within the 1945 Act. I think it is disastrous.

The noble Lord, Lord Grantchester, also opposed the Government measure, I think for very different reasons, as the noble Lord, Lord Hawke, suggested, but he made one statement which, if I understood him rightly, rather appalled me. He called for a flexibility in national wage arrangements as an inducement to persuade industry to move to those particular areas. I do not know whether the noble Lord was suggesting cheap labour. If he was, I do not think there would be any other noble Lord in this House who would rise to support him.

LORD GRANCHESTER

My Lords, I certainly was not suggesting cheap labour; I was suggesting something very much better than what is being provided by unemployment benefit.

LORD SHEPHERD

I am pleased to hear that, because I was rather appalled. The Minister in the other place, when this Bill was going through its stages, refused or was unable to give a list of the areas involved. The list has now been given and I believe it has been amended; it was originally given on February 9. I understood, from reading the debates of another place, that the provisions of this new Bill would cover approximately 14 per cent. of the working insured population, as opposed to 20 per cent. in the previous Act. But, looking at this list, I should be very surprised if the list does, in fact, equal 14 per cent. of the population. So far as England is concerned, I see that there are seven seaside resorts. I appreciate that these resorts have severe seasonal unemployment, but the big working populations will not exist there. I certainly look for and I cannot find any mention of the Lancashire area. Lancashire has some very nasty pockets of unemployment, and yet I cannot see them on this list. Therefore I ask the noble Earl, is this the list on which the Government ask us to accept this Bill? I think we should know.

In conclusion, I want to say something about the seven years. I just do not understand the Government's mentality in including a time limit on a Bill which they believe is a constructive Bill. They did not put a time limit on the Rent Bill. They did not put a time limit on the Homicide Bill. Certainly in the 1945 Bill we put no time limit. We believe that we have to be forward-looking; that the men and the authorities responsible must be continually looking to the future. How can they look to the future when they see that this particular provision will cease seven years hence? This is no emergency measure. This Bill should have been a Bill planning for dealing with the present unemployment and the anticipated unemployment that must come with adjustment of industry. Therefore I hope that on the Committee stage the noble Earl will feel it possible to accept an Amendment to delete that particular clause, because I think it is fundamentally and psychologically wrong that a time limit should be put on a Bill of this nature. In conclusion, I consider that the House must press the Government to make some considerable adjustments and Amendments to this Bill before it leaves this House.

6.11 p.m.

THE EARL OF DUNDEE

My Lords, we have had a debate which I think has been both valuable and extremely interesting, and I should like to thank all of your Lordships who have spoken, not only for your support but also for the informed criticism which many of your Lordships have levelled at various parts of the Bill. Before I offer my congratulations to the two noble Lords who have addressed you for the first time I should like, while it is still fresh in my mind, briefly to say a word or two about the speech of the noble Lord, Lord Shepherd. He thought that this Bill was a bad Bill because it does not go far enough to carry out a policy based on the Barlow Report. That, I think, is an interesting proposition; but at this time of night I do not want to start a discussion on the Barlow Report.

What I should like to say now to the noble Lord is this. He suggested that the Distribution of Industry Act of 1945 was intended to carry out the Barlow Report. In fact, this Bill contains even wider powers than the 1945 Act. The other criticism was that we have always had the powers and have not used them properly. But he cannot have it both ways. If this Bill is a bad Bill because it is not comprehensive or wide enough to carry out the wide ideas or notions of the Barlow Report, then the 1945 Act was an even worse Bill.

LORD SHEPHERD

I do not want to start an argument at this time of night, but I should like to make clear that my criticism of this Bill in relation to the Barlow Report is that this Bill is not a national distribution of industry, but deals purely with pockets of unemployment. It is not dealing with the planning and distribution of industry.

THE EARL OF DUNDEE

In that case neither did the Distribution of Industry Act of 1945, the powers and scope of which were even less comprehensive than the proposed provisions of this Bill. I give every credit to the post-war Government for getting quickly off the mark and for making such good use of the 1945 Distribution of Industry Act. But the period at which the rate of progress of Government building began to change was not the time when the Government of the Party of the noble Lord came to an end; it was the time when we had finished demobilisation and were getting back to peace-time conditions—that is to say, about 1948.

I think it is interesting to look at the figures. For the first three years after 1945, up to the end of 1948, in all development areas, a large amount of factory building was done by the Government—no less than 16½ million square feet, employing 90,000 people. But then for the next three years, 1949 to 1951, it dropped from 16½ million to 4.9 million, employing only another 23,000 people. I would never criticise the Government of the time for that, because it was not due to any change of policy; it was simply due to the fact that just after the war there was a tremendous rush for all these factories—everybody wanted to take advantage of the advance factories which were being offered. The rate since 1948 has not varied a great deal. On the other hand, of course, the number of privately financed factories for which industrial development certificates have been given for the development areas has substantially increased, and the total figure now is in excess of the total amount of government financed building. The noble Lord, Lord Shepherd, asked me about the seven-year period of the Bill. To the best of my ability I gave the reasons for that in my opening remarks, and as the noble Lord has been kind enough to give notice that he will put down an Amendment on the Committee stage, I think that perhaps we might leave further discussion of it until that stage of the Bill is reached.

I should like now to extend my own congratulations, and those of your Lordships, to the two outstanding maiden speeches to which we have listened. The noble Lord, Lord Riverdale, spoke as a man of great industrial experience in the North of England. I think that what he said about the problems of Sheffield interested your Lordships greatly, and certainly was most effectively expressed. Of course it would be a hardship if people who had spent years in preparing ground and a great deal of money in advance were to be refused an industrial development certificate. I said in my opening remarks that we did not take an entirely rigorous attitude about this; that we would give an industrial development certificate where it was reasonable to do so, and no doubt the fact that money had been spent would be a matter which would weigh in favour of giving it. On the other hand, I must make it clear that as a matter of general policy we have to do one thing or the other. We do not refuse a certificate simply because an area has full employment or even because it is a conurbation. But we must, as a matter of general practice, use this control if we want to get anything effective done under this Bill. I do not want to say anything to give the impression that we are not going to use our powers of refusing industrial development certificates with firmness in order to take advantage of the opportunities which we now have of pumping a great deal of new life and more diverse industry into the development areas.

The noble Lord, Lord Clydesmuir made a speech which was as modest as it was well informed. I was particularly delighted to hear it, because when the noble Lord's father was Secretary of State for Scotland, from 1938 until the outbreak of war, I had the pleasure of serving under him as Under-Secretary, and there is no-one in politics of whom I have kinder or happier memories. He was also, I am glad to say, a very great personal friend of mine, and I am so glad that his son is able, or is trying, to fit in some Parliamentary activity with the very great industrial responsibilities which we know occupy a great deal of his time. I hope very much that he will manage to find time to address your Lordships very often in future, because he is just the kind of person whom we in this House particularly like to come here and give us the benefit of his advice on these matters.

The noble Lord said a good deal about the favourable advertisement which was given to development areas, or could be given, by firms who go there. I believe your Lordships would agree that one of the most encouraging features of the situation with which we are trying to deal—though they are not all encouraging—is the success of so many firms who were at first extremely reluctant to go to the special areas and who were persuaded to do so only with great difficulty. Now that they have got there, are doing well and have found these areas much the best place for them to work in, they do not want to leave the area, but try to get colleagues to come there. They are, in fact, a first-rate example which we hope will be followed by many others.

I should like to deal with what has been perhaps the most uncompromising criticism of this Bill, which came partly from my noble friend Lord Bilsland, while something to the same effect was said by my noble friend Lord Polwarth. My noble friend Lord Bilsland spoke of the retrograde step of transforming the Industrial Estate Companies into Management Corporations. I believe that here there is perhaps an irreconcilable difference of opinion between my noble friend Lord Bilsland and my right honourable friend the President of the Board of Trade; and I do not know how far it can be bridged. I have here what my right honourable friend said in Committee on this subject but it is unnecessary for me to read much of it because it has evidently been studied already by both the noble Lords, Lord Bilsland and Lord Polwarth, who quoted from it. I would just mention one part of what my right honourable friend said: There is … a … distinction in the minds of some people in Scotland, that the men who are to run these corporations should be able to understand the needs of industrialists and not be merely technical men. He went on to say: I accept that. We will aim to get on the boards of the corporations people who will be able to talk to industrialists so that when we get industrialists and induce them to consider certain areas, the people running factories in that area will be able to talk to these industrialists in terms they understand. It is specifically laid down in Clause 8 that each Management Corporation: shall include a person appearing to the board to have adequate experience of industrial matters. My noble friend Lord Polwarth was perhaps not quite so irreconcilably opposed to this change as my noble friend Lord Bilsland. He appreciated that there were, as my right honourable friend the President of the Board has said, three different functions to be performed by three different bodies: that is, the Board of Trade, which has the duty of trying to attract industry to areas of abnormal unemployment; the Development Councils whose function is the promotion of the virtues of a particular district; and the actual members of the new Corporations whose function would be the management of Board of Trade property. My noble friend was anxious that there should be some co-operation between all of them. I do not see why there should not be. I am sure that my right honourable friend is anxious that the Development Councils, the Management Corporations and the Board of Trade should at least be on speaking terms with each other, and, we hope, on terms of cordiality.

LORD GREENHILL

My Lords, what are the advantages of this trinity?

THE EARL OF DUNDEE

My Lords, I dealt with that in my speech. The advantages are those which have been described by my right honourable friend the President of the Board of Trade in a speech which I do not wish to quote at length because both my noble friends who raised this matter have evidently read it and, indeed, have quoted from it themselves, so that there is no question of their not understanding the reference. It is just a plain difference of opinion which I will do anything I can to bridge, if that is possible.

Several of your Lordships have asked about the clarity of Clause 3, suggesting that the complicated actuarial calculations which have to be gone through by the district valuer may confuse the industrialist who is applying for the grant; but I do not think that that is quite the position. The whole point of the clause is that before the industrialist who is going to build a factory decides whether he is to take advantage of this provision or whether he would prefer the Government to build the factory and let it to him, he will know exactly what he is going to get. That is why the calculation has to be made in advance, on a notional basis, by the district valuer. It is not confusing to the district valuer, for he is accustomed to that kind of thing. It is not until after he has made that calculation and presented the result to the applicant for a factory, so that the applicant can know exactly the amount of the grant he is to get if he accepts, that the applicant has to make up his mind.

My noble friend Lord Aberdare appealed on behalf of a particular firm in Leicester which had been refused an industrial development certificate, and he explained the reasons why this firm ought to have it. I am glad to be able to tell him that the firm will get a certificate; but since he has raised the matter I ought to add that the reason for the doubts arose from the fact that when the firm first made their application they made a number of statements which were not correct. They have now withdrawn those statements and modified the terms of their application, and I am informed that an industrial development certificate will now be granted.

My noble friend concluded his speech by rattling off a number of machine gun questions which I am able to answer only because he was good enough to write me, about them yesterday; otherwise I doubt whether I should have been so lucky. Concerning Welsh representation on the Advisory Committee, I think it has already been made clear that we do not want to put people on that Committee simply because they are Welshmen or Scotsmen, because all they have to do is to advise on the potential viability of applicants; but in fact there is a Welshman now on the Committee. I have no reason to suppose he will not continue to be a member and your Lordships may be either relieved or indignant (as the case may be) to know that he is balanced by no fewer than three Scotsmen.

As for building grants, these are not available for acquiring existing buildings; otherwise there would be an open invitation to collusion. The grants provided for in Clause 3 are designed only to put the industrialist who prefers to build his own premises on the same advantageous footing as the one who rents or buys a Government-built factory. I believe that the question with regard to the person who authorises compulsory purchase, which my noble friend asked, is answered in Clause 13, which makes it clear that the existing procedure covering compulsory acquisition of land by local authorities under existing legislation shall be applied to the compulsory purchase of land by the Board under this Act. That is to say that it is the Board who would make the Order, but it is subject to a provision for publicity and for an appeal to the court.

My Lords, I am glad to see that one matter on which most of your Lordships have supported the provisions of the Bill is the flexibility of the new methods of determining development districts. I think that all your Lordships have agreed that that is a good thing. The noble Lord, Lord Macdonald of Gwaenysgor, seemed to think it had a too premature kind of flexibility in regard to the place which he mentioned in North Wales; and another noble Lord (I think it was my noble friend Lord Polwarth) said what a good thing it was that it should be so flexible that the list had been altered already. But, as a matter of fact, it has not been altered already. I am as much puzzled by the names in Wales as the noble Lord would be by names in Scotland, but the term "Rhyl" has always included the term "Prestatyn" for the purposes of this legislation. They were both together as a D.A.T.A.C. area under the 1958 Act and they have not been divorced. They have continued in wedlock under this new list. I do not know how the misunderstanding arose. Perhaps the noble Lord was told that the term "Rhyl" included "Prestatyn" and he may have taken it to mean that Prestatyn had been added on later, but it had not.

The noble Lord, Lord Grantchester, was opposed to this Bill.

LORD SHEPHERD

My Lords, is the noble Earl leaving this question of the list? I wondered whether he could say whether this is the complete list and whether it covers the 14 per cent. of the population which the other House was given to understand was the number of people who would be covered by the new Bill.

THE EARL OF DUNDEE

Yes, my Lords, this is complete in the sense which the noble Lord means. It is not half a list which is going to be added to in another few weeks. But it is not a static list. It is liable to be altered at any moment as the pattern of industry changes.

The noble Lord, Lord Grantchester, was critical of the Bill for rather a different reason than that of some of your Lordships. He thought that it would interfere with competitive economy. We must certainly take care that the provisions of the Bill do not result in unfairness. That is a thing to be watched. It is one of the difficulties in trying to let factories at an artificially low rent or to have differential rates of grant in proportion to the distance from a certain market. These things are very difficult to do without creating unfairness. But we must make it clear that we do not believe that there is any other way than this of doing what we all want, and that is correcting the unbalance of industry in this country and creating more industrial life in the development areas, which is the fundamental object of our policy. I know that the method of issuing I.D.C.s is bureaucratic. I do not think there is any other way of doing it than this. It would be quite undesirable to have a sort of local advisory committee to decide who should have an I.D.C. and who should not. It may be regrettable, but I do not see how it can be avoided.

I agreed with my noble friend Lord Hawke, who made a number of other useful and interesting suggestions in his speech, when he said it was not part of our political philosophy that we should have no controls at all. Whatever the political lineage of our policy may be, this certainly is our policy now. It is a control we intend to keep and to use, and to go on using until the problem of the development areas is solved.

Whilst I am grateful to the noble Lord, Lord Greenhill, for his remarks, I am afraid that my reaction to them was one of considerable disagreement. The noble Lord thought that I had been guilty of irrelevance in speaking to your Lordships about inflation and the price level. I would most strongly reply, and repeat, that I do not think anything could be more relevant to this Bill than the problem of inflation. It is because of the danger of inflation and insolvency that it has been so difficult to make more progress in the development areas in recent years. I think it is precisely because we hope we have now got inflation under control—there have been stable prices for two years and a rapidly expanding economy with a rising rate of industrial production, without inflationary pressure, without the wage-price spiral—that we believe we are now in a position to use the powers of this legislation which we had not been able to use as much as we should have liked in recent years. It is because of that position that industry is now sufficiently anxious to expand; that it will prefer to be directed by us and go into a development area sooner than not expand at all. And I think it is of the most fundamental importance to get into our minds the fact that we cannot have progress in correcting a bad balance of industry if we have an unsound unstable economy, and that the necessary basis—which we hope we are now getting—of progress in the development areas is to maintain the stable economy which we have established with so much difficulty, and very often with so much pain, over such a long period of years.

I do think, my Lords, although I do not want to say anything that would raise undue hopes, that it is because we now have the sound economy we did not have before that we really hope in the next few years to see something in the nature of a transformation of this intractable problem in these development areas, to which many of us have devoted so much thought and care throughout our political lives.

LORD AMWELL

My Lords, before the noble Earl sits down, may I just put a point which I think is rather appropriate? He speaks feelingly about expanding industry and all the prospects of industrial advancement that we are facing at the present time. Is it not advisable to realise that a tremendous amount of that is in the motor-car industry and that that cannot last? We have to anticipate some kind of an end to a rapid expansion in that particular industry. In considering the question of the distribution of industry, points of that kind ought to be taken into account well ahead.

THE EARL OF DUNDEE

My Lords, we cannot slacken our efforts to persuade the motor industry to go where we want it to go simply because we are afraid that some day people will stop buying more cars, and that the market will be glutted. The motor industry itself appears to have the utmost confidence in the expansion of the market, and in the demand for cars, for a very long time ahead, and it is having very remarkable success abroad as well as at home.

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