§ 2.50 p.m.
§ THE MINISTER OF STATE, MINISTRY OF TECHNOLOGY (LORD DELACOURT-SMITH)
My Lords, I beg to move that this Bill be now read a third time.
§ Moved, That the Bill be now read 3a. —(Lord Delacourt-Smith.)
§ On Question, Bill read 3a.
§ LORD WISE moved Amendment No. 1:
§ Before Clause 1, insert the following new clause:
§ Amendment of section 15(3) of Industrial Development Act 1966
§ The noble Lord said: My Lords, I understand that although permissible it is not customary to move a new Amendment on the Third Reading of a Bill in your Lordships' House. Your Lordships will appreciate that as a comparative newcomer to your Lordships' House I should not like to deviate from the recognised procedure, and I apologise for so doing. I also apologise for the lateness in tabling the Amendment, which was beyond my control. However, I feel that events are such as to justify my action, although I was admittedly a little hesitant before agreeing to do this.
§ The Amendment is identical in context to one moved in another place by the honourable Member for Norwich, North, during the Report stage of the Local Employment Bill, which was subsequently withdrawn upon the assurance of the Minister of State that power to give priority to low wage-earning areas already existed. While the Department of Economic Affairs was in existence, the Secretary of State assured East Anglian M.P.s that there would be no impediment to the issuing of industrial development certificates for East Anglia. He gave them this assurance after the publication of the Hunt Committee's Report. But a test case has arisen, and what has happened to these assurances? A substantial international firm has made an application to come to King's Lynn to manufacture there products which it is now 1071 importing and selling in this country. The products are mainly fuel burner pumps, water circulating pumps and hydrolastic transmission units, primarily for earthmoving and agricultural equipment. Its imports this year will probably be in the region of £920,000, which it is estimated will rise to nearly £2,500,000 in 1974. If they were able to manufacture these products in this country, that figure should drop from the present £920,000 to nil in 1974.
§ The firm spent a year investigating sites up and down the country, and there was a great deal of research before eventually deciding upon King's Lynn as the most suitable and practicable for their needs. Its market is mainly in the more densely populated areas of the Midlands and the South-East, and obviously it wishes to keep the lines of communication reasonably short. The hydrolastic transmission is a modern invention superseding the old well-tried gearboxes, and it is essential that the servicing is carried out with a minimum of delay. That is one reason why the firm wishes to remain in East Anglia rather than go into a development area. There is an abundance of local labour of the type required, and the estimated number of eventual employees is upwards of 300 to 400. That seems excellent for somewhere like Lynn, but I should have thought was comparatively useless for a development area.
§ This company wants to come to Lynn. It is willing to forgo the advantages it would receive in the way of all the grants and inducements if it went to a development area—and they are considerable— for it is of the opinion that these would be far outweighed by the subsequent communication and servicing problems. The company does not want to go elsewhere and would probably continue to import its products, or would buy existing factory property in an area nearer to London. We in Lynn need this company and would welcome it, but the Minister who is now responsible for the allocation of I.D.C.s said, on receiving a report on the application, that he saw the greatest difficulty in approving this project. Where is the assurance that was given? It has gone, it is lost. This shows the need for strengthening the Bill.
§ I do not want to delve into the implications of the Hunt Report, or into the subsequent Government appraisal of its 1072 implementation. In principle I agree with it but, as we in East Anglia know full well to our cost, the Hunt Report did little enough for us. I seek to bring areas with low level earnings into line with the high unemployment areas. I appreciate the problems and can sympathise with the regions designated as development areas, but I cannot agree with the automatic preference shown to them over areas such as East Anglia, where we also have our problems.
§ Our overspill and town expansion schemes are under way. The number of people expected to move in is so great in comparison with local industry that it cannot possibly meet the total work requirement. The East Anglian Study estimated that some 10,000 to 13,000 male jobs would have to be created by 1971 in the expanding towns alone. It showed that we are working longer hours for 9 per cent. less money than the average of the country, and if we worked no longer than the national average of hours we should be at least 10 per cent. lower in wages. I do not think the Government should underrate the significance of this, and a steady growth of industry is essential for continued or renewed prosperity.
§ East Anglia, and Norfolk especially, is a wonderful place in which to live, but not so wonderful a place in which to work. There is no incentive and it is demoralising for a man to take home no more at the end of a week's work than he would receive if he were unemployed or on sick pay. The Report shows that East Anglians spend as much money as other areas on food, transport and clothing, but less on housing, drink, tobacco and durable household goods. In other words, the cost of living is as high as elsewhere, but the standard is lower. It is an invidious situation, my Lords.
§ In many respects, low level earnings are almost as bad as periods of unemployment, for the spending money is inevitably less. Families cannot afford holidays and things of that sort. Youngsters are denied certain things. I believe it is a fact that the level of acceptances of East Anglian boys into university is lower than the vast majority of places in the rest of the country. Primarily, I think it is because they are denied the wherewithal to study, to read and to enlarge their horizons and outlooks. I think this could be rectified by 1073 allowing local industries to expand in conjunction with a steady influx of new ones. We do not seek any preferential treatment but only equality. I hope that as an act of good faith the Government will agree to the insertion of this new clause, or will, at any rate, give us a further assurance that I.D.C.s will be forthcoming without any trouble whatever. My Lords, I beg to move.
§ LORD LEATHERLAND
My Lords, I am rising on the spur of the moment, but I have behind me a background of 15 or 16 years' close association with East Anglia in my then capacity as the chairman of the regional council of one of the major political Parties in this country. I have been approached by Members of another place who told me that when they argued the case for earnings to be taken into consideration they were told that, instead of that, the Government would see that there was a steady flow of I.D.C.s to enable companies— industrialists—to move from London into the East Anglian area. They now complain that when a specific example of this kind of case has arisen, the I.D.C. has not been granted. I know that the people of East Anglia are not among the moaning classes: they are a happy, industrious lot of people. But they feel here that they have not had quite a fair deal from the Government or from the Department in question.
It is a fact—and I address myself now immediately to the terms of the Amendment—that earnings in Norfolk and some other parts of East Anglia are low. That may be because of the preponderance of agricultural industry in that part of the country, and that is an argument in favour of the transferring to or establishing in that part of the country some more types of industrial employment—and the particular case that has been mentioned is a fine example of the modern kind of industry which would be a boon to that part of the country. I think that we need a variety of employment in East Anglia. If it cannot be done by including in the grey areas those areas not only of high un-employment but also of low earnings (and in some ways one is a corollary to the other) but could be done by taking a generous view in granting I.D.C.s, so that established industries which want to expand 1074 can move themselves into East Anglia and let that expansion take place, with benefit to themselves, with benefit to the people they employ and with benefit to the community as a whole, it would be a very good thing. That is all I have to say, my Lords, but I did not want it to be thought that my noble friend Lord Wise was a lone voice speaking in the wilderness on this question.
§ LORD STONHAM
My Lords, I, too, have had a lifelong association with East Anglia, and can confirm what my noble friends Lord Wise and Lord Leatherland have said about the situation there. Indeed, I should have thought that the disparity between earnings in similar occupations, certainly in Norfolk and, from what I am aware, in other parts of the country also, was considerably more than the percentage quoted by the noble Lord, Lord Wise. From my visits to Norfolk on quite a number of occasions (though I have strongly in mind a very recent visit to the King's Lynn area). I was really astonished to learn of the wages being earned, not only by men in manual occupations, in industry, but also by women office workers, typists and so on, amounting to many pounds a week —I should have thought as much as one-third—below what I view as normal wages within my ken.
I knew of course of the efforts which were being made, particularly by my honourable friend the Member for King's Lynn, to get new industry there, which would have provided one remedy—more competition for labour. But I felt that in many cases the only hope for those workers to get what I regard as a reasonable wage would be to emigrate from East Anglia to other parts; and I do not think we want that. We do not want that area to be depopulated: it is not over-populated now. I would say to my noble friend who is going to reply for the Government that I do not know whether this particular Amendment is viable, or indeed whether it is in the right place, but it is very much in the right spirit and I hope that he will do what he can to meet the point—a very important one for some very worthy people— which has now been raised by my noble friend Lord Wise.
§ LORD STRANGE
My Lords, I am joining in only out of curiosity. I agree with what both the last two speakers 1075 have said. There is definitely a need for industry and slightly higher wages, I would think, in Lynn, as I think it is usually called—though the locals, I believe, call it "King's". But I am interested in this. I understand that one of the principal occupations there is in the vegetable trade, outside, and that it is very difficult to get people to do things like picking brussels sprouts, packing celery, and so on, which goes on over a wide district. What I am curious about is this. If this factory is put up, as I hope it is, and the men get better wages, what is going to happen to the vegetable crops? Because as your Lordships know, if the prices of these vegetables are raised beyond a certain level the market goes with them, since the housewife has a certain fixed price that she will pay for things like sprouts and eggs (as we may find out if we join the Common Market), and if that goes up she will go to something else, and therefore the principal industry of the district will lose its labour.
§ 3.8 p.m.
§ LORD DELACOURT-SMITH
My Lords, like most of the noble Lords who have spoken on this Amendment I, too, can claim an association over a good number of years with East Anglia, though not so long, I think, as in the case of at any rate the three noble Lords who were the first to speak in this short debate. The debate on this Amendment has concentrated on the question of East Anglia, and particularly on the position in relation to one decision on an applicacation for an industrial development certificate at King's Lynn. But, of course, the terms of the Amendment are very much wider than that. Perhaps I could say a brief word on the specific points which have been raised and then look at the wider principles to which the Amendment gives rise.
In the case of the specific application for an I.D.C. to which the noble Lord, Lord Wise, referred, I should be very happy indeed to look into the circumstances and to communicate with the noble Lord upon the specific case. But perhaps I ought to say that, while conscious of the needs of East Anglia and sympathetic to the requirements for new industry there, the Government have to look at each application for an I.D.C. upon its merits, having regard to the location proposed, the nature of the project 1076 and so forth. I do not think the Government could give an undertaking not to seek to steer mobile projects to the development areas where this seemed reasonable. But the brief debate we have had illustrates two features of the regional policies which we are seeking to pursue: first, the necessity for a measure of flexibility; and, second, the difficulty of holding a reasonable balance between conflicting, and in their respective ways legitimate, demands of different parts of the country. I am not able to say any more than that on the general I.D.C. position, but, as I have said, I shall be happy to look into the particular case mentioned and to communicate with the noble Lord, Lord Wise, upon it.
The noble Lord referred to the level of earnings in East Anglia, and I think it is true that in Norfolk and Suffolk the level of earnings is low. I would make the point, though, that there is some indication that the rate of increase in earnings levels in East Anglia is slightly higher than the average for the country as a whole. There are other parts of the country where wage levels are low, or at any rate fairly low, and where they are not showing the same tendency to rise, relative to the national average, as in the case in East Anglia. This illustrates again the complexity of the problem of trying to have regard to the conflicting claims and conflicting interests of different parts of the country.
But I must come to the Amendment itself, which asks us to amend the Bill before us to include the level of earnings as one of the factors to be taken into account when designating intermediate areas. The Industrial Development Act 1966 adopted for development areas a wider set of criteria than had previously been applied in designating areas for the purposes of regional policies. Whereas until then unemployment had been virtually the sole and certainly the overwhelming criterion, the 1966 Act in the designation of development areas said that the Minister of Technology should:… have regard to all the circumstances actual and expected including the state of employment and unemployment, population changes, migration and the objectives of regional policies.The present Bill deals with the selection and designation of intermediate areas. In designating intermediate areas the Government will have regard to the 1077 same criteria as in designating development areas. Indeed, the intermediate areas, as we saw on Second Reading, are those parts of the country where special measures are necessary because problems are arising of the same character as those which exist in the development areas, but where the economic problems are not so severe as to justify designation as development areas. As I have already said, the Act of 1966 requires the Minister to have regard to all the circumstances, actual and expected, and I think that with such words it is not necessary to spell out in the Act itself every single, individual relevant indicator.
The other factors to which we have regard in designating development or intermediate areas, factors such as heavy reliance on one particular industry, are not specified in the 1966 Act; but that does not prevent and has not prevented the Government from taking them into account. We do of course specify certain factors, the level of employment and the others which I have quoted, because it seems right to single out the factors which particularly need stressing. But that does not in any way preclude the taking into account of the other factors which follow within the quotation which I read. I want to make it clear in this connection that I can repeat an assurance which has already been given in another place that the Government already have the power for which this Amendment asks. The Government have the power to take into account the level of earnings in designating development areas and intermediate areas, and to the extent that it is judged appropriate along with other factors, the Government already pay regard to the earnings level, and it is certainly the intention to continue to do so. In the light of this explanation and the reaffirmation of the assurance that the level of earnings is a factor which is already taken into account and which will continue to be taken into account, I trust that the noble Lord will feel able to withdraw his Amendment.
§ LORD CHAMPION
My Lords, before my noble friend sits down may I ask this question? Is it the case that if he communicates with the noble Lord, Lord Wise, there is a possibility that the I.D.C. will be granted in the case which Lord Wise has put? Can that be done without 1078 an Amendment to the Bill which is now before us? If the Minister decides that this is a case well worth further consideration (and he might be favourably disposed to do so) would it be possible under the Act as it at present stands and under this Bill when enacted to grant the I.D.C.?
§ LORD DELACOURT-SMITH
My Lords, although it clearly does not arise under the present Amendment, which has no bearing on the granting of industrial development certificates, may I say that the answer to the specific question which has been put by my noble friend is, Yes.
§ Amendment, by leave, withdrawn.
§ Moved, That the Bill do now pass— (Lord Delacourt-Smith).
§ 3.17 p.m.
§ LORD BEAUMONT OF WHITLEY
My Lords, your Lordships may remember that I put forward an Amendment at the Committee stage on the question of the expanded towns. The expanded towns have quite a justifiable fear that they may be pushed a bit down the queue for I.D.C.s and for treatment by this Bill; and the noble Lord, Lord Delacourt-Smith, gave a welcome assurance on this point. Before the Bill passes I should like to ask him a question of which I have given him notice. It is whether he could give an assurance that when a firm which has already a base or factory within an expanded town wishes to expand again within that town, it will have no difficulty in getting an I.D.C. for that town. I am informed—I have no actual knowledge of this myself —that in the past some pressure has been put on such firms to go to development areas. It would seem only fair and just to establish the right of the expanded towns in this particularly useful and very important bit of social and industrial planning by giving them an assurance on this matter.
§ LORD DELACOURT-SMITH
My Lords, I was grateful to the noble Lord, Lord Beaumont of Whitley, for having given me notice that he intended to raise this point at this stage of the Bill. It is a very natural continuation of the short debate that he initiated at an earlier stage in the Bill on the expanded or overspill towns. The point that he raised is somewhat analogous to the point raised by the noble Lord, Lord Wise, in his Amendment. It is not, however, quite the same. The noble Lord, Lord Wise, was concerned with applications made by firms coming from outside and proposing to establish themselves in an expanded town; but it is the position of a firm already in such a town and proposing to expand, and therefore needing an I.D.C. to enable it to do so, that has been raised by the noble. Lord, Lord Beaumont of Whitley.
The position is that as a general rule applications for industrial development certificates will be approved for firms already established in expanded towns. Incidentally, the same practice is followed in new towns. I do not think that we can treat the two categories other than similarly. Having said that, I must say that equally we must reserve the right to refuse an application when it seems right to do so. Expanded towns vary a great deal in their circumstances, as was brought out in the debate on the Committee stage. Some of the expanded towns—such towns as Basingstoke or Hemel Hempstead come to mind in this connection—are already fairly full in the industrial sense, and labour is already pretty scarce in them. It would not be doing much of a service to them, and certainly it would not be consistent with the common sense of the regional policies we are trying to pursue, always to approve unlimited expansion by an existing firm in all the circumstances of expanded towns. Further, there may be cases where firms in an expanding town have already had a long run of industrial development certificates and a time comes when it seems right and reasonable for any further expansion to go to one of the assisted areas.
In all this we must bear in mind that the amount of mobile industry is not unlimited, and there is a clear reasonableness in seeking to direct such mobile industry as can be so directed to those areas where it is most needed. Further, 1080 there may be a wish to refuse an application in one of these expanded towns when it is associated with a rundown in a development area or intermediate area, or where there are special circumstances of some kind surrounding the application which would justify that course. I have felt is necessary to be candid in explaining these reservations; but at the same time I wish to assure the noble Lord that refusals in expanded towns and in the new towns will be very much the exception and that as a general rule applications are approved promptly. I hope that the noble Lord will feel that that is an adequate response to his question.
§ On Question, Bill passed.