LOCAL EMPLOYMENT BILL

HL Deb 29 January 1970 vol 307 cc497-522

5.10 p.m.

The MINISTER of STATE, MINISTRY of TECHNOLOGY (LORD DELACOURT-SMITH)

My Lords, I beg to move that this Bill be read a second time. It marks a further stage in the development of policies which are aimed to bring about a more balanced distribution of industry throughout the country. Policies with this aim date back to the mid-'thirties and the desire to alleviate the position of the then depressed areas, and they grew in the post-war years to a national determination to see that we must never go back to such a gross imbalance of job opportunities as had previously existed. Nobody who remembers the social decay and human despair in the pre-war distressed areas will question the Tightness of that national determination, or the wisdom of ensuring a reasonably balanced spread of economic activity. I hope that the provisions of this Bill, which aim to introduce a further degree of flexibility into our policies, will equally commend themselves to the House.

The present Government have already taken a number of steps to extend the assistance available to promote industrial development in those parts of the country where job opportunities fall below the number of workers. The Industrial Development Act 1966 introduced broad contiguous development areas in place of the former more scattered and more narrowly defined development distriots. In 1967 the regional employment premium was introduced. This is for regional employment directly related to the provision of jobs, as is the assistance given under the Local Employment Act, and there-fore to some extent counter-balances on supplements those forms of development area assistance—such as the 40 per cent, investment grant—which depend on the level of capital investment. The Government have moreover created the special development areas, parts of the country expected to face high and persistent unemployment—for example, through colliery closures—unless some special measures arc taken and additional incentives are provided.

And now to-day we have the present Bill which proposes the creation of inter- mediate areas. In September, 1967, the Government established an independent Committee under the Chairmanship of Sir Joseph Hunt, with the purpose—and I quote the Committee's terms of reference: to examine in relatior, to the economic welfare of the country as a whole and the needs of the development areas, the situation in other areas where the rate of economic growth gives cause (or may give cause) for concern, and to suggest whether revised policies to influence economic growth in such areas are desirable and, if so, what measures should be adopted ". The situation was that the increases in assistance to the development areas in 1966 and 1967 had increased the differential between those areas and those parts of the country which had difficult economic problems but which still did not qualify for the status of development areas. A basic source of the economic problem of the development areas them-selves—that is to say, the rapid decline of traditional industries—was being reproduced in certain other parts of the country. Coal mines were closing down in South Yorkshire and in the Nottinghamshire and Derby coalfields. The run-down of the textile industry was continuing in North-East Lancashire. There was the prospect of the loss of job opportunities at the Royal Naval Dockyard at Devonport. It was such issues as these that the Hunt Committee was primarily examining and of which they made an analysis which is thorough and valuable.

The Government have accepted and embodied the basic contention of the Committee that there are parts of the country outside the development areas whose economic problems qualify them for some, but not all, of the measures of assistance which are available in development areas themselves. For reasons to which I shall come back a little later, we have differed from the Hunt Committee in some respects, but we have departed from their recommendations only after the most careful consideration.

Perhaps I may now briefly describe the provisions of the Bill. Clause 1 gives the Minister of Technology power to specify by order intermediate areas. This is the same procedure as is adopted in the designation of the development areas them-selves. The criterion for designation as an intermediate area is that while the economic problems of the locality may not be as acute as those of a development area, there are, in the opinion of the Minister of Technology, special measures necessary to encourage the growth and proper distribution of industry. If Parliament approves the Bill, the Government's intention is to designate the following areas, broadly speaking, as those qualifying for intermediate area benefits; North East Lancashire; the Yorkshire coalfield; North Humberside, parts of the Notts Derby coalfield; South East Wales, Plymouth and Leith. Maps showing the development areas and the proposed intermediate areas have been placed in your Lordships' Library.

In addition, Clause 1 allows the Minister of Technology to exercise in the intermediate areas certain functions which he exercises at present in relation to development areas. Very briefly, these functions include: the payment of building grants; the provision of Government built factories; payments for the resettlement of key workers and their families; financial assistance for the improvement of basic services, and the payment of grants to local authorities towards the clearance of derelict land. In addition already, by administrative action, there has been made available in the intermediate areas the full range of development area training assistance. The Hunt Committee in fact recommended that the whole of the North West and Yorkshire and Humberside regions should qualify for a 25 per cent, building grant not linked to the provision of new jobs. The Government took the view that these regions include a number of relatively prosperous places whose claims to assistance in relation to the worst-hit parts of the country were not particularly strong, and that it would be wiser to concentrate the limited supply of mobile industry— and incidentally the funds available to assist industrial development—in those areas whose need was greatest.

If North East Lancashire and the York-shire coalfield had to compete on equal terms with Manchester and Leeds—as would have been the case if the Hunt Committee recommendations had been implemented in their entirety—chances of getting additional industry might well, in the Government view, have been substantially weakened. Financial assistance to industrial development will enable certain local projects to go ahead. It will also encourage developments to take place which otherwise would have occurred in other parts of the country where industrial expansion is less beneficial. To spread assistance to industrial development too widely in intermediate areas would mean either the diversion of projects away from the development areas themselves, which have more urgent needs, or the spreading of assistance so thinly as to bring little or no benefit to those places in the intermediate areas with problems that are particularly severe.

Further, the Government have taken the view that assistance for factory building in the intermediate areas should be linked to the provision of new jobs. We do not underestimate the importance of modernising industrial premises, but we feel that it is a lack of job opportunities, whether that lack is reflected in high unemployment, or in migration from the area concerned, which is at the root of many of the most pressing economic problems of Yorkshire and Lancashire, and' that we should concentrate our efforts on the provision of employment. 1 fully accept that it is undesirable for men to have to work in old-fashioned and inefficient factories, but it is a much more serious matter for them to have no job at all. Nor, of course, would it make sense to abandon the employment link in the intermediate areas while retaining it in the development areas.

Clause 2 of the Bill gives to the Minister of Technology the power to designate by Order derelict land clearance areas in which can be exercised the powers available in Section 20 of the Industrial Development Act. These powers allow the Minister of Housing and the Secretaries of State for Scotland and Wales to make grants to local authorities towards the cost of acquiring and improving derelict land where this would be appropriate with a view to contributing to the development of industry in the locality. The powers also allow the Minister of Technology to acquire derelict land and carry out work on it for the purpose of contributing to the development of industry. As the Government have already stressed in another place, it is our intention to interpret"contributing' to the development of industry"in the same broad sense in relation to intermediate areas as has been done already in the development areas.

Clause 7 of the Bill provides for the withdrawal of the selective employment premium of 7s. 6d. a week for men, with corresponding rates for women and juveniles, which is at present payable in the development areas. The Government have decided that the cost of the various measures of assistance to intermediate areas ought to be met out of the very substantial and growing sums being spent on assistance to the development areas and that this saving should be secured by the withdrawal of the 7s. 6d. additional payment. I should like to make it clear that this will not in any way affect payment of the regional employment premium of 30s. in the development areas and that in this and other ways the development areas will continue to enjoy a very substantial margin of preference over the rest of the country.

Before I conclude I should like to refer shortly to two other issues which are not specifically the subject of this Bill but which arise in considering the Hunt Committee's Report and the distribution of industry policy. The first relates to the issue of industrial development certificates. The Bill does not deal with the operation of the industrial development certificates control. As has been made clear already, i.d.c.s will be available in the proposed intermediate areas on just the same basis as in the present development areas. The i.d.c. control is, in our view, an important supplement to the positive measures of assistance proposed in the Bill and there was of course considerable discussion on industrial development certificates in another place. Accordingly, I should like to make a reference to it.

The Hunt Committee were strongly in favour of retaining the control. As they said in their Report (paragraph 482), after pointing out the contribution which i.d.c. control made to creating new employment in the development areas: we therefore concluded that the maintenance of the control is a necessary instrument for pursuing a positive location of industry policy ". The Government considered very carefully the recommendation (from which, incidentally, one member dissented) that the exemption limits should be raised to 10,000 sq. ft. It is not, of course, possible to say precisely what level of exemption limit would give greater flexibility without endangering the supply of indus- try for the assisted areas and the overspill towns. But on balance the Government felt that there was a real risk which we would be unwise to take of losing projects in these areas where we want industry to go if the exemption level were raised significantly.

We should not expect that this decision would adversely affect small firms which might be particularly concerned. We shall continue, as the Committee have recognised has been past practice, to operate the control flexibly and sensibly and to recognise the particular difficulties of small firms. I understand that this is one of the matters on which the Committee of Inquiry on Small Firms, appointed by my right honourable friend the President of the Board of Trade, are receiving evidence and will no doubt be covering in their Report. The Government will certainly take account of any recommendations they may make on this point.

While I am on i.d.c.s I should like to say a word about the time taken to decide applications. In areas where the control is operated fairly loosely decisions are given in a matter of days or at most weeks. Where the control is operated more stringently decisions often take longer, particularly on large or difficult cases. I do not believe that it would be practical or helpful to set an arbitrary time limit for the determination of applications. The control can be operated sensibly and fairly only if full consideration can be given to all the circumstances and applicants afforded an opportunity to discuss their proposals. This is bound to take time. But I should like to emphasise that the Ministry of Technology is very conscious of the need to settle applications quickly and we will continue to keep the position under review.

The second general point relates to the results which are being obtained from the Government's development areas policies. It is not, of course, easy to distinguish the effects of policies of a specifically regional character from the effects of national policies and from all the other factors which help to determine the investment decisions of industry. At the same time, there are some clear pointers to the impact of our regional policies. On the basis of estimates given by the firms themselves, projects for which industrial development certificates are currently being approved in the development areas are giving rise to between 60,000 and 70,000 new jobs in these areas, about two-thirds of them jobs for men.

There has also been some narrowing of the gap between the level of unemployment in the development areas and in the rest of the country. In 1966 unemployment in the development areas was more or less double the national rate. During 1969 the average rate for wholly unemployed in the development areas was 4.1 per cent, as compared with 2.3 per cent, for the country as a whole. This improvement is not spectacular, but it has to be considered against the back-ground of continuing loss of jobs in coal mining, in heavy engineering and other traditional industries of the development area. In these circumstances, it is no inconsiderable achievement if the unemployment gap between the development areas and the rest of the country gets no wider—and, as I say, it has in fact narrowed.

Furthermore, unemployment is not the only criterion by which to judge the success of distribution of industry policies. They have other important objectives, too. Some areas are over-dependent on one industry or on a narrow range of industries and there is a need to diversify the industrial structure. Other areas have suffered from heavy outward migration. Yet other parts of the country suffer from excessive congestion and inflationary pressure on resources. Distribution of industry policies are designed to alleviate and, in the end, to cure these varied symptoms of regional imbalance in our industrial structure. They are aimed to enable firms already in the development areas and in the proposed intermediate areas, and projects moving into those areas, to compete in efficiency and productivity with firms in other parts of the country and abroad.

The success which many development area firms enjoy in markets both here and abroad, the figures of new jobs created and other varied indications show convincingly that these policies are succeeding, and I am convinced that they will also show valuable results in the intermediate areas dealt with in the present Bill, to the substantial national advantage. Therefore, I invite your Lordships to give your approval to the Bill, which is designed to reinforce success. 1 beg to move.

Moved, That the Bill be now read 2^a. —(Lord Delacourt-Smith.)

5.30 p.m.

Lord SANDFORD

My Lords, I am sure the House would like me to begin by thanking the noble Lord the Minister of State for the comprehensive and lucid way in which he has introduced this short Bill. As he said, the antecedents of the Bill go right back into the thirties—the depressed areas of the 'thirties—but the Bill actually arises from the Hunt Report. The origin of the Hunt Report was complaint from certain areas about the bad effect that the regional policy of the Government was having on their particular localities. So, like the noble Lord, I will start with the Hunt Report and compare just briefly the Hunt recommendations with the Government's proposals.

The Hunt Report recommended that the whole of the North-Western, York-shire and Humberside Regions should have 25 per cent, building grants, not linked to jobs, and training grants as in the development areas. In contrast, the Government proposed that the assistance should be confined to seven selected intermediate areas, some of them in those regions. The Hunt Report recommended selected growth zones in the North-Western. Yorkshire and Humberside region, for Government industrial estates and factory building, with supporting investments, including link roads. In contrast to that, the Government selected certain areas for assistance strictly by criteria of need, unemployment and net outward migration—quite a different set of criteria. The Hunt Report recommended 85 per cent, grant for the clearance of derelict land; the Government plumped for 75 per cent.

As the noble Lord explained, there is also a wide divergence between the members of the Hunt Committee and the Government on the way in which i.d.c.s were to be controlled. The Hunt Committee recommended that the Merseyside development area was to be de-scheduled; the Government rejected that recommendation. The Hunt Report made further recommendations about dealing with air pollution, and the Government, so far as I can see, do not propose to act on that.

The Hunt Report suggested that the time was overdue for a comprehensive review of the whole of the Government's regional development policy, and I should like to hear from the noble Lord at the end of this debate what the attitude of the Government is to that suggestion. I make this point because that lack of harmony between Her Majesty's Government and a Committee of their own appointing is in itself an omen that all is far from well; and I would say that the approach of Her Majesty's Government to this problem has been fragmentary, inconsistent, intermittent and, considering the large amount of money now being spent, probably wasteful, although just how wasteful we cannot tell.

My Lords, this is a Local Employment Bill, and I am now going to confine myself briefly and strictly to the subject of local employment. I am going to do so all the more because my noble friend Lord Lauderdale is going to dwell at length and in much greater breadth, and with far greater eloquence, on the whole field of the Government's regional development policy. But, my Lords, at the heart of regional policy, as the noble Lord the Minister of State said, is the creation of jobs—work, employment—for it is far too expensive, far too wasteful and plainly wrong to have large numbers of able-bodied men and women in certain regions of our land willing but unable to find worthwhile work to do. So employment—the creation of jobs—is the criterion by which these policies ought to be judged.

The present position is this. This is what has happened in the past three years between March, 1966, and March, 1969 —the latest figures available in the December issue of the Department of Employment and Productivity's Gazette. These are the figures of the numbers of jobs that have been lost in that period in certain regions. In the Northern Region, the whole of which is a development area, and parts of which form a special development area, there has been a loss of 66,000 jobs. In Scotland, all of which is a development: area, and parts of which are special development areas, there has been a loss of 66,000 jobs. Incidentally, in one three-year period from 1959 to 1962, when the Conservative Party was in power, at a time when 76,000 jobs had been lost through colliery closures and so on, there was, due to our policies, a net gain of 50,000 jobs.

But going back to the three years from March, 1966, to March, 1969, in Wales, all of which is a development area, and parts of which—the valleys in the South —are special development areas, in those three years there has been a loss of 49,000 jobs, and that despite the expenditure there of £38 million in investment grants and £14 million in regional employment premiums per annum. In the Yorkshire and Humberside area, most of which is now scheduled as an intermediate area, there was in that three-year period a loss of 106,000 jobs. In the North-West, which contains the Merseyside development area and now some new intermediate areas, there was a loss in that three-year period of 111,000 jobs.

To look at it in another way, my Lords, the National Plan of 1965 forecast a manpower shortage of 400,000 people— an absurd condition to exist side by side with local and regional unemployment. Mr. Callaghan and Mr. Brown at the D.E.A.. looked ahead in 1965 to having all this adjusted under the National Plan and by means of the Government's regional policies; and Mr. Callaghan was talking of the regions"absolutely booming ahead ". "Absolutely booming ahead "was the phrase he used on television in April, 1965.

Let us look at what the effect of"absolutely booming ahead" for four years under this Government has in fact been—and I am now comparing September, 1965, with September, 1969. If 1 were to compare it with January, 1970, the figures would be worse still, but I do not think that that would be quite fair. But comparing September, 1965, with September, 1969, in the Northern Region in 1965 there were 32,000 people unemployed and there are now 65,000 unemployed, an increase of 33,000 unemployed. In Scotland in 1965 there were 58,000 unemployed, whereas; in September, 1969, there were 77,000 unemployed (there are now 95,000), an increase up to September, 1969, of 19,000 unemployed.

In Wales in 1965 there were just under 26,000 unemployed. Four years later there were 42,000 unemployed, an increase of 16,000. In the North-West there were 48,000 unemployed and that went up four years later to 74,000 (it is now 79,000), an increase of 26,000. In Yorkshire and Humberside the number went up from 22,000 to 54,000, an increase of 32,000 unemployed. That is what it is like to be in a region "absolutely booming ahead" with the Labour Government.

I have no doubt that Her Majesty's Government will say—in fact the Minister of State has already said it—that unemployment has gone up all over the country: and so it has. But this is also the Government's responsibility. In fact, unemployment has worsened by 31 per cent, in three years. But more to the point in this debate on local unemployment is what has happened to unemployment in particular areas and localities. And here we find that one of the effects of what we would call this rather misjudged and wasteful regional unemployment policy is that unemployment in Yorkshire and Humberside has gone up by 79 per cent, in three years, whereas in the rest of the country it has gone up by 31 per cent. No wonder there has been complaint and criticism and the Hunt Committee had to be brought into being to look at the position. Let us hope that this Bill marks a change back to the flexible, simple and precise arrangements which were first introduced with the 1960 Local Employment Act. We believe that it does mark such a change, and for that reason I can assure the noble Lord the Minister of State that we on this side welcome it gladly.

Before I sit down, I should like to ask one or two questions which I think arise on the Second Reading of a Bill of this kind. They refer to the question of whether we are getting value for the money—the large amount of money we are putting into this policy. I believe that my noble friend Lord Lauderdale will be saying something about the need to make an entirely new and comprehensive diagnosis of our regional economic problems. I certainly agree that it is due, and it was one of the most important recommendations of the Hunt Committee.

Meanwhile, it is welcome news that some partial inquiry is being made into the value we are getting for the money we are spending, particularly on regional unemployment premiums, a sum of £100 million a year. I hope that the Minister can expand on the brief announcement we saw in the Press the day before yester-day about a study that has been set up to look into this question—when it is likely to be able to report and so on— and also whether he can tell the House what progress is being made by those who are already studying the value we are getting for the money we are spending on investment grants, £80 million in the development areas alone.

A useful figure for comparison and assessment as to the value of these policies as a whole is the cost of each new job created by the combined effects of all the aspects of this policy. Under the Local Employment Act 1960 the cost worked out at well under £1,000 per job, and in fact in the five years between 1960 and 1965 an expenditure of £141 million (that was the amount expended in regional development policies in that period) led directly to the creation of 190,000 jobs. It would appear from the debate in the other House that there are many instances now of far less value for money being achieved. No doubt the problems have got worse and more difficult as colliery closures, and so on, have been accelerating, but I think the House ought to have some figures, or the promise of some figures, with which to,make comparisons between then and now.

When one tots up the items listed in Appendix 1 of the Hunt Report—clearance of derelict land, which used to be £1.6 million, going up to £3 million; training grants, £2.8 million; regional employment premium, £100 million; grants for factory building, £13½ million; other building grants, £38 million; investment grants in development areas, £80 million—they all tot up to around £250 million. But there is no clear indication of the number of jobs that have been created. If the noble Lord cannot tell us now more specifically than he has done what results are being achieved in terms of jobs created by these policies, perhaps he will tell us when such information may be expected. But whether he can or not, another thing I think we should like to know is will Her Majesty's Government respond to the plea from the Hunt Committee that a comprehensive and critical review of the whole of their regional policies is now overdue and should be set in hand.

5.47 p.m.

The Earl of LAUDERDALE

My Lords, in following the noble Lords, Lord Delacourt-Smith and Lord Sandford, I, too, should like to revert to the general regional policy which is implicit in this Bill and from which it arises. When the noble Lord, Lord Delacourt-Smith, referred to the horrors of the 'thirties my mind went back to the time that I left the university, when there were 3½ million unemployed and I used to sing in the streets of London for my dinner. With these vivid memories I find it difficult to repress some; passion in referring to this subject, and I ask the noble Lord, Lord Delacourt-Smith and other noble Lords to believe that in what I have to say I am hoping and seeking to be constructive as well as critical.

Rightly, this Bill tackles the grey areas. Rightly, it tackles dereliction. But it is a blunt and not very handy weapon for flogging a dead horse that we have flogged for too long. Everything done in this field since 1945 bears the stamp of the Barlow Report, based upon pre-war data, made available during the war and to a great extent digested by its hungry readers in the bomb shelters of the mini-blitz. That was the context in which it recommended a population share-out to secure regional balance as well as redevelopment of the worst unemployment areas. One might sum it up by saying: take work and workers to the workless. It was all based on the picture then in everybody's mind, and alas! still in many minds, of a North-South orientation of our geography, which could not foresee the repolarisation that is at hand today. The broad attitude was one of propping up the old rather than building tomorrow's new.

In the cause of outdoing Canute, successive Governments of both Parties have managed to spend something like £800 million since the war. Latterly, the expenditure has been at the rate of £260 million a year, and all that is left now is a widening gap between the facts of life and the antiquity of the idea. So far from re-peopling the places that have been going down, we have further congested those that are going up.

The Scottish figures are easier to separate out. The Toothill Report recorded that between 1931 and 1960 nearly a quarter of a million people left Scotland—something like 5 per cent, of the total. Professor Tress, a leading economist who has had the advantage of being a Government-appointed chairman of one of the regional economic planning councils and who thus speaks with much responsible experience of current public affairs, has calculated from the available figures that between 1951 and 1965 very nearly the same number again left Scotland—another quarter of a million, another 5 per cent. His figures also show—they are, of course, a sophisticated calculation from the crude statistics publicly available—that another 330,000 left the North of England, the North-West, Yorkshire and Humberside.

Meantime, the Midlands, the South and the South-East have gathered net British immigration of an order of 340,000. The newcomers have been largely younger folk; therefore, in statistical terms, with a higher fertility rate, so that the population explosion down South (wherein the statisticians' 1971 forecast was reached a decade too soon) has been one of the reasons why successive Governments have been forced to submit to the demand for structure and jobs down South—a couple of new cities, half a dozen new towns, a score of expanding towns with overspill agreements, a project for a third airport and so on. Such is witness to the collapse of the Barlow Commission hope that much of this could have been put elsewhere.

Of course, nothing succeeds like excess. We have had a gradual ageing of the Barlow idea, now nearly forty years old. This ageing has brought successive efforts to restyle it according to the fashion of the day. Unemployment has set the tone throughout. But then we were taught by competent commentators to realise that regional imbalance had a bearing on the overheating of the economy, and therefore sound regional policy would help us curb inflation. Of course we never quite faced the dilemma that rising productivity, bad for inflation, may also, in the short term, be bad for jobs, at any rate for the under-skilled. That dilemma pops up in this Bill in the Government's decision, notwithstanding the noble Lord's explanation, to which I listened with great interest, to attach the 25 per cent. factory building grant to jobs instead of allowing it to go simply for the improvement of factories, the raising of their productivity, and therewith the benefit of that area.

Through time, in the restyling of the Barlow idea we came to the conception that we should not move away simply from areas of unemployment which were, and remain, something like the quick-sands that you do not seem to be able to fill up, to the concept of growth points. Finally, we moved—and this Government takes or claims the credit for it—from outright subsidy of land and capital to the subsidy of labour, which may evoke some critical comment in the future (I believe it does now) for it surely has the danger that it may encourage wasteful use of manpower. But the fashion having swung from mini to maxi by the time the R.E.P. had been brought in, we have come to have five different kinds of areas: the special development areas of pit closures—let us call them the black ones; the enlarged development areas for general assistance—I will call them purple; the grey areas (as they are commonly called) brought into being by the expansion of the others. Then one comes to the green areas left outside which are jealous and in many cases anxious. Finally, you come to the white areas, the very base and heart of the economy, where I.D.C.s are either impossible or are very difficult to get, but which are booming so well that immigration cannot be resisted, even by a great and growing shortage of housing.

After forty years of muddling expedient with policy, and confusing means with ends, one is reminded of those lines of Oliver Goldsmith: Ill fares the land, to hastening ills a prey, Where wealth accumulates, and men decay". Why? The Confederation of British Industry has expressed the view, in which they are backed by the Economist Intelligence Unit, that financial incentives alone are not the critical factor in causing a substantial industry to move. They say that the catalyst is shortage of land or labour; and the C.B.I. would add that if a financial incentive is wanted, then surely the answer is a differential regional application of corporation tax.

But generally, the thinning or thickening of the blanket Barlow approach as between the black and the purple, and the grey and the green and the white areas of distinction is, I believe, near the heart of the matter in that it has failed to match quite different categories of problem. Some areas like the Highlands or Mid-Wales need many kinds of measure just to hold the people there to sustain the basic services. Some areas have growth but need just a little help. Some, like the grey areas, are more bothered by urban renewal and emigration than by unemployment as such. Some, like Preston and Lancaster, are suited to growth yet are left outside the grey areas and stay in the green. Some are quite un-suited to growth, and we may be wasting, or may have wasted some millions upon them. Some need more than grey area help—perhaps the assistance of a new town development corporation, to channel in capital from a different quarter.

This Bill prolongs the uniformity of medicine. Worse, by subsidising large new areas at the expense of the rest it leaves the marginally excluded parts of Lancashire and Yorkshire with older, less competitive industry, stamps them as more squalid and repulsive to the young, must inspire faster migration and leave a more ageing population. I quote Professor Carter, until recently Chairman of the North-West Regional Economic Planning Council and Vice-Chancellor of Lancaster University. He writes: Abolishing unwanted towns by making them so unpleasant that citizens depart"— is the consequence and it is a political dead end, because eventually it is necessary to spend more money than ever, if only in the interests of success at a subsequent General Election.

Regarding population drift, this Bill breaks entirely new ground. I was interested to learn that in the West Riding coalfield, for example, all but three of the nineteen local authorities with the most spoiled and degraded land have also a very high rate—25 per cent.—of sub-standard housing. Inquiry has shown, intimate detailed inquiry, that people are leaving those places at least as much because of the depressing environment as for lack of opportunity. Of course the worst areas in terms of dereliction are those with the lowest rateable value. Little wonder, then, that the 85 per cent. grant available in the development areas has not everywhere been the success it was thought likely to be! Challenge of the Changing North, published by the Economic Planning Council of the North —an area enjoying the 85 per cent. grant —recorded in 1965 that the area of ground needing treatment was some 13,700-odd acres. But the Ministry's own figure at the end of 1968 showed that the sum had now risen another 1,500-odd acres, even though 2,000 acres had been cleared meantime—and that is with the 85 per cent. grant being available. The Hunt Committee wanted an 85 per cent. grant for the grey areas. Why then cut it to 75 per cent., when obviously 85 per cent. is not sufficient?

Bluntly, we are not overtaking this dereliction problem, and I say that despite assurances given in this House (I think on December 11) that new dereliction is to be interpreted largely, if not wholly, as the effect of land going out of use through the closure of railways or pits. Even under the official definition the growth of sick land is prodigious. The English figures, which are easier to sort out, show that in 1964 something like 85,000 acres needed treatment. According to the Hunt Report, paragraph 75, at the end of 1967 that figure was no longer 85,000 but was 93,000. The 1968 Ministry figures published in 1969 still show the figure at about 93,000, although 2,000 more had been treated meantime.

Last year, the English treatment programme, at 4,300 acres a year, was only just sufficient on a 15-year programme to catch up with the backlog if no new dereliction arose. But new demand is rising all the time. The nature of spoiled and degraded land—that is, land still technically in use but neglected or un-sightly—is growing at a frightening pace. New pit spoil in West Yorkshire at 20 million tons a year requirss 25 acres covered to a height of 40 feet; and when the Ferrybridge, Eggboro, and Drax power stations come on stream they will be churning out another 4 million tons— that is to say, another 20 per cent. of ash a year, which will have to be put somewhere or other.

Then there is the camouflage of definition. Derelict land, hitherto defined as land that is out of use, does of course exclude land that may be technically in use; it also excludes land that has been made derelict by Nature, such as swamps or mud flats. But I have been interested to read Opportunity in the East Midlands, the publication of the East Midlands Planning Council embracing the area of Erewash Valley, about which the Government are rightly concerned and which will of course be assisted by this Bill in due time. It points out that dereliction excluded from the official definition often represents the major part of the problem. It says that Nottinghamshire alone has something like 1,100 acres of land that is really derelict but excluded from the official definition, which in turn is 1,300 acres. In other words, the real figure is nearly twice as much. West Riding figures of 1966 show spoiled and degraded land at 17,000 acres, as against a Ministry figure for the same period of less than 7,000. This, my Lords, is the measure of the problem.

My hopes rose when I read in the Bill, Clause 4(2), that "land" includes "land covered with water". May we hope that this means some modification and widening of the old definition in the 1966 Acts? With mountains of colliery waste and enormous volumes of power station ash, disposal is a gigantic problem in a shrinking island. If land literally does include land covered with water, could not the bings and tips be used on winning new ground for housing, as has already been done in Lancashire? Or on reclaiming mud flats for other sites which have already been identified as possible sites for maritime industrial development areas, MIDAS, on the Upper Forth, the Humber, the Lune Estuary, if not the Bristol Channel and the Wash as well? Admittedly, there are hazards: the spoil may well be volatile. But a resolve to make a big effort at derelict land clearance would be very worthy of this country in this Conservation Year. Before leaving that point, may I ask one other question of the Government? There is one recommendation of the Hunt Report that has neither been accepted nor rejected, nor even emasculated; that is the recommendation that there should be a National Reclamation Agency. What has happened to that? The regions are getting restive and are beginning to ask.

My Lords, all that I have said is but one edge of a large matter. After forty years of tinkering about on the frontiers of fantasy, the time surely is long past for a new look. Should we not admit at last that the post-war epoch is over, and indeed that another, a very decade of urgency, is at hand? After all the failed pragmatics of which this Bill, let us hope, is the last pallid performance, do not the precepts of statecraft urge us into a searching new study? This could not have come from the Hunt Committee because it was set up at the wrong time with the wrong remit; that remit excluded a study of general development area and general industrial location policy. I pray that if not this Government, then the next, will at last take a long, cold look, yet lighting facts that come before them with imagination, and aware that technology without vision is like bread without yeast. Such a study should start at the opposite end to Barlow; not where can you disperse population, but where could industry best go in its own interests—in an East/West repolarisation of our economic geography.

It should take into consideration factors only newly coming to light, such as the relevance to a development area of the proportion of the educated élite within it. Scotland, it would appear, is benefiting from a brain drain in reverse, if the studies of the National Institute of Economic and Social Research into what is called the "T.A.E. index" (that is the index of the terminal age of education) are any guide. Such a study should re-member that the movement of people and of industry is a function of lines of communication within the pattern of world air ports and sea ports. Such a study should chart the physical geography of freight desirelines within and across Britain's value-added, entrepot economy. It should have regard to new transport techniques: the merry-go-round train; the overland barge; the new conveyor belt; the capsule pipeline; the deep water ocean terminal, with its M.I.D.A. and the second tier port with its mini M.I.D.A. at the other end of the land bridge. Such a study should make a fresh locational appraisal of the purely technical needs of industry for special sorts of site in the decade ahead.

The study should know that most large-scale undertakings, particularly those that generate others, have fundamental site needs that are special to them. It may be a deep water dockside; it may be abundant cooling water; it may be the cheapest electrical energy—hence, closeness to the source of power; it may be research-based opportunities requiring access to a university; it may be sites with some extractive merits—mining potash, base metals or coal, or quarrying or even farming; it may be the significance of some transport intersection.

Such a study could build up a long-range projection of natural growth points, and it could then translate into purely employment terms the requirements of the industries that would be suited to those places—the needs "for", not "of", particular places as evoked by technology. Next it should study the minimum population needed to supply that work force, coupled with the minimum population needed for a viable community. Knowing that light industry will go where there are people, it should then consider what extra light industry would be needed alongside.

Such a study would recognise differences of treatment. To equip different types of industrial base and reception area for different types of industry would need different types of help and preparation, whether we think of Wick and Thurso and my own special pet, Loch Eriboll; whether we think of Preston, Lancaster and the Lune Estuary; whether we think of Knottingley, Normanton, Pontefract and the Five Towns of opportunity at the future intersection of the A.1 and the M.62; whether we think of Newtown, Montgomery, the Vale of Glamorgan, the Bristol Channel or the Thames. The study should lastly consider not only what policies are needed to bring these changes about, but how, once the policies have been effective, such a programme can be withdrawn without pain.

In sum, such a study would convert to-day's geography of need into to-morrow's geography of attainment. Then, as a supplement tto real economic growth, it would forecast the geography of desire for the use of dereliction to apply its waste to recovery of beauty and the in-richment of culture—all that meantime take second place to the geography of growth.

My Lords, in place of tranquillisers I plead for travail and for the black benediction of chronic malady. I plead for a very patriotism of the fourth dimension. The great Disraeli spoke of the two nations. Surely the good of Winchelsea and of Wick, the good of Pembroke and of Portobello, the good of Bournemouth and of Blyth, the good of Lancaster and of Ladbroke Grove are as much the concern of the rich South as they are of one another. We are an island, yes. Remember, my Lords, the words of the great Donne: No man is an iland of it selfe Every man is a peece of the continent A part of the maine".

6.14 p.m.

LORD DELACOURT-SMITH

My Lords, the brief debate which we have had has turned on much wider issues than those specifically contained in the Bill before us, and I think it would be very valuable if on some future occasion we could have a wider debate. I am sure the noble Earl, Lord Lauderdale, would be the first to agree that his searching and stimulating speech went far beyond the bounds of the measure which he made the subject of his text. In replying to this brief debate, I can touch on only one or two of the broad issues which have been raised. May I divide my remarks into two parts? Let me first say something fairly briefly about the derelict land, and then a little about the general issues of regional policy which have been raised by the two noble Lords who have spoken. So far as derelict land is concerned, let me say, quite clearly and without any qualification, that we recognise that there is no room for complacency in examining this problem, but the problem of derelict land is not one of recent origin. It is a problem which has been with us in varying forms and, in a sense, to an increasing degree since the Industrial Revolution. If one takes a long view, it is perhaps unfortunate that for so much of the 'fifties, from 1951 to 1959, there was a suspension of the derelict land payment grants which could have been made under the 1945 Distribution of Industry Act.

I think it is reasonable to claim that, considerable though the ground is which has still to be covered, and considerable though the progress which has still to be made, there has been a more vigorous approach to this problem under the present Administration than we have seen before. According to their varying circumstances, local authorities can now receive grants which range, in effect, from 50 per cent. upwards—substantially higher; 85 per cent., in the development areas and, under this Bill, 75 per cent. in the intermediate areas and the derelict land clearance areas. Normally, however, the figure is 50 per cent. in parts of the country which are altogether outside the development or intermediate areas. Quite apart from anything else, this Bill substantially extends the areas of the country eligible for higher rates of grant.

There was a reference to the Hunt Report and the National Reclamation Agency. That is an item in the Hunt Report to which careful consideration has been given, but it has been concluded by the Government that it is right to maintain, in the way the Bill does, the principle of sustaining the interest and encouraging the initiative of the local authorities in dealing with this problem in their own localities, and maintaining the involvement of local people and the councils who represent them as primary agents in seeing that progress is made in this matter. Of course expert assistance is valuable, too, and I should like to draw attention to the services which have been rendered by the Opencast Executive of the National Coal Board in this regard. Those services, which I think many local authorities have found of value, will continue to be available.

Now let me turn briefly—and I feel this is unduly briefly, in the light of the speeches we have heard, particularly the speech of the noble Earl—to the position in respect of regional policies. There is plenty of ground for saying that there are problems not yet solved, but here again I venture to claim that in the five years of the present Administration we have had a more vigorous, a more comprehensive and, I stress in the light of some of the remarks made by the noble Earl, a more flexible regional policy than has ever previously existed in the industrial history of this country. Whatever other criticisms may be made of the regional policies which the Government have followed, I should not have thought they could have been criticised for their lack of flexibility when one looks at the wide range of instruments which are available to deal with varying facets of regional problems.

The noble Lord, Lord Sandford, dealt at some length with the question of the statistics of job opportunity in the development areas, and I would welcome an opportunity when we might hear more fully and more extensively the comprehensive counter-proposals which noble Lords on the Front Bench opposite would put forward as their considered and comprehensive alternatives to the policies which the Government have followed. But I should like to stress that, important though employment is and important though job opportunity is, it is also the case—and I think the noble Earl would agree with me here—that a regional policy must not be judged by one criterion to the exclusion of others. The regional policy which we have been carrying out has been carried out against a background of general policies which have, in many cases, necessarily accelerated the loss of job opportunities in some of the basic industries which so dominate the economies of the development areas, and, to some degree, of the intermediate areas.

The programme of colliery closures; the programme of railway reorganisation, with a substantial reduction of jobs there; rationalisation in the shipbuilding industry; rationalisation in other parts of heavy engineering—these and other programmes and policies necessary on a national scale have in fact had the impact in some of the basic industries of positively reducing job opportunities at a more rapid rate than one might other-wise have expected, and also of limiting very materially the extent to which re-deployment within the industries them-selves could be carried out.

There must be many elements in a regional policy. There must be a place for measures which are designed to increase employment and job opportunities. There must be a place, too, for measures which are designed for the improvement and encouragement of industrial investment and industrial re-equipment—and this may very well not be the same as an increase in job opportunities. It may, however, create jobs which are of a different quality, both in their requirements and in their guarantees or expectations of long-term security, for it is in the capital-intensive industries—and so many of the growth industries on which our industrial future depends are capital-intensive industries—that such jobs as are provided are generally jobs of a high level of pay and, perhaps more important, jobs which promise security in the economic circumstances of the country and which also carry the possibility of a continuing growth in the future.

So there has to be an element which positively encourages capital investment and re-equipment; and there have also to be elements which encourage the development of the infrastructure. This is an important element in a regional policy, though I do not think one should put one's whole emphasis on it. Such figures as I have seen suggest that the improvement of the infrastructure can be extremely expensive, and can be an element which carries the danger that one may spend one's money in the wrong way; that one may build very good roads only to find that industry does not develop at the places where it was expected to develop, and so the roads prove rather a disappointing addition to the infrastructure.

My Lords, these considerations carry us very far afield, and having commented that we must have a variety of elements in our regional policy, and having tried to show some of the elements which have a necessary place, and repeating my hope that we shall in due course hear a comprehensive set of counter-proposals from the noble Lords on the Front Bench opposite, I should like to conclude by coming to the point which was asked about the review of our regional policies which was suggested by the Hunt Committee. I think that there is not quite such a strong case for this review as might at first sight appear, because most of the Government's measures, and certainly most of the expensive ones in budgetary terms, are of comparatively recent introduction—1966, 1967 and onwards. These have been the landmarks in the development of the regional policy with which we are concerned to-day, and it clearly takes time for the new incentives to be reflected in the investment plans which firms make; it takes time for these plans to mature, and it certainly takes time for the projects to be fully developed and brought into operation. We take the view, notwithstanding what the Hunt Committee said on this subject, that it is too soon to be certain how far the very substantial and expensive measures which the Government have initiated are contributing to industrial growth and are changing the industrial patterns in the regions concerned.

In addition, there are a number of considerations about the statistical methods of measuring employment and of identifying the causes for the creation of different jobs which would make such an assessment a very difficult one to undertake, and anybody trying to under-take it would be confronted by a number of imponderables. It is very difficult, too, to make a review which separates the effects of regional policies from the effects, sometimes coincident, sometimes contradictory, of national economic policy. The Government are anxious to develop a reliable assessment of the costs and of the benefits of the policies which have been initiated, and the noble Lord, Lord Sandford, referred to one or two of the studies which are being undertaken at the present time on this subject. We are undertaking at official level a major review of the investment grants scheme, and we hope from this to learn what can be learnt about the operation and the effectiveness of this scheme. This is a complex study, which is bound to take some time if the outcome of it, the report produced, is really to be worth while on such a complicated question.

Also, as we have indicated, we are considering how a study can most effectively be made into the operation of the regional employment premium, but this study has not yet been put in hand. Regional employment premium has been in payment for just over two years, and I think it will be agreed that it would have been a rather unwise exercise to try to embark upon such a study with less than that degree of experience. The Ministry of Technology hope shortly to complete a major inquiry into the reasons which have led firms to site new projects either in the areas which get various forms of assistance or outside them, and into the subsequent experience which firms have had. This is clearly relevant to the problem that we are discussing.

LORD SANDFORD

My Lords, may I interrupt? It is interesting to hear of the inquiries that have been set up. But how does the noble Lord square the fact that an inquiry has been set up into the workings of one of the latest measures— the regional employment premium, which has been running since 1967—with his statement that it is too soon to start a comprehensive review of other measures which he says have not had long enough to work themselves out?

LORD DELACOURT-SMITH

My Lords, let me first say that if I gave the impression that we had set up studies of the operation of the R.E.P. I misled noble Lords. The position is that we are considering how a study of this subject can most effectively be made. Possibly some of the Press reports have gone a little further than the decisions that have so far actually been made. But, equally, I am sure that the noble Lord will agree that it is one thing to study one specific aspect of a whole range of regional policies and quite another to try to assess how that range of policies has operated when they have come into existence, so far as the legislative provisions are concerned, only over the last three years.

There is a further point. An indication of an extensive review of these matters might at the moment have the effect of discouraging firms from making investment decisions which we hope they are going to make and which will be helpful to the development areas. The Government have always accepted that development area policies should be kept under review. We valued and welcomed the review which the Hunt Committee made to the extent that their terms of reference allowed them to make; but we are of the opinion that on balance it would not be sensible to commit our-selves at the present time to a full-scale cost-effectiveness study of the kind the Committee recommended.

My Lords, we have touched, properly and necessarily, on major matters. But I hope, that the stimulating exchanges which we have had, and which may in due course find their setting in a wider debate, will not prevent the House from giving this Bill a cordially applauded Second Reading.

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