Development Areas and Distribution of Industry

Part of the debate – in the House of Commons at 12:00 am on 25th February 1953.

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Photo of Mr Peter Thorneycroft Mr Peter Thorneycroft , Monmouth 12:00 am, 25th February 1953

I cannot answer the hon. Lady without obtaining the figures, but I will see that she receives them in the course of the debate.

I have spoken about what can be done and what is being done with reference to particular areas. I should like to consider for a moment the position of the country as a whole. I have tried not to give too many figures, but I want to give a few at this point. From 1st January, 1945, to 30th September, 1951, 4,700 new factories were completed, representing 100 million square feet. At the end of that period 1,450 factories and extensions, representing 45 million square feet, were under construction. That is the contribution made by right hon. and hon. Gentlemen opposite during their period of office.

By the end of 1952, 6.000 factories and extensions had been completed of an area of 140 million square feet, and 1,100 projects of 50 million square feet are at present under construction. I am most anxious not to over-state what is happening. I am always very suspicious of statistics, which I find are available in large numbers, and which can prove almost anything. But what the figures show to me is that the rate of completions speeded up between October, 1951, and December, 1952, and that at the end of that period a larger area was under construction than at the beginning. I do not want to over-paint the picture, but I think those figures provide an absolute answer to anyone who says we have brought factory building to a standstill. We are building them faster, and at the moment there is a larger area under construction than when we started.

Those figures were for the country as a whole. How do the Development Areas benefit from it? Of the 6,000 factories built since the war, 1,600 were in Development Areas. If we take the matter by area and value, the Development Areas, which contain about one-sixth of the insured population, have had about 40 per cent. of the building. I think the Committee will agree that, with the difficulties which confronted those areas, they deserved some assistance of that character New jobs have been provided since the war in the Development Areas to the tune of something like 300,000.

I wish to say a word about the future policy, an issue in this debate to which I hope hon. Members on both sides of the Committee will direct some of their remarks. I should like to hear from them whether they think the general policy for Development Areas, pursued by this Government and by the previous Government, is on the right lines. The view has been expressed in some quarters that this policy should be dropped and that an alternative policy should be put in its place. It has been said that the Government should concentrate not on scheduled areas where there is unemployment but in any place throughout the country where in their view development could usefully be encouraged.

Professor Cairncross, in an interesting and illuminating Report, summed up the essence of this line of thought in the conclusions of his Report to the Scottish Council. He said: The Government should have power to contribute the whole or part of the cost of the erection of factories in any part of the country where conditions warrant this step. It is clear to those who have studied the Report that Professor Cairncross was prepared to assist industrial growth in promising locations ahead even of the need to reduce unemployment in other areas.

I do not say that there are not powerful arguments that can be adduced for a policy of that kind, but we must face the fact that if it were adopted it would entail not only the repeal of the essential Sections of the Act under which this and previous Governments have been operating, but a reversal of the basic policy which has been pursued. Hon. Gentlemen can develop the argument for it if they wish: I am merely trying to put the position clearly before the Committee. We cannot pursue a policy which has scheduled areas and given special advantages, and at the same time expect the Government to extend help everywhere. Those two are mutually contradictory. My right hon. Friend the Secretary of State for Scotland and I have been considering this Report. I hope that hon. Members on both sides will give us the benefit of any views they wish to express upon it, for this is indeed no party issue whatever.

For my own part, I would say that as at present advised I do not believe that the time has yet come for some fundamental change in development area policy. I see much force in continuing to pursue it on the lines so far followed and attempting to go on getting the results which I hope that I, and to some extent the right hon. Gentleman opposite, have managed to persuade the Committee have been achieved since the war.

I have sought to present a fair and balanced account. I have certainly not sought to disguise my anxiety and the anxiety of the Government at some of the problems which confront us in certain areas. There is no disguising the fact that the impetus towards industrial building is not as high today as it was in the post-war boom conditions. The trend can be seen in the applications for industrial development certificates They have fallen in the last 15 months. I am giving all the facts to the Committee. Hon. Members must judge. They have fallen to £75 million from £113 million in the corresponding period. The value of the building licences has averaged £8,200,000 a month compared with £8,900,000.

Let us face all these facts squarely. Let us try to see the whole picture, not just the part which happens to suit our argument. All Governments tread a narrow path between two abysses. If they fall down either of them they will find disaster at the bottom. On the one hand, is the precipice of inflation, an investment boom in factory building and a first-class balance of payments crisis. There is no doubt that the nation was falling down that precipice 15 months ago. We caught the nation by the coattails just in time. Let no one be under any illusion as to what happens if we follow that line. At the end of it there is mass unemployment, because we cease to be competitive and can no longer hold our place as a first-class trading nation.

It is equally true to say that there is a precipice upon the other side, a precipice of savage deflation, of neglected re-equipment and of men and women denied the opportunity of useful work. We are equally determined to avoid that. Only those who have walked this path know just how narrow and how slippery it is and how the wind and the weather, which are not within the control of any Government whatever their persuasion, buffets one in the process.

We have regained that path. We intend to stay on it and, while continuing to administer our distribution and development policy with full sympathy for the needs of these areas, we shall not forget the wider need of building a sound and enduring economy.