New Clause. — (Factory Estates.)

Ballot for Notices of Motions – in the House of Commons at 12:00 am on 14th April 1965.

Alert me about debates like this

Photo of Mr Roy Wise Mr Roy Wise , Rugby 12:00 am, 14th April 1965

The Board of Trade shall have power to grant industrial development certificates to approved developers for the building of factory estates in advance of their occupiers being known, and such conditions may be imposed thereon to ensure that the factories are occupied in accordance with such orders as the Board of Trade may issue—[Mr. Peter Emery.]

Brought up, and read the First time.

Photo of Sir Peter Emery Sir Peter Emery , Reading

I beg to move, That the Clause be read a Second time.

It will be evident to everybody who understands the Bill that we now jump from office development permits to industrial development certificates. The new Clause offers probably our only opportunity, on Report, to deal specically with the provisions of Clause 16. It is reasonable that we should point out to the House that when the First Secretary of State and Secretary of State for Economic Affairs announced his intentions in the House and in the White Paper—Offices. A Statement by Her Majesty's Government—no information was given that there would be any interference with industrial development certificates or industrial development certificate procedure.

It has therefore come as a blow to some elements who were attempting to modernise and build up the modernisation of industry, that the Government should take the powers specifically mentioned in Clause 16, as amended in Committee and, even before the Bill has become an Act, proceed to circulate through the Ministry of Housing and Local Government the action that they intend to take once the Bill is on the Statute Book. It is now a matter of considerable notoriety that an undated letter was sent in February by the Ministry of Housing and Local Government to local authorities in Bedfordshire, Berkshire, Buckinghamshire, Cambridgeshire, Derbyshire, Dorset, Essex, Hampshire, Herefordshire, Hertfordshire, Huntingdonshire, the Isle of Ely, the Isle of Wight, Kent, Leicestershire, London, Middlesex, Norfolk, Northamptonshire, Nottinghamshire, Oxfordshire, Rutland, Shropshire, Peterborough, Staffordshire, Suffolk, Surrey, Sussex, Warwickshire and Worcestershire.

I read out that long list so that hon. Members should be under no misapprehension as to how extensive and all-pervading in the southern part of England are the regulations that the Government intend to bring in under the Bill in reducing the level of industrial development certificates.

The letter states quite clearly that when the Bill becomes an Act of Parliament it is the intention of the Board of Trade to reduce from 5,000 sq. ft. to 1,000 sq. ft. the additional extension which can be made for industrial development without an industrial development certificate. This matter is causing considerable concern in the more modern and up-to-date businesses which are at all times wishing to expand. It is not a good enough answer for the Government to say, "We will give them I.D.C.s anyway ". That is not the point. Up to now businesses have realised that they have the right to pursue this form of factory extension without an I.D.C. Now they realise that they have to go through the rigmarole and bureaucracy involved in obtaining an I.D.C.

The real object of the new Clause is to give the Government specific powers to deal with small firms and industrial development where we in Committee argued for many days that there is a specific need. I have suggested that the Government do not understand the way in which small businesses and small industries expand and extend their operations. The view that it is the company itself which asks for an industrial development certificate to modernise its plant, or to move to a new plant, is not in accordance with the facts. What really happens is that a small business—usually under-capitalised but at all times wishing to expand—spends its money not on bricks and mortar but on salesmen, new machinery and all the expenses which go with the normal expansion of the business, and it cannot afford the capital cost of putting up a new plant.

How have these businesses been able to find new and modernised plant, or factories to move to in the past? They have looked round. They have found estates where small industrial factories have been built, and they have been able to rent such factories. I have made a small survey of a number of firms which have moved from back-street houses, garages and from dilapidated slum properties which are no longer of any use for living accommodation but where it is possible to install lathes or sewing machines or some sort of industrial equipment. A number of these pseudo factories —they are not really factories; they are a disgrace—have been released by firms moving into small factories usually of between 2,800 and 4,500 sq. ft. These, up to now, have been able to be built and have been convenient for a firm wishing to modernise and move into a factory with proper sanitary accommodation.

The position that the Bill makes clear is that the level of 5,000 sq. ft. may be reduced, and it is obvious from the letter to which I have referred that it is the Government's intention to reduce it to 1,000 sq. ft. in the areas which I have mentioned earlier.

Photo of Mr Daniel Jones Mr Daniel Jones , Burnley

Does not the hon. Member think that it is not so much the Government's intention to limit the areas here but to extend them in other parts of the country where this development is badly needed? Will he address himself to that point? Further, I invite him to agree that aggrieved as industrialists may feel in the South, that feeling is not shared in the under-developed areas of the North, for reasons which I hope will appeal to the hon. Member.

Photo of Sir Peter Emery Sir Peter Emery , Reading

I am always grateful to the hon. Member for his interjections. I intended to use the most helpful interjection that he made in Committee to enforce my arguments later on. I will address myself to the point he has made. I ask the hon. Gentleman to interrupt me if I misinterpret him. He suggests that it is not the wish of the Government to be regressive or to limit. They wish to see this expansion go to other parts than to the counties which I have mentioned, to help the North-East or Scotland.

Photo of Sir Peter Emery Sir Peter Emery , Reading

I suggest to the hon. Gentleman that in theory that would seem a most logical argument, but in practice—this is our condemnation of the Board of Trade—it will not work.

Photo of Sir Peter Emery Sir Peter Emery , Reading

The hon. Gentleman asks, "Why?" I will explain. The type of small firm which would occupy this sort of accommodation would employ fewer than 30 people, as a rule. The average is generally between 18 and 28. The entrepreneur, the "boss", is usually the bookkeeper and a part-time salesman. He is attempting to build up a business which has local connections. He employs local labour and often his employees are not represented by a trade union. That will come later. Often the employees comprise members of his family, and that is the only reason that the employees are willing to work in the sort of accommodation in which such a business is started.

It is madness to believe that if a business of that sort is being conducted in Hackney or the East End of London or in any part of the stipulated area—or in the North-East—the owner will move 200 or 300 miles to occupy new factory accommodation.

Photo of Mr Daniel Jones Mr Daniel Jones , Burnley

Many have done—

Photo of Sir Peter Emery Sir Peter Emery , Reading

The hon. Gentleman suggests that many have done so—

Photo of Sir Peter Emery Sir Peter Emery , Reading

—but I do not believe that is true.

Photo of Sir Peter Emery Sir Peter Emery , Reading

I should need a lot of proof. I hope that the hon. Gentleman will have an opportunity to intervene in the discussion and give us proof of what he is saying. After we have completed the Committee stage discussions on this Bill the hon. Gentleman says that he has proofs that many firms have done this. I challenge that statement, and I hope that the hon. Gentleman will intervene and bring his information to the House, if he can. That may greatly affect the way in which we shall deal with this new Clause.

In my experience it is the case that the sort of firms to which I have referred never move more than 20 or 25 miles, usually no further than the range of local transport facilities, because such firms use local labour and "know how" and are not willing to risk losing that by going elsewhere. If the owner cannot get a new factory in the area where he is operating, he does not move. He attempts to expand amid the bad, insanitary and unreasonable factory conditions which he is occupying.

Photo of Mr Daniel Jones Mr Daniel Jones , Burnley

Is the hon. Gentleman arguing that, even if it is in the interest of the nation, such a person should not move but should still be allowed to remain in a slum?

Photo of Sir Peter Emery Sir Peter Emery , Reading

My argument is that it is in the interests of the nation that he should be made efficient and be allowed to expand. The Board of Trade should realise that many of the big exporting companies—B.M.C. is the best example—started in small back rooms or garages. If we limit that sort of operation we are limiting much of the contribution which small firms can make.

Photo of Mr Daniel Jones Mr Daniel Jones , Burnley

That is happening in the North today.

Photo of Sir Peter Emery Sir Peter Emery , Reading

The hon. Gentleman has gone back to the view that if we accept the Motion we shall hurt the North-East or Scotland. This is not a matter of party politics. On what we have attempted to do in the North-East our record is clear. I believe it is true that not one in a hundred of the firms which might be affected would be persuaded at any time to move further than 20 or 25 miles from the area where it now operates.

Many of these firms are classification 3, to which we referred during the Committee stage discussions, which are satellite industries. They include such things as laundries, bakeries and vehicle repair firms. These people cannot move, because the whole business is connected with the area where it is situated. It is nonsense to try to use such an argument in this case.

5.15 p.m.

Photo of Mr Henry Brewis Mr Henry Brewis , Galloway

I am not entirely with my hon. Friend on this point. Is he proposing to allow these businesses to expand in the South? Will not that undoubtedly bring people down from Scotland and the North, which surely is the last thing we wish to do?

Hon. Members:

Hear, hear.

Photo of Mr John Temple Mr John Temple , City of Chester

My hon. Friend the Member for Reading (Mr. Peter Emery) mentioned in the earlier part of his speech—I did not correct him then—that this is applicable to the South. It is applicable to the North-East and to a wide portion of the Midlands as well, and my hon. Friend will know that.

Photo of Sir Peter Emery Sir Peter Emery , Reading

The letter to which I referred is applicable to the South, and in Wales—

Photo of Sir Peter Emery Sir Peter Emery , Reading

Shropshire, Derbyshire, and to the counties which I read out.

The powers under the Bill allow this to be spread anywhere in the United Kingdom. My hon. Friend will realise from Amendments on the Notice Paper that we are attempting to ensure that certain parts, whether in the development districts or in Scotland or the North, should be excluded. It is correct that these powers would be inferred and would possibly apply in Scotland as anywhere else. I do not want to avoid the other point raised by my hon. Friend the Member for Galloway (Mr. Brewis) about the possibility of attracting employment. There was a loud "Hear, hear" from the Government Front Bench to that. Of course there is always the fear that some people will leave Scotland to come to the South, or will leave York to come to London, or leave Wales to come to the conurbation round the Metropolis. Anyone who does not accept that as true as not facing facts. It is the situation which exists now and which I think will exist in 50 years' time.

Photo of Mr Daniel Jones Mr Daniel Jones , Burnley

It is a situation that we ought to control.

Photo of Sir Peter Emery Sir Peter Emery , Reading

The trouble will not be cured by dealing with small factories and the expansion of satellite industries. It is necessary to provide major schemes, and it is by the provision of large factories that we shall be able to attract industry to the North-East and to Scotland.

I wish to deal specifically with this new Clause. It should be clearly realised that our objections here were made during the Committee stage discussions and there have been responses from the Government. They accepted the importance of this type of industrial development and, indeed, redevelopment, but rejected our Amendments in Committee. The President of the Board of Trade said: The administration of I.D.Cs has always been very flexible and they have been liberally granted for local industries where … they cannot be located at any distance from or outside the area. and where there is an undoubted need for them."—[OFFICIAL REPORT. Standing Committee D, 30th March. 1965; c. 695.] Here is the Board of Trade admitting the very point that I made just now to my hon. Friend. It admits that there are industries which it is essential for us to have in the South and situated near their original place of occupation.

The President of the Board of Trade went on to say that he wished to steer industry, particularly light industry, to Ludlow, Knighton, or even Montgomeryshire. He considered that it is necessary to have some control of the kind that the 1,000 sq. ft. I.D.C. would allow. He said: This is precisely the purpose for which we should hope to use ".—[OFFICIAL REPORT, Standing Committee D, 30th March, 1965; c. 704.] the present requirements.

I do not believe that the assurances which were given by the President of the Board of Trade and, later, the Minister of State mean very much. The purpose of the control is to prevent industry from bettering itself in its present location and, by withholding an I.D.C., to steer industry into some other location. The applicant has been told that his request will be sympathetically and flexibly considered, but, honestly, this is only an assurance and has nothing to do with the Bill itself.

Planning authorities have been able to use powers, given to them under the 1947 Act, to ensure that where property such as I have referred to has in the past been released, it will not again be misused if a planning application has been granted for the type of extension to which I am referring. Therefore, there are already specific powers to stop the misuse of vacated property which might apply in the instances to which I have referred. Also, it is important to realise that the Minister of State gave an assurance that it has been the Board of Trade's policy to give very favourable consideration to factories which are caught in the situation which I have described. How much value does he place on such an assurance? I am not attempting in any way to make this a party political point. I am trying to put the position of a firm which wants to expand; it will look at the law. If the Minister of State feels that he can give that most adequate assurance, why cannot it be written into the Bill?

I believe that in reply to this Clause the Minister of State will say, "This is unnecessary. We do not need it. We can do this now." That may or may not be true. It is true that after the Bill becomes an Act the Board of Trade can grant every I.D.C. or O.D.P. asked for, but it is evident that it will not do that. Therefore, industry must realise that there will be some deviations about I.D.C.s.

It seems to me that it has not been the policy of the Board to grant I.D.Cs. freely by the method which I have suggested, because it has never been necessary. Because the regulations did not exist, it was not necessary. So it is not fair to say "We have always given I.D.Cs. freely in the past." The Board of Trade has given them at other levels and in response to other types of application. It has never done this in respect of I.D.Cs. for development below 5,000 sq. ft., because that was not necessary. Therefore, it is not a fair argument to say, "We have granted them freely and will continue to do so". We have here a new criterion put into the law, and we are particularly concerned about it. Experience has too frequently shown that assurances given in the House, however much they were meant at the time—I have no doubt that the Minister means exactly what he says at the moment—have no legal binding force. Indeed, the Minister must realise that if the situation changed he could abide by the letter of the law and the manner in which the law has been made clear.

During the Committee stage the hon. Member for Burnley (Mr. Dan Jones) said something with which my hon. Friends and I were delighted to agree, that men in business should be able clearly to see the end of the road when they enter upon any project. That is very fair. All of us would agree with him. But we believe that when a man starts a business project he ought to have certain assurances given to him by the law and that the law should allow him to see to the end of the road whenever possible. There may be problems and risks, but he should be able to judge fairly how the law stands. Suddenly in the middle of the road—for some it will be very near the beginning of the road—the Bill sets up a new obstacle. That is wrong in this instance. There are certain people who may be affected by the Bill as it stands, and the new Clause is trying, in another sense, to deal with them. They may already have made an investment for erecting the type of factories which the new Clause would allow. They have been able quite clearly to see the risks involved and the increased costs that they might have to face. Having seen to the end of the road, they have made their decision. Then the Government say, "No. You now need an entirely different permission". It means that the Government are altering the rules of the game while those persons are playing the game.

We believe this to be wrong. It was specifically towards that end that one of my hon. Friends tried to deal with matters of compensation to cover the expenses of that type of man. The new Clause would allow, in a manner which has not been made evidence before, that person to be covered when dealing with industrial development certificates for the building of small estates. We like the simile of the hon. Member for Burnley, and we hope that he will support us in pressing this matter on the Government.

The main purpose of the new Clause is to make clear that the small types of business or industry which go into the type of development dealt with under the limit of 5,000 sq. ft. do not themselves apply for I.D.C.s. They do not spend their own money on development permission, and they have to rent a factory if they are to move. It is to provide for the modernisation of those industries that we most strongly urge the Government to accept the new Clause.

5.30 p.m.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

May I ask hon. Members to confine themselves to the new Clause before the House? The debates so far, since I came into the Chair today, have been remarkably wide. Mr. Costain.

Photo of Sir Albert Costain Sir Albert Costain , Folkestone and Hythe

I support my hon. Friend the Member for Reading (Mr. Peter Emery) in the new Clause, but first of all I ought to read the new Clause to hon. Members opposite. I ought also to apologise to my hon. Friends that we are putting forward such a Socialist Clause. I am certain that hon. Members opposite have not read it and have not realised that it is the biggest piece of Socialist amending legislation which I hope the Conservatives ever put forward. It puts complete power in the President of the Board of Trade. It is amazing that the hon. Member for Burnley (Mr. Dan Jones) should in any way oppose it.

Photo of Mr George Darling Mr George Darling , Sheffield, Hillsborough

I am sure that my hon. Friend the Member for Burnley (Mr. Dan Jones) was not quarrelling with the new Clause. He was quarrelling with the very curious argument which the hon. Member for Reading (Mr. Peter Emery) adduced in support of it, which had nothine to do with the new Clause.

Photo of Sir Albert Costain Sir Albert Costain , Folkestone and Hythe

I take it from those helpful remarks that the Minister will accept the new Clause.

We have put it forward from this side of the House because those hon. Members who were in the Committee realised what a narrow bit of Socialist legislation the Bill is. There must be some enter- prise introduced into the Bill to make it practicable. Whenever I speak in the Chamber I try to describe my own practical experience of matters to the benefit of the House, and I can claim a good deal of experience in building factories. I want to draw the Minister's attention to what happened in the new towns which were created by Socialist Governments. They did not get off well at the start because they took too narrow a view of the matter. But they got off to a success when the Conservative Party came into power and introduced the private enterprise element which we suggest in the Clause.

I recently went to Harlow New Town, with which I have some connection, on a tour of the factories to find out how they had evolved. At one time they could not get factories going there, but suddenly there was a spurt of factories. If the Minister looks up his records of the time when my right hon. Friends were in power at the Board of Trade in 1951 he will find that in order to get these new towns going they agreed to the building of advance factories. Previously there had been the greatest difficulty in getting factories to move from London to a new town.

Of necessity industrialists are very cautious about moving from one area to another, and when they realise that it will take from two to three years from the time they fill in the first form to the time the furniture van arrives to move the office furniture, there are very many excuses why they should not move. There is always some member of the board who says, "Why should we move? It will take too long."

But immediately Harlow New Town began building these advance factories the light began to dawn. Those members of boards which were debating whether to move or not suddenly realised that because the advance factories had been built they would be able to move at very short notice. They were able to persuade their colleagues on the board that they ought to move. This just tipped the balance in favour of the new factories.

We ask in the new Clause that the President of the Board of Trade should have power to grant industrial development certificates to approved developers —developers approved by the Board of Trade. This is Socialism at its best. It gives no power to anyone but the President of the Board of Trade. It does not give the President of the Board of Trade any special right to build a factory, but it gives him the right to put some private enterprise into his Department. Having given that permission, he is offered a further safeguard in the Clause, so that he has no excuse for not accepting it; he can impose such conditions as to ensure that these factories are occupied in accordance with such orders as the Board of Trade may issue. No more water-tight measure has ever been produced from this side of the House. Why cannot the Minister immediately say, "We are surprised that you introduced the new Clause and we most certainly accept it"?

Photo of Mr George Darling Mr George Darling , Sheffield, Hillsborough

I was waiting for an hon. Member apposite to address himself to the Clause, as the hon. Member for Folkestone and Hythe (Mr. Costain) has done—and I was glad that he did so, because I say to him right away that this is a Socialist Clause. I am sure that his hon. Friend the Member for Rugby (Mr. Wise) already has doubts about supporting it.

If the Board of Trade did not possess the powers set out in the new Clause, we should require a new Clause of this kind in order that the Board of Trade could do the job which the hon. Member for Folkestone and Hythe has been describing. In fact, the Board of Trade already has powers to grant I.D.C.s for the building of factory estates, even though the occupiers of the factories may not be known when the I.D.C. is issued. The Board already has these powers, and in certain parts of the country they have been exercised. I do not know whether the hon. Member for Reading (Mr. Peter Emery) wishes me to spell this out in great detail, but the powers are there.

Photo of Mr Henry Brewis Mr Henry Brewis , Galloway

Are they exercisable in the development districts?

Photo of Mr George Darling Mr George Darling , Sheffield, Hillsborough

Yes. They could be exercised and no doubt have been exercised. For instance, if a local authority went ahead with a factory estate of some kind and there arose the kind of circumstances which the hon. Member for Folkestone and Hythe had in mind, it would obviously be desirable that the factory estates should be built in this way and the industrial development certificates given. The advantage of the development district lies in the loans, grants and other inducements which would arise.

Photo of Sir Geoffrey Johnson Smith Sir Geoffrey Johnson Smith , East Grinstead

Is the hon. Member saying that if a local authority, as part of the redevelopment of an area, for example slum clearance, wanted to re-establish a non-conforming industrial user, when the Bill became an Act it would not prevent such a local authority from being able to re-establish such a non-conforming industrial user or must it go through all the rigmarole of the Bill?

Photo of Mr George Darling Mr George Darling , Sheffield, Hillsborough

Planning permission and the I.D.C. would have to go together. This goes on all over the country, except in Northern Ireland. It might be helpful if I read the proposed new Clause. It states: The Board of Trade shall have power to grant industrial development certificates to approved developers for the building of factory estates in advance of their occupiers being known, and such conditions may be imposed thereon to ensure that the factories are occupied in accordance with such orders as the Board of Trade may issue. Those powers are already in the hands of the Board of Trade. There is, therefore, no need to re-enact them in the Bill. They can be used in circumstances where it is appropriate to develop estates of this kind and will be so used.

The hon. Member for Reading drew attention to the circular which was sent out explaining the 1,000 sq. ft. limit which will be applied in the Midlands and the South. I will quote, since we considered this in Committee, the statements which were made on Second Reading, because I assure hon. Members that there was no dubiety on this issue. This was not suddenly sprung on the Committee. My right hon. Friend the President of the Board of Trade said: Industrial estates have been built up out of these small units"— that is, under 5,000 sq. ft. giving in total employment for several hundreds of people. This may be one reason why former Presidents of the Board of Trade repeatedly protested the resolute toughness with which they were applying the I.D.C. control, while it became obvious to the naked eye, and from the statistics, that the situation was getting worse and worse. My right hon. Friend went on: We propose, therefore, when the Bill becomes law, to introduce an order providing that, in the London, South-East, Eastern and Midland regions of the Board of Trade, the limit should be set at 1,000 sq. ft., but that it should be left at 5,000 sq. ft. in the rest of the country. My right hon. Friend went on to explain why, and one of the reasons he gave was mentioned by the hon. Member for Galloway (Mr. Brewis). We want to know the extent to which we have this congestion in the Midlands and South-East, when only about 10 per cent. of the industrial development is going through with I.D.Cs. Planning permission is given for the rest, and obviously the rest must be under 5,000 sq. ft. My right hon. Friend went on to say: My right hon. Friend the Minister of Housing and Local Government is writing to local authorities "— that was the letter to which the hon. Member for Reading referred— in the areas I have mentioned drawing their attention to the Bill's provisions and to the Government's intentions and asking them to consider applications for planning permissions for new building with special care from now on, until the Order is made."—[OFFICIAL REPORT. 1st February, 1965; Vol. 705, c. 742–3.] This was, therefore, not a circular that was suddenly sent out by the Ministry of Housing and Local Government, or something different or novel, because the Ministry is constantly sending out circulars giving advice to local authorities. It sent out a circular in 1962 dealing with this problem and, in that circular, the Ministry explained that the Board of Trade had the same kind of power proposed in the new Clause.

I repeat the assurance which has been given about the circumstances mentioned by the hon. Member for Reading; of slum clearance, central developments in towns and the kind of growth and development which affects the small factory. With my usual lucidity and clarity, if I may say so, I gave that assurance in Committee, when I said: It has been the Board of Trade's policy to give very favourable consideration to factories of more than 5,000 sq. ft. which are caught in the situation … described. Obviously, we would not treat factories of less than 5,000 sq. ft. with any less sympathy. 5.45 p.m.

Having said that, the hon. Member for Reading said, after thanking me for having given that assurance: It will probably meet the case I have advanced."—[OFFICIAL REPORT, Standing Committee D, 30th March, 1965; c. 706.] It is true that that assurance, which I now repeat, will meet the case which he advanced. We need this 1,000 sq. ft. provision for the reasons I have given. However, the 1,000 sq. ft. provision has nothing to do, except indirectly, with the new Clause. As I said, the Clause is clearly a Socialistic one, as the hon. Member for Folkestone and Hythe rightly said. If we did not have this power we would certainly be asking for it for the reasons given by the hon. Member for Folkestone and Flythe. Because we have such power the new Clause is unnecessary.

Photo of Sir John Hall Sir John Hall , Wycombe

It might help hon. Members to make up their minds about the new Clause if the Minister would quote the Statute under which this power is given.

Photo of Mr George Darling Mr George Darling , Sheffield, Hillsborough

It is contained in the various Distribution of Industry Acts. If the hon. Gentleman will look them up he will find them. It is rather a negative arrangement, for there is nothing in the Statute which says that the Board of Trade cannot issue an I.D.C. if the occupiers are not known. It refers to the developer who will need an I.D.C. in the circumstances we have been discussing. There is nothing in the legislation which prevents the Board of Trade from issuing a certificate in that situation and, therefore, we have power to issue certificates in the manner sought by the new Clause. That power has been exercised and can continue to be exercised. Thus, the new Clause is not needed.

Photo of Mr Roy Wise Mr Roy Wise , Rugby

The Minister of State seems to have correctly read my views about the new Clause. I congratulate him on his perspicacity. I will not reply in detail to the pure spirit of 1984 we got from the hon. Member for Burnley (Mr. Dan Jones)—because he went a little too far in general principles in his intervention.

I gather that the Minister will advise my hon. Friends either to reject or to withdraw the new Clause on the grounds that it is unnecessary. I suggest that it is not only unnecessary but revolting because it is designed to extend a power that is wholly improper in relation to the manner in which the Board of Trade should give directions—not only the giving of directions but almost the invention of industries for particular areas.

Hitherto, in all cases, the Board of Trade has been able to interfere if the area involved was of more than 5,000 sq. ft. We are now faced with a situation in which the Government are proposing to reduce that area to 1,000 sq. ft. In other words, one will not be able to build even a tool-shed without the quiet acquiescence of the Board of Trade. Anybody who wants to put up a factory on a new estate may find himself having to go cap in hand to request permission to add a tool-shed, if it is over 1,000 sq. ft., in which to keep a lathe and a band saw.

There are large numbers of small concerns which cannot be directed arbitrarily. Hitherto, they have had a fair chance of setting up in an area which is attractive to them because, for instance, it is a busy area. Consider the case of a man who wishes to set up a small printing works. He is more likely to want to do that in a small Midlands town, where there will probably be plenty of business for him, rather than in a partly derelict area where he will get less business and which probably already has sufficient printers to do the work that is required. If the new Clause became part of this already rather tiresome enactment, such a man would be largely debarred from setting up business in the way he wishes. He would find, first of all, that the Board of Trade would have decided whether or not it liked printing works, and also whether or not the area was a fit one in which to do anything like that.

I cannot see that this is anything but—not Socialism—

Photo of Mr Roy Wise Mr Roy Wise , Rugby

Beyond that. I do not think that even Stalin ever thought of this—

Photo of Sir John Hall Sir John Hall , Wycombe

Is not my hon. Friend's indignation wrongly addressed? Should it not be addressed to existing legislation? If we understand the Minister correctly, the power asked for in the new Clause already exists, so that the Board of Trade can do precisely what it is now being asked to do.

Photo of Mr Roy Wise Mr Roy Wise , Rugby

I rather fear that most legislation dealing with development districts came from our side of the House, and I regard it as revolting from whichever side it may come. But as far as I can see, the Board of Trade at present has this power only in respect of areas of more than 5,000 sq. ft. It is only now that we come down to the smallest area in which one could swing a cat—not that I have ever swung a cat: I cannot say precisely what number of square feet are required for that purpose.

I trust that this new Clause will be allowed to perish peacefully, without too much fuss. It is dangerous to extend the Board of Trade's present powers. I am still convinced that in most cases industry would get on much better without the Board of Trade having these powers. I am very reluctant to allow any further interference with what is very necessary in many areas for various ancillary trades.

There is an example in addition to that I gave of the printing works. A number of very small firms carrying on business in very small workshops make vitally important precision goods for bigger firms. When one of the bigger firms comes along it is no good saying that such small concerns should go to Newcastle-upon-Tyne to make their precision instruments. They want to make their precision instruments on top of their market. As I said more than once in the Standing Committee, the tendency of industry is to go where communication costs are lowest, and that applies to small as well as to big firms. I think that it would be intolerable to allow the Board of Trade to prevent a very large number of these firms from taking this perfectly sound economic step.

Photo of Sir Harwood Harrison Sir Harwood Harrison , Eye

I was carried away by the powerful speech of my hon. Friend the Member for Reading (Mr. Peter Emery), and I did not immediately thereafter try to catch your eye, Mr. Deputy-Speaker, because I wanted to see how the debate developed.

I am now told from my own back benches that this new Clause is the most extraordinary piece of Socialism there could be, but I think that my hon. Friend moved its Second Reading because he foresees that some such powers may be necessary as small businesses might not, under the Bill, be able to extend on their present sites with the limit reduced from 5,000 sq. ft. to 1,000 sq. ft. An area of 1,000 sq. ft. may sound big, but it is only 17 yds. by 6 yds.

Much has been said to the effect that the whole of the South-East is very crowded. In the Eye division I have over 180 parishes, and although in this last year we have had a migrant population for the building of the atomic power station at Sizewell, my electorate has been going down every year, and we have been worried about where some of our boys and girls go. I thought that the hon. Member for Norwich, South (Mr. Norwood) disagreed, but I see that he now nods.

Photo of Mr Christopher Norwood Mr Christopher Norwood , Norwich South

I did not question the statement made by the hon. and gallant Gentleman; I merely said that I could well understand the reasons for it.

Photo of Sir Harwood Harrison Sir Harwood Harrison , Eye

In some ways we are rather like other parts of the country which have been referred to—Scotland, and the rest—because we have been losing our young people, which is bad for the corporate life of our villages. Nevertheless, during the last five or six years I have seen 20 or 30 of our more enterprising young men start such businesses as agricultural engineering, agricultural contracting, and so on. There has been an increase in the size of the local village garage, whose proprietor now wants a showroom in which to display his cars and lorries for sale. These young men have also gone into business as feedingstuffs and corn merchants, maltsters, the manufacture and sale of wrought iron work, drainage equipment, and other things.

They start in small premises in their villages, and have an expanding labour force. These enterprising young men are in some ways already threatened by the Budget, but is the Bill part of the Socialist prejudice against such private enterprise? If, at present, they have 2,000 sq. ft. of factory space and want in future to add another 2,000 ft., is it probable that they will face the threat of not getting permission because Suffolk is supposed to be part of the overpopulated part of the South-East? In these villages, businesses like this should have the right to develop to meet the local needs of the villagers in a more mechanical age.

It is that aspect that worries me in what the Minister has said, and I should like to be reassured that businesses in villages in Suffolk, Norfolk, Essex, Huntingdonshire and Cambridgeshire would be able to get permission to expand by another 2,000 or 3,000 sq. ft., as they have been able to do in the past.

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Wanstead and Woodford

One of the pleasant things about this friendly debate is that the issues raised by the new Clause clearly cut across party differences, and hon. Members are able to address their arguments to its merits in relation to the problems as they affect their own constituencies. If I find myself taking a view different from that of my hon. Friend the Member for Rugby (Mr. Wise), it is because I represent, in Wanstead and Woodford, a constituency in the Greater London area which has been affected by the increasing congestion of the South-East. For that reason I support, and made it clear at the time of the election that I supported, a stronger regional policy. I am therefore in broad sympathy with the general objectives of this Bill.

In these matters, I do not even begin to have the experience that my hon. Friend the Member for Folkestone and Hythe (Mr. Costain) has, and I did not have the honour to serve on the Standing Committee. I have, however, had some experience in industry of the problem of obtaining industrial development certificates in different parts of the country, and I can, therefore, speak with some limited knowledge of the field we are considering.

It was a little disingenuous of the Minister of State, if he does not mind my saying so, to say that this new Clause has nothing to do with Clause 16, and that earlier speakers in the debate, and particularly my hon. Friend the Member for Reading (Mr. Peter Emery) in his powerful speech, had somehow been using the new Clause as a peg on which to hang irrelevant arguments. That is not so. The new Clause must be looked at against the background of the changes which it is intended to introduce as a result of the main Clause. There is, notably, the change which reduces the figure from 5,000 sq. ft. to 1,000 sq. ft. above which an industrial development certificate for a new factory will have to be applied for.

6.0 p.m.

My experience of this legislation and some of the remarks made by my hon. Friends and hon. Members opposite suggest that the industrial development certificate procedure has been of relatively limited effectiveness in attaining the purpose at which it is aimed. The reason for this is not difficult to see. When one applies for a certificate one of the pieces of information which has to be filled in on the form is the number of employees on the site and the number of additional employees who will be found working there after the development is completed. In many cases it is not difficult to say that there will be no increase in employment because all one is trying to do is to remove congestion which exists as a result of the increased activity arising since the last expansion.

Having got the industrial development certificate one comes along some years later and asks the Board of Trade for another certificate and states that there will be no increase in employment. The representative of the Board of Trade finds that the employment has been increased by, say, 500 people, an increase for which no certificate was needed but which arose because of the expansion of the factory. This is the background against which we are considering the new Clause. Reducing the level from 5,000 sq. ft. to 1,000 sq. ft. will intensify the difficulty. It may be harder to do the development in dollops of 5,000 sq. ft. but easier in dollops of 1,000 sq. ft. This general change may militate against the effectiveness of the general policy which the Bill is intended to follow.

My hon. Friend the Member for Reading quoted from the circular letter sent out by the Ministry of Housing and Local Government. I confess that I was tempted to improve on Bernard Shaw in the words he put into the mouth of Eliza Doolittle "In Hampshire, Herefordshire and Hertfordshire hindustrial hinnovation will 'ardly hever 'appen". It will become more difficult for small businesses to establish themselves in new factories which often alone can provide the stimulus to pull themselves into the second half of the twentieth century.

The hon. Member for Burnley (Mr. Dan Jones), who has now left the Chamber, objected to the arguments adduced in favour of the Clause on the ground that the intention would be frustrated in that industries would not be persuaded to move to various parts of the country where we want to see them established. That was based on a total misconception of how these things work. The point was made from this side of the House that very small firms with whom this Amendment is concerned can hardly ever be induced to move on their own to sites hundreds of miles away. To attempt to promote a regional policy by directing industry at that sort of level—firms which employ 18 to 28 people—would be flying in the face of logic.

Fortunately, this is not the only method by which a regional policy can be pursued. The most effective course is not by means of using the "stick" because in a free country and a basically free economy the stick is not the most satisfactory way if implementing policy. The most effective way is by use of the "carrot". There is no doubt, and I am sure that the Minister of State will agree that it has been the free depreciation offered by my right hon. Friend the Member for Barnet (Mr. Maudling) in his Budget, two years ago—

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. The debate is getting very broad again. I hope that the hon. Member will come to the new Clause.

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Wanstead and Woodford

With respect, Mr. Deputy-Speaker, the argument is that the new Clause is necessary to make sure that modernisation can take place within a pattern of industry where regional considerations have but a limited application.

I was about to argue—and I apologise if I was out of order—that regional objectives can be more effectively attained by other means. If I may, I wish to make one suggestion in this connection which has a relation to the small firms and the way in which we want them to move. That is to ensure that the basic large firms, which are often capital-intensive firms, should be given maximum incentives to establish themselves in areas of high unemployment.

It is a criticism of the way in which the policy is being implemented that a test of labour intensiveness is applied, that is, whether one can establish that a firm will employ enough labour, but these big firms are not given an incentive. This is a great mistake because these are the firms which would attract small satellite firms to settle with them in the development districts.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

I make no comment on the merit of the hon. Member's arguments, but he must address himself to the new Clause and take note of what the Chair says.

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Wanstead and Woodford

I apologise if I was guilty of failing to take note of your Ruling, Mr. Deputy-Speaker.

I was under the impression that my argument was related to the promoting of modernisation of the small firms within areas of high economic pressure—the phrase used in the publication of the Town and Country Planning Association—by allowing the establishment of small factory sites without having to go to all the rigmarole of the I.D.C. procedure, and that this was a necessary corollary of the effective policy of trying to persuade these firms to move to development districts by linking with big, capital-intensive, basic firms which provide the raw materials, a number of small firms. The impact of the Budget last week will reduce the effectiveness of that inducement.

Hon. Members:

Order.

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Wanstead and Woodford

I shall not pursue that, particularly in view of the Rulings you have given, Mr. Deputy-Speaker, but I suggest that the attempt to control, to try to promote, regional development and particularly to try to promote opposition to the drift to the South-East and persuade firms to go north is wrong in relation to these small firms. We ought to give every encouragement to them to modernise and innovate and bring themselves up to date by establishing the sort of small factory estate—flatted factories and things of that sort—which are coming more and more into use without having to go through the rigmarole of the industrial development certificate procedure.

Photo of Sir Geoffrey Johnson Smith Sir Geoffrey Johnson Smith , East Grinstead

The House will recollect that I put a question to the Minister of State. I did not think that the hon. Gentleman's answer was altogether satisfactory. During the last few minutes I have had the opportunity of consulting some of my hon. Friends, who have come to the same conclusion. My question may have been so phrased that it was not as clear as it might have been. This may have led the hon. Gentleman to give an answer which was not as clear as he would like it to have been. I shall spend a few minutes trying to express more clearly what is in my mind, because it is a genuine point. I know that the Minister of State will be indulgent with me, because he knows that I did not have the honour, enjoyed by himself and other hon. Members, of being a member of the Standing Committee. Therefore, I am not as familiar with the Bill as some hon. Members on both sides are.

The point upon which I seek clarification is this. The Clause, if the House were disposed to agree to it, might help me in some respects. I ask hon. Members to think of an area which has within its boundaries industrial companies engaged in light industry, which is regarded by the planning authority as a non-conforming industrial user. To deal with the problem, many local authorities try to set up small trading estates. When the time comes to clear the area, they tell the companies affected, "We have to pull you down. You must move away. We have the opportunity of providing space close to the area which has been prepared in advance".

Sometimes this offer is taken advantage of by a company if it falls into the category of a non-conforming industrial user. On other occasions the company decides not to take advantage of the offer, but moves further afield. As my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) made clear to the House, in his persuasive and eloquent speech, many companies are of such a size that they cannot move far away; they are part of the local industrial pattern.

If the Clause is not accepted, to what extent will such companies and local authorities have to go through the procedure laid down in the Bill, particularly in the light of Clause 16? In my constituency there is a local authority which is concerned about this aspect of the Bill, because it has a number of nonconforming industrial users and wants to re-establish them within the area. The hon. Gentleman would help that local authority and, no doubt, other local authorities in areas affected by the Bill if he explained to the House precisely how the Bill would operate in such a situation.

Photo of Mr George Darling Mr George Darling , Sheffield, Hillsborough

An industrial development certificate will be required. The hypothetical development described by the hon. Member for East Grinstead (Mr. G. Johnson Smith) would be involved in the planning arrangements of the local authority—slum clearance, and all the rest of it. But the erection of the new factory that the displaced firm would go into would require an I.D.C. It is part of the planning procedure. This is not something new. This has gone on for a long time.

I can only repeat the assurance which I gave in Standing Committee, and which was accepted by the hon. Member for Reading (Mr. Peter Emery), that it has been the Board of Trade's policy to give very favourable consideration to applications for I.D.C.s in these circumstances. I went on to say—this, too, was accepted —as to the new limit of 1,000 sq. ft. that the favourable consideration which has been given in the past to the larger factories will also be given to applications where the factory is less than 5,000 sq. ft. but more than 1,000 sq. ft.

The hon. and gallant Member for Eye (Sir H. Harrison) spoke of local factories which, obviously, could not be put anywhere else. We have taken note of the very interesting observations of the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin). I do not think that the hon. Gentleman would expect me to reply to them in detail. He made a number of interesting points which I hope that we shall have an opportunity of discussing in future.

6.15 p.m.

Photo of Sir Peter Emery Sir Peter Emery , Reading

I thank my hon. Friends for the contributions they have made, particularly my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin), who was able, with logic, to reinforce some of my argu- ments. The Minister of State has said that the powers set out in the new Clause exist already. This pleases me, because we wanted to ensure that this was the case. When my hon. Friend the Member for Wycombe (Mr. John Hall) specifically asked where these powers were, it had to be pointed out that, even when replying to a new Clause, with all the power of hidden minions to provide him with a brief, the Minister of State was not absolutely certain where the powers existed. I am not trying to score off the hon. Gentleman.

Photo of Mr George Darling Mr George Darling , Sheffield, Hillsborough

Surely the hon. Gentleman appreciated that I gave him the correct reply. There is nothing to prevent the Board of Trade exercising these powers in any of the legislation.

Photo of Sir Peter Emery Sir Peter Emery , Reading

This is excellent. I repeat that I am not trying to score off the hon. Gentleman. He was not able to tell the House specifically where these powers existed. Again, without attempting to score off him, may I tell him that some of the leading people concerned with this sort of problem, with this sort of legislation, and with this sort of development, are not clear about it. They approached us to see what we could do.

So that we can continue in the spirit which prevailed in Committee, which was a spirit of amiability and pleasantry, I appeal to the Ministry to treat the new Clause as consolidating legislation. We would be bringing this all together and merely stating the position. It may, in fact, exist somewhere else, but the people concerned in these matters will look at the Bill when enacted, because this will be the most modern Measure. I shall not ask my hon. Friends to divide the House. But having said that, would not the hon. Gentleman be just as magnanimous and say that he could quite easily accept the Clause? The Clause does no more than state what the hon. Gentleman asserts is the present position. If the matter were clearly stated in this Measure, it would be of considerable help to those who are in doubt.

Photo of Mr George Darling Mr George Darling , Sheffield, Hillsborough

I cannot accept the Clause. It is not needed. I will state the reason. The Clause ends in this way: and such conditions may be imposed thereon to ensure that the factories are occupied in accordance with such orders as the Board of Trade may issue. We do not want to lay down any conditions or issue any orders. The system works extremely well as it is. The powers, such as they are, that the Board of Trade has to do what the hon. Gentleman wants ought not to be associated with conditions which are not spelled out in the Bill.

Photo of Sir Peter Emery Sir Peter Emery , Reading

I am sorry to rise again, but we are now getting a little clearer. What the Minister has told us is not quite the case, for it is not exactly as the Clause spells it out. These are not the powers that exist. He does not want to accept the point which we are stressing, namely, … in accordance with such orders as the Board of Trade may issue. We want to ensure that the Board of Trade should be able to stipulate who should go into these factories. This is what happens at the moment with local authorities. It is done in Middlesex, Surrey, and in a number of other local authority areas to ensure that these factories are occupied by the people for whom they are really intended. We are trying to help the Minister, not to limit him. I should have thought that, having said that, he could still accept this Clause.

Question put and negatived.