Orders of the Day — Problems of the Regions

– in the House of Commons at 12:00 am on 24th April 1967.

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Photo of Dr Horace King Dr Horace King , Southampton, Itchen 12:00 am, 24th April 1967

Before I call upon the right hon. Member for Mitcham (Mr. R. Carr), may I announce that I have not selected the Amendment standing in the names of the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) and his hon. Friends, but that I have selected the Amendment in the names of the Prime Minister and his right hon. Friends.

3.53 p.m.

Photo of Mr Robert Carr Mr Robert Carr , Mitcham

I beg to move, That this House regrets the effect of Her Majesty's Government's restrictive economic policies on the development of the less prosperous regions, and calls upon Her Majesty's Government to take positive measures clearly designed to promote economic growth in these areas. This is an extremely important subject. I think that all of us, wherever we sit in the House, are agreed that anything which we can do to correct the persistent imbalance of activity between one region and another would be an extremely valuable achievement, economically and socially.

In raising this debate, we have two purposes in mind. First, we wish to expose what we regard as the hollowness and failure of the Government's policy in yet another vital part of the nation's life. Secondly, we wish the House to have the opportunity to discuss critically, but constructively, the needs of the less prosperous regions and the most likely policies to meet them satisfactorily. Those two purposes are quite clear in the words of the Motion which we have tabled and which is before the House.

It is natural and right for an Opposition to attack a Government wherever they see that Government's policies failing. It is equally natural for a Government to defend themselves. However, I appeal to the Government spokesmen today to respond constructively as well as defensively, to respond self-critically and not just in the spirit that everything which they do must be right and must be defended at all costs. I appeal to them most strongly to treat the debate in that spirit. Let us have our attack and our defence, but let us, please, have some constructive thinking for the future, tinged with self-criticism and a certain attitude of humility.

I am bound to say that the terms of the Government's Amendment are not encouraging in that respect. The Amendment starts off by blaming the Tory Government for what we did in the 13 years during which we were in power. I notice that this is the second Government Amendment in a week which has had to fall back on that excuse. That gambit may have worked in 1965, but right hon. and hon. Gentlemen opposite should have grown up by now. It will not wash any more, in 1967.

The facts and the judgment of the National Plan, with its promise of a 3·8 per cent. growth rate, were this Government's sole responsibility and no one else's. So were the promises and estimates on which they fought a General Election a year ago. As the Foreign Secretary said in Belper on 30th March, 1966, the eve of poll last year: There can be no alibis for us. We are carrying on where we left off. This time we cannot claim to have inherited a Tory mess. If there are any skeletons in the Downing Street cupboards, they come from the corpses of the Prime Minister's own dead promises and from no other source.

Under the Conservative Government, during the five financial years ended on 31st March, 1965, over £140 million was provided in the development areas for nearly 2.000 projects estimated to provide about 200,000 new jobs. As the Chancellor of the Exchequer said on television only a few months after the Conservative Government left office, referring to the development regions, They are absolutely booming ahead, I am glad to say. Scotland, the North-East, the North-West and Wales are all doing fine … They are not doing fine now, as every hon. Member knows.

It is the policies of this Government alone which have changed the picture, and so the first part of the Government's Amendment is demolished by the words of their own leaders—the Chancellor of the Exchequer and the Foreign Secretary—which I have just quoted to the House.

The second part of the Government's Amendment, instead of putting forward or promising the putting forward of policies to improve matters, is complacently self-congratulatory. "A better balance" is one of the key phrases. However, during the nine months since the freeze of last July, unemployment in the less prosperous regions of these islands has grown more rapidly and is greater in absolute terms than at a comparable stage in any of the squeezes applied by the Conservative Government. Far from being protected, the less prosperous regions have been hit harder and faster by this freeze than by the previous ones, and it is no comfort to the people in those less prosperous regions if the more prosperous have been hit hard as well.

Do the Government really want to take credit for having clobbered the rest of the country so hard that by comparison the proportion of unemployment in the development regions looks far less bad than, in fact, it is? Is that really the claim which the Government want to put before the country?

Only yesterday the Sunday Times carried news of a report from the Lancashire and Merseyside Industrial Development Association saying that the Government's declared policy for correcting imbalance has been a sham. Those are not my words as an Opposition politician, but the words of the Industrial Development Association, and the promise that in this squeeze the less prosperous regions would be protected has been proved to be a false and empty one.

Let us look at the figures. The latest employment figures for mid-April were published by the Ministry of Labour last Thursday, and they bode extremely ill for the less prosperous regions. The seasonally adjusted national figure for wholly unemployed for the nation as a whole increased by no less than 28,300 in the four weeks between the March and April counts, and the seasonally adjusted percentage went up in every region, with one exception, the Eastern and Southern Region. The seasonal trend for unfilled vacancies were also unfavourable, and I ask the House to compare the present position in the less prosperous regions with that in April, 1962.

As the House knows, April, 1962, was nine months after the squeeze which was introduced in July, 1961 by my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd). That was the squeeze which was vilified by the Labour Party and which they said would never be repeated by a Labour Government. Similarly, April, 1967, is nine months after the squeeze introduced last year by the Prime Minister. The periods are, therefore, exactly comparable, and if hon. Members study the Ministry of Labour figures they will find that in every case unemployment in the less prosperous regions in April, 1967, is higher than it was in April, 1962. Not only is it higher in actual numbers, but, what is worse, what is potentially far more dangerous, is that it has been rising, and is rising faster than it did five years ago.

Let us consider the figures which prove what I have just been saying. Let us consider the percentage increase in unemployment which took place between July and April of those two periods, between July and April, 1961–62, and July and April, 1966–67.

During the last nine months unemployment in Scotland has increased by 55·9 per cent. In the 1961–62 period, it increased by only 33·6 per cent. Unemployment in Wales during the last nine months has increased by 83·9 per cent. In 1961–62, it increased by only 53·7 per cent. In the Northern Region, in the last nine months unemployment has risen by 97·7 per cent. In the same period in 1961–62 it rose by only 79·8 per cent. In the North-Western Region the increase in the last nine months amounted to 117·6 per cent., whereas it was only 78·6 per cent. in the same period in 1961–62. In the South-Western Region there has been an increase of 109·7 per cent. in the last nine months, compared with an increase of only 77·9 per cent. in 1961–62. In Northern Ireland, there has been an increase of 45·1 per cent. in the last nine months, whereas in the same nine months of 1961–62 the increase was only 18·2 per cent.

One sees, therefore, that in every one of the less prosperous regions unemployment today is not only higher than it was in 1961–62 at the same stage of the previous squeeze, but it has been rising more rapidly, and this is the dangerous point.

On what course are the development regions now set? According to the Chancellor, the course for the country as a whole is "steady as she goes". If this is so, the less prosperous regions are headed straight for the rocks. Let us hope that the Chancellor's words are not right.

Photo of Mr Hector Hughes Mr Hector Hughes , Aberdeen North

The right hon. Gentleman has several times used the expression, "the less prosperous regions". Will he be so kind as to say what he means by the less prosperous regions? Does he realise that if he includes North-East Scotland in that expression his statements are grossly inaccurate?

Photo of Mr Robert Carr Mr Robert Carr , Mitcham

By less prosperous regions I mean the regions which I have read out and the figures which I have given. I do not believe that those figures can be challenged. I am sure that during the last nine months, as in any year or any nine months, one will find variations within each region, but the figures which I have given include the hon. and learned Gentleman's area with the rest of the Scottish region.

Photo of Mr Robert Carr Mr Robert Carr , Mitcham

No. I have given way once, and I wish to continue.

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

Order. If the right hon. Gentleman who has the Floor does not give way, the hon. and learned Member must not go on trying to intervene.

Photo of Mr Hector Hughes Mr Hector Hughes , Aberdeen North

Which are the less prosperous regions?

Photo of Mr Robert Carr Mr Robert Carr , Mitcham

If the Chancellor is right in saying that the national course is "steady as she goes", the less prosperous regions to which I have just referred are heading straight for the rocks, and so I ask the Government to tell us their estimates for unemployment in these regions next winter. According to the National Institute's Economic Review for February, 1967, on present policies unemployment will go on rising into the beginning of 1968 and beyond—that is the total unemployment in the country—and this, the Economic Review thinks, might imply figures of about 5 per cent. in Scotland and the Northern Region to take two examples.

Do the Government agree that that is what might happen? If they do not, what are their estimates? I know that there is a certain Governmental tradition not to talk about estimates, but I beg the Government to think twice about maintaining that tradition in this important matter today, because in a matter which is so important to such a vast number of people in this country the Government have a duty to tell us what they know, and what they expect. We know that estimates can be fallible, but I beg the Government to come forward with the best estimate they can, because a refusal to do this will only increase anxiety in the development areas, will make them fear the worst, and will depress that vital factor of confidence which it is extremely important to nourish.

The Government spokesman when he deals with much of the rest of the story of decline which I have put before the House will no doubt tell us something about new factory building, and how much of this has been approved by the Government in the less prosperous regions during 1966. I am glad that the hon. and learned Member for Aberdeen, North (Mr. Hector Hughes) is so pleased, because, strangely enough, so am I, and I am sure the House is, too, because we all want this problem to be solved. I hope that the Joint Under-Secretary for Economic Affairs will tell us about it, and give us full and up-to-date information.

What worries us is the fact that a large proportion of the 1966 approvals must have been sought before the 20th July measures, or at least before the firms had had time to assess the effects of those measures upon their prospects. We want as much concrete information as we can get on the question whether these approvals are being turned into bricks and mortar at the expected rate. May the House be given chapter and verse, and not merely generalisations? How many extra jobs will these new factories create in 1967 and 1968? What is the current rate of application for new factories? Is it being maintained, in spite of the freeze? These are vital factors in assessing the future situation.

I cannot help noticing that according to the official figures factory completions, as opposed to approvals, were tending to fall in 1966. I do not know what latest figures are available to the Government, but to people outside it is possible to know the figures only for the first part of 1966, and in that period there was a tendency for competions to fall as compared with 1965. They fell in the first half of 1966 in Scotland, the North and the South-Western Regions—three of the most important that we are considering today.

So much for the figures and the position. I now turn to the second half of the Motion, which is concerned with the needs of the development regions and the policies most likely to meet those needs. My hon. Friends and I put first the need for having a prospect of expansion. This is the prime condition for progress. Without it we can hang out all the bait we like; the fish will not bite. Without it we can cover Scotland, Wales, Devon and Cornwall with advance factories, end to end, and we shall not fill them. We should never have got the motor car industry to go to Scotland and Merseyside without the prospect of expansion. Look at that industry today. The prospect of expansion last summer was knocked on the head, and has not yet been revived, especially in industries of good growth potential. The index of industrial production in February of this year was the same as it was in December, 1964–26 months earlier, when this Government first came to power.

The prospect of economic growth to 1970 held out by the Chancellor in his recent Budget speech is, to say the least, extremely depressing. It represents a rate of growth less than that achieved under the Conservative Government—a rate which was so readily criticised by the party opposite as being hopelessly inadequate not only for the country as a whole, but for the less prosperous regions in particular.

Photo of Mr John Mendelson Mr John Mendelson , Penistone

Does the right hon. Gentleman recall that when discussing the period to which he has referred—from July last year to April of this year—on several occasions the right hon. Member for Enfield, West (Mr. Iain Macleod) has told the Chancellor, "You must carry on with deflation. You must carry on on the rocky road"? What right has the right hon. Gentleman now to criticise the Government, his right hon. Friend having given approval during the last nine months?

Photo of Mr Robert Carr Mr Robert Carr , Mitcham

Every right—among others, the right to challenge the Government on the policies on which they went to the country, which were exactly opposite to the ones that they have been carrying out.

As I have said, the rate of growth which the Chancellor mentioned in his Budget speech not a fortnight ago was less than that actually achieved in the last six years of Conservative Government—a rate that was labelled by the party opposite as being hopelessly inadequate for the country as a whole and the less prosperous regions in particular. At least, in the "bad old days of Tory misrule" we achieved a growth rate of 3·8 per cent. a year—and achieving something is much better than promising it falsely.

The second factor which is of vital importance to the less prosperous regions is the factor of confidence and of financial availability for new investment. Confidence and new finance depend largely, but not entirely, on the prospect of expansion, about which I have been talking. Another essential requirement is that of profit. Good profits are essential, first, for firms to plough back into new investment and, secondly, to give firms the financial status which they require to be able to raise new money.

The Government and their supporters must stop talking with two voices about profits. This is where confidence in industry is necessary, as the C.B.I. has recently made clear. If the Government are deliberately to go on squeezing profits in order to appease their left wing, I can assure them that they will not get an upsurge of new investment in the development areas, because the finance necessary for that new investment will not be available.

The Government must also change their taxation policy. Not only must taxation of industrial profits be reduced in total; it must be changed in kind and in scale. The combination of Corporation Tax and the withholding tax on dividends at their present rates is seriously reducing the cash generation for new investment in many companies. Furthermore, if the Government want to encourage the really efficient firms to go to development areas—and in the long run only the efficient firms will do those areas permanent good—they should give up their misconceived system of invest- ment grants and return to investment allowances, coupled with free depreciation.

Photo of Mr Peter Shore Mr Peter Shore , Stepney

indicated dissent.

Photo of Mr Robert Carr Mr Robert Carr , Mitcham

The Joint Under-Secretary of State for Economic Affairs shakes his head. I am a practical man and not a theorist in this matter. I know—because I have been at the receiving end of this system in industry.

What action is needed in addition to the factors of expansion, confidence, finance for the encouragement of new investment in development areas? There is the question of specific incentives. We believe that there are three essential requirements. First, they must be certain; secondly, they must be clear—that is to say, easily understood; and, thirdly, they must be easily and quickly obtained. We are not satisfied that either in the present or in the past—I am not seeking to make any party point—the grants and subsidies available have always met those essential conditions of certainty, clarity and speed.

I suggest that there should now be a critical study of the experience and views of firms which have already gone to development areas in order to discover what their troubles were, to what extent they were helped, and whether they feel that they could have been helped more or in a different way. We now have enough experience of firms which have already taken this step to be able to draw on that experience and to learn from it.

It is important to be clear about the real purpose of development area grants and subsidies. Development areas will flourish only if they attract efficient and profitable investment. Grants should not be pitched at a level which will attract activities which could not be undertaken profitably without the subsidy. The object of these grants and subsidies should be to tilt the scales in favour of a particular location for an investment which, in any case, would be undertaken somewhere. Essentially, therefore, they should provide pump-priming aid to enable companies to overcome the initial difficulties and costs of getting established in a new area, and should not be permanent subsidies which make good any lack of competitive efficiency.

Photo of Mr Edward Leadbitter Mr Edward Leadbitter , Hartlepools, The

If you: supposition is correct the grant system should be based on the criteria that you have given—

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

Order. The hon. Member must put his question in the proper way.

Photo of Mr Edward Leadbitter Mr Edward Leadbitter , Hartlepools, The

Before the debate ends, will the right hon. Gentleman explain why the firm of Pitch Fibre Pipes (Hartlepools) received a £238,000 grant under the last Conservative Administration, against the kind of criteria that the hon. Member has mentioned?

Photo of Mr Robert Carr Mr Robert Carr , Mitcham

I am sure that the Minister will look up the records and give the required information. I have no means of doing so. The hon. Gentleman is getting this wrong. Can we not apply ourselves, as I appealed, to a constructive Parliamentary discussion of what should be done now? If the House cannot get away from perpetual post-mortems on what has happened in the past—[HON. MEMBERS: "Oh."] As I said, let us have our attack and our defence. That is part of what the House is for, but it is for a second purpose—

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

Order. The hon. Member must contain himself.

Photo of Mr Edward Leadbitter Mr Edward Leadbitter , Hartlepools, The

On a point of order. Throughout his speech the right hon. Member for Mitcham (Mr. R. Carr) has insisted upon facts and a constructive examination of regional problems. I appeal, through you, Mr. Speaker, that the right hon. Gentleman should pursue this line and answer questions adequately and not make comments of the kind that he has made.

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

The hon. Member has been in the House long enough to know that that is in nowise a point of order.

Photo of Mr Robert Carr Mr Robert Carr , Mitcham

I devoted the beginning of my speech to the functions of the House in the case of the Opposition attacking a Government who they believe have failed, and I have no doubt that Government speakers will devote part of their speeches to defending themselves. I am now dealing with the second part of the proposal, which I hope will be dealt with also by the Government, which is discussing in a constructive but critical way what we might do to improve things in future.

I dealt with specific incentives and want now to turn to the importance of infrastructure and services. The importance of these has often been underestimated. We believe that a strong case can be made for spending more of the money available on this aspect of the problem and less, perhaps, on direct incentives to individual firms. Good communications are essential, not only for freight but for people, for the management of the company itself—if it is, as so often happens, a company with parents and factories in other parts of the country and perhaps other parts of the world—as well as for customers from home and abroad. This, among other things, means good air services.

Life in the area must, in general, be made attractive to the managers and key workers who may have to be imported to start a new factory and to visitors as well. That means housing, hospitals, hotels, shopping and recreational facilities, cultural activities like theatres and in many ways cleaning up the mess of a past industrial age. That sort of development would boost the present industries as well as attracting new ones.

Here, however we come up against what we believe to be the folly of the Selective Employment Tax. It is doubtful whether any Government have ever undertaken any one measure more damaging to the development areas than S.E.T. The proposition that employment in all manufacturing activities should be subsidised and that in all service industries taxed is, we believe, perverse and wrong in principle. It is particularly damaging in development areas, where there is an urgent need for more and better services to make the area more attractive by raising the quality of life.

It is particularly important in some cases—such as the Highlands, North Wales and the South-West—where service industries, notably tourism, are a primary and not a secondary source of employment. The discriminating effects of S.E.T. must be abolished—we would say throughout the country, but surely, beyond argument, at least in the development areas.

Similarly, if we want to encourage service industries in the development areas, it is necessary to remove another of the Government's pet follies, namely, investment grants, which again discriminate against all services and favour all manufacturing regardless. The combination of S.E.T. and discriminating investment grants has been a body blow, particularly to the tourist industry, which is the basic industry in many important parts of the less prosperous regions.

Another important factor in attracting growth to these areas is mobility of labour. Some misguided enthusiasts of the development areas are inclined to equate mobility of labour with emmigration; but nothing could be further from the truth. Physical mobility within the regions is essential to get movement of labour to new growth points and occupational mobility is essential if new industries are to get the labour they want, which should always be the main attraction of a development area. Therefore, more money and hard planning needs to be devoted to helping workers to move to new jobs within the regions and to increasing facilities for training and retraining at all ages.

Another big and difficult aspect of the development region policy is the question whether aid to the regions should be more concentrated or more widely spread. I cannot help recalling my experience at the Ministry of Labour, 10 years ago, when I was appalled by the limitations placed upon us by the rigidity of the old scheduled development area system as it then existed. It made it politically extremely difficult to deschedule a square mile of territory, and correspondingly created a resistance to scheduling new areas which needed special help as quickly as we should have done. It was that rigidity which led to our next concept of development districts, which had the advantages of speed and flexibility. However, it also carried the danger of forcing one to look at problems in too narrow a context.

Therefore, the Conservative Government, in their last few years of office, developed the new approach, under the particular leadership of my right hon. Friend the Leader of the Opposition, my right hon. Friend the then Secretary of State for Scotland and my right hon. and learned Friend the Member for St. Marylebone (Mr. Hogg) by looking at the problems of a region as a whole, but focussing help on selected growth points within it which had particular advantages for industrial expansion and growth, whose effects we felt would then spread out and encourage the development of the rest of the region.

We are still sure that this was the right and progressive approach and that the present Government have been wrong in reversing that trend by scheduling much wider areas. Whatever they may say, this is bound to dilute effort and help to increase the unpredictability of assistance. It has one other important disadvantage. We believe that it will make the radical improvements in infrastructure extremely expensive, to the extent of being too expensive to be carried out effectively—

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

Order. Interventions make for long speeches. Many hon. Members wish to speak.

Photo of Mr Robert Carr Mr Robert Carr , Mitcham

Because of points of order and interventions, I have given way several times and I hope that the hon. Member will forgive me.

I turn, finally, to the Green Paper which was produced for discussion by the Government a week or two ago. We are wholly in sympathy with its purpose. We think it right that it should be carefully considered and I do not want to pronounce any final judgment on it today. However, I have some critical questions to put. The attractions of the proposal are obvious, but it is equally important, before embarking on a radical new scheme of this kind to give thought to its possible dangers. We see a number of serious ones which we think should be carefully considered.

First, it seems to us to compound all the faults of the S.E.T., to which I have referred, and to build fresh anomalies into them. Secondly, we cannot help wondering whether a labour subsidy on a scale which might be as much as £2 per week per man might foster an inefficient use of manpower and lead, for example, to the hoarding of skilled workers in their present firms. These are both dangers which should be looked squarely in the face and carefully considered.

We also feel that it could mean that a firm in a development area need not be even reasonably efficient to compete successfully with a much more efficient one elsewhere in the country. We genuinely believe that this could lead to economic weakening as well. This, too, should be considered.

It might be held that those disadvantages would not apply if the employment premium were known to be only temporary, but if it were thought by industry to be only temporary this would have the drawback of unpredictability. This would weaken its power as an incentive to attract new firms to the regions. At the very least, it would be necessary, in our view, to state in advance that the premium could not be cut off suddenly, but would be tapered gradually under well defined circumstances.

The last and, perhaps, most important question of all about it is whether this premium would be the best way of spending an extra £100 million a year in the development regions. It might be a good way, but would it be the best way? If we are to spend annually an extra sum of this magnitude, might we not do more to stimulate both existing and new industry by spending it on the improvement of infrastructure and amenities, which, as I have stressed, we regard as of being of particular importance?

Moreover, if help is to be give to industrial companies for a limited period, is it not better to give it for the first few highly expensive years of a new enterprise than for an arbitrary five years or any other period to both old and new firms alike?

I have tried, in the second part of my speech, to put forward a number of serious thoughts which the House should examine in approaching this problem. I must return in my concluding sentences, however, to our strong feeling that the Government, despite their words and promises, are failing in their regional policy. When we look at the Government's attempts at regional policy, it seems to us that, as in many other fields, they have tried to apply a lot of specific remedies while getting the general treatment wrong.

What is really required is to get the general economic trends resulting from overall economic policies working with, instead of against, the particular remedies for the local problems. It seems to us that the Government have got the economic tide running in the wrong direction and then are frantically adopting all sorts of aids to help them to try to swim against the tide.

In our view, only when we get an overall policy in which the incentives of taxation, the pressures of competition, the structure of industrial relations and the trade unions and the attack on restrictive practices, wherever they may be, are all working in the direction of a high-earning, high-efficiency, expanding economy, shall we get the basic conditions in which special help for the less prosperous regions will enable them to grow and to prosper.

4.34 p.m.

Photo of Mr Peter Shore Mr Peter Shore , Stepney

I beg to move to leave out from 'House' to the end of the Question and to add instead thereof: 'regrets the failure of the previous Conservative administrations to tackle adequately the deep seated economic problems of the less prosperous regions and welcomes the energetic measures taken by Her Majesty's Government in the past two years to achieve a better economic balance between the regions on a permanent basis'. Of the many suggestions and criticisms—and I hope to deal with the criticisms as I proceed with my speech—made by the right hon. Member for Mitcham (Mr. R. Carr), the one which I found most helpful was his suggestion that more work should be done in studying the experience of firms which have gone into development areas. I think that far too little field work is done into the actual practice of Government policy. I would consider not only the experience of firms which have actually moved but would like to see more done to examine the reasons why many firms remain in their present locations when, on the face of it at least, there would appear to be many advantages for them to move. I assure the right hon. Gentleman, therefore, that on that point at least, I shall look most seriously at his suggestion.

The development areas taken together represent something like half the total geographical area of the United Kingdom. They include virtually the whole of Scotland and Wales, as well as the Northern region, Merseyside and the South-West. Those areas contain no less than 20 per cent. of the country's population.

Nobody, I think, will deny the point made in our Amendment that this problem is deep-seated. Certainly, as long as I can remember—although I admit that I am not the oldest Member of the House—the problem of high unemployment in the development areas has been with us. We have advanced since the 1930s when—it is almost incredible now to think back on them—the figures of unemployment in the development areas, or depressed, distressed or special areas as they were then called, stood at a level of over 20 per cent. for a number of years.

Although that has passed, however—and thank heaven that it has—apart from the single decade of the 1940s, of war, socialism and the Labour Government, the problem of differentially and unacceptably high unemployment in the development areas has been with us. I do not think that anyone would disagree with that. Nor would I have thought that anyone would disagree with the point made in our Amendment that successive Conservative Governments have failed to solve this problem. I shall be brief, perhaps mercifully brief, on this point.

I would simply draw to the attention of the House that throughout the whole of the 1950s and the early 1960s, the extent of unemployment in the development areas as compared with the rest of the United Kingdom has been of the order of two and a half times to three times as much. Secondly, throughout this period, there has been a heavy migration of labour from the areas of high unemployment to other parts of the country.

It is one thing to talk, as the right hon. Member for Mitcham has done, about movement, as it were, intra-regionally. No one will dispute that this is necessary and is likely to continue. What we have had over virtually the whole period of the 1950s and the early 1960s, however, has been a movement inter-regionally, nearly all of it focusing on London and the South-East and, of course, the Midland areas as well. Indeed, the great mass of new work has been concentrated in those areas in that period.

It is important to bring this other side of the coin into sight because we are not dealing simply with problems of un- employment, great as they are, in the development areas, but also, in any proper regional policy, with the problems of congestion and over-crowding in the London area and in other areas in the Midlands and South as well. We have that aspect to think of, and when one takes into account migration as well as the unemployment figures, one can see the scale of the problems with which we are faced.

Those who have read the Green Paper will see that we have there set out the actual experience of the development areas and the rest of the country in relation to unemployment over the period since 1959, and the point I want to emphasise is that even in periods of boom in the rest of the country—periods such as that in 1961, and even that in 1965–66—unemployment figures in the development areas have been three times as great as in the rest of the country.

It is true to say that even in periods of high employment nationally, the development areas have never known full employment. When we look at the figures for 1961 and 1965, we find that the unemployment figure in the development areas in both years was 2·8 per cent.—and those are the best years one can find for those areas. I would simply make the obvious point that if the rest of the country were to experience unemployment of 2·8 per cent. in the best years, let alone in the worst years, it would be considered to be intolerable and we would all be under very great pressure to find remedial measures.

I make this somewhat elaborate introduction to the subject because I want the House to get last July's measures in perspective. Those measures clearly will not help the problem of regional unemployment, but it is absolutely wrong to allege that the problems we have been talking about have been caused by those measures. The problems long antedate the measures and are problems of a quite different order. It is equally true to say, on the record of our experience, that it is not enough simply to try to run the rest of the economy even in a state of boom in the hope that this will bring full employment in all the regions. It has not done so in the past, and I see no reason to believe that it will do so in the future.

What are the problems with which we are dealing? There are probably three main influences at work. I need not say much about them, because the House is pretty familiar with them. First, the areas are characterised by a structure in industry that is very much dependent on the older basic industries. Those industries have been contracting, are still contracting, and their contraction has not been sufficiently offset by the introduction of new industry.

Secondly, they are often areas where there is considerable environmental inadequacy. That is partly the scar of the first Industrial Revolution to which the right hon. Gentleman referred, but also in areas where populations remain rather static there has been a lack of real development building generally and new services such as we find in the South and elsewhere, where there has been considerable advance of development.

The third factor, which is very important, is what we have all come to recognise, not just in this country but in other countries, as the pull of the Metropolis. That is very powerful, and in Britain, where our Metropolis is both the governmental capital and the commercial capital, this pull appears to be extremely strong.

Taking account of those factors, all one can say is that if one simply allows a market economy to operate in a more or less unregulated way the disadvantages which face the development areas are bound to increase. There is therefore a need for very strong policies to defeat those disadvantages. I will not make too much of it, but I think that the Opposition have in the past been very uncertain about their own policies for the development areas. They have found it very difficult to make up their minds whether the right way to deal with the problem was to intervene strongly against the workings of the market economy or whether it was not better on economic grounds to allow for the movement of population in the belief that industry naturally tends to go to the places of maximum advantage.

I will not say that this view has always been held, but there is the view—and I think that it has been an important element in the thinking of right hon. Gentlemen opposite—that it is wrong to do more than the minimum, because of the dangerous consequences, as they see it, to economic efficiency, of offsetting the disadvantages of the development areas. In a debate some five years ago, the right hon. Gentleman the Member for Flint, West (Mr. Birch) put the point very clearly when he said: I never thought it made very much sense to subsidise firms to go to uneconomic locations. I believe that we shall bitterly regret that in the end. …"—[OFFICIAL REPORT, 26th July, 1961; Vol. 645, c. 459.] That is a school of thought.

We are sceptical about that approach. Our own approach is different. We do not believe that location decisions about industry are often—or, at least, always—taken on rational economic grounds. The more one studies industry and location decisions the less clear are the motives that determine whether a firm moves to a certain area or, particularly, whether it stays where it is. We are also influenced by the thought that even when the decision about the location of industry is taken by a private firm, which has weighed up private benefits against private costs, this is not always the same as the arithmetical weighing up of social benefits and social costs. Indeed, if the social costs and social benefits factor had been taken into account, a number of decisions affecting location—certainly in London and the South-Eastern region—might never have been made.

I therefore put the point quite clearly that we are quite unashamedly interventionist in our approach to development area policy, and in using maximum powers to get a location of industry policy which will even out the differences in unemployment in different parts of the country—

Photo of Mr Stanley McMaster Mr Stanley McMaster , Belfast East

Does that statement mean that the Government are now abandoning the emphasis on mobility which they had in the National Plan?

Photo of Mr Peter Shore Mr Peter Shore , Stepney

I do not think we ever put an emphasis on mobility that in any way contradicts the point I am making about the need to close the gap between unemployment in the favoured regions and unemployment in the development regions.

I have outlined our approach to the problem, and I would now like to say what, as I see it, are the eight, as it were, main points of policy that we have either innovated or developed during our period of office so far. The first, and perhaps most important, is that we have attempted to introduce into this country comprehensive regional planning. By that I mean two things, first a national policy for the regions which attempts to take into account not only the distribution of industry and the pattern of economic development, but also the growth and location of population. Another aspect of our regional planning policy has been to set up machinery, boards and councils, and to get them to undertake studies in some depth of their own regions up to 1981. That is the initial period we have asked them to study.

This is a most helpful development in policy because we are no longer leaving it, as it were, to Whitehall to think ahead about the regions. We are bringing into the picture for the first time some of the best people we can find to continue to study their own regions in the belief that they may know more about their problems than people not actually residing there. The advantages which I think we can gain from this are that we can get a picture not only of what is happening today, tommorrow or next year, but of the actual pattern of development, what is growing and what is declining in particular regions, and therefore evolve medium-term and longer-term strategies which may help us in future to prevent the very developments we are now finding so difficult to counter and offset in the areas of high unemployment.

The second thing we have done is to use much more strongly powers over industrial locations. The story there is clear. I simply remind the House that in the period 1961–64, the best years from the point of view of the party opposite, 26 per cent. of i.d.c.s were issued in favour of the development areas. In 1965 and 1966 that percentage rose to 34 per cent. That reflects the energy and drive particularly of my right hon. Friend the President of the Board of Trade. I also mention an astonishing omission from the policies of right hon. Gentlemen opposite in previous years. We have extended i.d.c.s to cover the location of offices as well as industrial buildings. This is a development of major importance.

Thirdly, I turn to the investment grants. I do not want to go over the whole battlefield of investment grants versus free de- preciation and investment allowances, but there seem to be two reasons—although we cannot prove this as it is too soon to prove it; these measures are too recent—why investment grants have advantages. One is in the evidence which the N.E.D.C. produced. The right hon. Member for Mitcham will recall that late in 1964, or early in 1965, their Report showed the amount of understanding of the existing tax incentive system shown by firms to whom, after all, it was addressed. While I would not want to overstress the conclusions, it was pretty clear that a very large number of firms to whom the advantages of this tax system were directed were simply unable to understand its advantages. The investment grants system is far more simple, more direct and more likely to be effective.

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , South Angus

Is the hon. Gentleman aware that the Chief Officer of the Board of Trade for Scotland has recently commented that firms in Scotland seem to be unaware of the operations of the investment grant system? Does that correspond with what he has been saying?

Photo of Mr Peter Shore Mr Peter Shore , Stepney

Although I did not want to take it in this particular order, that brings me to a very important point in our policy. That is the giving of publicity to these aids. This has been a very important, but somewhat neglected, factor in previous attempts to make industry aware of these benefits. It is no good having policies if people do not know about them. The advertising which has recently gone into putting across the advantages of the investment grants system and of other benefits available to development areas is extremely important.

Before the hon. Member for South Angus (Mr. Bruce-Gardyne) intervened, I was about to make another point in favour of the investment grants system. This other quite commonsense advantage over the previous system is that for many new firms and firms undertaking quite expensive and perhaps initially unprofitable expenditures in development areas there is the certainty that they will actually get the grant, whereas under the previous system they had to make profits before they could enjoy any of the allowances to be set against them.

I turn to the fourth plank of the policy we have pursued. That is the great increase in advance factory programmes. Here again the record speaks for itself. Between 1959 and 1964 something like 49 advance factories were announced under the previous Administration. In the last two years 94 advance factories have been announced in four separate programmes. The details for which the right hon. Member asked I cannot give at the moment, but I shall see if my right hon. Friend can supply them later.

The next point I stress, which again brings home the energy which has gone into development area policy, is the use of the various financial measures under the Local Employment Acts. Here again the contrast is quite notable. In the three financial years 1961–64 spending was at the rate of £23 million a year and in the last three years it has been at the rate of £45 million a year. That is a fantastic increase in a three-year period.

The last point I make about our existing policies is very important indeed. It is what we are doing to increase training and training programmes in the development areas. Certainly a very helpful scheme was introduced by the previous Administration. It came into effect on 1st September, 1964, which might have been thought a little late. Nevertheless, it was a very good scheme to give a direct grant in development areas to firms in respect of workers they had under training. It has been a great success. We improved the grant, as we thought we ought, in April, 1966. The number who have taken advantage of it is quite striking. In 1965 it was 15,000 and in 1966 it was no fewer than 27,000. My preliminary figures for the first quarter of this year suggest that the rate of increase is continuing.

That adds up to a formidable programme. The right hon. Gentleman invited me to look ahead. I will say something about how we see things for the future. The right hon. Gentleman took up the point, which those of us who have read the speech of his right hon. Friend the Shadow Chancellor were already familiar with, about the effect of the measures taken last July as compared with the measures taken in July, 1961. He and his right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) made the same point, that, because unemployment had risen more quickly in the period 1966–67 than it had in 1961–62, there was good reason for thinking that it would go on getting worse, as it certainly got worse in 1962–63.

It is not wise to be over-mechanical in comparing particular periods and the sequence of events. I do not accept that what has happened in one period must necessarily follow in another. I am reinforced in this view because one of the great differences between 1961–62 and 1966–67 was that in the earlier period the then Government had virtually no regional policy operating.

If anyone has any doubt about this, I will remind the House of the words used by the then Chancellor, the right hon. and learned Member the Member for Wirral (Mr. Selwyn Lloyd) in his July speech: The Government's local employment policy has so far succeeded, that, when the projects already in hand come into production, virtually only in Scotland and Northern Ireland should there be a serious lack of employment opportunities.—[OFFICIAL REPORT, 26th July, 1961; Vol. 645, c. 436.] That is what the right hon. and learned Member for Wirral said in the summer of 1961. It will therefore not surprise the House to recall that there was virtually no energy, and certainly no new policies, in train at that period which could help to deal with the problem of regional unemployment, which certainly developed fast durin gthe two years that followed. In the light of what I have told the House no one will say that we have not already begun to develop strongly a whole series of policies designed to help the development areas.

Although I would accept that there are no certainties in economic policy, obviously, as my right hon. Friend the Chancellor of the Exchequer made clear, we are watching the situation closely. The Budget allows for very considerable increases in public expenditure, a factor which was not available during the post-1961–62 period. We have also given our estimates of the demand in the economy, which we expect to be rising.

I would not conclude from all this that this is all that needs to be done. This is not the view of the Government. We have addressed our minds to the question of what further must be done. We have not on this occasion, nor on many others, had to wait for an Opposition Motion asking for further measures before we have acted in an attempt to anticipate the problems we see ahead.

We put forward the Green Paper for the consideration, not only of the House, but also of the N.E.D.C. and the regional councils. The basic suggestion in the Green Paper is that a premium of £1 to £2 a week shall be paid for male employees in manufacturing industries in the development areas. There will be corresponding payments of a regional premium for women workers and young people. The total cost, at what is estimated to be a medium figure of 30s. per employee, will be £100 million a year. This substantial figure will more than double the financial assistance at present available to the development areas under the expanded programmes we are pursuing.

I have said that we have invited comment on the proposal. It is not for me to make any judgment this afternoon, because the Government are prepared to listen, and will listen with very great care, to the various points which have been put forward. I will not attempt, because it would take me too long, to answer all the important points put by the right hon. Member. In particular, his point as to whether there is a danger of encouraging inefficiency must be taken head on. We must weigh up the effect on the inefficient use of labour due to bad use of labour, due to restrictive labour practices, due to the effect of high unemployment, and the continued high unemployment, in the development areas. People cannot be persuaded easily to abandon these practices. I know that the right hon. Gentleman, with his experience at the Ministry of Labour, will look with some sympathy at this point.

I pose three questions which may be relevant in considering the Selective Employment Tax regional premium. First, is this the most effective way we can find of helping to reduce unemployment in the development areas? I have no doubt that we shall hear a number of views on this during the course of the next few weeks.

There is one aspect which deserves a special mention. Unlike some of our other proposals, such as the now 45 per cent. investment grant for new machinery and plant in development areas, this proposal would considerably help labour-intensive industry. It would complement the assistance we are giving to capital-intensive industry with assistance to labour-intensive industry. Labour-intensive industries have the effect of mopping up a great deal more unemployment than capital-intensive industries.

I want to take head on the very misleading suggestion that labour-intensive industries somehow or other are not modern industries, but are industries of the past. This is a great mistake. There are many very modern industries—I am thinking of many in engineering, particularly in electronics—which are certainly labour-intensive.

Photo of Mr Henry Clark Mr Henry Clark , North Antrim

Does not the Joint Under-Secretary agree that labour-intensive industries are intrinsically unstable in the total quantity of labour they employ? The labour force of a labour-intensive industry is varied according to the business coming forward from year to year. Labour-intensive industries do not provide what the development areas want, which is stable employment. The sack from labour-intensive industries is much more common than it is from capital-intensive industries.

Photo of Mr Peter Shore Mr Peter Shore , Stepney

I would hesitate to generalise about that. The important question is which labour-intensive industry one is thinking of. The point I made is that there are several labour-intensive industries which one can look upon as growth industries and which, therefore, one could encourage in this way.

The second question relevant in considering our proposal is this. In finding ways to help the development areas, can we produce methods which avoid overheating the more prosperous regions and do not have adverse effects on the balance of payments? Obviously, this is an important question. The short answer is that it is possible if one can divert demand from other regions, the more prosperous regions, to the development areas.

This can never be a straightforward operation. One cannot, as it were, expect that the amount of demand which one generates in the development areas will be precisely the same as the amount of demand diverted from other areas. Nevertheless, there are good reasons for believing that the effect of this proposal will be to divert demand. The House will understand why this should be so when it considers the way in which the regional employment premium is expected to work. It is expected to reduce costs and, therefore, prices of goods within the development areas. In so far as it does that, it will divert demand because industry in the development areas will be more competitive and will divert demand from other regions in the country.

Photo of Mr Hugh Gray Mr Hugh Gray , Yarmouth

It seems that my hon. Friend talks all the time of dichotomies, comparing the prosperous areas with the development areas. Will he say what the Government intend to do for the less prosperous areas, like East Anglia, which fall between those two extremes?

Photo of Mr Peter Shore Mr Peter Shore , Stepney

In the context if this discussion on the regional employment premium, I shall not attempt to answer that. All I say to my hon. Friend is that I fully accept the need, within the context of regional policies, not merely to have a strong policy to help the development areas but also to have policies which take account of the needs of other regions. Clearly, although we tend to contrast the Midlands, London and the South-East with the development areas, we are always aware of the differences which exist and the fact that there is, as it were, a middle band of regions of intermediate prosperity. One of the great advantages which we gain from our regional studies is a clear picture of the problems and prospects for these intermediate regions as well as for the other two groups of which I have spoken.

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk

In following the Green Paper theme, the hon. Gentleman should realise that every area, however defined, has a boundary. What is only too likely to happen is that, for example, a brickworks on one side of the line will get the premium and a brickworks only five miles away on the other side will eventually go out of business. There will be a new development area before very long.

Photo of Mr Peter Shore Mr Peter Shore , Stepney

The hon. Gentleman knows that, no matter what scheme is introduced, if it has a frontier of eligibility, so to speak, one will always face the problem of those who are on one side or the other. This arises in the whole field of Government policy. I can see no easy way out of it, unless one were to have a somewhat more graduated approach, a spread of benefits. I do not rule that out, but it is not something which I wish to pursue at the moment.

The last question I ask myself on the subject of a regional employment premium is this. Can we do whatever we do for the regions in a way which avoids the necessity to raise taxation? On that, I remind the House that, on a Keynsian analysis at any rate, it is perfectly legitimate to go in for deficit financing if an area is under-employed and one wishes to bring into use resources which are otherwise unused. What we are trying to do on a regional or development area basis is what we are all familiar with on a national basis. We are, in a sense, trying to reflate in order to increase the output of a particular region.

We look upon the proposal for a regional employment premium as a medium-term measure. The Green Paper suggests a period of five years during which, should the proposal be adopted, benefits would build up, but one should not forget that, as soon as it is introduced, some benefit will accrue.

We are far from complacent about this problem. I am sure that my speech has not indicated any complacency. We certainly do not feel it. We are looking at all the measures which we ourselves have introduced or intensified to see what further help we can give and what further strengthening is possible. We shall also consider the suggestions put to us during this debate. The Government regard the problem of unemployment and a differentially high rate in the development areas, together with the wider problem of regional imbalance of which it is part, as one of the major problems which it is our task to overcome and remedy.

5.18 p.m.

Photo of Mr Henry Clark Mr Henry Clark , North Antrim

This is a thoroughly worthwhile debate and I very much welcome the opportunity to speak now. The general problem in the regions was made perfectly clear by my right hon. Friend the Member for Mitcham (Mr. R. Carr). The Government's Amendment, which draws attention to the "energetic measures" which they have taken to alleviate the difference between the various regions, is almost laughable. There is no question that the difference between the less prosperous and the more prosperous regions has grown substantially under the Labour Government.

I shall restrict my comments as much as possible so that other hon. Members may take part, directing them almost entirely to the Green Paper, "A Proposal for a Regional Employment Premium". To begin with, I welcome the Green Paper as, as far as I know—I am no great Parliamentary historian—a precedent.

As a back-bencher, I have always wondered what the point was in the House discussing a Blue Book, because in nearly every case it was something on which the Government intended to take no action for several years. That was unfortunately only too true whether under the present Government or the Conservative Government. I also wonder about the point of back-benchers discussing a White Paper, because this usually contains clearly-defined Government policy, and no matter what back-benchers say, no changes are likely to take place in the policy. It remains to be seen whether the Green Paper justifies a new colour, whether the Government will take note of the discussions in the House and elsewhere and come forward with a policy which is a compromise between the various suggestions that have been made. It is usually easy to get a compromise on a suggestion concerning which the Government intend to spend about £100 million.

When the First Secretary introduced the Green Paper I rose to give my immediate reaction. I welcome the premium, but wondered what he could do to stop the growth in the development areas of mushroom industries springing up to take an economic opportunity which only arose for a short time, using secondhand equipment, taking the employment premium and drifting out of business in a year or two. That is not a false fear. We have had considerable experience of that in my own less prosperous area in Northern Ireland. In terms of the development regions one can almost always talk from the particular to the general. I can remember a number of artificial silk factories which opened up in Northern Ireland before the war, made their money and disappeared like ships in the night. That will be all the easier with a premium of this sort.

But, having looked at it, I am beginning to come round to believing that this employment premium may be the right solution. It is simple. I believe that one can be far too subtle in giving incentives to new industries. I think that a mistake of the present Government in many of the things they have done is that they have changed well-established customs for deep and subtle reasons of their own which have been completely lost on the rest of the country. But there are snags. Within the development areas there are local regional problems, and in Northern Ireland we face them to a greater extent, perhaps, than any other area except Scotland.

I am sorry not to see the hon. Member for Belfast, West (Mr. Fitt) here today. For certain political reasons of his own, he is for ever telling us that the area in Northern Ireland west of the River Bann suffers heavier unemployment than others. That is not true, and, to use a phrase used by a friend in discussing this question, the facts of economic geography depend little on whether one is Catholic or Protestant. They have nothing to do with whether one is east or west of the Bann, or with the political affiliations of the people. It is the prosperity of the area within 25 miles of Belfast and the high levels of unemployment outside that area that matter. That "contour line" of employment runs exactly half-way through my constituency.

In Ballymena even today the level of employment matches well up to the ideas of what full employment were considered to be before and soon after the war. But 20 miles further north in Ballymoney one finds an unemployment rate of about 12–15 per cent. We have a serious problem there. I do not see that an overall premium of £1 or £2 a week in Northern Ireland will do a great deal to alleviate that very serious problem. Perhaps it will be possible to have slight variations within development areas.

An overall premium of £1 or £2 a week will not solve another serious problem, that of transporting workers to their places of employment. Partly because of the problem I have just described, and partly because we have a rural population which is only now beginning to go to the towns to work in industry, many people throughout Northern Ireland travel between 20 and 40 miles to and from work every day, and all too often they pay bus fares of 30s., 35s. a week and—at times—more than £2 a week, from an average wage of only £8 or £9 a week.

When one considers the incentive of unemployment benefits compared with travelling and working in conditions in which one brings home barely £5 a week, one sees that there is a very fair excuse for those who are desribed as "unemployable" and "work-shy". I have taken this matter up more than once with the Treasury, when it says that it is impossible to give tax assistance towards the bus fares of those people for travelling to work. But, oddly enough, if a firm runs its own bus the costs of taking workers to work are tax-deductible. That is very hard on the small companies, which do not bring enough workers from one direction to be able to afford to run a bus. The Government should carefully examine that problem in terms of Income Tax and Corporation Tax, for it is one that a £1 or £2 premium does not go far to solve.

Another serious problem which we know in Northern Ireland, and which is typical throughout the development areas, is that of a shortage of skilled workers. Where many men are coming off the farms or out of old-fashioned textile mills and heavy industry such as shipyards, we are often short of the necessary skills for modern light engineering which is the general trend of development in those areas. With a premium of £1 or £2 a week, there will be every incentive for skilled men to leave their trades and take up semiskilled work in one of the new factories, as they all too often do because such high wages have been paid in some of those factories. With £2 a week to play with, such firms will be able to attract even more skilled men from the service industries, which are the real infrastructure for industry.

If one is trying to create the right atmosphere for industry, the kind of firms that one wants to start with are small engineering contracting firms and electrical contracting firms, and one wants plumbers and carpenters who can help the new factories get going. One of the reasons why industrial development takes place so well within 25 miles of Belfast is that if an electric motor burns out in a factory in that area it can be replaced within half a day. But further away the factory may be stopped for a whole day before the motor is repaired. We must build up the right sort of service industries for industry, so that we can get industrial growth. I do not see that the scheme will benefit those people; it will make it harder for them to keep their skilled labour.

It is all very well for the Under-Secretary to say that we want growth industries in the development areas. Of course we do; that is self-evident. But every industry must be flexible, and there is no question that in the labour-intensive industry it is the labour force that is flexible, and the industry is continually taking on and sacking people. I had a most unfortunate experience with a well-known radio company, which one would have thought at first sight to be a growth industry. Its labour force fluctuated between 1,200 and 800 over a period of 10 years, and when its factory finally closed down there was almost a celebration in the town because we had got rid of an industry which had lost the affection of local people. It was replaced in the same factory by a far more stable industry.

There is no question that the labour-intensive industries which may be attracted by the £2 premium cannot only create a great deal of unhappiness and instability by taking on and firing at regular intervals but can be dogs in the manger and delay the development of the capital intensive growth industries, which we want.

We have a really worthwhile proposition here. We are glad to see that the Government have realised just what a major problem unemployment in the development areas is. They have put forward a solution of perhaps the right order to begin to solve this question. They intend to spend, if this is carried out, about £10 million in Northern Ireland. Can we have an assurance that if this money is spent it will not be to the prejudice of the other schemes already being carried out to bring industry to these areas? There is no doubt that the road programme, which is so vital for the spread of industry all over Northern Ireland, is being inhibited by a shortage of funds and loan capital, which is usually supplied to Northern Ireland by the Treasury here.

Photo of Mr Peter Shore Mr Peter Shore , Stepney

I would like to give the hon. Gentleman the assurance that the regional employment premium to which he referred is being considered by the Government as a measure additional to the present range of policies and expenditures in development areas.

Photo of Mr Henry Clark Mr Henry Clark , North Antrim

The Minister has not gone quite so far as I would have liked him to. I understood that this was an addition, but there is no getting out of it that the squeeze policies are inhibiting some of our capital expansion programmes, particularly the road programme. The Northern Ireland Government are being held to their original estimates for new roads, and not to those estimates plus the increase in costs which has taken place in the last two years. I should like the Government to take note of that and accept that if we are to spread full employment beyond the 25-mile range, we shall need a steady expenditure on roads.

I have discussed this suggestion in a reasonably impartial way. It is no less than the development areas need. We have borne the brunt of the squeeze and the economic policies of the last two years. It is rather tragic. Having lived with the unemployment problem in Northern Ireland all my life, I was in a position two years ago to say with some confidence that by 1970 we might have the problem beaten. I had real hopes then that we would soon get the level of unemployment in Northern Ireland permanently below 5 per cent.

We had made considerable progress. For instance, the latest census figures show that we have cut the net emigration from Northern Ireland by about 3,000 a year and the population is becoming more stable. The tragedy came with the April figures, this spring, when unemployment should be on the decrease. The figure for April was 9·4 per cent. of the adult male population unemployed—nearly 10 per cent. That is over 1,000 more men unemployed in Northern Ireland today than in March; against the seasonal trend! If one looks at the policies of the Labour Government one does well to remember that those 24,000 new jobs for civil servants in Whitehall would virtually solve the problem of unemployment in Northern Ireland.

5.34 p.m.

Photo of Mr George Lawson Mr George Lawson , Motherwell

I am not quite making a maiden speech, but it is a long time since I spoke. I am happy to participate on a subject about which I and many of my colleagues have been interested for a long time.

It is rather interesting to hear the hon. Member for Antrim, North (Mr. Henry Clark) tell us that he believes that the Government regard it as a matter of major policy that we should be concerned with unemployment in the development regions. Let me tell him that I, and all of my colleagues on this side of the House, have been concerned with this question virtually ever since we could think politically. In many ways the movement that I represent came into existence as a protest against the kind of conditions under which we had to live. That there has been so much concern with this problem and the finding of a solution is not entirely due to us, but it is in large measure due to the pressures that we have exercised over the years. It is significant that today there is near unanimity.

The hon. Gentleman spoke of talking impartially about a subject such as this. It is significant that in a comparatively short time so many changes have taken place in the general thinking of the people of this country, notably among Members of this House. It is not so long ago since hon. Members opposite, who were then on this side of the House, regarded it as absurd that we should put forward so many suggestions about how Government intervention was necessary in order to deal adequately with this problem. We have constantly had to press the idea that under the kind of conditions existing in so many of what are now called the development areas the natural factor was so much against the area that Government intervention was necessary.

On many occasions we described the many forms that this Government intervention could take. It is a little ironical that we should be subjected to something akin to a vote of censure—we who have stood for this kind of thing—from the party opposite which has always condemned it. I do not blame hon. Members opposite; I am happy that they have accepted general responsibility for the shaping of the economy. But it is ironical that it is we who should be attacked for not being 100 per cent. successful in the measures that we are introducing.

It is very well known on this side of the House, and it is becoming increasingly well known, that there have been two great economic problems confronting our society over the past 20 to 30 years. Indeed, the problems were there many years previously, but they have become more clearly understood since then.

The first problem is unemployment. The fact that we have been so relatively successful in solving the unemployment problem has brought into being a second, related problem. In other words, the solution of one problem gives rise to another, which is how to control inflation, how to control our costs. This is largely the hook upon which this nation is stuck, if one can be stuck upon a hook. The very success that we have had in solving the first problem, although it was not done entirely by us—it was a national effort but we spearpointed it—has brought into being the second. There is no easy answer to this. They have to be seen as problems which must be solved jointly. Knowledge about how to handle our economy is still very inadequate; this is something that we all recognise.

If I have a criticism to level at my own Front Bench it is that in the past it talked far too confidently about what it could do. I am prepared to make that criticism. Its intentions were sound and are sound yet. Sometimes when one has to handle them the facts are more difficult than in perhaps appreciated, but there is no harm in this. There is no harm in reaching out for a solution of these problems. We at least were concerned with them; we did not have to be driven on all the time to do something, as was the case with the party opposite. We were driven on by the belief that these things had to be done and could be done. They will be done and they are in the course of being done.

I am more concerned with the problems of my own area and of Scotland than with the general set-up. I welcome the general acceptance by hon. Members opposite of Government responsibility for action in solving the problems of development areas. However, it is important to ensure that this intervention by the State is not just intervention on behalf of areas which are unable to look after themselves, areas which will go down and down because of some weakness in the people there, or for some other reason. We should ensure that the intervention is not called for merely because of social purposes, good though they are. It is increasingly being appreciated that the intervention for which we are asking, and for which we have been asking for a long time, is intervention which is economically advantageous to the nation.

For example, the business man does not always know what is best. The gibe "Whitehall knows best" is familiar to us. Very often Whitehall knows very much better than other parts of the country what is good for the nation. [Interruption.] If hon. Members are challenging me, why are they taking part in the debate? Are they not asking for more Government intervention, and does not that mean acting through some such agency as Whitehall?

If the business man is left to locate his business or industry where it suits him, that may not always be to even his best advantage. For example, if there is a large market, he may move into such an area and thus cause more and more congestion and not necessarily create more and more efficiency.

It is true of the Scots and the Welsh and others that our industry has been drawn away to other areas. National sentiment does not usually matter in the making of profits. I am prepared to say that Scotland suffers first from the Scots—perhaps this is a reply to the Scottish Nationalists—in that the Scots were as ready as anybody else to pull up their roots and move to where it seemed to, or did, profit them most. We have had many examples of Scottish businesses failing to keep abreast of technical developments elsewhere, and we have had many cases when Scottish wages have not been as high as those elsewhere. That might be regarded as part of the failure of Scottish trade unions to keep abreast of what was happening elsewhere. There are many sides to this subject.

The point is that if the decision is left to the isolated group or individual, then that group or individual will move to the area which seems to it or to him to be best, and while that may sometimes be for the general good, often it is not. That is when the necessity for the overall intervention of the State becomes increasingly apparent.

The State can make mistakes and some of its interventions may result in bad development, but that is only the State trying out its apprentice hand. We ought not to expect every decision in the State's planning and every intervention by the State to be wholly successful. The State is very "green" very raw, very immature, very lacking in skill and know-how in this kind of thing, but it will improve.

In my area there are divided approaches to the problem. The right hon. Member for Mitcham (Mr. R. Carr) asked whether we ought to dilute aid over wider areas or concentrate it. I believe that we need to consider more closely the natural features of an area, its natural advantages, sometimes its disadvantages, and thus encourage the kind of development that is wanted. We could become more and more selective and not just offer a general blanket of aid to certain areas.

What is now fairly apparent is that most British firms which go to development areas do so because they are more or less driven out of their own areas. They are denied the right to develop a factory, for example, in their own area, and so they move to a development area. But they go reluctantly, not having weighed all the pros and cons, because they are driven out and because the shortest answer to their problem that they can find is to move to a development area. We have not gone into the question of why firms move at all, but it is fairly safe to say that the processes are those which do not permit a firm to expand where it is. If that is why a firm moves, then we should be thinking not so much of a general blanket of attractions, but rather in terms of what areas contain, of what are their deficiencies or advantages, and how we can encourage certain types of development in certain areas.

Let us take the Clyde area as an example. A number of my colleagues and I were recently the guests of the Clyde Trust, which took us down the river and showed us a variety of problems with which it was concerned and how it was dealing with them. At that time it was very much concerned with the problems of the container berth and the container ship. We discussed whether there was something about the whole of the Clyde region which permitted us to think of its possible development optimistically. We asked whether there were factors in the area which would always be against us, despite what might be done, so that the area would always be a second-class or third-class or even more inferior area.

What we were told was very encouraging. We were told that the Clyde Estuary had a great advantage over virtually any other port area of Great Britain. It has the advantage of sheltered very deep water. The ship of the future—already it is the ship of the present—will increasingly be a huge ship. It may be 100,000 tons, or 150,000 tons, or 200,000 tons—we cannot say what the limits will be. Naturally, these huge ships will be able to use only limited ports and in some respects move in only limited waters.

It is already dangerous for ships of this kind to move up the English Channel. For example, some of the ships coming across the Atlantic have to go right round Scotland to get to Rotterdam. The English Channel is virtually closed, or soon will be, to these very large ships. We were also told that this was becoming increasingly true of the Irish Channel.

That means that the first port for these ships will be in the Clyde, at Greenock, the Tail of the Bank and right up the Clyde to that point. We were told that the largest of these ships could virtually come right up with virtually no alteration to the approaches. This could mean that the huge tanker or the huge container ship could come right across the Atlantic with its first port of call not Europe but Greenock, or the Tail of the Bank, Glasgow. There its cargo could be broken up and placed in smaller ships and even sent to Europe. We can consider the great potentiality of this area in using liner trains, with the liner trains bringing goods from the Midlands of England, for even the heavily populated areas of England might find it cheaper to send their goods up to the Clyde than to some English port.

The Clyde has the advantage of very deep and sheltered water. When these huge ships approach to tie up, they must cut off their power a long way out, and in such circumstances they are badly exposed to heavy weather. In the sheltered areas of the Clyde there is scarcely any movement of the tide, and a ship can run right in, load and sail again. Alternatively, the cargo can be broken up and sent to other ports. There is a great possibility in the use of liner trains and the new road system carrying big containers across the narrow belt of Scotland to the East coast port of Grangemouth, where the cargo can be reloaded on 1,000-ton ships and sent to the Continent. If we were on our toes we could make this area a Rotterdam.

This is what I mean when I speak of thinking in terms of the possibility of areas. Because of great political pressure, a previous Conservative Cabinet decided that a strip mill would be built at Ravenscraig in my constituency of Motherwell. This is a great asset to industrial Scotland; if it had not been created, the outlook for industrial Scotland would be very bleak indeed. But although this strip mill has been established in Ravenscraig, it is not complete. It is crippled in that it cannot handle a sufficiently broad range of products. It has certain important deficiencies which must be rectified. If they were rectified, I am assured, it could look in the face any comparable mill in the world. It needs the supplementation of a tin-plate mill and a galvanising plant. Given these advantages at Ravenscraig, that area of industrial Scotland would be one of the greatest industrial complexes of Britain and, I believe, of the whole of Europe.

Let me turn to another type of activity. Not everybody wishes to live in an industrial area. On the West coast of Scotland there is a great potentiality in the development of fish farming. People have been interested in it for a long time. It may well be that fish farming on a substantial scale is not yet as economic as we hope it will become. Consider the reaches of sheltered water which could be protected. Already there is a device which can close up the mouth of a loch to fish; an electric current can be passed across the mouth so as to bar fish from entering or leaving. The West of Scotland is one longe series of long sea lochs. I hope that action will be taken on a much larger scale, with State intervention, to assist with this kind of development—not for cheap fish but for expensive fish, such as shell fish, scampi, lobsters, crabs, oysters, plaice and black sole. I might even add herring. At one time no herring in the world could compare with the herring that came from Loch Fyne. I know something about this. One could tell the Loch Fyne herring just by looking at it. If we could foster the catching of herring such as Loch Fyne herring, and handle them as they should be handled, it would give great potentiality to the area.

I have given two examples of possible industrial development, given Government assistance. We should be thinking about large-scale possibilities, not fiddling little things here and there but large things which should be done. If we think in terms of deliberately shaping our economy, this is what could be done. This approach to shaping our economy is now being accepted. It does not debar what is called private enterprise. Let us have as much enterprise as we can get, but, in addition, all the time there needs to be more and more intelligent study of areas and an intelligent consideration of what can be based upon those areas. Having concluded what it is best to do with an area, let us get down to a serious job. In this way we can re-make Britain—and as a Scotsman I am prepared to include the rest.

I am in no carping mood, but if there is any criticism that can be made of the Conservative Government it is that over the years our country has gone down and down compared with other countries. We have not kept pace. But we have the capacity and the ability if we use it and if we get rid of some of the psychological barriers that stand in the way of our showing that we are as good as anybody else.

There was a time when the Scots used to brag that they ran the Empire and this country. Now far too many of our fellow countrymen are whining about Whitehall. There is a job for us to do, with the assistance of Whitehall. We can make Scotland and Britain—we might even be able to make Ireland—among the most desirable parts of the world in which to live. That is the sort of task in which we should engage.

5.58 p.m.

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , South Angus

It is a pleasure to hear the hon. Member for Motherwell (Mr. Lawson) restored to full voice after a period of enforced silence. I noticed a change between his speech and that of the Joint Under-Secretary, his hon. Friend the Member for Stepney (Mr. Shore), and the kind of speeches which were made by the Labour Party when they were in opposition.

The hon. Member said that he detected a change of voice from this side of the House. I beg him to read the speech of his hon. Friend the Member for Stepney tomorrow and compare it with some of the speeches which the present Secretary of State for Scotland used to make when he was in opposition. He will find a remarkable change of tone. Suddenly, all these problems have become intractable, and suddenly all the solutions which the Secretary of State had at his fingertips have become difficult; they will now, we are told, take rather a long time, but somehow, some day, it is said, with a great deal of luck, we may get somewhere towards them. It is time that the hon. Member recognised that his right hon. Friends have changed their tone, with all the implications for permanent unemployment that this implies.

I think that in the Chancellor's Budget speech there was only one passage with which I found myself in agreement. That was where he said that if we could even out the disparities in unemployment and in activity rates between different areas of the country the management of our economy would be infinitely facilitated, and would, at the same time, enable us to eliminate some of the difficulties—and, indeed, the miseries—which arise from high levels of unemployment in some of the regions.

How much I agree with that sentiment. That is why this debate seems to me an important and opportune one, so that we can try to see what is happening in the regions and what the outlook, following this deplorable Budget, will be.

Photo of Mr Hugh Gray Mr Hugh Gray , Yarmouth

Is the hon. Member saying that he is in favour of the redistribution of wealth between areas? Is not this a Socialist concept rather than a Tory one?

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , South Angus

I do not think that the elimination of the disparities in activity rates and levels of unemployment between the different areas is a Socialist, or, indeed, a Tory concept. It is a question of the way in which we manage the economy. I agree with the Chan- cellor—that was the only point, as I was saying, in which I found myself in agreement with him in his Budget speech—that it would make it very much easier to handle the management of the economy.

My right hon. Friend the Member for Mitcham (Mr. R. Carr), in his opening speech, asked the Government one very important question, to which we did not have an answer. I hope we shall have an answer from the Secretary of State for Scotland when he sums up the debate tonight. That question was: what is the Government's estimate, in the regions we are discussing today, of the likely levels of unemployment later this year, next autumn, next spring, next year? I hope that the Secretary of State will give us an answer to this question, because it seems to me a vitally important one. If he is honest, I fear that the only answer he can give will be a sombre one.

The Government, as I see it, inherited in Scotland a situation which was looking more optimistic and more hopeful than we had seen for a good many years—because of the actions of the previous Government. The hon. Gentleman the Member for Motherwell (Mr. Lawson) referred to the strip mill at Ravenscraig as a decision of a Cabinet, and then, in his generosity, he got around to mentioning that it was a decision of a Conservative Cabinet. That was one of the major steps which the last Conservative Government took. There were other steps, and I need not enumerate them all, but, for instance, the level of the motor car industry in Scotland was stepped up, and there was the pulp mill at Fort William, and very many other major projects which diversified the industrial base in Scotland and, I believe, put the Scottish economy on a far healthier footing than it had had for several years.

The Government have been carried along—or were being carried along—on the momentum of those achievements. During the famous year when they were running the economy as no economy had ever been run before—in the words of the First Secretary—the strains and pressures of over-employment in the South-East, the Midlands and many other parts of England meant that firms thinking in terms of expansion would inevitably strive to expand in Scotland, because there was nowhere else they could possibly obtain labour. This, too, I think, helped to create a far healthier situation.

What have the Government done with it? The hon. Member for Stepney went over the familiar list which we have had several times in the past from Ministers. The investment grant system, for instance. I interrupted him to point out, according to the Board of Trade's own chief officer in Scotland, what was claimed to be one of the prime attractions of investment grant, that it would be readily understood and accepted by manufacturers, does not appear to be working out. I believe that it is not working out not because there is a shortage of publicity but because at present manufacturers, whether in Scotland or in England, are not in an investing mood, and that is hardly surprising. That is a vitally important point and I want to return to it.

The hon. Gentleman also referred to the stricter system of i.d.c.s introduced by the present Government. Personally, I have never believed that a system of i.d.c.s, whether it is strict or loose, is the ideal way to approach the problem of correcting regional balance. I believe we want more of the carrot and less of the stick, because unlike the hon. Member for Motherwell, I really do not believe that the gentleman in Whitehall knows best, or is ever likely to know best. I believe that the manufacturer is the man who is most likely to know where his operations will be most profitably carried on.

By all means let us give him inducements to move to areas where there is room for him to expand, but I am very doubtful about the wisdom of imposing strictly defined rules through an i.d.c. system for preventing him from expanding where he is, because, apart from anything else, the likely result is not that he will move to Scotland, but that he will not expand at all.

We have heard a lot, too, about advance factories. Certainly, the Government have had a programme for advance factories. I seem to remember, even before becoming a Member of this House, hearing of and reading reports of wonderful speeches which the Secretary of State for Scotland used to make and in which he flayed the policy for advance factories as meaning only jobs in the pipeline which never materialised at the end. We heard a different tone today.

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , South Angus

The right hon. Gentleman says, "Not at all", but I can remember reports of speeches of his and the complaints we used to have from him about jobs in the pipeline which never materialised. Nowadays, I suppose, so long as it is a planned Socialist pipeline all the jobs will come out at the end.

Photo of Mr William Ross Mr William Ross , Kilmarnock

I wonder if the hon. Gentleman would like to quote any one speech in which I took exception to advance factories being built? Any one speech.

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , South Angus

I did not say the right hon. Gentleman took exception to their being built. What I said was that his complaint was always that they meant only jobs in the pipeline and that this was no substitute for Socialist planning, which was to be the panacea to solve our problems.

The Government, as my right hon. Friend pointed out, scrapped the most successful system of free depreciation and the system of investment allowances which concentrated encouragement to investment where it was likely to be profitable. We do not want unprofitable investment in Scotland or in any other of the less privileged parts of the United Kingdom. Unprofitable investment is not desirable and we should not be encouraging it.

My right hon. Friend drew attention to the ominous signs of the icy fingers creeping over the regions once more. It is interesting to note that, at constant prices, even in 1965 the level of manufacturing capacity in Scotland was substantially lower than it was in 1961, the last occasion on which we stamped on the brakes. Of course, the Secretary of State must be aware that the level of emigration was rising to new records. That process has continued. As the hon. Gentleman the Member for Stepney said, we have to tackle the problem of migration between the regions.

It is perfectly true that emigration from Scotland to England has not risen very sharply. What has happened is that there has been an enormous increase in the number of Scots leaving these shores for good. Under a Labour Government, they prefer infinitely to go to other countries where their talents are better rewarded and better appreciated than they are in England or Scotland.

That was the situation when the Prime Minister came along and stamped on the brake last July. A few years ago, a critique of the Tory Government's economic policy was published, entitled, "Sunshades in October". It is an unfortunate feature of the calendar that, somehow, the application of sunshades often seems to take place in July or at the latest in September.

The simile was clear. Time and again, we have stamped on the brake of the economy when the machine was already running down. We have done it once again and, as my right hon. Friend pointed out, we see now its impact in the regions.

The fall in unemployment in Scotland between January and April of this year has been the smallest for a decade, and the comment of the spokesman of the Scottish Council on last week's unemployment figures was that the comparable trend with the situation in 1962 was unmistakable. It is, except, as my right hon. Friend suggested, that this time the indications are more ominous than they were on that occasion.

What do the Government intend to do? The hon. Member for Stepney said that they had two advantages. He said that there was nothing mechanical about these things and that, just because it happened before, did not mean necessarily that it would happen again. But that is not much consolation to us. On the whole, past experience suggests that it will happen again. He said that the Government were watching the situation closely, but that is not much comfort to us, either, because again, on past experience, we can see that the action is likely to be slow in affecting the levels of unemployment and emigration which we are experiencing in Scotland.

In what was otherwise a totally deplorable speech in the Budget debate, the First Secretary said one thing which was significant and, I think, correct. He agreed that the effect of these successive doses of inflation is slow to work through to the economy of Scotland. We have by no means seen the peak of unemployment in Scotland this spring. All past indications suggest that the peak must come and will come ineluctably next spring.

Another aspect of the situation which is much more ominous than that which we faced in 1962 is the decline in manufacturing investment. The Government have spent a great deal of time talking about the increases in investment grants and an extra 5 per cent., as if an extra 1s. in the £ on the Government's dole will persuade a manufacturer to invest at a time when he can see no prospects of profitable investment and no hope of being allowed to distribute a profit if he makes one.

To my mind, this is the most serious and alarming aspect of the present situation. As my right hon. Friend pointed out, the Chancellor has admitted that, between now and 1970, not only shall we have a substantially lower rate of expansion, even if the Government's best expectations are fulfilled, than occurred under the previous Conservative Government, but that all the additional wealth which, on the Government's estimation is to be created, is already earmarked for the expansion of the public sector. There is nothing there for manufacturers in Scotland or anywhere else to go for. As I see it, that means that the downturn in investment which we are already facing, whether it he 10 per cent., according to the Board of Trade's latest estimate, or 15 per cent., as other recent independent estimates have suggested, will be prolonged, because there is nothing for manufacturers to go for.

In the February issue of the C.B.I's Industrial Trends, it was shown that manufacturing investment intentions in Scotland had actually been reduced over the previous three months while there had been some recovery in England. That is the way in which the squeeze is hitting Scotland hard, and it is likely to hit her harder as the months go by.

Reference has been made to the Government's proposals for regional employment premiums. I do not believe that that is the right way of giving regional incentives, because, as my right hon. Friend said, we do not want to give an incentive to the wastage and hoarding of labour anywhere. What we want to do is to discourage the wasteful use of labour, above all in the areas of high employment and overdevelopment such as the South-East and the Midlands. In addition, the regional employment premium is being built on to the crazy structure of the Selective Employment Tax, with all the bias against the tourist and service industries, which are so vitally important to many parts of Scotland. I know that the reason for it is to try to give a backhanded stimulus to exports, but if we need to give artificial stimuli to exports we might be better advised to look at the rate of exchange.

In his previous incarnation, the Secretary of State talked a great deal about planning. Did he plan to have 90,000 unemployed in Scotland this spring? Does he plan to have 120,000, 130,000 or 140,000 unemployed by next spring? Did he plan to have a level of emigration of 50,000 from Scotland this year? Those are the only tangible results in Scotland which we can see of the right hon. Gentleman's attempts at planning.

In the past, my constituency has been fortunate to escape high levels of unemployment, though we have had a continuing problem of emigration. However, only last week we had one factory close down, resulting in 110 redundancies. Does the Secretary of State suggest that I should tell those people, "It is all right. You are out of work, but it is planned this time, so that there is nothing for you to worry about"? We cannot do that.

Once again, we are inflicting on the people of Scotland a loss through emigration of the best of our talents in doctors, technicians, scientists and others whom we can ill-afford to lose. We are inflicting a wastage of jobs and of capacity; and to what end?

Photo of Mr William Hannan Mr William Hannan , Glasgow Maryhill

Does the hon. Gentleman suggest that emigration and unemployment began only in October, 1964? Is he not aware that, during the period of office of the previous Conservative Administration, in 1963, there were 163,000 unemployed and that unemployment today is less than it was when the present Government came into office?

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , South Angus

What the hon. Gentleman does not seem to be aware of is that his right hon. Friends said that they would cure these problems, yet we see them getting worse. The level of emigration has never been anything like as high as it is today.

What I find unforgivable about this experience is that I cannot see that it will solve our problems at all. We shall not solve our balance of payments difficulties by deflating and creating additional unemployment in Scotland. All that we do is to hit investment and thereby ensure that we sow the seeds of the next balance of payments crisis with the one that we are trying to escape from now.

Sooner or later we have to be prepared to tackle the balance of payments restraint on our ability to expand. I believe that this must mean a willingness to look again at the whole question of the exchange rate. I do not accept that anybody in Scotland should be driven to emigrate or to lose his job so that the Prime Minister can go to his grave with the words 2 dollars 80 cents written on his heart.

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

Many hon. Members from many regions wish to speak. I hope that hon. Members will be reasonably brief.

6.21 p.m.

Photo of Mr Geoffrey Rhodes Mr Geoffrey Rhodes , Newcastle upon Tyne East

I am sure that the hon. Member for South Angus (Mr. Bruce-Gardyne) will forgive me if I do not follow him too closely into the problem in Scotland, of which I would not claim any special knowledge.

The Motion calls on the Government to take positive measures clearly designed to promote economic growth in the less prosperous areas. The presumptions are that such measures have not been taken, that the less prosperous regions have been let down by the Government, and that if the Opposition were the Government they would have done better. It is this last presumption which I would like to consider.

The July, 1966, squeeze has had a bad effect on many of these regions, and I think that it would be foolish to deny this. It was similar in many respects to the kind of squeeze that we had in July 1961 when the party opposite was in power. During that squeeze—and I remember it very well, because I was nursing my constituency at the time—unemployment in the Northern Region jumped to 5·5 per cent. over twice the national average. The industries in the North took a terrible beating.

The region suffered particularly severely, because before the previous Conservative Government imposed the squeeze they had not created the shock absorbers which would have enabled the North to withstand it. Between March, 1960, and March, 1963, that is, immediately before the squeeze was imposed, and running through the early part of it, additional employment for the Northern Region arising from the granting of I.D.C.s amounted to only 28,870 jobs. I say "only" because in the following three years, during the major part of the lifetime of the present Government, I.D.C. approvals for this region brought in an estimated additional 62,020 jobs, and I understand that the latest figures, which will be issued shortly, will show that this excellent progress in the provision of new jobs has been more than maintained.

It is interesting to note that in 1966 no less than 41·4 per cent. of the total floor space allocated to new factories in development areas came to the North. This compares rather favourably with the 24 per cent. which was granted in 1962 when the Conservatives were in power.

Photo of Mr Robert Elliott Mr Robert Elliott , Newcastle upon Tyne North

This point is interesting enough, but does not the hon. Gentleman appreciate that it takes a good deal of time to bring a new industry into an area? I call in aid in reply to what the hon. Gentleman is saying an Answer given to me by the President of the Board of Trade in December last, when he said that, of the 578 I.D.C.s issued in the years 1960 to 1965, only 29 had been issued since the Labour Government took office. In other words, it was the work of Conservative Governments which brought these jobs to the Northern Region.

Photo of Mr Geoffrey Rhodes Mr Geoffrey Rhodes , Newcastle upon Tyne East

I agree that it takes a long time to plan the installation of new factories in these regions. My complaint about the Conservative Government's squeeze is that the counter measures came too late, and were too meagre in their application when the squeeze was in force.

Let us consider the development areas, and look in particular, at the floor space allocated to the Northern Region. The region's percentage in 1961 was 26·5; in 1962, it was 24·4; in 1963, it was 31·3; in 1964, it was 34·3; in 1965, it was 39·7; and, last year, it was 41·4. I suggest that the latest figures will show a further increase. The hon. Gentleman is capable of doing an arithematical calculation to discover that the persistent increase year after year, which was beginning shortly before his party went out of power, has been continued during the lifetime of the present Government.

Since the Labour Government came to power, the lion's share of new factory space has been coming to the Northern Region. I understand that it has received a bigger proportion than any other region. The last time this happened was when the Labour Government were in power, between 1945 and 1951. It is right and proper that this should be so, because the Northern Region had the lion's share of the declining industries.

During the last four years of the previous Conservative Administration, employment in the declining basic industries of the Northern Region, especially in coal mining, fell by a total of 60,000 jobs. It was because the rate of decline was so steep, and because intervention by the Government came so late, that the ranks of the Tory Party in the North were completely decimated during the 1964 General Election. After the Labour Government came to power there was a considerable increase in the percentage allocation of floor space to this region.

If the present trend continues, the region will be in a far healthier state to withstand the effects of the squeeze than it was four years ago. Male unemployment is the most severe problem in this region and I suggest that the regional employment premium, to which reference has been made, could be a very effective weapon in dealing with it.

Photo of Mr Robert Carr Mr Robert Carr , Mitcham

I am sure that the hon. Gentleman does not want to mislead the House on facts. When he talks about trends, is he aware that according to official records factory building completed in the first half of 1966 in the Northern Region amounted to 1·2 million sq. ft., compared with 1·9 million sq. ft. the year before? The trend is downwards, and not upwards.

Photo of Mr Geoffrey Rhodes Mr Geoffrey Rhodes , Newcastle upon Tyne East

I do not dispute that if one were to check the regional allocation of I.D.C.s over the years one would find that there was a dip in some earlier years, but the point is that the allocation of floor space has been increasing rather than decreasing under this Government. These are the figures which were supplied in answer to my hon. Friend the Member for Swansea, West (Mr. Alan Williams) on 10th April. The right hon. Gentleman can check them in HANSARD.

During the weekend the North had a fleeting visit from the Chairman of the Conservative Party, the right hon. Member for Taunton (Mr. du Cann). I have given the right hon. Gentleman notice of what I am going to say. Speaking in Gateshead, he said that it was a 'damned disgrace' that 50,000 people in the North are unemployed", and he went on to ask whether the Prime Minister and the Chancellor of the Exchequer knew that the North-East existed, or cared whether it did. The right hon. Gentleman shows his ignorance of Tynesiders if he thinks that they will fall for a load of petty political cant of that type.

The right hon. Gentleman's memory is rather selective, and not quite so long as that of many of the Tynesiders. They can remember when 50,000 people were unemployed, not just for one month, but right through the latter months of 1962 to the early months of 1964, and that in the middle of that period it reached 92,360, nearly twice the number which the right hon. Gentleman said was a damned disgrace. The figure to which I have just referred was a double-damned disgrace, and it is fair to ask whether the right hon. Gentleman, who, I believe, was in the House at the time, told his Government that it was a damned disgrace that nearly 100,000 people were out of work in the Northern Region.

Nobody in this House or elsewhere, whatever his political persuasion, can afford to be complacent about the unemployment situation in the North of England. I willingly concede to my colleagues on these benches who are members of the Northern group, and, indeed, to the hon. Member for Newcastle-upon-Tyne, North (Mr. R. W. Elliot), and the hon. Lady the Member for Tyne-mouth (Dame Irene Ward), that nobody in the North is happy about the employment situation there at the present time. But we shall not solve the problem by people buzzing off to the North at the weekend and saying that the situation is disgraceful, and leaving without putting forward some constructive suggestion and explaining why this problem was allowed to develop in the region, in the first place, during the late 'fifties and early 'sixties.

Any reasonable person, and I quote as my authority for this spokesmen for the North-East Development Council and many other bodies, can see that the North has been withstanding the effects of the squeeze far better this time than it did when the Conservative Party had to impose a similar squeeze on the economy for rather similar reasons, and the region recognises this.

It may have escaped the notice of the master-mind who ran the Conservative county council election campaign that the two counties with the lowest swings in the United Kingdom—the ones least responsive to the pro-Conservative swing—happened to be Northumberland and Durham. I suggest that the Chairman of the Conservative Party came to Tyneside last weekend not to offer constructive suggestions to the people of the area as to the way in which the problem could be solved, but for the sole purpose of political scaremongering, and because of the miserable swing that he got in the area a week ago, in the county council elections. I suggest that his visit was in preparation for the borough council elections in Newcastle and elsewhere in May.

I suggest that the main purpose of the Motion is far less that of seeking to solve the problem of the area than to get over a bit of political propaganda for the election campaign that is about to take place. This is as clear as daylight to anybody who understands the timing of debates in the House of Commons and their subject matter. I can assure the House that Northerners are not so easily motivated by that kind of party political propaganda. They prefer common sense, and for the rest of my speech I propose to make some useful and constructive suggestions for a solution of our current problems.

Photo of Mr Robert Elliott Mr Robert Elliott , Newcastle upon Tyne North

I listened to the Chairman of the Conservative Party make his speech, and I would point out that he was speaking of the fact that unemployment in the Northern Region has recently risen dramatically, due to the policies of the Government, by no less than 1,749, as compared with the usual seasonal fall at this time, of 3,500.

Photo of Mr Geoffrey Rhodes Mr Geoffrey Rhodes , Newcastle upon Tyne East

I concede that an unemployment figure of 50,000 is much worse than it should be, and that it may be regarded as highly dramatic—but it is not half as dramatic as an unemployment figure of 92,000, which was the peak figure when the party opposite was in power—and I would point out that there was an unemployment figure of 50,000 not just for one month but continuously from 1962 to 1964. References to the dramatic rise in unemployment are nothing more than political humbug.

On the credit side, people in the North are satisfied that in a region with only 5·7 per cent. of the United Kingdom insured population in manufacturing industries we are getting over 20 per cent. of the new jobs that are being created for the whole country. We are getting four times our share, in purely percentage terms, and that is right and proper. There is some confidence in the region, as is shown by the fact, which may not seem immediately relevant, that in 1966 house-building starts, in both the public and the private sectors, were well up on the previous year. This shows the degree of confidence of the people of the area. Nevertheless, serious underlying weaknesses in the Northern economy remain.

First, and most obviously, it still depends heavily on the two basic industries of mining and shipbuilding. In this region, the mining industry is still contracting at the rate of 6,000 jobs a year, and in shipbuilding a very difficult position exists in respect of order books, aggravated by the present disgraceful lock-out of draughtsmen by the Shipbuilding Employers' Federation. If this lock-out continues much longer it will have disastrous consequences for the industry.

Because of the situation that I have described there is a need further to diversify industry and to bring in far more factories which can utilise the male labour that is coming on to the market. We already have three new industrial retraining centres but I am sure that my hon. Friend the Member for Durham, North-West (Mr. Armstrong) will agree that if any region needs an extra industrial retraining centre his constituency does. I say that on his behalf because I believe that there is a convention which does not enable him to intervene in this debate.

Photo of Mr Geoffrey Rhodes Mr Geoffrey Rhodes , Newcastle upon Tyne East

I am sorry; I have already given way two or three times.

Photo of Mr Geoffrey Rhodes Mr Geoffrey Rhodes , Newcastle upon Tyne East

I am conscious of what Mr. Speaker said a moment ago, and, also, that some of my colleagues wish to speak.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

I have risen twice—

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

I am grateful to the hon. Member. He has referred to the lock-out of draughtsmen. Will he go further and tell us what his views are on the situation that exists in the shipbuilding industry on Tyneside, namely, that no orders whatsoever are coming forward? It has nothing to do with the draughtsmen's lock-out. Under the Conservative Government—[Interruption.]—for a period—[Interruption.]—we had a good number of orders for the shipyards on the Tyne. Will the hon. Member deal with the problem of Vickers, in his constituency—[Interruption.]

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

Order. Hon. Members are disguising speeches as interventions.

Photo of Mr Geoffrey Rhodes Mr Geoffrey Rhodes , Newcastle upon Tyne East

I am sorry that I gave way. I could answer the hon. Lady's point if I chose to go into details about the shipbuilding industry. I will merely say that the hon. Member for Newcastle-upon-Tyne, East has done more to try to solve Vickers' problems than his predecessor did during the previous five years. The lock-out is relevant to this problem. It is disgraceful that in this day employers should use tactics appropriate to the 1920s and the 1930s to try to settle a dispute.

The main question is whether deflation has gone too far, and whether this is the time to give a further boost to investment in the regions. The North-East of England has never been a contributory cause to inflation. That is why it has always asked for differential treatment, to spare it from the consequences of the overheating of the economy in other areas. The measures put forward in the past have met with a degree of success. During the recent squeeze there have been no serious capital investment cuts of the kind that we had a few years ago. The time has now come, however, for us to ask for something more. No one can be complacent about this situation. We should ask the Government to use the Selective Employment Tax for regional stabilisation. The Chancellor should vary the premium return to industry geographically, so that firms in development areas will get more.

The proposal in the Green Paper, whereby employers in development areas will get an extra premium in the range of £1 to £2 per man per week, would make a serious contribution to attracting male employment to the development areas. I know that this will create problems of competition for labour between service and manufacturing industry, but male employment is so critical in the North that any measures of special relevancy to these industries which are likely to draw in male labour on this basis, and especially if the differential for male labour was markedly higher than for female, would be justifiable.

The £100 million or so a year which it would cost would be possibly the biggest contribution to solving the problem of regional unemployment which has come from either party during the last 10 years. I hope that the Government will not bow to the pressure groups which will oppose this proposal and that they will be persuaded least of all by the Opposition.

Although the people in the North do not begrudge the gains of other parts of the country, they are disturbed that the Post Office Savings Bank was redirected from its first destination, the North of England, to Scotland, that the Motor Vehicle Registration Office has recently been directed to Swansea—I do not object to that—and that there has been a deferment of the decision on Inland Revenue offices. We feel that the time has come to reach a decision that the Mint at least should be located in the North, where we have the necessary facilities to meet its challenge for the region.

Finally—and I believe that this is crucial—we need more technological and research establishments geared to local industry. Unless the manufacturing concerns in the area can be persuaded to undertake a substantial proportion of the basic development work which underpins their manufacturing processes, there is a danger that the region will be condemned to merely productive activity which is in many cases becoming obsolete anyway. The creation of a climate favourable to technological innovation is scarcely helped when there are no Government civil research stations and only one research association in the region.

The Government's heavy investment in industries based on the physical sciences, such as electronics, has been confined to other regions. Therefore, we have a technological imbalance in the region, which inhibits contact between industry and the universities and discourages graduates from settling down to a career in the North—even those from our own universities—and which seriously reduces the choice of employment available to school-leavers with scientific leanings.

We welcome the setting up of, for instance, the new polytechnics in the North, but I greatly regret that the decision has been deferred to establish a new technological university in the North. It was a tragedy that, during the university development under the party opposite, so many were established in regions without the technological imbalance of the North.

My last few suggestions were by way of constructive criticism, as I and my colleagues are not complacent about the problem. We believe that the North, in terms of new industry and factory space, has been doing reasonably well, and far better than it did four years ago—but it is not well enough. It needs to move far more quckly forward. However, as for the Opposition and the speeches of the Chairman of the Conservative Party at the weekend—they are a political irrelevance. They have no relevance to the kind of problems which we are tackling. For this reason, I will willingly support the Government in the Lobby and vote against the Opposition's Motion.

6.45 p.m.

Photo of Mr Charles Fletcher-Cooke Mr Charles Fletcher-Cooke , Darwen

I should like to lower the temperature a little and to quote not partisan material or any party chief, but that of an eminently non-partisan body, the Lancashire and Merseyside Industrial Development Association, which was referred to by my right hon. Friend the Member for Mitcham (Mr. R. Carr). This distinguished body, comprising all that is best in Lancashire and Merseyside, of all parties and no party, yesterday and today has come out with a savage condemnation of the way things are going in the region for which it is responsible.

The House should know that, of that region, only a small proportion, the northern part of Merseyside, is a development area. Therefore, I am the first back bencher, I think, to speak on behalf of those without these privileges. Yet those of us who represent this area, which is greatly in need of a reform of its infrastructure, where the communications are so bad and which is in many ways still suffering from the legacy of the past, where industries are old, know from recent experience that the habit of attaching magnetic influence to certain areas which the Government have chosen to create in a certain way is reducing even such industry as we have.

I therefore add my voice to that of the hon. Member for Yarmouth (Dr. Gray), who appealed earlier for the creation of a middle band or grey area, to use the Parliamentary Secretary's terms, in a demand for efforts to see that these magnetic areas—it is now suggested by the Green Paper that they should be made even more magnetic—shall not operate so as to draw all the cream away from areas like the North-East of Lancashire.

I made very much this same speech about 15 years ago, when the North-East Development area of Lancashire was imposed. The hon. Member for Nelson and Colne (Mr. Sydney Silverman) will remember that happening. It was on the doorstep of my constituency and I feared that it might become a magnet for my constituency, for Blackburn and for other areas which, for some reason were excluded from it. My own Government did it, and, fortunately for the people of Blackburn and Darwen and Bolton and the other areas excluded, it was not very effective and the magnetic effect was not too great—

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

I am not interested in whether Codlin is the friend or Short. That is not the important part. What the hon. and learned Gentleman said about the creation of a development area in North-East Lancashire ought to be completed by remembering that, although the Tory Administration, for the only time in their history, allowed North-East Lancashire to be a development area, just before the 1959 General Election, as soon as they had won that election, they withdrew the Act upon which development areas depended and North-East Lancashire has not been a development area ever since.

Photo of Mr Charles Fletcher-Cooke Mr Charles Fletcher-Cooke , Darwen

Well, it is time that it was so again and it is time, if the Lancashire and Merseyside Industrial Development Association has its way, that the whole of Lancashire should be given these benefits, because it needs them. This Association feels very keenly the "all or nothing" nature of the development area policy as it is developing. It is clear from recent events that it is having a deleterious effect, at least on the weaving belt of Lancashire. Mills—weaving sheds —have been going out rapidly recently. One went out in my constituency the week before last. It is weaving out and it will never reopen. That we must face.

A larger and stronger firm than the very good but small firm which ran the millCourtaulds—has announced, and I am glad that it has, its intention to build four large modern weaving sheds. Considering the resources of labour and expertise that exists in the weaving belt of Lancashire, one would have thought that the four large modern weaving sheds should be placed there, but it looks as if they will not.

We know that one is to go to a development area 70 miles north of Lancashire and there is serious doubt about the other three. I am convinced that if it had been decided that they would come to Lancashire, as they should, the fact would already have been announced, but there is a rather suspicious hush over their location.

I am also convinced that if the proposals in the Green Paper for a premium of £1 or £2 for each worker off the Selective Employment Tax are put into effect, those new weaving sheds will go to a development area and not to Lancashire, which, under the present rule, is not to have the benefit of the premium. Is that the way that the Government think that regionalism should operate? It seems to me incredible that it should be "all or nothing".

I suggest that the Government will be making the whole thing far too artificial and too much of a straitjacket unless they adopt some sort of marginal provisions at least. If the new and, I am glad to say, successful group of the Conservative Party on the Lancashire County Council, run by Mr. Lumby, is not to have its way —it has already called for the scheduling of Lancashire within the development area—let the Government tonight at least say that they are considering sympathetically some sort of semi-status at the very least, so that if there is to be a refund of premium, for example, of Selective Employment Tax in the development areas, we sha:1 get at least 50 per cent. refund. At least, let us get somewhat more than the rate of investment grant that goes to Birmingham and London under the existing scheme. Let us get something between that and the full 45 per cent. for the development areas.

If we have that extreme contrast in a place such as Lancashire, which is flanked on the north by one development area and on the west by another in Merseyside and Wales, all our desires to see the quality of life in Lancashire improve and to find growth appearing there to take the place of the weaving sheds that we see all around us during these months, will fail; and it will be a dreadful danger, because it will be not only a failure of the general squeeze, but it will be an induced failure by the Government by putting these two magnetic points so near Lancashire and yet excluding her from their benefits.

6.54 p.m.

Photo of Mr Denis Coe Mr Denis Coe , Middleton and Prestwich

I am delighted that the House has been given this opportunity to discuss the Government's policy towards the regions. It seems clear that the Conservative Motion is an attack of bad conscience in blaming my right hon. Friends for not achieving all the things that they themselves had hardly begun in 13 years.

The reason why these problems are being discussed today is not, I suggest, as in the case of the poverty debate last week, an indictment of the Government, but an indication of the long period of Conservative inaction. Not only have we in the regions to face that long 13 years of inaction. We must also face the fact that for a much longer period we have had so-called private, free enterprise, which has left in its wake in many of the regions the squalor of bad housing, ugly environments and declining industries.

I now represent a constituency as does the hon. and learned Member for Darwen (Mr. Fletcher-Cooke), in the Lancashire and Cheshire area, but I was born and bred in the Northern area, on Tyneside, and I know something of the problems of that area. I am glad to hear from my hon. Friend the Member for Newcastle-upon-Tyne, East (Mr. Rhodes) of the progress which is being made there. But I know the problems and the squalor which existed there in the 1930s. During the period of Conservative rule from 1951 to 1964, I saw little difference in their attitude towards those areas. Therefore, while I thank hon. Members opposite for giving us the opportunity of discussing the regions, I believe their arguments to be totally hypocritical.

The problems which we are discussing are long term. By their very nature, they could not possibly have been solved in two and a half years. I therefore congratulate my right hon. Friends on the initiatives which they have taken already in regional policy. There can be little doubt that the establishment of regional planning councils and boards is focusing attention on the needs of each region. As my hon. Friend the Under-Secretary said earlier this afternoon, we are also getting knowledge about the regions which we have never had before and on which we have been able to base solid regional policies. This is now coming through the existence of those two types of body. They, in turn, are working in close liaison with Government Departments.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

Does not my hon. Friend think it quite fantastic in a planning sense that in the present circumstances of the textile industry in Lancashire the Government should spend millions of pounds to encourage a wealthy weaving firm to establish new weaving sheds, with 1,000 new looms, in an area which has nothing to do with the textile industry and never has had, while 1,000 looms are idle and hundreds and thousands of skilled textile workers are unemployed in the Lancashire area? Is it not absolutely fantastic?

Photo of Mr Denis Coe Mr Denis Coe , Middleton and Prestwich

I have no doubt that if my hon. Friend is able to speak in the debate, he will make the point fully. If he will be patient, I will deal with some of the problems which face him and me as fellow Members in the area which we represent.

To go back to the positive features of Government policy towards the regions, the designation of development areas and the investment grants which we have had and the recent increases suggested for the development areas are steps in the right direction. I welcome the increase in the provision of advance factories and the liberal granting of industrial development certificates. I hope also that we will be able to evolve a scheme using the employment premium which will help to reduce labour costs and improve prospects in the development areas. All this I put on the credit side.

After making rather important strictures against the Opposition, it would be churlish for me not to thank them for giving the Government, myself and my hon. Friends an opportunity of reminding the electorate that these are positive measures which the Government have already carried out.

I should like to comment on three aspects of regional policy which seem to me to be important. The first is the economic position of non-development areas, such as the area to which I belong —the North-West—which are experiencing extremely difficult employment and other problems. Secondly, I would like to look quickly at the wider implications of environmental and cultural opportunnities in the regions, and, thirdly, at the administrative structure within the regions as an aid to their economic and cultural development.

The Industrial Development Act, 1966, laid down a much wider definition of development areas than we have ever had before. It defined them as places where … special measures are necessary to encourage the growth and proper distribution of industry … Again, it says that in exercising those powers … the Board"— that is, the Board of Trade— shall have regard to all the circumstances actual and expected, including the stage of employment and unemployment, population changes, migration and the objectives of regional policies. Those of us in the North-West, and, in particular, in North-East Lancashire, South Lancashire and parts of the coastal area—and my hon. Friend the Member for Yarmouth (Dr. Gray) mentioned East Anglia—feel that this wide definition in the Act does not appear to be as yet observed, and that the level of unemployment appears to be the main and, perhaps, the only criterion on which the development areas are being designated.

The result is that areas such as my own area where there is still a large predominance of the two major industries of coal and textiles are in very serious difficulties, and we know from what has been said recently in the House that quite apart from the unemployment problem we have to face major problems of urban renewal. We have to face the fact that the latest estimates for the North-West made by the North-West Planning Council talks in terms of an increase of 1 million people in the area, and of investment allowances which, at the moment, will be in the 20 to 25 per cent. range because we are not in the development area.

While the granting of industrial development certificates has improved in the North-West and is better in our area, from the evidence given by the First Secretary, than in areas such as London, we are still greatly concerned about how much more could be done in the granting of industrial development certificates. Therefore, as the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) pointed out, we are in some ways referred to as grey areas; we are an area which is not booming nor have we sufficient unemployment to qualify as a development area.

Obviously, the ideal solution to our problems in the North-West will be for the Government to designate us as a development area. I am sure that all would be very delighted if that were to happen. However, I recognise the difficulty that this might cause. If we were to go on arguing in this way, one difficulty might be that the whole country would be defined as a development area, or there would be a very much larger development area in total than there is now, and this would make matters difficult.

The second possibility is the use of much more flexibility in the size of investment allowances and the granting of industrial development certificates. The Government can do a great deal here by sophisticating its machinery of government more than has been done up to now. I suggest that if this sort of action were taken we would need some changes in the structure of government, a point to which I shall refer in a moment or two.

My second point relates to the wider implications of environment and the cultural opportunities in the regions. Again, it is right that we should pay tribute to my right hon. Friends in the Government who have recognised that we should look at such problems as the development of the arts in the regions, the development of sport in the regions, and the development of polytechnics and other educational establishments. These are all to the credit of the Government.

But I also argue that this type of development of the regions is to a large extent dependent on the emphasis which local authorities and other regional bodies place on raising the quality of life in the regions. I therefore welcome the fact that, for example, the North-West Planning Council has carried out quite extensive studies into a number of important aspects such as atmospheric pollution, litter, industrial waste and bad architecture. How important is that item of architecture? How long must we continue to be faced with the sort of architecture that passes as something beautiful, but which will be an eyesore for the next 50 to 100 years or more? That is something on which I hope we shall get a considerable lead in the regions.

The Council is also looking at such matters as parks, and the whole question of the arts. In areas such as the North-West, which is despoiled in so many ways by old squalid buildings, the need for much greater beauty to be created is especially important. I suggest that in some ways it is literally a matter of education; of introducing both children and their parents to a love of beauty, a knowledge of cultural activities, and the like. There is pressure within the areas not to be satisfied with the sort of conditions and environment that have been allowed to develop, but the Government must be even more active in giving a lead here.

Thirdly, I want to look at the administrative structure within the regions as an aid to their economic and cultural development. Here, we must look at two main strands. The first is the local and regional structure, and the second is the ministerial and governmental structure. I welcome the setting up of economic planning councils, but we must ask what, in the long run, is to be the future of these councils and how, in the long run, will they be fitted into the whole structure of local and regional government. We need to know about this now if we are to plan ahead effectively in terms of integrating regional activities. In other words, we want a great deal of guidance from the Royal Commission on Local Government.

I do not believe that we can any longer afford a galaxy of different types of local authority, variously elected, and above them have a non-elective regional government. A clear indication must be given as to where we are going. We have already got examples of large authorities which are virtually regions in themselves. The obvious example is London, but we also have it in Birmingham, which has a totally different local government structure from that in London. Again, what particular type of structure are we to have in the North-East?

In dealing with these problems we must have a definite pattern, so that we may look forward 100 years, because it must be remembered that once we decide on our future pattern of local and regional government that pattern will have to last for at least 100 years. We must, therefore, be certain that in getting the right type of local government regionally it fits in to the pattern, and co-ordinates affairs within the region. Unless we get authorities which are physically, financially and temperamentally capable of tackling major problems of transport, urban renewal, and so forth, and do it in the right degree, we are in for another period of difficulty over the variations in structure that exist now.

Turning to ministerial and governmental structure, I welcome the planning boards being set up locally which are proving to be an example of intergovernmental co-operation which can grow quite considerably. They are being useful in co-ordinating regional policy. Again, however, I have to ask whether we are satisfied that the existing ministerial structure is the most effective that is possible. Perhaps the day is coming when, for example, the Board of Trade ought not to be considered so much an autonomous governmental Department, but should be incorporated in the Ministry of Economic Affairs. That would make a good deal of sense and I hope that it will at least be discussed. So many of the activities of the Board of Trade —the granting of industrial development certificates and so on—are part and parcel of that economic growth which is the concern of the Treasury bench, through the Ministry of Economic Affairs.

I am not sure that we should not be moving towards something which embraces all these rather than having this fragmentation which exists at the moment. I hope that in this context we may have much stronger links at Government level and much greater co-operation particularly in the Ministry of Housing and Local Government, the Department of Economic Affairs, the Ministry of Technology, the Ministry of Transport and the Board of Trade.

At present, there is need for more flexibility in the Government administration of the regions. This is possible within the structure we have, but it can be improved in the way I have suggested. The fact that the party opposite has failed in its policies towards the regions stems to a large extent from the fact that hon. Members opposite are temperamentally and psychologically opposed to Government intervention in any great degree. They are never quite sure at what level they should allow that to happen. Because we on this side of the House believe that it is the place of the Government to encourage the regions so that we have good development of life for all our people, I believe that the Government are on the right lines; but I hope that they will take some account of the ways in which I think these matters can be improved.

7.11 p.m.

Photo of Mr David Steel Mr David Steel , Roxburghshire, Selkirkshire and Peeblesshire

I very much agree with the hon. Member for Middleton and Prestwich (Mr. Coe) about the need for reform of regional government and I shall return to this later.

It is interesting that the Motion put forward by the Opposition is almost self-condemnatory. By including the phrase "less prosperous regions" hon. Members opposite recognise that after their long period in office such places exist. That in itself condemns them out of their own mouths. I was very disappointed by the speech from the Opposition Front Bench because it seemed that we were being advised by their policies to go back to the sort of thing we had when they were in office.

I remember the right hon. Member for Wolverhampton, South-West (Mr. Powell) bringing great joy to the people of Scotland when he said in Glasgow: Let economic forces work unhindered and the workers will be obliged to migrate where there are jobs. The Government acted on that, and so did the people. I remember also that in the debate on the Local Employment Bill on 2nd December, 1959, the right hon. Member for Barnet (Mr. Maudling)— who might be regarded as a more orthodox member of the Opposition—when resisting a Liberal Amendment to take account of unemployment and depopulation, said: I do not want to enter deeply into the merits of the argument on depopulation—many arguments could be adduced on both sides. We in this country cannot set ourselves like Canute against a tide which is flowing quite hard in many parts of the world." —[OFFICIAL REPORT, 2nd December. 1959; Vol. 614, c. 1300.] Again it was a refusal to tackle a problem when it was recognised. The then President of the Board of Trade, now leader of the Opposition, in Berwick also resisted demands that depopulation should be tackled as part of Government policy.

It is a little late in the day now for a Motion such as this regretting the fact that areas of the country are less prosperous than others. The right hon. Member for Mitcham (Mr. R. Carr) said that the creation of new development areas would dilute the assistance given. That is exactly what I heard in speeches at the General Election when I was defending the Government in their extension of development areas. Conservative policy seemed to be to criticise the spreading of the jam too far and yet asking for it to be spread further to areas such as Edinburgh. There is no concrete policy to compare with what has been put forward by the Government. I certainly support such steps as have been taken. The Opposition last week discovered child poverty. This week they have discovered less prosperous regions. We wait excitedly to see what they will discover next week.

In their Amendment the Government ask us to applaud their energy. I have no objection to applauding their energy; but what people in the less prosperous regions want to applaud are results. To give the Secretary of State for Scotland one example, there is no question that the present Minister of State for Scotland, when he was Under-Secretary of State in charge of housing, was most energetic. He tried to get the programme moving, but it did not come off. That was not his fault. It was largely because of the economic circumstances of the country and the damper which the Chancellor of the Exchequer put on growth and development of the economy, which applied just as much in Scotland as elsewhere. So, although we can applaud his energy, there were no results to applaud.

Credit restrictions, for example, applied by the Chancellor were just as severe in Scotland as elsewhere. Yet if regional economic policies are to be successful some attempt must be made to make sure that the damping down of the economy when required does not hit the so-called less prosperous parts. The Chancellor visited the S.T.U.C. conference in Scotland at the week-end. He was photographed sailing on a steamer down the Clyde. Significantly, his hand was on the control of the steamer and, clearly in the photograph, the control was at "Stop".

Photo of Mr William Ross Mr William Ross , Kilmarnock

My right hon. Friend brought the ship into harbour.

Photo of Mr David Steel Mr David Steel , Roxburghshire, Selkirkshire and Peeblesshire

The Chancellor's policies have affected the policies of the right hon. Gentleman who is attempting to interrupt me. I ask him, when winding up the debate, to answer a question which was almost put by the hon. Member for Antrim, North (Mr. Henry Clark) whether it is the intention of the Government to vary investment grants or the new regional employment premium within development areas? The hon. Member gave the example of Belfast and the region around Belfast. In Scotland we have the problem of trying to stop the mini-drift to the central belt. So far nothing outlined by the Government leads to the suggestion that this will be stopped. If equal incentives are given elsewhere, the natural pull will be from places such as the Highlands, the Borders and the North-East towards the centre. I know that it is not easy, but I hope that some way will be found by the Government to introduce varied investment grants or use industrial development certificates so that while large industries may go to the central belt smaller industries may go to the other regions.

It is a pity that the Green Paper on the regional employment premium has been attached to the Selective Employment Tax because in parts of Scotland, notably the Highlands, and also in places such as Cornwall, the economy depends very heavily on service industries. This Paper brings no hope to them. It is important to develop tourist industries in the same way as the Government of Eire pump in money for their tourist industry and even the Stormont Parliament does in Northern Ireland. We do not get promotion of tourism as a foreign exchange earner and the encouragement of people to spend their holidays at home instead of going abroad. We do not get the encouragement which should be given.

Photo of Gwyneth Dunwoody Gwyneth Dunwoody , Exeter

Would not the hon. Member accept that it is terribly important for those of us who have been dependent on tourism for so long to have investment of a completely different industrial kind and that in those regions this is most desirable?

Photo of Mr David Steel Mr David Steel , Roxburghshire, Selkirkshire and Peeblesshire

I agree. I am not one of those who believe that tourism is the cure-all for the remoter areas. But my constituency, which has very healthy manufacturing industries, could develop the potential of tourism much more than it is at the moment. This is true of other places.

I want to see some development in the less prosperous regions which would not be covered by the Green Paper—things like consultative and advisory offices; in my part of the country, training colleges; new technical colleges; and, if we are to revive the proposal of a further university in Scotland, what about one at Inverness? None of these things will be directly encouraged as a result of the Green Paper.

Therefore, although the Green Paper is to be welcomed as a means of attracting new industry and filling advance factories, for instance, it is a pity that it is tied to the Selective Employment Tax. It would have been much better if the Government had adopted the proposal put forward by the Liberal Party on the 1966 Finance Bill that, instead of the Selective Employment Tax differentiating between manufacturing and service industries, there should be a payroll tax levied regionally, which could bring into account the point made by the hon. Member for Yarmouth (Dr. Gray) about East Anglia. Such a tax could be varied regionally. There could be different levels and different categories for different areas. There would be not merely development areas and other areas but a sliding scale variable from year to year, which could become part of our permanent tax system.

Will the benefit of the regional employment premium be passed on in some measure to the employees in areas where the standard of living is lower than the national average? This is why the Liberal Party's Amendment refers to the standard of living of the people in the less prosperous regions. This is something we shall have to cure. I am appalled when at my clinics from week to week people show me their pay slips. A working man earning £9 a week and with a fairly large family to support is well below what we glibly talk of as the national average of wages of about £20 a week. The national average is meaningless in some parts of the country. I hope that as part of an attempt to bring industry into the development areas the wage levels will rise.

Is it the Government's intention that some of the £2 premium which is to be given to manufacturers should be passed on to employees? I suspect that this is not intended. The Green Paper talks of this premium not causing inflation. There is a need to increase demand in the development areas. If we are to cease to have less prosperous regions, it follows that they must become more prosperous, that demand must rise, and that there must be more money in people's pockets. I am not sure that the Green Paper will achieve this.

What is the future of the various bodies which the Government have set up? I am very concerned about some of the public criticism of the bodies which have been set up over the past two or three years. The Secretary of State for Scotland must be concerned about the criticism voiced at the S.T.U.C. of the Scottish Planning Council. We are all concerned about the criticism that has been made of the Highland Development Board. I am concerned that in my constituency the consultative group, which I have encouraged and supported all along, is also coming under criticism.

Part of the explanation for the criticism in each case is that these bodies are not reflecting the views of, and not working closely with, those whose interests they are supposed to be protecting. They are far more identified with the Government and with the administration of government—with the Scottish Office—than they are with the people whom they are supposed to represent.

The Government must be careful about this, because it would be a tragedy if these bodies ceased to have public support because of a feeling that they were on the wrong side of the fence. Were the Government right in their decision that the secretariats of these bodies should be provided by the Civil Service and be part of the administrative machine? This mistake may partly explain the criticism. The public relations of the three bodies I have mentioned have left much to be desired. It is important that these bodies carry with them the people concerned in the areas.

The Government have invited us to give them a pat on the back for what they have done. They have certainly done a great deal for the less prosperous regions of Scotland. It is true that they have shown energy, but it is results that people want to see. The present mood of the people of Scotland is that the Government having faced the right direction, they want to give the Government not a pat on the back but a heftier blow lower down the anatomy.

7.25 p.m.

Photo of Mr Roy Hughes Mr Roy Hughes , Newport (Monmouthshire/Gwent)

This debate on the problems of the regions has been initiated by the Tory Party. I admire the audacity of hon. Members opposite. A few weeks ago there was a by-election in one of the most famous industrial valleys in Great Britain, the Rhondda Valley, the people of which have suffered much over many years as a result of industrial depression. In the by-election the people of Rhondda demonstrated that they were not satisfied with what the Labour Government were doing for them, but showed their contempt for the poor Tory candidate, who forfeited his deposit. How right the people of Rhondda were, for the record of the Tory Party in dealing with the problems of the regions is a disastrous one.

I am one of those who believe that the Labour Government have not done as much as they could have done for what are now so fashionably called the development areas. I should like to see the Government intervening in a physical sense with elements of Government-sponsored manufacturing industry being introduced into the areas. In our pre-1964 pamphlets, we on this side said that, where private enterprise failed the nation, the State would step in. I suggest that this is what has happened, because private enterprise has not introduced industry in sufficient quantities into these regions.

From the point of view of the Labour Government, there are signs of improvement. The recent decision to transfer the headquarters of the Motor Vehicle Registration Office to Swansea is a most praiseworthy decision. The recently issued Green Paper on the development areas contains some interesting proposals which, if implemented, could benefit regions like Wales, Scotland and the North of England.

Speaking generally, since the end of the war labour has been in short supply. In the development areas, however, there has been a surplus due to uneven distribution of demand. The demand for labour in the Midlands and the South of England builds up with inflationary effects and damage to our balance of payments position, but even in these times the level of unemployment in Wales, Scotland and the North of England represents a waste of human resources.

To follow the story through, I quote from paragraph 24 on page 11 of the Green Paper: When action has become imperative to restrain the pressure of demand in the areas of high employment—and because this has involved measures affecting the whole economy —then unemployment in the Development Areas has been pushed up to an extent which has not proved acceptable for any length of time. This has led to a reaction against the measures of restraint and to pressure for relaxations. In other words, areas like Wales, Scotland and the North of England are not the cause of the Government's having to introduce restrictionist measures, but once such measures are introduced, it is areas such as those which have to bear the brunt of the burden. The Chancellor admitted as much in his Budget speech this year. This is most unfair and emphasises the need for a more equitable distribution of industry throughout the country.

There is a tendency to regard the whole of South Wales as a development area; but this blanket judgment is not correct. It is not my purpose to make a constituency speech, but I have the honour and privilege to represent the County Borough of Newport, which is a thriving town. Its industry is prospering and its municipal achievements are second to none. My concern today is about Newport in relation to the region in which it is situated, for there is a close affinity between my constituency and the mining valleys of the hinterland.

Thousands of people in the valleys work in Newport. They shop there, too. In the light of this close affinity, it is necessary to consider carefully the Government's decision to study the physical and economic potential of Severnside. If the report is favourable and such a development takes place, it will have to be carefully planned. For example, would such a development mean that famous towns like Cardiff and Newport would be turned into a meaningless agglomeration? We have heard in the debate about market forces and the efficiency of industry. These terms are not necessarily complementary. Would the Severnside development mean that this area would be turned into another South-East of England, with all its attendant problems of housing and transport? This would not be economic efficiency.

Might we create something which future generations would for ever be trying to unravel? If such a development does take place, it will be necessary to ensure that there is a diversified location of industry serving a balanced population who would retain their local characteristics and way of life. For many people, this would be a more civilised approach.

For many years, we have suffered in our country from what has become known as rural depopulation, but this is now being followed by industrial depopulation due to the decline of some of the older industrial areas. I recommend hon. Members opposite to make a tour of some of the industrial valleys of South Wales and see there for themselves the real ravages of capitalism.

The pace of change in the second half of the 20th century is much more rapid than ever before. New techniques and new industries are quickly developing. Therefore, in contemplating development on such a scale as Severnside, we must ask ourselves whether we might again desecrate vast areas and build monuments which future generations will be only too ready to abandon.

What about the availability of capital? People in the present development areas may well ask why, if capital is available in such vast quantities, it is not available to rehabilitate some of the older industrial areas, in which—be it remembered—the capital was accumulated in the first place.

It may be said that Severnside is necessary for our possible participation in the Common Market. But that is another story, the end of which has not yet been decided. The gist of my message today is that South Wales badly needs industrial development, but let us make it in an orderly location of industry where labour is available and in areas where communities already exist.

7.35 p.m.

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

The hon. Member for Newport (Mr. Roy Hughes) has referred to Severnside and possible developments there. I shall cross the Severn Bridge and look at it from the other side of the Bristol Channel.

The success of a regional development policy can be judged by the answers to two questions. First, does it help the region concerned to do what it can do best; does it help to bring out the natural advantages which the region has? Second, does it help the region to overcome the natural weaknesses inherent in its geographical and economic position? On both those counts, the South-West has come off extremely badly, and I do not believe that the Green Paper proposal for a regional employment premium will help very much in the problems which we have there.

One of our natural advantages is our good and mild climate, which makes farming and horticulture a natural basic industry in the South-West. Another is the beauty of our country and coastline, which makes the South-West the largest tourist region of the country, a region in which about one-third of the population derive their livelihood from the tourist trade. In the north, there is the industrial complex, with the great natural advantages on both sides of the Severn.

What about the disadvantages? The first, perhaps the most obvious, is that the South-West is remote from the main centres of population, the main conurbations, and the distances within the region itself are very great. This remoteness is a feature which must be considered more and more by the Government and everyone concerned, because the disadvantages of our remoteness are being accentuated as the magnet of Europe and the magnet of the discovery of gas under the North Sea tend to draw attention and development away from the western half of the country towards the eastern half. Another disadvantage is the lower level of earnings general in the South-West, which, of course, is partly dictated by the insufficiency of industrial employment there.

My principal complaint against the Government's policy is that it has hit the things which we can do best, and this has outweighed the help which is available to new industries to move into the development areas. There are many examples of this, and I shall deal with them briefly.

The first is the S.E.T., the net cost of which to the South-West Region is £16 million. In relation to our wages and salary bill that is a bigger burden than any other region must bear. There is also the effect on the tourist industry of the withdrawal of the investment allowances. Here we have an industry of increasing significance both for people holidaying at home and its foreign earnings, which grow year by year. Yet it has lost the incentive to modernise its equipment and other provisions which must be improved if we are to continue to attract tourists to this part of the country.

It is no good the Government saying, as they so often do, that the tourist industry in the development areas is all right because of the various forms of assistance which are available, for only one of the main tourist centres in the West Country is in a development area. The other three are outside and, therefore, do not get the benefit provided by development area policy.

Then there is the question of communications, which I believe to be more important to us than anything else. Our road programme has been cut and there are no definite plans for the extension of the motorway network into the peninsula. The nearer it gets to the north, to Bristol and the surrounding area, the more important it becomes that we should have firm plans to extend it further down the peninsula, for otherwise whatever plans are made to bring in new industries are likely to be unsuccessful.

In the north we have had in my constituency the rejection by the Minister of Transport of the Portbury dock development plan. She is saying "Yes" to port development in many parts of the country but continues to say "No" to the development of the Bristol dock. That is bound to have a bad effect on the northern part of the region, which will sooner or later be reflected further south.

Does the Green Paper help? In my opinion it does not, for four reasons. First, it still maintains the main features of what I regard as a fundamentally bad tax—the Selective Employment Tax. Second, it fails to recognise that the service industries and agriculture are primary industries in the south-west. They are as important and will remain as important to us as, say, manufacturing industry is to the Midlands. Third, I believe that the Green Paper makes too big a differentiation between the develop- ment areas and the comparatively weak economic areas just outside, as my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) said. Fourth, it will increase the existing anomalies in the premiums available for manufacturing industries.

I agree that to some extent the weight of those arguments is acknowledged in the Green Paper. For example, dealing with the yield of the tax in relation to wages and earnings, it states in paragraph 49: … it is clear that the net yield of the tax as a percentage of the wage and salary bill must be rather higher in these subregions"— here it is referring largely to Devon and Cornwall so far as the South-West is concerned— than it is either in Britain as a whole or in the Development Areas as a whole. That is one of the arguments which we have used against the Selective Employment Tax ever since it was first produced. I am glad to see that it is recognised, at any rate in the Green Paper.

The Green Paper goes on to acknowledge that the regional employment premiums will not solve the problems in the South-West, Mid-Wales and the Highlands of Scotland, which are very largely dependent upon the service industries. It states in paragraph 50: But it would not be a reasonable criticism of either the existing arrangements or the proposed new premium, both designed to help growth in manufacturing industry, that they do not do the job which they are not meant to do of promoting development in parts of the country where the proportion of manufacturing industry is low and cannot be rapidly increased. Paragraph 51 begins: It is more constructive to look at the problems of these areas with a view to making the most of the kind of resources and potentialities which they do possess. That would be fair enough if the Government had suggested something concrete to deal with the situation. But they have not. They acknowledge that the problem exists, and that this solution will not suit those rural parts of the country very largely dependent upon service industries. No solution is offered, and if there were one to develop the potentialities I should have no complaint about that paragraph. The heart of my criticism is, as it has been time and time again, that the Government will persist in introducing economic policies which hit the West Country. They say that they will do something to undo the damage, but further action never follows. Why do the damage in the first place? Why not get the policy right to begin with?

There are also the obvious disadvantages in the delay between the introduction of a tax and then deciding how one will minimise its bad effects on the West Country. The tourist industry was a classic example. It lost its investment allowances; months went by before anything was put in their place; and when an alternative was offered it was totally unsatisfactory and insufficient to get the increased investment that we require in the tourist industry. The same is true of the S.E.T. We have been assured by the Government that they recognise its anti-regional bias, and yet none of that basic problem is recognised in the Green Paper.

There are, finally, the anomalies which the new premium will introduce to manufacturing industry. I am thinking of areas in the West Country which are just outside the development areas. There are many such places which are economically relatively weak and which need to have their industrial base strengthened. I fear that some of those industries may well move over the border into the development areas now. If that happens, one merely transfers the problem from one place to another. I hope that the Government will consider that point very seriously, because there is a real danger of that happening.

Another anomaly—I shall give only one example—which will certainly arise concerns the china clay industry, which, by its very nature, cannot move. I understand that under the Green Paper the china clay industry in Cornwall will have a higher investment grant and S.E.T. premium than the china clay industry in Devon. In other words, there will be totally unfair conditions of competition between parts of the same industry, depending on whether they happen to be in Cornwall or Devon.

Photo of Mr Peter Shore Mr Peter Shore , Stepney

The hon. Gentleman must be aware that any act of economic discrimination in favour of one area as opposed to another must create what he calls conditions of unfair competition between them. If he stopped beefing, on the basis of no evidence, about the alleged ill effects of Government measures on the South-West and addressed himself constructively to the suggestion in paragraph 51 that if people have things to say which will help the areas in which they are interested we shall be prepared to listen, he would do himself and the South-West Region a service.

Photo of Mr Paul Dean Mr Paul Dean , Somerset North

That is exactly what I am doing, and I hope that the Minister is listening to this. I can assure him that it is no good his thinking that he can laugh this one off and take no notice of what is being said. What I am saying now about the likely effect of the Green Paper is, I can assure him, shared by a very large number of people in the South-West, including members of his own Regional Economic Development Councils.

I hope that the hon. Gentleman will get off his high horse and listen to these arguments. I know that he made the point earlier about the china clay industry. I accept that if one draws a line and sets up development areas this kind of problem is bound to arise. The point that I am putting is that the more we differentiate in a part of the country which is relatively economically weak, the more we differentiate between the help given to one area and that to another, the more we shall create anomalies when we are trying to spread industrial development evenly over a region. I hope that he will think about this point.

Whether this Paper is valuable for the older industries I do not know. It may be. But I beg the Government to realise that what may be suitable for the older industrial parts of the country is not necessarily suitable for areas like the South-West, and I do not believe that in this proposal the Government have either got rid of the fundamental disadvantages or put forward a suggestion which will be any more satisfactory.

7.52 p.m.

Photo of Gwyneth Dunwoody Gwyneth Dunwoody , Exeter

I am delighted to be following the hon. Member for Somerset, North (Mr. Dean), partly because I do not think that I have ever found myself in greater disagreement with anyone. His attitude has given us a very clear demonstration of precisely the difficulty in which the Opposition find themselves in relation to the Government's regional policy. On the one hand, he told us that more help should be given to areas outside of the development areas, a point with which I might have found myself in some sympathy. But, on the other, he seems to be objecting to the fact that the development areas are being spread a little wider than they were when his party was in power.

What the hon. Member has given us is a very clear indication of what the Conservative Party managed to achieve in the South-West in particular, during all the years that it represented the area in this House. I am not simply harking back to the last 13 years of Conservative administration, I am harking back to the many years previously, when the majority, the enormous majority of Members representing the South-West in this House was Conservative.

My hon. Friend the Joint Under-Secretary, in one of the last debates on the South-West, told us how many debates, we have had on this one region since the Government came to power. I am very grateful that he is our Government spokesman, because he knows the very real problems facing us and I hope that he will forgive me if, tonight, I address myself very much to some of the pressing things worrying me about the South-West.

The hon. Gentleman the Member for Somerset, North has demonstrated that we are still, in some quarters, not really looking at the economic problems of the South-West. He has referred to agriculture, which, on the evidence that we have had, is becoming increasingly mechanised. People are leaving the land and going into the towns and cities. Agriculture is dying from that point of view, but it is a developing industry which will not use many more people.

The hon. Member has mentioned tourism, but has not said what he envisages for those people who work in the cities of our regions, or those who are forced to leave the region to find higher paid employment in skilled trades. This particularly concerns me. I have a very real fear about what is happening in the South-West. The Government set up regional planning authorities and for the first time really considered the whole region. We would like not to have the centre in Bristol. I am sufficiently parochial to wish that it were centred in Exeter.

But, more than that, I fear that we will see the drawing of an invisible line through the centre of our region. We will have the North, which will automatically have a certain amount of development, because of Severnside. Severn-side has been mentioned, quite rightly, as being a growth point, as being one of the future areas in which we shall see a great deal of investment. It will have a motorway passing through it and it will have a logical egress to the sea. It is a natural place for development, but what will this do to the rest of the region?

Will we have a situation, not in five years' time but in 15 or 20 years' time, when the south of the region will be relegated to being an emergency area? This is the last possible thing that we can afford to have happen. I would not in any way doubt the need, if one is to have differentiation between different parts of the region, to put our investment into Cornwall, as opposed to those parts of Devon like my own. This is not to say that I would not like an alteration in the policy of granting I.D.C.s to other areas. What concerns me is that our ancient cities are not getting the future investment, the future industrialisation. Although they have fairly low unemployment problems, these will not be improved unless we get new industries as opposed to the present service and tourist industries.

I ask the Government to consider this very seriously. We have all the advantages of an amenity area, but one cannot live on a view, even the most beautiful view. One cannot allow large parts of the National Park to be the only thing which attracts people to Devon and Cornwall. I am worried that there is such a complete misunderstanding in the regions about the role of the regional economic planning councils. We have had a little demonstration of that in the debate this evening.

It is not yet fully understood by people in the region who should be benefiting from the planning councils that the information gathered and the discussions taking place are for transmission to Whitehall in order to influence the forward planning of the Government. The regional councils have to bear a great deal of the blame on this score. When one has a regional council dominated, as in some cases, by a very extrovert personality, one hears a great deal about what they are doing, while in other regions—it would be invidious to name economic planning council chairmen —one hears a great deal of what is going on. One hears about the sort of services being undertaken. We suffer a little in the South-West from the very poor public relations of some regional councils.

We have a large geographical area and it is not easy for our representatives to come to council meetings. It is important that the calibre of the people on these councils should be of the very highest. If I may ride one small hobby horse for a moment, why is it that in the four counties in the South-West one cannot find one woman who is coherent enough or strong enough to represent any part of the region? My hon. Friend the Joint Under-Secretary, who has my greatest respect and deepest affection, knows very well that the mass of females are perfectly capable of speaking for themselves. I hope that he will address his very sharp mind to this problem, because I am sure that there must be, somewhere, a woman who would satisfy even him.

There has been much discussion this evening about what are called the grey areas. That is a rather depressing title and they are more neighbourhood areas of the development areas. Can we have some indication of the Government's thinking on these lines? I accept that in parts of Cornwall and North Devon there are fantastically high rates of unemployment, so that I cannot demand preferential treatment for a cathedral city largely dependent on service industries, but I hope that the Government will consider some sort of associated status for such areas.

Will the Government ensure far more co-ordination among the very Government Departments which are making the decisions which will affect the future of the regions? I know that the Government intend to assist the regions, but there appears to be a fatal lack of co-ordination among some Departments, so that we get the Board of Trade, for instance, putting in new factories and the Ministry of Transport allowing railway lines to be closed, or railway services to be altered in such a way that the workers in a region can no longer use that form of transport to get to work.

The way to win friends and influence people this evening is to stand up, speak up and shut up, and that is what I intend to do. My hon. Friend obviously has our support for all the Government have done up to now. We know that this problem is so deep-seated that it could not possibly be dealt with in two years, but I give my hon. Friend warning that we shall be fairly vocal for the next few years and that we are standing right behind him.

8.2 p.m.

Photo of Mr Robert Elliott Mr Robert Elliott , Newcastle upon Tyne North

I am very pleased to follow the hon. Lady the Member for Exeter (Mrs. Gwyneth Dunwoody) who has made a pleasant and interesting speech. For most of us this is bound to be an area debate and most of us would agree with her assessment that no area can live on a view. I share her anxiety about the role of the economic planning councils—that anxiety spreads much further than the South-West—and with her I am sure that there must be a woman of sufficient calibre to serve on the hon. Lady's economic planning council. Certainly if she is an example of the womanhood of the South-West, there must be.

This is bound to be essentially a debate which brings out the problems of the areas represented by those called to speak. Although that is so, the problems of the development areas are such that they are very much a national problem and the problems of each area affect the country's economy as a whole.

The background and basis to the Motion is firmly based on something which the hon. Member for Motherwell (Mr. Lawson) said. With many other hon. Members, I was pleased to hear the hon. Gentleman speak. I, too, have been a Government Whip and I know what silence means. With the hon. Gentleman, I have been part of what are called the "usual channels". The hon. Gentleman was a very honourable and noble part of those channels, and it was very nice to hear him make his forthright speech.

When the hon. Gentleman said that the Labour Party when in opposition had been far too confident about the problems of the development areas, he hit the nail right on the head. This is something which might be said to the hon. Member for Newcastle-upon-Tyne, East (Mr. Rhodes), whose speech was very forthright. Certainly he speaks very forcefully. But I was in the House before he was and I used to sit exactly where he was when he made his speech tonight. I remember sitting on that side of the House behind the then Conservative Government and taking a great deal of stick from Labour Members about regional policy. We were told very forcefully by some very able orators that it was merely a question of planning, of broader thinking, of a Labour Government, and then the problems of the development areas would soon fade into the mists. This debate was bound to come, because, of course, the problems have not faded into the mists and the magnitude of some has increased. It is therefore right and proper that the Conservative Party, now in opposition, should point out that the Government's restrictive economic policies are harming the development areas.

The hon. Member for Newcastle-upon-Tyne, East rightly said that the Conservative Party had done very badly at the polls in the North-East, but there was great resentment when we were campaigning just over a year ago because of the suggestion from Labour platforms that in 17 months of Labour Government unemployment had been cured. Certainly there had been a dramatic improvement, at least in employment prospects, but, as I said when I ventured to intervene in the hon. Gentleman's speech, new jobs take quite a time to attract and new industries take a time to become established. We in the Conservative Party in the North-East felt a certain sense of righteousness, because the improvement, at least in the first three-quarters of the period of Labour Government, had been largely due to the efforts of Conservative Administrations. I told the House and the hon. Gentleman the number of industrial development certificates which we had effected during our period in office.

It is much more important to get right the fact that basically both parties desire to see developing areas. In that we are at one and basically sincere. It is a matter of the method. We wished to see new industry brought to the area and we therefore tried, reasonably effectively, to get together about what should be done in the areas.

I am sorry to dwell so long on the speech of the hon. Member for Newcastle-upon-Tyne, East for more than one reason but he forcefully criticised the weekend speech of my right hon. Friend the Chairman of the Conservative Party and was less than fair in doing so, because after this period of Labour Government there is an unemployment crisis in the North-East.

In the past few days two shipbuilding firms have announced that they will be closing, which means unemployment for 700 men, while 400 men at George Clark Limited, Sunderland, are to become redundant at the end of July. The rise in unemployment in the Northern Region announced last week was 1,749, compared with the normal seasonal fall in unemployment in that period of 3,500. If that does not constitute an unemployment problem, I do not know what does and I completely defend my right hon. Friend's weekend speech.

Because they have been mentioned a great deal, I take this opportunity to refer to the economic development councils. These councils were heralded with loud trumpets. These were the Labour Party in action, and their setting up was the plan which, we had been told, would bring about dramatic changes and produce the answer to all our ills.

What have the councils achieved thus far'? We are told that they are making studies in depth. But how long will those studies in depth go on? I do not have the slightest doubt that the work of the economic planning councils may have very good effects in the long term, because we need much more statistical knowledge in the long term, but the North East is very worried about the short term. As any hon. or right hon Gentleman who represents the North East of England will discover if he talks to employers—this week-end I had the opportunity of speaking to the principal of a large department store about conditions, prospects and trade—there is anything but optimism about the future. Hon. Members will realise, therefore, that both employers and employed in the North East will welcome this Motion.

"Challenge to the Changing North" was produced by the Northern Economic Planning Council. It provided a mass of statistical information, much of which we knew already but some of which possibly we did not know. There were certain recommendations and I will quote one: The establishment of a technological university on Tees-side should be treated as a matter of great urgency". In passing, I refer that recommendation to the Government for their consideration.

But I stress that this general planning —and there was so much trumpeting to herald it on the part of the Labour Government—in the North East of England has done nothing to extend that which was already there. The basis for the development of the region was well and truly laid in the time of a Conservative Government by Mr. Harold Macmillan, when he was Prime Minister, by my right hon. and learned Friend the Member for St. Marylebone (Mr. Hogg) and by my right hon. Friend the present Leader of the Opposition when he was President of the Board of Trade. It was my right hon. Friend the Leader of the Opposition, when he was President of the Board of Trade, who brought the Government Departments together under one roof.

Photo of Mr Geoffrey Rhodes Mr Geoffrey Rhodes , Newcastle upon Tyne East

I apologise to the hon. Member for not being here earlier in his speech, but I was in the Official Reporters room. I ask him to comment on the fact that during the supervision of his right hon. Friend the Member for Bexley (Mr. Heath) from the latter months of 1962 to the early months of 1964 there were over 50,000 unemployed in the region, a figure which the Chairman of the Tory Party described this week-end as a disgrace.

Photo of Mr Robert Elliott Mr Robert Elliott , Newcastle upon Tyne North

I thought that I had answered that point when I quoted the number of industrial development certificates which had been issued. It was our work at that time which brought in new industry. Now we have had a check and we suffer from that check. We shall run into greater difficulties as a result. I repeat that we have an unemployment crisis in the North East of England. The hon. Member, I know, is a conscientious constituency Member and is fully aware of that situation.

Hon. Members representing development areas should never underestimate the problem which is caused by contracting industries. In opening the debate the hon. Member for Stepney (Mr. Shore) spoke very sensibly on that point. It is an enormous problem when we have two basic industries in an area such as the North East—coal and ship building—which are contracting rapidly together. When I became a Member of the House 10 years ago the coal industry in Northumberland and Durham still employed about 100,000 men. That figure dropped rapidly to 90,000 and it is now getting near 80,000. What is even more worrying is that it will drop even more rapidly in the future.

It is not easy to replace the employment content of the coal mines with new light industry, so much of which we have been pleased to welcome to the North East of England. The general problem of new industries was sensibly touched on by my right hon. Friend and the hon. Member for Stepney. We must do more to study the new industry which has come to areas such as ours. There are growing pains for some of the industries. Hon. Members for the North East have visited a good number of these industries, and we know that they have had problems which with a little experience could be overcome. We need to look very hard at the problems of those industries which have come to development areas and to study them.

I should like to take the opportunity which several hon. Members have taken during the debate to welcome the principle involved in the new White Paper, or, if I may describe it more correctly, the new Green Paper. We support in principle that £100 million should be injected into the development areas. We on this side of the House believe that to be necessary. But many of us doubt very much—and certainly I doubt it very much—whether this money should be injected through the machinery of the Selective Employment Tax. I believe that the Selective Employment Tax has been very damaging to development areas, and I emphasise to the Government that there is a need in my area particularly for a greater concentration on the service industries and a greater improvement in the service industries. After saying that we should never overlook the problems of contracting major industries, the hon. Member for Stepney added that we must always recognise the importance of environment in an area which needs new industries. While welcoming the principle of extra aid for development areas, I very much doubt whether the machinery of the discredited Selective Employment Tax is the way in which to do it.

We must also be ready to be more mobile within our area. I recall some of the debates which we had in times of Conservative Governments when hon. Members opposite, in all sincerity, wanted the development of an area such a; the North East on the basis of the redundant coal industry. If "Challenge of the Changing North" achieved anything useful, it was to be found in the suggestion that at long last there was a general acceptance of the growth area principle. It is all very well to talk about spreading the jam over a bigger area, but what the Government have come fully to realise in recent months is that there is not all that much jam to spread and that a concentration on areas most in need of assistance would be very beneficial indeed to areas such as mine As a Member for a development area, I therefore conclude by welcoming wholeheartedly our Motion, and I have the greatest pleasure in supporting it.

8.18 p.m.

Photo of Mr Bertie Hazell Mr Bertie Hazell , North Norfolk

In the concluding stage of the debate I am glad to have the opportunity to say a few words about the problems of the Eastern Region. There has, rightly, been much discussion of problems relating to the North-East, Scotland, Wales and other areas of heavy unemployment.

The Eastern Region is an area of mixed fortunes. In some parts of the region overspill is being provided for London, and in those parts employment prospects are quite good. But much of the region is rural in character. Hon. Members on both sides have referred to the problems which affect the rural areas of the country, particularly in view of the fact that agriculture, which plays such a prominent part, while maintaining and increasing production steadily year by year is, nevertheless, because of modern developments, employing fewer and fewer men.

The House will be aware that over the last two years the movement of workers from the land has been about 29,000 per year. This, of course, shows the rapidly changing trend within the agricultural industry, and this development throws up considerable problems. How and where shall we find opportunities of employment for those who leave the agricultural industry? Particularly, what are the prospects of employment for the young men who are reared in the villages of our countryside?

We all of us had hopes when the regional economic planning councils were established that we should begin to see the outline of a trend for the future emerging from their reports. It will be recalled that when the programme for setting up the planning councils was envisaged it was intended that one council should operate for the whole South and Eastern region. As a result of suggestions from hon. Members from the Eastern Region we were able to persuade the Government to set up a specific council for the region because of its peculiar problems. That council has had regular meetings, but so far nothing appears to have emerged to give any indication of its thinking as to the future of that part of the country.

It is true that in some parts of the country the regional economic planning councils have issued substantial reports, and these act as a guideline to the future, but in the Eastern Region nothing so far has emerged—at any rate, I have not seen it. We are anxiously waiting to see whether a report is likely to be forthcoming in due course so that we may be able to see what are the lines of the planning council's thinking for the future of the Eastern area.

I want particularly to mention the County of Norfolk which, of all counties, is a purely agricultural one. In the northern part of the county we have no large cities or towns to which our young people can go. They are compelled to leave the villages in which they have been brought up, and the consequence is the depopulation of the rural parts of the county. In North Norfolk, at any rate, the age of the population is much higher than the age of the population in most other parts of the country.

If, to take the long-term view, we cannot maintain our young people and secure for them opportunities for employment in the areas in which they have been brought up, this area will, obviously, become semi-derelict. We cannot hope to maintain an ageing population unless there are within that population young people to stimulate and make it a virile area.

We have some small industries which are associated with agriculture, such as canning industries, but these are very largely seasonal in character, and as a consequence we find our unemployment averaging 5 per cent. In some places it is rather more, but 5 per cent. is the average. This is very surprising indeed, because it has often been argued that a prosperous agricultural area suffers very little from unemployment. Such is not the case in our area.

I am concerned about the Green Paper —very much concerned. In the old days we used to regard an area of unemployment as being very suitable to rank for development grant. Now, in view of the geographically wider areas, an area such as mine, even with a figure of 5 per cent. unemployment, receives no support by development grant because, geographically, it is not large enough. It is true that there has been assistance from my right hon. Friend the President of the Board of Trade in granting industrial development certificates where these have been sought, but the granting of a certificate without financial assistance such as has been available in development areas is not likely to attract much new industry into Norfolk; and with the added inducement which the Green Paper envisages the prospects of securing industry in such a county will be very small indeed.

I want to pay tribute to Norfolk County Council for the work which it has done in trying to encourage industry into the area, but only last week I received a letter from a firm which had been set up at Sheringham at the request of the council, giving details of the cost of its building. The firm said that while it recognised at that time a grant was not available to build its factory, nevertheless it hoped that if it came into the area, because of the pressure it received from the council to move into Norfolk, a grant might be available. It is not possible in this instance under the present regulations.

The possibilities of getting new industries, even small ones, into a county like Norfolk, with 5 or 6 per cent. unemployment, are very remote if there is not to be financial aid available, and particularly if the suggestions in the Green Paper are implemented, because that will add a further inducement to manufacturers to seek to go to the areas where the money goes, too.

My time is almost up, but there is just one other point I should like to make, and it is this. Gas has been discovered in considerable quantities in the North Sea off the Norfolk coast. It looks as though the point of entry may well be in my constituency. In a small way, this will help to find employment, but delays in ordinary planning approvals are causing a good deal of concern. After a 12-day hearing and an inspector's report submitted to the Minister, the Minister decided that the inquiry should be reopened. The reopening of the inquiry is due to take place next month.

The companies concerned in the discovery of gas in the North Sea are very anxious. Unless they can begin to connect their pipes during the summer months, 12 months will have elapsed before they can bring this valuable raw material on to the beaches. This, at a time when we know that gas can be of material aid to the economy of the country, would be disastrous.

We ought to given every encouragement to make sure that this new raw material is brought in at the earliest possible date, and I therefore hope that the Minister responsible will not delay his ultimate decision once the report of his inspector is to hand following the reopened inquiry.

I stress the fact—and I hope that it will not fall on deaf ears—that rural areas such as Norfolk require new industry, and I hope that this will not be overlooked when the terms of the Green Paper ultimately become accepted fact; otherwise. I can see areas like Norfolk gradually becoming derelict. No one will wish to go there even to enjoy what facilities there are on the Norfolk coast during the summer season if villages become derelict.

8.30 p.m.

Photo of Mr Michael Noble Mr Michael Noble , Argyll

The debate has been an extremely interesting one and in a different category from a great many debates of this sort to which I have listened in the past.

I listened with particular interest to the speech of the hon. Member for Norfolk, North (Mr. Hazel]) because he was raising problems which are very real not only in his own constituency but in a great many different parts of the country. He was stressing the inevitable difficulty, particularly once there are even larger development areas than we have had before, for the areas which have been described as "grey". That may or may not be an accurate description of them. Certainly the hon. Member for Exeter (Mrs. Gwyneth Dunwoody) had nothing particularly grey in her appearance before us this evening.

The debate was opened for the Government by the Joint Under-Secretary of State for Economic Affairs in what could be described as a very careful speech. He assured us at the end of it that he was certainly not complacent, even if he sounded so. I am prepared to give him the benefit of the doubt on that, because I know how difficult it is to do many of the things which his right hon. and hon. Friends promised, so to speak, in his name in 1964 and 1966 and then found almost impossible to achieve, as has been demonstrated since.

He talked in particular about the development areas and said that they had achieved at best an unemployment rate of 2·8 per cent. What he did not tell us was whether he regarded that as satisfactory. That is one of the problems which have bedevilled all discussions on unemployment for as long as most of us have been alive. I remember the late Hugh Gaitskell saying that 3 per cent. was full employment. I remember the present Prime Minister saying that about 2 or 2½ per cent. was perfectly acceptable. I agree with the view which has been expressed that, for development areas, even 2·8 per cent. is not satisfactory if it is to be the long-term level. It is equally true that if vast areas of Scotland, Wales, Norfolk and other places could get down to a steady 2·8 per cent., they would feel that there had been an enormous change.

In the course of his speech the hon. Gentleman told the House something which was not entirely new, and I was hoping for more original ideas from someone who, I understand, has spent so much of his time in a research department. He said that it is impossible to run the rest of the country at boom conditions and believe that that in itself will cure the regional imbalance. That is perfectly self-evident, and has been clear for the last twenty years at least. Whether it is true or not, he did not address himself to the point which my right hon. Friend the Member for Mitcham (Mr. R. Carr) made clearly, that the position of the country cannot be improved by "clobbering" the consumer industries so that the prosperous areas are reduced in effectiveness and thereby a phoney better balance is created between the regions.

In my comparatively short time in the House and my short experience of the problem, if one thing has become apparent, it is that one never gets major expansion in Wales, the North East, the South West, Scotland or anywhere else when the rest of the country is in recession. If it is found necessary to close down on the economy, as happened in July when Scottish industry was by no means fully stretched, that is economically had for the country as a whole.

What both sides of the House have been trying to do, successfully more or less according to the period, is to get the whole country running at something like a level production figure. I do not remember offhand exactly what the position was in Scotland in July last year, but I suspect that it was running at about 90 per cent. of its production capacity. Yet that had to be stamped on, as it had to be stamped on in 1961 and earlier "stop-go" periods, because the rest of the country was going too fast. This is bad economics from the country's point of view, and devastating to the people who live in those regions, and this, apart from anything else, was one of the many things which we were promised would never happen again.

Then the hon. Gentleman said, and, I think, without any justification at least in the last few years, that the Opposition could not make up their minds whether to have a full regional policy or not. If he is referring to the fact that there were, and, I have no doubt, still are, some of my right hon. and hon. Friends who believe in letting the market take its course, he is right, but do not let him forget that it was this party which in 1962–63 initiated almost every idea which his party is now carrying on. The Government have made a few changes and improvements, but if I may dare say so with the Secretary of State for Scotland present, I have not yet seen any part of the country which has matched what the Scottish Office was able to produce in 1962, 1963 and 1964. Indeed, I doubt whether any part of the country is matching it today, because in Scotland, for special reasons, we have been able to produce a much more effective policy. We dislike calling it a regional policy because we regard ourselves as a country; but we led in this field, and I believe that we still do.

This policy, which was initiated by the White Paper on Development in Central Scotland, was followed almost immediately by the North-Eastern Plan, and we hoped that the problems of the North-East were going a long way to being solved by the action which was then taken. I was therefore depressed, as I know my hon. Friend the Member for Newcastle-upon-Tyne, North (Mr. R. W. Elliott) was, to have to record that after a period of considerable success, last month's figures show, instead of an increase in employment of 3,000, a drop of 1,000, showing that this problem, which two years ago looked to be well on the way to solution, has had a serious relapse.

I beg hon. Gentlemen opposite not to think that this gives any satisfaction to those who have worked and thought hard about this. We are every bit as keen as they are to see the policies which we produced being developed if they are successful and if they are producing the right sort of results, and it is only when they fail to do that, and when we believe that the Government are failing to take, the decisions which they ought to take, that we feel we have to be critical of them.

I agree with the Joint Under-Secretary that during the past few years the Government have been prepared to intervene; but this is not a new Socialist idea. It was done quite considerably through the Conservative era, but it is not good enough merly to intervene. One must intervene to be effective, and one must intervene on things which are going to be economically viable and produce the results that one wants. I think that this is the point which was dealt with by the hon. Member for Motherwell (Mr. Lawson).

The next section which the hon. Gentleman took was one in which he said that it was not the July measures which had caused the regional problems. Everybody in the House knows this. The July measures were quite separate and distinct from the regional problems, but what we were told at the time was that the regions would be sheltered from the results of these things, and of course they cannot be, and they have not been.

I hope very much that when the right hon. Gentleman replies to the debate he will be able to tell the House what has happened to the number of i.d.c.s which were available in the regions since July. It is all very well for people in the regions to see what is happening before their eyes, but if we are to get confidence back, they have to know, as I believe the figures may well be beginning to show, that after a disastrous fall for a number of months after July the number of people—I hope and pray that this is so—interested in going to the regions and applying for i.d.c.s to do so is going up.

The freeze, in itself, inevitably has serious repercussions on the regions; it cannot be otherwise. It was quite clear that if one had a freeze of wages the only way in which one could get more money was to move to an area where higher rates of wages were being paid. Although the figures are not yet available, I am sure that the Secretary of State for Scotland will agree that all the available evidence shows that migration from Scotland has been increasing rather than decreasing.

A second, perhaps smaller, but nonetheless important point, in a period of freeze —a point which I took up with the right hon. Gentleman and the Minister of Labour some months ago—is that if there is a big contract in a development area and if the costs of a certain type of building are likely to be high, the contract is almost bound to go to a London contractor who is paying very high hourly rates —perhaps building at London Airport. London contractors of this sort can get people to go to places like Dounreay, whereas a builder from Aberdeen cannot because he cannot pay the wages.

Photo of Mr William Ross Mr William Ross , Kilmarnock

It was a Scottish contractor who built Dounreay.

Photo of Mr Michael Noble Mr Michael Noble , Argyll

The contractor who wished to apply for the contract to do the new work there said that it was totally impossible because the rates demanded by the unions for working there were several shillings an hour above those that he was paying in Aberdeen, and he was therefore not able to tender for the contract. The right hon. Gentleman has all the facts and figures, because I kept him fully informed of the correspondence I was having with his right hon. Friend.

It is also difficult to justify the argument that in a period of freeze it is right to be brutal to N.A.L.G.O. and the electricians while at the same time allowing the National Coal Board to increase the price of coal, the Electricity Board to increase the price of electricity and the Post Office—because it came in, in some sort of budgetary way, in the middle of the July measures—to increase postal charges. This does not make sense to people living in development areas. They ask, "Why should we, in a period of freeze, be expected to pay more money to nationalised industries which are controlled by the Government when we are not allowed to pay more money to people we may desperately need?" Although the July measures are not responsible for the problem, they have done a great deal to aggravate it.

The Minister went on to refer to eight points. First, he talked about the comprehensive national plan. There is no objection to that, but the First Secretary has already withdrawn the National Plan for England as being in need of major revision, although the Secretary of State has not done the same for Scotland. A comprehensive plan that within a year of publication has to be withdrawn in order to be rethought is not a great incentive or inducement to industry.

We have heard today a number of complaints about the formation of the boards which will examine everything in depth. The bon. Member for Exeter complained that it was impossible to get people of sufficiently high calibre. Few hon. Members know what the boards are doing. They have been in existence for varying lengths of time, but no reports and very little official information have come out about them.

I read, as perhaps the Minister did, the report called "Is Regionalism Working?" in New Society on 15th December, by Ian Gough, of the Department of Social Administration of the University of Manchester. He obviously took a great deal of trouble to discover what was happening. Some of the things he said closely accord with points made on both sides this evening. In one part of the report he said: More often than not, they"— the regional planning boards— are asked at the last minute to look at the regional implications of policies which departments have already determined and for which annual estimates have already been agreed. He said later: The boards have been given too little information too late, and at most they and the councils can suggest only minor alterations. Also, It is unlikely that the councils' views would carry much weight on what are essentially political matters, since they are not elected. We all hope that these councils and boards will play a useful part, but it is clear that to get a number of people together to talk is of limited value and that the talk will be useful only if they are supported by really good research organisations. If not, they will not know what they are talking about.

To hark back for a second to the past, the genuine success of the Scottish Development Group, which was a different concept, was due to the fact that it was made up from Government Departments, that it had the research facilities, that it did not have to talk in public and that it had to produce results—which I am glad to say it did. I do not wonder that there is a certain amount of frustration among the general public.

I should like the right hon. Gentleman to clear up what the Joint Under-Secretary of State said about i.d.c.s and special help. He said that since 1964 the i.d.c.s had increased from 26 per cent. to 34 per cent. and the special help from £23 million to £45 million. Are these for comparable areas, as I have no figures with which to check them? If they are, the Government get the credit which they deserve and I do not want to take it away. However, if the figures are comparable but by a curious chance the development districts have almost doubled in size, the advantage is very small and might even be negatived. I hope that the right hon. Gentleman can say that these are comparable in area as well as in amount—not offhand, obviously.

I am all for the hon. Gentleman claiming merit where he can, and he claimed that the new policy of investment grants, the success of which he did not want to evaluate as it has had only a short time to run, had one great merit, that the grants were much clearer to the industries concerned. If this is so—and I will give him the point—then for a Government which has brought in Corporation Tax, Capital Gains Tax and the Land Commission to produce anything clearer is such a blessed relief for every company accountant in the country that I am amazed that they have not all accepted their investment grants without even reading the paper.

The hon. Gentleman was less than forthcoming about the future. He said that we must not be over-mechanical in interpreting the statistics. He told us—I can understand this—that one cannot immediately project what happened in 1961–62, which was so different from what happened in 1966–67, to the next year. I hope that one could not, because since 1961–62—whatever hon. Gentlemen opposite may say—a vast change has occurred in most development areas and a great deal of new industry has replaced the heavy industry, like coal mines, which was collapsing. We all hope that next year will be nothing like as bad or the weather so bad as it was in 1962–63.

Whatever they may be, we did not get much in the way of forecasts or ideas from the Joint Under-Secretary. He told us simply that in 1961–62 the Opposition had no regional policy. Perhaps we did not. But, if I may talk about Scotland, during that period Colvilles came to Scotland, Bathgate came to Scotland and Linwood was planned to come to Scotland. I am taking no credit for this—it was before my day—but these things happened even if we did not have a regional policy. I would rather that things happened without a regional policy than have a regional policy and have nothing happen.

I am sure that the hon. Gentleman listened to his hon. Friend the Member for Motherwell (Mr. Lawson), who talked with great local knowledge—because it is in his constituency—about Colvilles and said that what is necessary at Colvilles is a comparatively small increase in the plant, bringing in tin-plate manufacture, galvanising, and so on. The Government have been looking at this matter for two and a half years, and perhaps the Secretary of State for Scotland may be able tonight to announce that that is his policy. Those are the sort of things which will be known to the right hon. Gentleman—his hon. Friend must have told him about them—and it might well be that he has decided to do it.

I come now to the Green Paper. There are obviously problems, and it is right that the House should not try to come to specific definite conclusions today. I do not take the point made by the Joint Under-Secretary that it was a bull point for the Government to produce a Paper of this sort before the Opposition put down their Motion. It is a buff point for any Government to discuss any ideas at any time, and I am delighted that they have done it.

My hon. Friend the Member for Somerset, North (Mr. Dean) and the hon. Member for Norfolk, North brought out the problem that different development areas are not the same and that something which may be totally and absolutely right for the North East, where there is a high concentration of labour-intensive industries, might be disastrous for the Highlands, where there is practically no, or very little, labour-intensive industry. Therefore, the problem has to be studied with care and in depth. I beg the Government, when they have studied it, not to try to produce something that is universally grey for the whole country but to try genuinely to be selective and pick out what is needed for the differing parts of the development areas and treat them practically and sensibly according to their needs.

It is true that if there is a labour-intensive industry somewhere in the Highlands, it is delighted that it should get the premium—it may make the difference between success and failure—but the Joint Under-Secretary talked about the pull of the Metropolis, and this is very real and true. There is, however, another pull which is going on throughout the whole country, and that is the pull to the nearest big city. It does not matter whether it is Newcastle, the Central Belt of Scotland or wherever it may be. It is extremely important to consider the large premium payment which is envisaged to see what the effect will be if people are pulled in from all the surrounding areas—in the case of Scotland, the Borders, the Highlands, Perthshire, and so on—to the centre because of the extra demand for labour there.

I am not certain that we can be at all convinced that it will go very far, as the hon. Gentleman suggested that it might, to reduce unit costs of production. In so many of these areas wages are already a good deal lower than in Birmingham and the South East. It is at least possible that, human nature being what it is, when the firms are being paid considerable amounts per man employed, employees may take the opportunity of saying, "You are getting so much for employing me. I want my wage made up to the London or Birmingham level." That at least would be a very human reaction. If that is so, the unit costs of production, which in the past have been lower in Scotland than anywhere else in the United Kingdom, will tend to rise and we shall not get the reduction in costs of which the Joint Under-Secretary spoke.

The Joint Under-Secretary asked himself: can we really stimulate demand? I believe that this may stimulate some demand, but the Government could do a great deal more, as we were continually urged to do, by seeing that some of the very large Government contracts—for the Post Office, the Armed Forces, and so on—were funnelled into the development areas. I know that it is difficult, and I know the problems and the cost, but this is the way in which one can get work going there if one is prepared to accept the implications.

The hon. Gentleman finished by asking whether we could avoid increased taxation while helping with the regional problems. All I can say is that on the evidence we have at the moment the answer is quite clearly "No".

Time is short, but one should mention several other important points which all have a very important part in the regional problems we are debating. There is the problem of migration. I felt tremendously jealous when my hon. Friend the Member for Antrim, North (Mr. Henry Clark) told us that the Northern Ireland Government had been able to cut net emigration there. I wish the Secretary of State for Scotland could say the same for our country. It is not only the crude numbers, which add to the unemployment figures, but the fact that we are losing skills. That is very important.

The Secretary of State for Scotland spoke at the weekend of the importance of housing in relation to migration. I do not want to re-open that question, but neither in Scotland nor in any part of the development areas has the present Government's housing record been good—[Interruption.]—I will not be tempted now, but I could go on for a long time on that one.

We have the problem of roads—

Photo of Mr Michael Noble Mr Michael Noble , Argyll

I am afraid that I cannot give way: I have only a minute or two left.

My hon. Friend the Member for Somerset, North stressed the importance of roads to the development areas, and he was dead right. Good communications are probably the most important attraction to industry there is. To make another small but quick point, one knows the extreme importance of the rate burdens on both commercial and industrial development.

The picture as we see it at the moment, therefore, is that production in the country as a whole has been going down and industry's confidence has been falling. Does the Secretary of State believe that he can get production up and confidence rising again this year or, indeed, next year? If he does so, and if he can tell us why, we will do our best to help him. Government investment during the period has been extremely high and private investment has been low. We were told during the Budget debate that if private investment picked up, Government investment would have to drop back a bit because there would not be room for both within the national resources. If that is so, can we have a guarantee that if Government investment is cut back it will not be cut back in the development areas? Will they this time be really sheltered?

Can the Secretary of State tell us what is the current net gain of jobs? He has said that there have been 6,000 extra jobs in Scotland in the next few months but in the next few months we have also been sadly aware of rather more than 6,000 jobs lost in big industries that have published their redundancies. Can we know how these are going and what action is being taken in the scattered areas, perhaps, to try to keep, for instance, the chipboard factory going at Inverness—very important to a much wider area than Inverness itself—and in Kintyre, in my own constituency?

The hon. Member for Motherwell, whom we were all delighted to hear in the Chamber again, was obviously in some difficulty, because while he was saying that the gentleman in Whitehall generally knows better he was also saying that Scotland suffers from the Scots. I was not quite certain into which of the two categories he put the Secretary of State for Scotland.

I hope that the right hon. Gentleman will answer the questions raised by my right hon. Friend the Member for Mitcham (Mr. R. Carr), but when he does so I trust that he will try to compare like with like because he inherited, as the Chancellor of the Exchequer said, Scotland doing "pretty well in 1964". There has been very little improvement in what I understand is called the activity rate in Scotland since the right hon. Gentleman went there. People there are no longer finding him credible. One can see that in the results at Pollok—and not just at Pollok, but at Nuneaton, Rhondda, West and Honiton. They are not any longer believing him. I am sure he used his best endeavours at Dunoon, in my constituency, when he attended the S.T.U.C. conference. Those there did not believe him either.

I sincerely hope that in replying to the debate the right hon. Gentleman will stick to the positive things which he believes he can do. If he thinks that the country is ready to accept stories about the awful atrocities for which Tories were responsible back in the 'thirties, as the hon. Member for Stepney suggested, that will not carry any weight outside this House, even though the Government get their majority tonight. As the Foreign Secretary was reported as saying to a heckler last night, "Come outside and I will show you". I hope that the Secretary of State will go outside, into Scotland, and see for himself, and I hope that for once he will listen and not lecture.

9.1 p.m.

Photo of Mr William Ross Mr William Ross , Kilmarnock

When the right hon. Member for Argyll (Mr. Noble) talks about credibility we have to judge it on the promises, pledges and everything else which he and his party supporters have been putting forward tonight; and look at their credibility. He mentioned the meeting at Dunoon during the week-end. One thing which neither he, as Secretary of State, nor any Tory Secretary of State, ever did was to speak to the Scottish Trade Union Congress. [An HON. MEMBER: "They were never invited."] If the right hon. Gentleman had put out feelers he would have been invited. Then he would have heard some very hard words about Tory Governments of the past and the hope that we never have one again.

I express appreciation of the fact that we have had this Supply day debate on regional development problems. It was overdue. When we were in opposition we used to have two days every year devoted to discussion of Scottish industry and employment. We have not had a day's debate on this subject in the past two and a half years. When we were in opposition we had a debate which was purely Scottish, not one which was mixed up with the important problems of Wales, the West Country and the North of England. I can understand the reason for that. As soon after the election as possible, the right hon. Gentleman started predicting disaster for all the regions.

I believe that it was the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) who suggested that we inherited a wonderful situation. What a wonderful situation it was for the whole country! We had to take strict measures right at the start to deal with the balance of payments. [Laughter.] Hon. Members opposite cannot laugh off a debt of £840 million. Even though we succeeded in halving that debt in one year it could not be considered funny and cannot be laughed off now. [An HON. MEMBER: "It has nothing to do with the debate."] It had something to do with what the right hon. Gentleman was referring to in 1955 and 1957 and 1961. It is implicit in everything that has been said today.

The right hon. Member for Mitcham (Mr. R. Carr) was comparing 1961 with today. What was he worried about when making that comparison? It was simply that right hon. Members opposite had a situation in which the balance of payments was menaced and they had to take certain actions. We took action not because of our mismanagement of the balance of payments, but because of the unhealthy position we inherited from the Tories. They should be ashamed. As soon as we started to deal with the problems they bequeathed to us, they started predicting disaster. They were sorry that it did not come.

Photo of Mr William Ross Mr William Ross , Kilmarnock

No. We were able to shield the development areas. Hon. Members opposite should read the report made in December, 1965, by Lord Polwarth, of the Scottish Council.

No one ever pretended that the whole of the development areas could be offered full shelter in the July measures. We said that we would take certain measures to shelter them as far as possible. Everyone knows that it is impossible entirely to shelter development areas when a Government are working on an overall economic policy.

I will remind hon. Members opposite of what has happened. From listening to hon. Members opposite one would think that fro in 1951 to 1964 we had Governments who were pledged to driving themselves and working themselves to the bone for regional policies. This was not so. Part of our anger during those years arose because we saw the dismantlement of the training centres and the abandonment of advance factories as a way of dealing with the imbalance. It took us 10 years to convince the Tories to go in for advance factory building. It was not until 1957–58 that they started to wake up and realise that there was a problem.

In 1961, one of the things which they did, but which we never did—[An HON. MEMBER: "What about the Amendment?"] This is related to the Amendment. They stopped house building in Scotland. They cut it down. The right hon. Member for Argyll spoke about the number of houses built in Scotland. In the first year after he became Secretary of State for Scotland the number of houses built in Scotland was 26,000. In 1953, nine years earlier, the number built was 39,000. The Tories never got back to that figure. In 1962, they cut down on school building and on roads.

The right hon. Gentleman talked about the great years. I have here the Report of the Estimates Committee on the working of the Local Employment Act, 1960, which was to sort everything out, according to the then President of the Board of Trade, who later became Chancellor of the Exchequer. In March, 1960, in the development areas of Scotland alone—just when this Act got on to the Statute Book—there were 55,487 unemployed. In April, 1963, after three years' terrific drive to get rid of the problem, the number of unemployed in those areas was 99,989. In Scotland itself it was 134,000.

Now the Tories are complaining of being worried that the number is 85,000. We have a right to be worried. We have always been worried. Hon. Members opposite never lost many nights' sleep over Scotland's problems.

Photo of Mr Sydney Irving Mr Sydney Irving , Dartford

The right hon. Gentleman is obviously not giving way.

Hon. Members:


Photo of Mr William Ross Mr William Ross , Kilmarnock

The Report of the Estimates Committee—[HON. MEMBERS: "Give way."]—published on 15th May, 1963, on the administration of the Local Employment Act, had this to say: Expenditure under the Act seems to be falling, in fact, at a time when the need for it is generally agreed to be greater than ever. That was the priority which right hon. and hon. Members opposite had.

The right hon. Member for Argyll talked about the Planning Board and said that this was a development of the Scottish Development Group. It was. I think that we have certain advantages in Scotland in that we have a self-contained region, with a Controller for the Ministry of Labour and the Board of Trade, all there on a regional basis. Within that set-up, we have been able to collect a general staff of civil servants in the Planning Board, bringing in people from the nationalised industries as well, with the Planning Council using them. Perhaps we are better off than other areas.

Photo of Mr Henry Clark Mr Henry Clark , North Antrim

On a point of order, Mr. Deputy Speaker. Could you advise the House whether it would be in order for the Secretary of State to talk about developments outside Scotland?

Photo of Mr Sydney Irving Mr Sydney Irving , Dartford

That is not a point of order.

Photo of Mr William Ross Mr William Ross , Kilmarnock

The hon. Member for Antrim, North (Mr. H. Clark) will appreciate that the Report of the Estimates Committee to which I referred dealt not just with Scotland, but with the whole country.

Photo of Mr Frederic Bennett Mr Frederic Bennett , Torquay

On a point of order, Mr. Deputy Speaker. I have sat here throughout the debate. This is a perfectly genuine point which I wish to raise with you. I understood that the Minister would deal with the whole subject of the debate, which covers all the regions and not just one. I feel that we have—[An HON. MEMBER; "Come to the point."]—I am prepared to make my point of order to you, Mr. Deputy Speaker

Photo of Mr Archibald Manuel Mr Archibald Manuel , Central Ayrshire

It is not a point of order at all.

Photo of Mr Frederic Bennett Mr Frederic Bennett , Torquay

I want to give the Minister the maximum time to reply. Perhaps I may be allowed to put my point of order in silence.

I would like you, Mr. Deputy Speaker

Hon. Members:

Sit down.

Photo of Mr Sydney Irving Mr Sydney Irving , Dartford

Order. With respect, I think that the hon. Gentleman has made his point of order. It is up to the Minister to deal with the question in the way in which he thinks appropriate. If the House will listen to him, we may enter a wider field of discussion.

Photo of Mr William Ross Mr William Ross , Kilmarnock

Hon. Members will appreciate that I have to answer some of the points put by the right hon. Member for Argyll, the former Secretary of State for Scotland.

The right hon. Gentleman spoke of what had been done and referred to the plan for Central Scotland. But this was something put forward at the very last minute, in November, 1963. Perhaps hon. Members opposite forget what the right hon. Gentleman said about it. This is on the question of credibility. In winding up the debate on 3rd December, 1963, he said: … this is the first attempt really to get things in Scotland put right."—[OFFICIAL REPORT, 3rd December, 1963; Vol. 685, c. 1105.] It was late, on 3rd December, 1963, to admit that he and his right hon. Friends had been wasting their time for 12 years. Yet now they ask us to accept their concern today as genuine.

Photo of Mr William Ross Mr William Ross , Kilmarnock

I do not know to whom the right hon. Gentleman gave way, but it was seldom to me.

The right hon. Member for Mitcham, in opening the debate, asked that we should deal with this matter constructively, but he spent a good deal of his time bashing the Government, presumably leaving it to everyone else to concentrate on the subject of debate. Some of the points which the right hon. Gentleman made, notably those on the selective employment premium, were fairly made. The same is true of the right hon. Member for Argyll. We ought not to come to hasty conclusions about this, but, on the other hand, we must recognise that it is directed at the problem of manufacturing industry. There may well be a problem for tourism, for example, but it does not necessarily follow that the one is related to the other, or that this is the only solution for all the problems of the areas.

The right hon. Member for Argyll had already committed himself. When we were discussing the proposal for a selective employment premium—I think that this came in an intervention in a speech by his right hon. Friend the Member for the City of Chester (Mr. Temple), during the Budget debate—the right hon. Gentleman said that the selective employment premium would do great harm. [An HON. MEMBER: "It has."] Selective employment premium has not even started yet. The hon. Gentleman thinks that we are talking about Selective Employment Tax. He had better wake up. Selective employment premium is only a proposal in the Green Paper. The right hon. Member for Argyll was at odds with some of his hon. Friends about the proposal.

The right hon. Member for Mitcham asked about the question of clarity. [Interruption.]

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

Order. I wish to hear the debate.

Photo of Mr William Ross Mr William Ross , Kilmarnock

The right hon. Member for Mitcham said that any incentives should be certain, clear and speedy. I do not think that he would deny that there was a lack of clarity about what people would gain from the investment allowances and free depreciation. Among the factors that led people to welcome the change we made were the aspects of clarity, certainty and speed. The Scottish Council was quite sure that the new cash grants, with their 20 cent. advantage over non-development areas, would make Scotland an even easier location to sell. That was the opinion of people in the business of attracting industry into Scotland, and I have never seen that denied in any way.

The right hon. Member for Mitcham also asked us about the slow rate of completions of buildings for which I.D.C.s are granted, and that question was also hinted at by the right hon. Member for Argyll. They will be pleased to know that completions in the three main development areas—Scotland the North and Wales—increased to 9·8 million in 1965, compared with 7·7 million in 1964, and in the first half of 1966 the rate of completions was much the same as a year earlier. The right hon. Gentleman expressed fears about slowing down, but there is no indication of any slowing down this year.

Photo of Mr Robert Carr Mr Robert Carr , Mitcham

The official figures show that there was a slowing down in completions in the first half of 1966 compared with 1965. How can the right hon. Gentleman say what he is saying?

Photo of Mr William Ross Mr William Ross , Kilmarnock

I am giving the right hon. Gentleman the official figures.

The right hon. Member for Mitcham spoke about the future industrial prospects and the C.B.I. survey. Manufacturing investment in 1966 was higher than was originally estimated by the Board of Trade, which has no evidence that during the last few months manufacturing industry generally has become more pessimistic about the future, and that is also true about Scotland. [Interruption.]

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

Order. The House must leave it to the protagonists.

Photo of Mr William Ross Mr William Ross , Kilmarnock

The survey must be viewed against what was projected in 1966 and what actually happened. I am sorry that hon. Members opposite did not get the pessimistic answers they expected. Encouragement to invest is provided by the increase we have made in the investment grant, raising it from 40 to 45 per cent. in the development areas and to 25 per cent. elsewhere. That was not taken fully into account by the C.B.I. survey, which should be viewed against those increases.

I do not doubt that many firms are now taking advantage of the increased grants, and that is reflected in the number of industrial development certificates issued, not only in Scotland but in other parts of the development areas, during the first quarter of 1967. Scottish hon. Members will be delighted to know that inquiries, far from dropping off, are increasing; projects approved, far from dropping off, have increased, and the total of 80 is the highest number we have had in the 1960s in Scotland. They will provide over 6,000 jobs, something that was never equalled during the drives that we have heard about that took place in 1962, 1963 and 1964. In 1962, the number of jobs for the whole year did not amount to more than 10,000. This is what we were able to do in one quarter.

Photo of Mr Robert Carr Mr Robert Carr , Mitcham

I am sure that the right hon. Gentleman does not wish to mislead the House in a matter of fact. Is he aware that I have before me the Monthly Digest of Statistics, an official Government publication? This shows that the building completions in Scotland and in the North, to mention just two of the development regions, were smaller in the first half of 1966 than in the first half of 1965?

Photo of Mr William Ross Mr William Ross , Kilmarnock

This does not mean that there was a hold-up, a slowing-down of completions in the projects that had been approved. These full figures with 1966—[Interruption.] What hon. Members have been trying to suggest is that the I.D.C.s having been granted, there has been no, proceeding to the actual work, but they have been quite wrong.

The right hon. Gentleman the Member for Argyll asked me if the figures given by my hon. Friend the Joint Under-Secretary about I.D.C.s were for comparable areas. They are. They refer to Scotland, Wales and Northern Ireland, so like was compared with like. We have had further comments from some hon. Members about the Green Paper. The hon. and learned Member for Darwen (Mr. Fletcher-Cooke) spoke about the middle band. To my mind that had agricultural connotations, and I think that he had better stick to the grey areas.

The trouble about this is that whether one has a development area, a development district or a development region, one has a boundary. I appreciate the difficulties about this contiguous situation. We have the problem in Scotland of Leith and Edinburgh. This is something implicit in the definition of development districts and something that we have to bear. I want to express my appreciation to my hon. Friend the Member for Newcastle-upon-Tyne, East (Mr. Rhodes) for his robust and angry speech. It was a worthwhile one, pointing out the change over I.D.C.s in relation to these areas. My hon. Friend the Member for Motherwell (Mr. Lawson) returned to our debates, to which he is no stranger. I can assure him that I certainly welcome his support from the back benches. I was not altogether happy about his suggestion that we were over-confident when we were in opposition. We were not over-confident. We knew that we could do better than that lot and we are doing better. [An HON. MEMBER: "County council elections."] County council elections have not taken place in Scotland yet.

My hon. Friend spoke about selective development appropriate to particular areas. This is exactly what is being done at present. He referred to fish farming. He will be glad to know that already there is interest in Artoe and Inverailort. I do not recognise psychological barriers to the Scots doing well with their own problems and helping others as well.

My hon. Friend the Member for Middleton and Prestwich (Mr. Coe), made a very constructive and stimulating speech. I want to suggest to him that there is flexibility for I.D.C.s outside of development areas where special problems can be recognised, and in respect of which action can be taken. He made the very important point about the disadvantage of environment. This is the special characteristic of our old development areas, although not the only one. There are old areas which are still prosperous, but which still need cleaning up. I appreciate the concern of the E.P.C.s in these areas, which want to get on with the job. My hon. Friend asked me to look into the crystal ball about the tie-up with the new local government set-up. It would be very foolish to prophesy what would be the outcome.

The hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) was quite right to speak of the new adventurers on the Conservative benches. They are discovering something new every week. Last week, as he said, it was child poverty. This week it is the regions. They may even discover themselves in their own weaknesses if they go far enough.

The hon. Member asked whether it would be possible to vary the investment grants and the S.E.P. in development areas. He should appreciate that the variety is already there in loans and grants under the Local Employment Acts. Those are advantages for projects which are capital intensive and there is a balancing feature with the new S.E.P. if the projects are labour intensive.

The hon. Member spoke of housing. In Scotland, we have nothing to apologise for about housing. [Interruption.] I do not know where hon. Members were when the Tories were not building houses in Scotland. During their last two and a half years they built 74,000 houses in Scotland, whereas since we became the Government we have completed 90,000. They left office with houses under construction and awaiting approval numbering 55,000, whereas today the number is nearly 70,000.

Hon. Members spoke of the energy of my hon. Friend the Minister of State: we are now seeing the results of that energy. [Interruption.]

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

Order. There are too many spontaneous debaters about at the moment.

Photo of Mr William Ross Mr William Ross , Kilmarnock

I am satisfied—[HON. MEMBERS: "We are not."] During the past two and a half years we have nearly doubled the number for new industries. In Scotland and the other development areas, the advance factory programme which we initiated and which has meant for Scotland about 34 advance factories is not to be the end of the line. Before very long, my right hon. Friend the President of the Board of Trade will be announcing yet another round of advance factories and my right hon. Friend the Secretary of State for Wales is working on the process of getting a "land bank" to be ready to take full advantage of that.

When I think of the number of debates on this subject in which I have participated I can well understand why hon. Members opposite have been quiet about it, because their record in this respect is the blackest of all their records. The right hon. Member for Argyll became Secretary of State for Scotland in July, 1962. Within six months, the number of unemployed in Scotland had practically doubled. When we get to the stage when we have done as badly as he did, hon. Member will be entitled to criticise us and my hon. Friends will not allow us to forget a performance like that.

I understand exactly why hon. Members opposite have been quiet about it. It is because their consciences have been troubling them. Even the "cloth cap commissioner" who went to the North-East went far too late, and I can assure hon. Members opposite that it is far too late to suggest to the people of the development areas that the Conservatives are really concerned about their well-being.

Hon. Members:

Sit down.

Photo of Mr William Ross Mr William Ross , Kilmarnock

I ask my hon. and right hon. Friends to support us in the Lobby.

Hon. Members:

Sit down.

Photo of Mr Teddy Taylor Mr Teddy Taylor , Glasgow Cathcart

The right hon. Gentleman had had a go at me several times and I have never had a chance to get back at him. [Interruption.] During our 13 years of power, we never had—[Interruption.]

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

Order. I wish to hear the hon. Member who has caught my eye.

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

Order. This noise is no good to anybody. Mr. Taylor.

Hon. Members:

Sit down.

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

Order. The hon. Member—

Hon. Members:

He is walking out.

Question put, That the words proposed to be left out stand part of the Question:—

The House divided: Ayes 220, Noes 274.

Division No. 314.]AYES[9.30 p.m.
Alison, Michael (Barkston Ash)Carlisle, MarkFraser, Rt. Hn. Hugh (St'fford & Stone)
Allason, James (Hemel Hempstead)Carr, Rt. Hn. RobertGalbraith, Hn. T. G.
Astor, JohnCary, Sir RobertGibson-Watt, David
Atkins, Humphrey (M't'n & M'd'n)Channon, H. P. G.Gilmour, Ian (Norfolk, C.)
Awdry, DanielChichester-Clark, R.Gilmour, Sir John (Fife, E.)
Baker, W H. K.Clark, HenryGlover, Sir Douglas
Balniel, LordClegg, WalterGlyn, Sir Richard
Barber, R1. Hn. AnthonyCooke, RobertCodber, Rt. Hn. J. B.
Batsford, BrianCooper-Key, Sir NeillGoodhew, Victor
Beamish, Col. Sir TuftonCordle, JohnGower, Raymond
Bell, RonaldCorfield, F. V.Grant, Anthony
Bennett, Sir Frederic (Torquay)Costain, A. P.Grant-Ferris, R.
Bennett, Dr. Reginald (Gos & Fhm)Craddock, Sir Beresford (Spelthorne)Gresham Cooke, R.
Berry, Hn. AnthonyCawley, AidanGrieve, Percy
Biffen, JohnCrouch, DavidGrimond, Rt. Hn. J.
Biggs-Davison, JohnCrowder, F. P.Gurden, Harold
Birch, Rt. Hn. NigelCunningham, Sir KnoxHall, John (Wycombe)
Black, Sir CyrilCurrie, G. B. H.Hall-Davis, A. G. F.
Blaker, PeterDalkeith, Earl ofHamilton, Marquess of (Fermanagh)
Body, RichardDance, JamesHamilton, Michael (Salisbury)
Bossom, Sir CliveDean, Paul (Somerset, N.)Harris, Frederic (Croydon, N. W.)
Boyd-Carpenter, Rt. Hn, JohnDeedes, Rt. Hn. W. F. (Ashford)Harrison, Brian (Maldon)
Boyle, Rt. Hn. Sir EdwardDoughty, CharlesHarrison, Col. Sir Harwood (Eye)
Braine, BernardDrayson, G. B.Harvey, Sir Arthur Vere
Brinton, Sir Tattondu Cann, Rt. Hn. EdwardHastings, Stephen
Bromley-Davenport, Lt.-Col. Sir WalterEden, Sir JohnHawkins, Paul
Brown, Sir Edward (Bath)Elliot, Capt. Walter (Carshalton)Hay, John
Bruce-Gardyne, J.Errington, Sir EricHeald, Rt. Hn. Sir Lionel
Bryan, PaulEyre, ReginaldHeseltine, Michael
Buchanan-Smith, Alick (Angus, N & M)Fisher, NigelHiggins, Terence L.
Buck, Antony (Colchester)Fletcher-Cooke, CharlesHiley, Joseph
Bullus, Sir EricForrest, GeorgeHill, J. E. B.
Burden, F. A.Fortescue, TimHobson, Rt. Hn. Sir John
Gampbell, GordonFoster, Sir JohnHogg, Rt. Hn. Quintin
Holland, PhilipMaydon, Lt.-Cmdr. S. L. C.Sinclair, Sir George
Hooson, EmlynMills, Peter (Torrington)Smith, John
Hornby, RichardMills, Stratton (Belfast, N.)Stainton, Keith
Howell, David (Guildford)Miscampbell, NormanSteel, David (Roxburgh)
Hunt, JohnMitchell, David (Basingstoke)Stodart, Anthony
Hutchison, Michael ClarkMonro, HectorStoddart-Scott, Col. Sir M. (Ripon)
Iremonger, T. L.Morgan, Geraint (Denbigh)Summers, Sir Spencer
Irvine, Bryant Godman (Rye)Morrison, Charles (Devizes)Tapsell, Peter
Jenkin, Patrick (Woodford)Mott-Radclyffe, Sir CharlesTaylor, Sir Charles (Eastbourne)
Jennings, J. C. (Burton)Munro-Lucas-Tooth, Sir HughTaylor, Edward M. (G'gow, Cathcart)
Johnson Smith, G. (E. Grinstead)Murton, OscarTaylor, Frank (Moss Side)
Jones, Arthur (Northants, S.)Nabarro, Sir GeraldTeeling, Sir William
Jopling, MichaelNeave, AireyTemple, John M.
Kaberry, Sir DonaldNicholls, Sir HarmarThatcher, Mrs. Margaret
Kerby, Capt. HenryNoble, Rt. Hn. MichaelTilney, John
Kimball, MarcusNott, JohnTurton, Rt. Hn. R. H.
King, Evelyn (Dorset, S.)Onslow, Cranleyvan straubenzee, W. R.
Kitson, TimothyOrr, Capt. L. P. S.Vaughan-Morgan, Rt. Hn. Sir John
Knight, Mrs. JillOsborn, John (Hallam)Wainwright, Richard (Come Valley)
Lambton, ViscountOsborne, Sir Cyril (Louth)Walker, Peter (Worcester)
Lancaster, Col. C. G.Pearson, Sir Frank (Clitheroe)Walker-Smith, Rt. Hn. Sir Derek
Langford-Holt, Sir JohnPercival, IanWall, Patrick
Legge-Bourke, Sir HarryPike, Miss MervynWalters, Dennis
Lewis, Kenneth (Rutland)Pink, R. BonnerWard, Dame Irene
Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)Powell, Rt. Hn. J. EnochWeatherill, Bernard
Lloyd, Ian (P'tsm'th, Langstone)Price, David (Eastleigh)Webster, David
Lloyd, Rt. Hn. Selwyn (Wirral)Prior, J. M. L.Wells, John (Maidstone)
Loveys, W. H.Pym, FrancisWhitelaw, Rt. Hn. William
Lubbock, EricQuennell, Miss J. M.Wills, Sir Gerald (Bridgwater)
MacArthur, IanRamsden, Rt. Hn. JamesWilson, Geoffrey (Truro)
Maclean, Sir FitzroyRawlinson, Rt. Hn. Sir PeterWinstanley, Dr. M. P.
McMaster, StanleyRees-Davies, W. R.Wolrige-Gordon, Patrick
Macmillan, Maurice (Farnham)Renton, Rt. Hn. Sir DavidWoodnutt, Mark
Maddan, MartinRidley, Hn. NicholasWright, Esmond
Maginnis, John E.Robson Brown, Sir WilliamWylie, N. R.
Marples, Rt. Hn. ErnestRossi, Hugh (Hornsey)Younger, Hn. George
Marten, NeilRoyle, Anthony
Maude, AngusRussell, Sir RonaldTELLERS FOR THE AYES:
Maudling, Rt. Hn. ReginaldScott, NicholasMr. R. W. Elliott and
Mawby, RaySharpies, RichardMr. Jasper More.
Maxwell-Hyslop, R. J.Shaw, Michael (Sc'b'gh & Whitby)
Albu, AustenCorbet, Mrs. FredaFord, Ben
Allaun, Frank (Salford, E.)Craddock, George (Bradford, S.)Forrester, John
Alldritt, WalterCrawshaw, RichardFowler, Gerry
Allen, ScholefieldCronin, JohnFreeson, Reginald
Anderson, DonaldCrossman, Rt. Hn. RichardGardner, Tony
Armstrong, ErnestCullen, Mrs. AliceCarrett, W. E.
Ashley, JackDalyell, TamGinsburg, David
Atkinson, Norman (Tottenham)Darling, Rt. Hn. GeorgeGourlay, Harry
Bacon, Rt. Hn. AliceDavidson, Arthur (Accrington)Gray, Dr. Hugh (Yarmouth)
Bagier, Gordon A. T.Davies, Dr. Ernest (Stretford)Greenwood, Rt. Hn. Anthony
Barnes, MichaelDavies, G. Elfed (Rhondda, E.)Gregory, Arnold
Baxter, WilliamDavies, Ednyfed Hudson (Conway)Grey, Charles (Durham)
Beaney, AlanDavies, Harold (Leek)Griffiths, David (Rother Valley)
Bellenger, Rt. Hn. F. J.Davies, Ifor (Gower)Griffiths, Rt. Hn. James (Llanelly)
Bence, CyrilDavies, Robert (Cambridge)Griffiths, Will (Exchange)
Benn, Rt. Hn. Anthony WedgwoodDelargy, HughGunter, Rt. Hn. R. J.
Bennett, James (G'gow, Bridgeton)Dell, EdmundHale, Leslie (Oldham, W.)
Bidwell, SydneyDempsey, JamesHamilton, James (Bothwell)
Binns, JohnDewar, DonaldHamilton, William (Fife, W.)
Bishop, E. S.Diamond, Rt. Hn. JohnHamling, William
Blackburn, F.Dickens, JamesHannan, William
Booth, AlbertDobson, RayHarper, Joseph
Bottomley, Rt. Hn. ArthurDoig, PeterHarrison, Walter (Wakefield)
Bowden, Rt. Hn. HerbertDriberg, TomHart, Mrs. Judith
Braddock, Mrs. E, M.Dunnett, JackHaseldine, Norman
Bray, Dr. JeremyDunwoody, Mrs. Gwyneth (Exeter)Hattersley, Roy
Brooks, EdwinEdwards, Rt. Hn. Ness (Caerphilly)Hazell, Bert
Broughton, Dr. A. D. D.Edwards, William (Merioneth)Herbison, Rt. Hn. Margaret
Brown, Rt. Hn. George (Belper)English, MichaelHobden, Dennis (Brighton, K'town)
Brown, Bob (N 'tle-upon-Tyne, W.)Ennals, DavidHoughton, Rt. Hn. Douglas
Buchan, NormanEnsor, DavidHowarth, Harry (Wellingborough)
Buchanan, Richard (C'gow, Sp'burn)Evans, Albert (Islington, S.W.)Howarth, Robert (Bolton, E.)
Butler, Mrs. Joyce (Wood Green)Evans, loan L. (Birm'h'm, Yardley)Howie, W.
Callaghan, Rt. Hn. JamesFaulds, AndrewHoy, James
Carmichael, NellFernyhough, E.Huckfield, L.
Carter-Jones, LewisFinch, HaroldHughes, Rt. Hn. Ciedwyn (Anglesey)
Castle, Rt. Hn. BarbaraFletcher, Raymond (Ilkeston)Hughes, Hector (Aberdeen, N.)
Chapman, DonaldFletcher, Ted (Darlington)Hughes, Roy (Newport)
Coe, DenisFloud, BernardHynd, John
Coleman, DonaldFoley, MauriceIrvine, A. J. (Edge Hill)
Conlan, BernardFoot, Sir Dingle (Ipswich)Jackson, Colin (B'h'se & Spenb'gh)
Jackson, Peter M, (High Peak)Mikardo, IanRyan, John
Jay, Rt. Hn. DouglasMillan, BruceSheldon, Robert
Jeger, Mrs. Lena (H'b'n & St.P'cras, S.)Milne, Edward (Blyth)Shinwell, Rt. Hn. E.
Jenkins, Hugh (Putney)Molloy, WilliamShore, Peter (Stepney)
Johnson, Carol (Lewisham, S.)Morgan, Elystan (Cardiganshire)Short, Rt. Hn. Edward (N'c'He-u-Tyne)
Jones, Dan (Burnley)Morris, Charles R. (Openahaw)Silkin, Rt. Hn. John (Deptford)
Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)Morris, John (Aberavon)Silverman, Sydney (Nelson)
Jones, J. Idwal (Wrexham)Moyle, RolandSkeffington, Arthur
Jones, T. Alec (Rhondda West)Murray, AlbertSmall, William
Kelley, RichardNewens, StanSnow, Julian
Kenyon, CliffordNoel-Baker, Francis (Swindon)Spriggs, Leslie
Kerr, Mrs. Anne (R'ter & Chatham)Noel-Baker, Rt. Hn. Philip (Derby, S.)Steele, Thomas (Dunbartonshire, W.)
Kerr, Dr. David (W'worth, Central)Norwood, ChristopherStewart, Rt. Hn. Michael
Kerr, Russell (Fettham)Oakes, GordonStonehouse, John
Lawson, GeorgeOgden, EricStrauss, Rt. Hn. G. R.
Leadbitter, TedO'Malley, BrianSummerskill, Hn. Dr. Shirley
Ledger, RonOram, Albert E.Swain, Thomas
Lee, Rt. Hn. Frederick (Newton)Orme, StanleySwingler, Stephen
Lee, Rt. Hn. Frederick (Newton)Oswald, ThomasThomas, George (Cardiff, W.)
Lestor, Miss JoanOwen, Dr. David (Plymouth, Stn)Thornton, Ernest
Lever, Harold (Cheetham)Owen, Will (Morpeth)Tinn, James
Lewis, Arthur (W. Ham, N.)Padley, WalterTomney, Frank
Lewis, Ron (Carlisle)Page, Derek (King's Lynn)Urwin, T. W.
Lipton, MarcusPaget, R. T.Varley, Eric G.
Lomas, KennethPalmer, ArthurWainwright, Edwin (Dearne Valley)
Loughlin, CharlesPannell, Rt. Hn. CharlesWalden, Brian (All Saints)
Luard, EvanPark, TrevorWallace, George
Lyon, Alexander W. (York)Parker, John (Dagenham)Watkins, David (Consett)
Lyons, Edward (Bradford. E.)Parkyn, Brian (Bedford)Watkins, Tudor (Brecon & Radnor)
Mabon, Dr. J. DicksonPavitt, LaurenceWellbeloved, James
MacColl, JamesPearson, Arthur (Pontypridd)Whitaker, Ben
MacDermot, NiallPeart, Rt. Hn. FredWhite, Mrs. Eirene
Macdonald, A. H.Pentland, NormanWhitlock, William
McGuire, MichaelPerry, Ernest G. (Battersea, S.)Wigg, Rt. Hn. George
McKay, Mrs. MargaretPerry, George H. (Nottingham, S.)Wilkins, W. A.
Mackenzie, Gregor (Rutherglen)Prentice, Rt. Hn. R. E.Willey, Rt. Hn. Frederick
Mackie, JohnPrice, Christopher (Perry Barr)Williams, Alan Lee (Hornchurch)
Mackintosh, John P.Price, Thomas (Westhoughton)Williams, Clifford (Abertillery)
Maclennan, RobertProbert, ArthurWilliams, Mrs. Shirley (Hitchin)
MacMillan, Malcolm (Western Islet)Pursey, Cmdr. HarryWilliams, W. T. (Warrington)
MacPherson, MalcolmRankin, JohnWillis, George (Edinburgh, E.)
Mahon, Peter (Preston, S.)Rees, MerlynWinnick, David
Mallalieu, E. L. (Brigg)Reynolds, G. W,Winterbottom, R. E.
Mallalieu, J.P.W.(Huddersfield, E.)Rhodes, GeoffreyWoodburn, Rt. Hn. A.
Manuel, ArchieRoberts, Albert (Normanton)Woof, Robert
Mapp, CharlesRoberts, Goronwy (Caernarvon)Wyatt, Woodrow
Marquand, DavidRobinson, Rt. Hn. Kenneth(St.P'c'as)Yates, Victor
Mason, RoyRobinson, W. O. J. (Walth'stow, E.)
Maxwell, RobertRoebuck, RoyTELLERS FOR THE NOES:
Mayhew, ChristopherRose, PaulMr. Neil McBride and
Mellish, RobertRoss, Rt. Hn. WilliamMr. Harold Walker.
Mendelson, J. J.Rowland, Christopher (Meriden)

Question put, That the proposed words be there added:—

The House divided: Ayes 274, Noes 225.

Division No. 315.]AYES[9.43 p.m.
Albu, AustenBrooks, EdwinDavies, Ednyfed Hudson (Conway)
Allaun, Frank (Salford, E.)Broughton, Dr. A. D. D.Davies, Harold (Leek)
Alldritt, WalterBrown, Rt. Hn. George (Belper)Davies, Ifor (Gower)
Allen, ScholefieldBrown, Bob (N'c' tle-upon-Tyne, W.)Davies, Robert (Cambridge)
Anderson, DonaldBuchan, NormanDelargy, Hugh
Armstrong, ErnestBuchanan, Richard (G'gow, Sp'burn)Dell, Edmund
Ashley, JackButler, Mrs. Joyce (Wood Green)Dempsey, James
Atkinson, Norman (Tottenham)Callaghan, Rt. Hn. JamesDewar, Donald
Bacon, Rt. Hn. AliceCarmichael, NeilDiamond, Rt. Hn. John
Bagier, Gordon A. T.Carter-Jones, LewisDickens, James
Barnes, MichaelCastle, Rt. Hn. BarbaraDobson, Ray
Baxter, WilliamChapman, DonaldDoig, Peter
Beaney, AlanCoe, DenisDriberg, Tom
Bellenger, Rt. Hn. F. J.Coleman, DonaldDunnett, Jack
Bence, CyrilConlan, BernardDunwoody, Mrs. Gwyneth (Exeter)
Benn, Rt. Hn. Anthony WedgwoodCorbet, Mrs. FredaEdwards, Rt. Hn. Ness (Caerphilly)
Bennett, James (G'gow, Bridgeton)Craddock, Ceorge (Bradford, S.)Edwards, William (Merioneth)
Bidwell, SydneyCrawshaw, RichardEnglish, Michael
Binns, JohnCronin, JohnEnnals, David
Bishop, E. S.Crossman, Rt. Hn. RichardEnsor, David
Blackburn, F.Cullen, Mrs. AliceEvans, Albert (Islington, S.W.)
Booth, AlbertDalyell, TamEvans, loan L. (Birm'h'm, Yardley)
Bottomley, Rt. Hn. ArthurDarling, Rt. Hn. GeorgeFaulds, Andrew
Bowden, Rt. Hn. HerbertDavidson, Arthur (Accrington)Fernyhough, E.
Braddock, Mrs. E. M.Davies, Dr. Ernest (Stretford)Finch, Harold
Bray, Dr. JeremyDavies, G. Elfed (Rhondda, E.)Fletcher, Raymond (Ilkeston)
Fletcher, Ted (Darlington)Lewis, Ron (Carlisle)Price, Christopher (Perry Barr)
Floud, BernardLipton, MarcusPrice, Thomas (Westhoughton)
Foley, MauriceLomas, KennethProbert, Arthur
Foot, Sir Dingle (Ipswich)Loughlin, CharlesPursey, Cmdr. Harry
Ford, BenLuard, EvanRankin, John
Forrester, JohnLyon, Alexander W. (York)Rees, Merlyn
Fowler, GerryLyons, Edward (Bradford, E.)Reynolds, G. W.
Freeson, ReginaldMabon, Dr. J. DicksonRhodes, Geoffrey
Gardner, TonyMacColl, JamesRoberts, Albert (Normanton)
Garrett, W. E.MacDermot, NiallRoberts, Goronwy (Caernarvon)
Ginsburg, DavidMacdonald, A. H.Robinson, Rt. Hn. Kenneth (St.P'c'as)
Gourlay, HarryMcGuire, MichaelRobinson, W. O. J. (Walth'stow, E.)
Gray, Dr. Hugh (Yarmouth)McKay, Mrs. MargaretRoebuck, Roy
Greenwood, Fit. Hn. AnthonyMackenzie, Gregor (Rutherglen)Rose, Paul
Gregory, ArnoldMackie, JohnRoss, Rt. Hn. William
Grey, Charles (Durham)Mackintosh, John P.Rowland, Christopher (Meriden)
Griffiths, David (Rother Valley)Maclennan, RobertRyan, John
Griffiths, Rt. Hn. James (Llanelly)MacMillan, Malcolm (Western Isles)Sheldon, Robert
Griffiths, Will (Exchange)MacPherson, MalcolmShinwell, Rt. Hn. E.
Gunter, Rt. Hn. R. J.Mahon, Peter (Preston, S.)Shore, Peter (Stepney)
Hale, Leslie (Oldham, W.)Mallalieu, E. L. (Brigg)Short, Rt. Hn. Edward (N'c'tle-u-Tyne)
Hamilton, James (Bothwell)Mallalieu, J.P.W. (Huddersfield, E.)Silkin, Rt. Hn. John (Deptford)
Hamilton, William (Fife, W.)Manuel, ArchieSilverman, Sydney (Nelson)
Hamling, WilliamMapp, CharlesSkeffington, Arthur
Hannan, WilliamMarquand, DavidSmall, William
Harper, JosephMason, RoySnow, Julian
Harrison, Walter (Wakefield)Maxwell, RobertSpriggs, Leslie
Hart, Mrs. JudithMayhew, ChristopherSteele, Thomas (Dunbartonshire, W.)
Haseldine, NormanMellish, RobertStewart, Rt. Hn. Michael
Hattersley, RoyMendelson, J. J.Stonehouse, John
Hazell, BertMikardo, IanStrauss, Rt. Hn. G. R.
Herbison, Rt. Hn. MargaretMillan, BruceSummerskill, Hn. Dr. Shirley
Hobden, Dennis (Brighton, K'town)
Houghton, Rt. Hn. DouglasMilne, Edward (Blyth)Swain, Thomas
Howarth, Harry (Wellingborough)Molloy, WilliamSwingler, Stephen
Howarth, Robert (Bolton, E.)Morgan, Elystan (Cardiganshire)Thomas, George (Cardiff, W.)
Howie, W.Morris, Charles R. (Openshaw)Thornton, Ernest
Hoy, JamesMorris, John (Aberavon)Tinn, James
Huckfield, L.Moyle, RolandTomney, Frank
Hughes, Rt. Hn. Cledwyn (Anglesey)Murray, AlbertUrwin, T. W.
Hughes, Hector (Aberdeen, N.)Newens, StanVarley, Eric G.
Hughes, Roy (Newport)Noel-Baker, Francis (Swindon)Wainwright, Edwin (Dearne Valley)
Hynd, JohnNoel-Baker, Rt. Hn. Philip (Derby, S.)Walden, Brian (All Saints)
Irvine, A. J. (Edge Hill)Norwood, ChristopherWallace, George
Jackson, Colin (B'h'se & Spenb'gh)Oakes, GordonWatkins, David (Consett)
Jackson, Peter M. (High Peak)Ogden, EricWatkins, Tudor (Brecon & Radnor)
Jay, Rt. Hn. DouglasO'Malley, BrianWellbeloved, James
Jeger, Mrs. Lena (H'b'n & St. P'cras, S.)Oram, Albert E.Whitaker, Ben
Jenkins, Hugh (Putney)Orme, StanleyWhite, Mrs. Eirene
Johnson, Carol (Lewisham, S.)Oswald, ThomasWhitlock, William
Jones, Dan (Burnley)Owen, Dr. David (Plymouth, S'tn)Wigg, Rt. Hn. George
Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)Owen, Will (Morpeth)Wilkins, W. A.
Jones, J. Idwal (Wrexham)Padley, WalterWilley, Rt. Hn. Frederick
Jones, T. A. (Rhondda, W.)Page, Derek (King's Lynn)Williams, Alan Lee (Hornchurch)
Kelley, RichardPaget, R. T.Williams, Clifford (Abertillery)
Kenyon, CliffordPalmer, ArthurWilliams, Mrs. Shirley (Hitchin)
Kerr, Mrs. Anne (R'ter & Chatham)Pannell, Rt. Hn. CharlesWilliams, W. T. (Warrington)
Kerr, Dr. David (W'worth, Central)Park, TrevorWillis, George (Edinburgh, E.)
Kerr, Russell (Feltham)Parker, John (Dagenham)Winnick, David
Lawson, GeorgeParkyn, Brian (Bedford)Winterbottom, R. E.
Leadbitter, TedPavitt, LaurenceWoodburn, Rt. Hn. A.
Ledger, RonPearson, Arthur (Pontypridd)Woof, Robert
Lee, Rt. Hn. Frederick (Newton)Peart, Rt. Hn. FredWyatt, Woodrow
Lee, John (Reading)Pentland, NormanYates, Victor
Lestor, Miss JoanPerry, Ernest G. (Battersea, S.)
Lever, Harold (Cheetham)Perry, George H. (Nottingham, S.)TELLERS FOR THE AYES:
Lewis, Arthur (W. Ham, N.)Prentice, Rt. Hn. R. E.Mr. Neil McBride and
Mr. Harold Walker.
Alison, Michael (Barkston Ash)Biffen, JohnBryan, Paul
Allason, James (Hemel Hempstead)Biggs-Davison, JohnBuchanan-Smith, Alick (Angus, N & M)
Astor, JohnBirch, Rt. Hn. NigelBuck, Antony (Colchester)
Atkins, Humphrey (M't'n & M'd'n)Black, Sir CyrilBullus, Sir Eric
Awdry, DanielBlaker, PeterBurden, F. A.
Baker, W. H. K.Body, RichardCampbell, Gordon
Balniel, LordBossom, Sir CliveCarlisle, Mark
Barber, Rt. Hn. AnthonyBoyd-Carpenter, Rt. Hn. JohnCarr, Rt. Hn. Robert
Batsford, BrianBoyle, Rt. Hn. Sir EdwardCary, Sir Robert
Beamish, Col. Sir TuftonBraine, BernardChannon, H. P. G.
Bell, RonaldBrinton, Sir TattonChichester-Clark, R.
Bennett, Sir Frederic (Torquay)Bromley-Davenport, Lt. -Col. Sir WalterClark, Henry
Bennett, Dr. Reginald (Gos. & Fhm)Brown, Sir Edward (Bath)Glegg, Walter
Berry, Hn. AnthonyBruce-Gardyne, J.Cooke, Robert
Cooper-Key, Sir NeillHornby, RichardPike, Miss Mervyn
Cordle, JohnHowell, David (Guildford)Pink, R. Bonner
Corfield, F. V.Hunt, JohnPowell, Rt. Hn. J. Enoch
Costain, A. P.Hutchison, Michael ClarkPrice, David (Eastleigh)
Craddock, Sir Beresford (Spolthorne)Iremonger, T. L.Prior, J. M. L.
Crawley, AidanIrvine, Bryant Codman (Rye)Pym, Francis
Crouch, DavidJenkin, Patrick (Woodford)Quennell, Miss J. M.
Crowder, F. P.Jennings, J. C. (Burton)Ramsden, Rt. Hn. James
Cunningham, Sir KnoxJohnson Smith, G. (E. Grinstead)Rawlinson, Rt. Hn. Sir Peter
Currie, G. B. H.Jones, Arthur (Northants, S.)Rees-Davies, W. R.
Dalkeith, Earl ofJopling, MichaelRonton, Rt. Hn. Sir David
Dance, JamesKaberry, Sir DonaldRidley, Hn. Nicholas
Dean, Paul (Somerset, N.)Kerby, Capt. HenryRidsdale, Julian
Deedes, Rt. Hn. W. F, (Ashford)Kimball, MarcusRobson Brown, Sir William
Doughty, CharlesKing, Evelyn (Dorset, S.)Rossi, Hugh (Hornsey)
Drayson, G. B.Kitson, TimothyRoyle, Anthony
du Cann, Rt. Hn. EdwardKnight, Mrs. JillRussell, Sir Ronald
Eden, Sir JohnLambton, ViscountScott, Nicholas
Elliot, Capt. Walter (Carshalton)Lancaster, Col. C. G.Sharpies, Richard
Errington, Sir ErieLangford-Holt, Sir JohnShaw, Michael (Sc'b'gh & Whitby)
Eyre, ReginaldLegge-Bourke, Sir HarrySinclair, Sir George
Fisher, NigelLewis, Kenneth (Rutland)Smith, John
Fletcher-Cooke, CharlesLloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)Stainton, Keith
Forrest, GeorgeLloyd, Ian (P'tsm'th, Langstone)Steel, David (Roxburgh)
Fortescue, TimLloyd, Rt. Hn. Selwyn (Wirral)Stodart, Anthony
Foster, Sir John
Fraser, Rt. Hn. Hugh (St'fford & Stone)Loveys, W. H.Stoddart-Scott, Col. Sir M. (Ripon)
Galbraith, Hn. T. G.Lubbock, EricSummers, Sir Spencer
Gibson-Watt, DavidMac Arthur, IanTapsell, Peter
Gilmour, Ian (Norfolk, C.)Maclean, Sir FitzroyTaylor, Sir Charles (Eastbourne)
Gilmour, Sir John (Fife, E.)McMaster, StanleyTaylor, Edward M. (G'gow, Cathcart)
Glover, Sir DouglasMacmillan, Maurice (Farnham)Taylor, Frank (Moss Side)
Glyn, Sir RichardMaddan, MartinTeeling, Sir William
Godber, Rt. Hn. J. B.Maginnis, John E.Temple, John M.
Goodhew, VictorMarples, Rt. Hn. ErnestThatcher, Mrs. Margaret
Gower, RaymondMarten, NeilTilney, John
Grant, AnthonyMaude, AngusTurton, Rt. Hn. R. H.
Grant-Ferris, R.Maudling, Rt. Hn. Reginaldvan Straubenzee, W. R.
Gresham Cooke, R.Mawby, RayVaughan-Morgan, Rt. Hn. Sir John
Grieve, PercyMaxwell-Hyslop, R. J.Wainwright, Richard (Colne Valley)
Grimond, Rt. Hn. J.Maydon, Lt.-Cmdr. S. L. C.Walker, Peter (Worcester)
Gurden, HaroldMills, Peter (Torrington)Walker-Smith, Rt. Hn. Sir Derek
Hall, John (Wycombe)Mills, Stratton (Belfast, N.)Wall, Patrick
Hall-Davis, A. G. F.Miscampbell, NormanWalters, Dennis
Hamilton, Marquess of (Fermanagh)Mitchell, David (Basingstoke)Ward, Dame Irene
Hamilton, Michael (Salisbury)Monro, HectorWeatherill, Bernard
Harris, Frederic (Croydon, N.W.)Morgan, Geraint (Denbigh)Webster, David
Harris, Reader (Heston)Morrison, Charles (Devizes)Wells, John (Maidstone)
Harrison, Brian (Maldon)Mott-Radclyffe, Sir CharlesWhitelaw, Rt. Hn. William
Harrison, Col. Sir Harwood (Eye)Munro-Lucas-Tooth, Sir HughWills, Sir Gerald (Bridgwater)
Harvey, Sir Arthur VereMurton, OscarWilson, Geoffrey (Truro).
Hastings, StephenNabarro, Sir GeraldWinstanley, Dr. M. P.
Hawkins, PaulNeave, AireyWolrige-Gordon, Patrick
Hay, JohnNicholls, Sir HarmarWood, Rt. Hn. Richard
Heald, Rt. Hn. Sir LionelNoble, Rt. Hn. MichaelWoodnutt, Mark
Heseltine, MichaelNott, JohnWright, Esmond
Higgins, Terence L.Onslow, CranleyWylie, N. R.
Hiley, JosephOrr, Capt. L. P. S.Younger, Hn. George
Hill, J. E. B.Osborn, John (Hallam)
Hobson, Rt. Hn. Sir JohnOsborne, Sir Cyril (Louth)TELLERS FOR THE NOES:
Hogg, Rt. Hn. QuintinPage, John (Harrow, W.)Mr. R. W. Elliott and
Holland, PhilipPearson, Sir Frank (Clitheroe)Mr. Jasper More.
Hooson, EmlynPercival, Ian
Main Question, as amended, put and agreed to.
That this House regrets the failure of the previous Conservative administrations to tackle adequately the deep seated economic problems of the less prosperous regions and welcomes the energetic measures taken by Her Majesty's Government in the past two years to achieve a better economic balance between the regions on a permanent basis.