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

:With this new Clause it would be appropriate to consider also new Clause 4 (Services and office employment), new Clause 6 (Machine tool industry), new Clause 7 (Shipping) and Amendment No. 14, in Clause 7, page 8, line 24, at end insert:

'(g) to encourage the proper distribution of employment in the service industries and of office employment'.

:I do not think that hon. Members on either side of the House will dispute that the tourist industry makes an important contribution to the economy both nationally and in the regional context. Certainly this was recognised by both sides in the Committee on the Bill, but I think it may be helpful if I briefly summarise the industry's most significant contribution in statistical terms.

In 1971 there were an estimated 7 million visitors from overseas to the United Kingdom. This compared with 6·7 million in 1970 who contributed £433 million in earnings of foreign currency to this country. The final earnings figure for 1971 is not yet available but if one looks at the figures for the first three quarters of that year and compares them with the figures for the corresponding period in 1970 one sees that there is an increase, and it is fair to assume that the final figure will make it another record year for earnings.

In terms of domestic employment the tourist industry must not be under-estimated. Hon. Members will appreciate that it is difficult to represent the importance of the tourist industry in statistical terms since this industry is not classified as such in the employment statistics, but the annual count of persons employed in catering, hotels and associated services shows that in June, 1971, 559,000 persons were employed. I think hon. Members on both sides would agree that the tourist industry thus makes a very healthy contribution to the economic scene. More important in the context of the Bill is the implication that the importance of the industry will increase in the future.

The regional importance of this industry is equally impressive. If one examines the existing development areas one sees that tourism makes a contribution to most of those regional economies. For example, in the Northern area, which one tends to think of in terms of problems of shipbuilding, coal mining and so on, there is the Lake District, an important tourist area. Likewise in Scotland there are the Highlands and Islands, and in Wales its central and western parts.

However, it is the South-West from which I should like to draw my illustrations of the importance of this industry. It is estimated that some 3 million visitors come to Cornwall annually and the income to the county exceeds £50 million. Tourism is now the Duchy's largest single income earner, since its income has now surpassed the revenue derived from agriculture, horticulture and fisheries. In the South-West region, which includes the South-West development area, some 50,000 people are employed in tourism.

These few statistics provide ample evidence of the importance of tourism both to the national economy and to the regional economies, but there is one additional point to be made:that the Bill is a regional development Bill as well as an Industry Bill. The problems of the various regions which were classified as development areas or intermediate areas vary. Thus the techniques for solving them also will vary, and so a flexible approach should be used to solve these problems. No region has suffered more than the South-West from the inflexible approach of the past.

That is why I believe special provision should be made through the Bill to assist the tourist industry on which the South-West relies very heavily. To look at the immediate future, there are two main ways in which the tourist industry may require help. Hotels and restaurants may require assistance to undertake necessary extensions or modernisation; new hotels may require to be established in the area. Prior to the passing of the Development of Tourism Act, 1969, such premises could qualify for investment grants under the Local Employment Acts provided they satisfied the employment criteria. With the assistance of that Act the hotels were enabled to obtain financial assistance for capital expenditure schemes. The 1969 Act has worked well, I think, but it placed a definite time limit because the work had to commence before a certain date and has had to termiante this year. Because the Bill restricts the number of qualifying activities, the tourist industry, and particularly the hotel and catering trade, could suffer. It is very difficult to quantify in cash terms, but unless we make special provision now there will be a potential future loss.

The second area in which the tourist industry could need assistance is that represented by the approval of moneys for special or approved projects. The Government at present make £1 million available for this purpose under Section 3 of the Development of Tourism Act. Of this sum the English Tourist Board gets half and the other two boards share the remaining half. In his statement in the autumn of 1970, my right hon. Friend the Chancellor of the Exchequer said that this aid was to be confined to development areas and not extended to other assisted areas. That means that projects in intermediate areas cannot at present qualify. I shall refer to the significance of this in a moment or two.

The basic situation is that the demand for money for approved projects far exceeds the amount available. The present £1 million is inadequate. From the 1971 report of the English Tourist Board, one sees that from all the development areas in England some 484 applications were made of which the board was able to assist only 76. From the South-West development area the board received 234 applications but only in respect of 23 could help be given. The helping ratio was 10 per cent.

When I took this matter up with the board I was told in no uncertain terms that it would have wished to help many more projects than the 10 per cent. I have mentioned. A large number of projects were supported by the regional tourist boards to the centre for assistance, but because the board had only £½ million to allocate to all the development areas it was not able to assist all those projects which it would otherwise have wished to help. That being so, I believe that more money should be made available. Since in other Clauses we are making money available to other important economic activities, I feel that because of the success and importance of the tourist industry both nationally and regionally we should name the sort of figure to be made available each year.

One must not under-estimate the importance of these approved tourist projects to the South-West. All sorts of schemes have been helped:conventional projects such as the building of swimming pools and also less conventional and orthodox schemes such as the reservicing and reopening of old mineral railways on Bodmin Moor as a tourist attraction. Attractions of that sort need help, so £½ million for the whole of England seems inadequate.

:I support new Clause 1, particularly with its reference to the South-West. I also wish to make a passing reference to the new Clause 4 and Amendment No. 14 which draw attention to the importance of the service industries.

Many times in the House I have pleaded with my own Government, and now with the present Government, that they should look at regional policy with a far greater degree of flexibility than has been apparent in most legislation. In particular, in the South-West we face the very difficult problem that whereas so much regional aid is directed to industry one of our major industries is tourism, and the House has already had statistics to show that the South-West is still the country's largest tourist region.

It is also true to say that the South-West does not attract the percentage of overseas visitors that many of us would like to see. To a great extent this is due to the fact that the region's tourist facilities are grossly under-developed. The 1969 Act has undoubtedly made a major contribution to improving those facilities, but anyone looking at the position must accept that a very large part of that financial aid has been concentrated on London and many existing tourist centres while not nearly enough has been diverted to the outer regions, such as, in particular, the South-West.

When we talk of tourist aids we talk about aid to hotels, but it is very important that we should not look on aid for building hotels and improving hotel and restaurant facilities purely from the point of view of tourism. In Plymouth we have seen a marked improvement in the provision of hotels, but accommodation is still inadequate. There is no doubt that an industrial city is greatly helped by having adequate hotel facilities. It is a very important part of industrial aid to see that hotel facilities and requirements for visiting businessmen and industrialists are adequate.

I make the plea for extra aid for hotels. First, under the present Act, aid should go out from London to the outer regions and should be aimed first at tourism, as obviously that is the largest growth industry; but also we should take account of existing industrial areas. Here it becomes very important to extend this aid far wider than merely to development areas and to take in the intermediate areas. In cities such as Plymouth there has been an improvement, but there is need for greater improvement.

On the next aspect, at long last the Government are converts to the need for regional incentives and very substantial fiscal help. We have seen a quite remarkable conversion. The Bill is rather too closely aligned to industry. I should prefer to see it much more regional in context. It is regional aid we are discussing. Substantial sums of money are involved in the Bill. We are asking that this money should be used in a flexible regional policy.

The service industries are expanding all the time, but this expansion is taking place in the prosperous regions of the country, the congested regions of London and the big cities. There is an urgent need to get office development and service industries from these congested centres into some of our poorer regions. That is crucially important in the South-West. We are very unlikely to attract the sort of major industry we want. We want it and we will do everything we can to get it. We want car factories and petrochemical complexes, but this may not be possible. There are other areas of high unemployment with a traditional industrial background which may be the most attractive and, perhaps, worthy areas for this sort of industry.

We in the South-West have an attractive environment. It is the sort of place in which people want to live. It is a very attractive place for service industries and office facilities and for decanting major office complexes from the big cities. The Bill should place far greater emphasis on the lines of Amendment 14 to encourage service industries.

Plymouth is an industrial town mostly dependent on the dockyards. We need new industry. We are of intermediate area status. That was given by the Labour Government in 1969. In the first few years it had a dramatic impact. During the severe economic problems of the last 18 months, the initial impetus has to some extent slowed down. I hope that it will pick up again.

It is not just industry that we need. We need offices. The Government could do a great deal more than they have done to bring Government offices down into the regions. We also need to attract people who are setting up large office complexes, such as insurance companies and banks. We want them to move out from London. This has been done extremely effectively at Swindon. It needs encouragement and financial aid. It is a vital part of regional development.

The Government have been converted to the need for Government money for regional aid in a quite remarkable transformation. I understand the concern that this causes among some die-hards on the Government benches. But my plea is that the Government should go a step further and use that money flexibly for a regional policy which pays adequate attention to the importance of the tourist industry for some of these areas and, in particular, to the growth of the service industries and the need to take service industries and office developments out of the congested centres to the periphery, to areas such as the South-West. These areas are attractive and people want to live in them. Distance need not be a problem. The Government should give special fiscal incentives so that we can build up this sort of employment and ensure that we retain young people in our region.

One of the most depressing situations is the continuing depopulation among the young which is taking place in the South-West. There is a great influx of old people. We need the dynamic of retaining our young. We can do that only with a broad range of industrial and service industry development. At present we are markedly imbalanced. I urge the Government to show a greater degree of flexibility in the way they distribute and use the money provided by the Bill.

:I appreciate the concern of hon. Members on the Government benches that two successive speakers have risen from the Opposition side of the House. I am grateful, Mr. Deputy Speaker, for your co-operation in this matter. It seems a little awkward that we should be discussing a group of new Clauses and an Amendment all but one of which have been tabled by the Opposition and have not been spoken to. It might be for the convenience of the House and it might ease our discussion if I state as succinctly as possible the case on the new Clauses, although many of my hon. Friends will wish to speak.

I put down new Clause 7 with great personal regret because, as hon. Members who served on the Committee will recollect, the Amendment relating to shipping was moved by one of my hon. Friends.

:On a point of order. Had I already been called to speak in the debate, Mr. Deputy Speaker, I should have made this point as a point of order. The hon. Member for Swansea, West (Mr. Alan Williams) is now raising new Clause 7. I think that the Chair's selection of Amendments is somewhat strange. I do not wish to cast any reflection on that selection, but we were beginning a debate on the service industries. I know that hon. Members on both sides of the House are extremely interested in this matter and feel that it should be considered by the House. While we must obviously discuss the important new Clause to which the hon. Gentleman is referring, it is a pity to disrupt the start of consideration of the tourist and service industries.

:As always, the selection of these matters is for Mr. Speaker, and that selection has been made.

:Further to that point of order, Mr. Deputy Speaker. I happen to be interested in both subjects and I am looking forward to speaking to both. I do not understand why we have to get off tourism to get on to shipping. I have a great deal to say about both. It is very important to discuss tourism because the Treasury does not know much about it. Are we supposed to be discussing both, Mr. Deputy Speaker, or shall we not hear from anyone on the Government side of the House with regard to tourism before we get on to shipping?

:I am sure that the House was not surprised, though delighted, to hear that the hon. Lady had much to say on both these matters. The selection has been made.

:On a point of order, Mr. Deputy Speaker. The fault may be merely my lack of grasp of procedures, but as these new Clauses and the Amendment have been grouped together may I ask whether any hon. Member who succeeds in catching your eye can speak only once, so that when my hon. Friend the Member for Tynemouth (Dame Irene Ward) wishes to speak on tourism and on shipping she has to regale the House with a composite speech encompassing both subjects? May I respectfully suggest, Mr. Deputy Speaker, that this would be a most unsatisfactory way to proceed?

:I hope it will prove that the hon. Member is incorrect concerning the unsatisfactory nature of the procedure. He has, however, correctly interpreted the procedure.

:I approach the Box tentatively once more. I am grateful for the obvious support I shall receive from the hon. Member for Oswestry (Mr. Biffen) because, instead of two subjects. I must speak to three or four subjects.

:Who will reply from the Government Front Bench? They are not competent to reply—

:Hear, hear.

:Order. Whom the Government wish to put forward to speak for them is not my affair.

:Having sat through all the debates in Committee, I assure the hon. Lady that the level of competence will not vary, no matter who speaks from the Government Front Bench. Indeed, many of the new Clauses and Amendments have been tabled yet again because in Committee we despaired of discovering what the Government's thinking was.

On a personal level, I am sorry to be propounding the Clause relating to shipping, because my hon. Friend the Member for Barrow-in-Furness (Mr. Booth),who dealt with the matter in Committee and who had conducted a great deal of research into it, has unfortunately been taken seriously ill and is in hospital. I am sure that hon. Members on both sides will wish my hon. Friend well and hope that he will soon be back with us.

Hon. Members who served on the Standing Committee will recollect that my hon. Friend advanced a well-documented case in support of the shipping proposition and said that he recognised there was a time lag, from the very nature of the way that statistics are compiled, between the date of ordering and the time of reporting orders. Therefore, the statistics can be slightly misleading. For example, some of the orders which were listed for last year would have been placed much earlier. I shall not weary the House by regaling the full length of statistics. They are on the record for those who wish to see them.

What became clear in Committee was that the concern expressed by the Chamber of Shipping and by the Shipbuilders and Repairers National Association seemed to be legitimate. There is a worry here. It is not a party political point; it is not something which I imagine will divide the parties. There is a real difficulty which my hon. Friend summed up in Committee in this way:

"British shipping companies are no longer contracting for ships…In the first quarter of 1972 orders for 0·3 million tons were placed—1·4 per cent. of world orders".

whereas

"In July, 1970, 15·5 per cent, of world shipping orders were for United Kingdom shipping companies."—[Official Report, Standing Committee H, 13th July, 1972; c. 739–40.]

That was at the very time when Japanese shipping companies, far from contracting their ordering, in the last six months increased their orders from 19·6 million deadweight tons to 30·9 million deadweight tons.

The contrast is obviously singularly marked. It is also alarming in its future impact on employment in the shipbuilding industry and on our future invisible earnings, because the shipping industry is a major foreign currency earner, despite the fact that on the shipping account we are already in deficit.

The disturbing proposition advanced by the Chamber of Shipping is that by 1975 we could have a deficit on the shipping account alone of £200 million. I accept that this is a lobbying statistic which may contain a wide margin of error, but no Government can contemplate calmly the possibility of a deficit of £200 million at the end of the next three years, particularly as the amount of cargo transported by shipping has doubled in the last ten years. Obviously, the position quacontracting orders will affect the shipbuilding industry and, in the medium term, our foreign earning capacity.

As to the new Clause relating to machine tools, our concern arises in the light of the latest investment trend statistics. It is very disturbing to learn that in the last six months between the two reports there has been the biggest decline in business confidence and in expected investment that there has been for nine years. This is despite the Budget, despite the publication of the Bill and information on it being available to industry and even though industry now has the assurance that we are to enter the Common Market—or it appears that we are to enter the Common Market. We were told in the early stages of the Common Market debates that all that industry was waiting for was the green light to start investment. It seems that industry has suddenly become colour-blind.

:Is it not possible that the very generous grants and subsidies of two or three years ago for the shipping industry resulted in the bringing forward of orders and over-ordering by ship-owners, who are now naturally having to cut back? Could not this be an argument against distorting the normal economics, because it will result in more bunching and thinning of orders in the way I suggest?

:It is well known in the House where the hon. Gentleman wants to cut back in the shipping industry. I do not accept his proposition. It is not substantiated by the evidence of shipping orders being placed by shipping companies from other countries. No doubt the hon. Gentleman will have a chance to regale us with his unique points of view.

Therefore, it seems that there has not been the upturn which was to have been expected from a give-away Budget, from a Bill which proposes very large subsidies and from the open sesame of entry into the Common Market. None of these things has triggered off the investment we want, despite assurance that each one of them would do just that.

Against this background, we are concerned for the machine tool industry because its orders are closely related to the level of confidence prevailing in industry generally. For this reason, the Government should accept the Clause relating to machine tools.

The major portion of the debate will probably turn on the services, on tourism and on office development. For that reason I have left this portion to the end of my speech, because I shall deal with this at slightly greater length.

:Under the terms of Clause 8 of the Bill the Minister is empowered to do almost anything. He would be able to bring forward a plan on machine tools if that were worthwhile.

:One of the things the Minister can do when replying to the debate is to indicate what he has in mind. We may well feel after the assurances we receive from him that it is not necessary to divide the House. I have a strong suspicion that any proposition of the Minister which suggests to this side that it is not necessary to divide will convince many hon. Members opposite, particularly the hon. Member for Oswestry, that it will be necessary to divide the House. However, it will be useful for the House to hear just what proposition the Minister has in mind.

On Friday, 28th April, 1972, Mr. Campbell Adamson, Director-General of the CBI, said this at Manchester Town Hall:

"In our opinion, the number of mobile jobs in manufacturing industry in the 1970s will be limited, but the service industries will provide new opportunities for employment, and positive action is necessary to give the assisted areas a fair share of such industries."

In Committee we urged that where service industries and office organisations were potentially mobile, the Government should give assistance to encourage that mobility and attract them to the development and assisted areas.

It is depressing that, after two years in office, the Government are still awaiting their internal report on the future distribution of Government offices. As yet, there has been no meaningful follow-up from the present Government to the dispersal of such units as the business statistics office to Newport or even the motor taxation department of the Ministry of Transport to my own city of Swansea.

As for the private sector, at a meeting with businessmen the other day at which other hon. Members were present we were given in confidence certain information about the future siting of a headquarters which is at present in the centre of London. I shall not name the firm because I was told in confidence. I was appalled to learn that the company in question, which could have gone anywhere and whose major competitor is sited in the North of England and is a very effective competitor despite that allegedly disadvantageous siting, has decided that the headquarters must be within the commuter belt. It is that sort of intransigence which the Government must somehow overcome.

In Committee, by some probing questions my hon. Friend the Member for Glasgow, Craigton (Mr. Millan) obtained some staggering answers from the Minister. He established that between 1969 and 1972 the number of office development certificates in the South-East more than doubled and that in central London office development certificates, which accounted for 6·3 million sq. ft. in 1969, were issued for 12·2 million sq. ft.—virtually double—in 1971; and in the first quarter of this year the trend is still accelerating. Thus under the present Government, far from there being an attempt at least to sustain a policy of encouraging offices to go outside greater London, there is in fact an accerelation in the concentration of offices in this area.

It must not be forgotten that, whether it be general service industry or office development, while firms remain determined to build in the congested areas, that very congestion will be perpetuated and aggravated, attracting young people away from the unemployment areas and leaving behind in those areas an age-imbalance in the population pattern. In some of the Welsh valley communities, for example, there is an ageing population pattern.

The gravity of the problem must not be underestimated. I think that many hon. Members on both sides—though probably more on the Government side—feel that we are just carrying on with the sort of situation which has prevailed hitherto. In fact, the situation has deteriorated so markedly in the last two years that we need a greater intensity of attention to the service sector if there is to be the slightest hope of giving adequate employment assistance to the development areas.

The Department of Employment's quarterly estimates of employment in Great Britain show the shattering statistic that in one year, between December. 1970, and December, 1971, employment in three of the development areas, in the North, in Wales and in Scotland, fell by 107,000—far more than the nominal increase in unemployment in those areas—and of that total 97,000 were lost jobs for men. Thus, on the employment front, we see a partially concealed reduction in jobs available which seems to be selective in hitting jobs for men particularly hard.

Also, in the period since 1st January, 1970, over 450 manufacturing establishments have closed in Scotland, in Wales and in the North and industrial jobs in the pipeline have fallen by 50,000 in the development areas. At the same time, industrial development certificates for new industries lined up to come to the development areas were 60 per cent. higher in 1969 than they were last year.

:Dr. Dickson Mabon.

:On a point of order, Mr. Deputy Speaker. We all appreciate that the selection of hon. Members to speak and the order in which they are selected is entirely a matter for the Chair, but it will not have escaped your notice that there is by no means a balance of numbers between hon. Members on each side of the House seeking to catch your eye. In the circumstances, I respectfully ask whether it might expedite a more balanced conduct of our proceedings if there were an even selection of speakers, since the number on the Opposition side will be rapidly exhausted anyway.

:The hon. Gentleman is perfectly right in the general considerations which he expresses, and I hope that he will find that things will even themselves out in due course.

:I quite understand the point made by the hon. Member for South Angus (Mr. Bruce-Gardyne). I only hope that, if trouble happens the other way, he will quickly stick up for us as well. As I have received a message asking me to telephone my wife at once, I suspect that this will be the shortest speech I have made in the House for some time, and I hope that the Minister will excuse me if he speaks soon after me and I do not hear his reply.

I very much agree with the hon. Member for Bodmin (Mr. Hicks) in his plea for the tourist boards in new Clause 1. There would be no English Tourist Board at all if there had not been a rebellion among hon. Members on his side and certain of us on this side which carried the day against the Government Front Bench at the time and was instrumental in bringing the English Tourist Board into being. If it be possible to secure acceptance of new Clause 1 today by a rebellion, I shall certainly join in it. It is well worth having the extra £20 million to finance the three boards, the Wales Tourist Board, the English Tourist Board and the Scottish Tourist Board, all of which have done excellent work since they were established—far better than any of us expected.

I agree with the hon. Gentleman in what he said, especially in the light of the end of the hotel development incentive scheme. There is a passage in the foreword to the Report of the Scottish Tourist Board for 1971–72, written by Sir Hector MacLennan, which says:

"It would be the Board's wish to continue to help with refurbishing of small hotels when funds become available. We are aware that there will be a short-fall in medium priced accommodation, especially in the key tourist centres."

But they are short of money for the promotion of the smaller style of hotel which is so important in rural areas. I hope that the Government will accept if not the Clause at least the principle of trying to help tourism more than they have done so far.

Secondly, I realise that the Government have substantially changed their regional policy and regret what has happened in the past. This is particularly so in the spread of office jobs. I know that the Government are engaged in an internal exercise to try to shove out more Government jobs to the assisted areas. I hope that effort will be successful, and the Opposition must monitor that attempt. However, just as distressing is the picture of office jobs in private industry and the relaxation, since the Government came to power of the strict attitude to office development certificates, which has meant a considerable slow down in the number of office jobs going to assisted areas.

Thirdly, the shipbuilding industry, grateful though it is for the Bill, and the shipping industry, which is grateful for the conversations it has had with Ministers, are waiting today for an announcement of the Government's future attitude towards British shipping. I need not advance further the case put forward by my hon. Friend the Member for Swansea, West (Mr. Alan Williams), which is supported by others of my hon. Friends, but we are anxious today to have some answer about the need to build up the orders flowing from British shipping companies to British shipbuilding yards.

Today's Lloyd's Listshows quite clearly that, whatever hon. Members opposite may think in criticising the view of British shipping, people are holding back on orders in anticipation of a Government statement. Whether or not it is a good thing to have a statement, whether it is a good thing to help shipping is irrelevant to the simple fact that people are holding back. That is a view expressed not only by Lloyds but also officially by the Association of Shipbuilders and Repairers in its communication this month. Nothing could be clearer.

If the Minister of State cannot speak today about that matter, and cannot make a definitive statement, I plead with him to give us a date before the recess when such a statement will be made. On that assurance, I should be willing not to vote for new Clause 7. However, it will have to be a definite assurance and I ask the Minister of State to respond accordingly.

:Probably the House will be pleased to know that I want to discuss new Clause 7, which is concerned with shipbuilding and shipping. I thought that the hon. Member for Swansea, West (Mr. Alan Williams) made an interesting speech. Occasionally we get good ideas from the Opposition. The problem is that while they have so many ideas their economic policy does not provide the money to put all their good ideas into operation. I have confidence in my Government, although they do not always agree with me, that if one can persuade them to be reasonable then at least they are able to provide the money.

I agree with the hon. Member for Greenock (Dr. Dickson Mabon). Those of us who are interested in shipbuilding and shipping know that orders are being held back. I hope that none of my right hon. Friends on the Front Bench will disagree with the view of the House. Those hon. Members who represent areas which are linked with shipbuilding and shipping know only too well from those concerned in earning their livelihood in the industry, both management and men. that shipbuilders and ship owners are being held up. It is on that issue that I shall make my contribution.

I believe, although I am probably not always right, that Secretaries of State are very nice indeed. I like to get hold of Secretaries of State and I always try to be fair to them. I should probably like them a little more if they could make up their minds a little more quickly and get on with the job. Instead of raising Questions in the House or making statements. I have been very busy in other directions. I am really not competent to make statements but I consider that I am a good advocate for things which I think are right. Following the controversial issue about what would happen following the joint communication from shipping and shipbuilding interests, I immediately wrote to the Secretary of State. I shall read his reply, because, no matter who answers this debate, I do not think that we shall get a better answer. All I can say is that it will probably be an unsatisfactory answer.

I wrote to the Secretary of State for Trade and Industry and received an answer yesterday—I think that was very nice of him. He must have known that I should let the House know the answer and he probably also knew that I should not be satisfied with it. The Secretary of State's letter of 27th July says:

"Thank you for your letter of 17th July with the enclosed letter"—

it was no bother—

"from the Chamber of Shipping about the new investment incentives scheme for shipping which has been submitted to me jointly by the Chamber and the SRNA.

I am afraid that I am still not in a position to announce a decision on the proposals put forward by the Chamber of Shipping and the SRNA. The position remains, as I said in the House in the course of Question Time on 17th July, that I hope to respond to the proposals shortly."

It is very much like a Secretary of State's reply—

"But I can assure you that I am fully conscious of the need of all concerned to have an early decision"—

He does not define what he means by "early"—

"and it is my firm intention that an announcement will not be unnecessarily delayed."

It is a very political answer—

"I am writing both to the Chamber of Shipping and the SRNA to tell them this. As you can imagine, I am only too well aware of the fall-off in new orders for UK ownership in the last year, and this will certainly be one of the factors taken into account in reaching a decision.

There is really nothing more I can say at present and I can only ask you to be patient for a little while longer."

I think it was very nice of the Secretary of State to deliver himself into my hands. However, that reply does not suit me and it will not suit the Chamber of Shipping.

:Resign.

:It would not be any use the Government resigning because we would have to put up with you, and that would be jolly horrid.

:Order. The hon. Lady must choose her words a little more carefully.

:I do choose my words very carefully, but sometimes one must be human. That is what I try to be. That is a very disappointing reply and I hope therefore that whoever replies to the debate will give a more satisfactory answer.

:While I believe that the content of certain of the Amendments and of new Clause 6 and new Clause 7 is worthy of debate I do not think that they are appropriate to the Bill and therefore I do not support them. To suggest with a Bill as comprehensive as this that after it is enacted the Secretary of State should immediately prepare a scheme to help the machine tool industry, and a scheme of assistance for the shipbuilding industry seems improper. It is wide-ranging and it is generous as it stands and I should have thought it was putting slightly the wrong construction on the Bill to add new Clauses 7 and 8.

For a long time I have held that we have a duty not to stand aside and leave industry to struggle on its own against world competition, an inadequate cash flow, increasing costs of raw materials and wages, and other economic problems. Everyone is involved in a mixed economy. We are very much involved in our shipbuilding industry and I support the Government in the steps they have taken so far and in the further steps they are considering of help for the industry. But the machine tool industry is perhaps the very cornerstone of British industry. It must not be allowed to fail. It must be sustained and allowed to grow, to develop and to modernise so that it is in the forefront of world competition.

:Why should we have yet another inquiry into the machine tool industry? We have had four or five over the last 10 years. Is my hon. Friend recommending another inquiry by the Government, or by anyone else?

:I am not recommending another inquiry or a specific provision in the Bill. But the Government are involved in the changes which have to take place in both private and public sectors of industry. The Bill is concerned with the private sector. I am concerned that the Government should play their part in helping the private sector to overcome its difficulties and at the moment the machine tool industry, like the shipbuilding industry, is facing a difficult period of change.

I wish now to turn to new Clause 1 which was so ably moved by my hon. Friend the Member for Bodmin (Mr. Hicks). I agree with everything he said about support being needed for the tourist industry. In North-East Kent we have a tourist industry which is in a state of decline. But it is not an assisted area in any sense. If the new Clause is accepted, as I hope it will be, these small tourist areas, small pockets in a state of distress, cannot be left out. The Government cannot give assistance for tourism in the assisted areas without considering these other distressed areas.

:Does my hon. Friend deplore the fact that North-East Kent is not an assisted area?

:I have said before, in Standing Committee and in the Chamber, that North-East Kent should be regarded as an area requiring assistance. It has been so scheduled since the war, but it was removed from that category. Government policy is that North-East Kent should not be regarded as an assisted area to any degree, but they have shown some flexibility in assisting meeting the high unemployment rate which still exists there. After all, the unemployment rate in the constituency of my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies) during the winter reaches 9 or 10 per cent., a proportion which would normally justify almost immediate consideration for classification as an assisted area. I am not demanding that, but merely suggesting that if we agreed to new Clause 1—and the arguments for it were put strongly and were well received by the House—I should have to ask the Secretary of State to agree to consider similar assistance, for the tourist industry at least, in non-assisted areas.

I do not disagree with new Clause 4. The Bill does not place a specific emphasis on the need for assistance to service industries in the asssisted areas and the phrase "service industries" has a wider meaning than just the tourist industry, for it includes office employment in all its forms. It is an important factor and the Bill does not make a specific reference to it. My criticism of new Clause 6 and new Clause 7, of being specific about certain industries, does not apply here, because the service industries in a growing industrial society are much more labour-intensive than manufacturing industries as they are developed today.

In an aside, the hon. Member for Plymouth, Sutton (Dr. David Owen) said that he did not think that he could expect to get a petro-chemical complex in the South-West. Even if he did get it, it would not employ many people. But if he got several office blocks housing several hundreds or thousands of people engaged on pensions or insurance administration, or even working in the administration centre of a direct mail order business, he would find that they were requiring labour on a large scale so that job opportunities would increase considerably.

:I intend to be brief, even though my wife has not seen fit to send me an urgent telegram—following the example of the wife of my hon. Friend the Member for Greenock (Dr. Dickson Mabon). As did the hon. Lady the Member for Tynemouth (Dame Irene Ward), I wish to deal with new Clause 7. The position is becoming serious, as reports emanating from the Shipbuilders and Repairers National Association indicate. I quote from Lloyds List:

"It is also known that some owners have refrained from placing contracts until there is a Government decision, expected soon…"

I am grateful, as the whole House is, to the hon. Lady for having read the Secretary of State's letter into the record, but my worry is that vital orders are being held up for want of a decision with every day that passes.

It is not enough to rehabilitate the shipbuilding yards on the Upper Clyde unless the Government are prepared, with the ship owners and the shipbuilders, to devise schemes to get a flow of orders from United Kingdom owners going into United Kingdom yards.

It is significant that the first order received by Govan shipbuilders came not from a United Kingdom owner, but from Kuwait, although it would be breaching the rules of order to go into the details of that. We have pressed the Government time and again to consider how to devise a scheme to persuade United Kingdom owners to put their orders in United Kingdom yards. Perhaps it could be done by forms of credit or grants.

I know that there are difficulties because of international agreements and so on, but even the report from the Expenditure Committee yesterday shows that, although there is some measure of disagreement, if other nations are continuing to tie their owners to buying in their yards, it is vital for the United Kingdom industry to have matching methods so that United Kingdom owners are tied to United Kingdom yards.

I hope that the Secretary of State will say that he has in mind some scheme agreed between the owners and the builders. It is appropriate for the Opposition to ask for such a scheme and I would wholeheartedly support new Clause 7. The sooner the Secretary of State can give a clear indication of what he has in mind, the better it will be for all employed in British shipbuilding and all who sail in British ships.

:New Clause I identifies many of the problems and heart searchings that have confronted back benchers on my side of the House in terms of the Bill as a whole. Differentials in favour of an industry or a part of the country are given automatically at the expense of other industries or other parts. The tourist industry identifies the problem completely.

My hon. Friend the Member for Canterbury (Mr. Crouch) commented on that this morning. I have much sympathy with what my hon. Friend the Member for Bodmin (Mr. Hicks) is trying to do, but I could not take that sympathy into the Lobby in support of what he is proposing, because I cannot accept that there should be a differential in favour of holiday resorts in Scotland, or the South-West as opposed to North-East Kent, or my own area, Hastings. All of us right round the perimeter of the country and particularly in the tourist areas face exactly the same problems of changes in types of demand, of changes in volume of demand and changes in distribution of demand, and the problems of Blackpool or Bodmin are exactly the same as those of Hastings and other South Coast towns. I admit that we cannot offer the rather dangerous tours of mines that are available in Bodmin, but we can offer a certain battle site.

It is unfair to give subsidies to those areas when that must automatically be at the expense of other areas in exactly the same difficulty but not enjoying the privileges of the secondary effects that the Bill will promote. Investment in assisted areas by the Government will go, often directly but nearly always indirectly, into the tourist industry and the spin off for the tourist and service industries in the assisted areas will simply not be available under the Bill for other parts of the country. I hope that my right hon. Friend will be able to tell us something about the already existing powers to help the tourist industry, because I believe them to be substantial and quite sufficient without new Clause 1.

I support what my hon. Friend the Member for Canterbury said about new Clause 6. Why select the two industries of machine tools and shipbuilding as opposed to other and even more vital industries which are in greater trouble, for instance, the ball bearing industry and certain other science-based industries? Discrimination does not assist in that respect.

:I was delighted to see that the Opposition had put down new Clause 4 because that indicates that in an emergency situation there is general acceptance of the importance of the service industries. At the time of the introduction of SET, some of us greatly regretted the attempt by the then Labour Government to discriminate against service industries and to try to prove that somehow employment in service industries was not as important as employment in manufacturing industries. In the debates at the time many of us, in the Conservative Party and in the Liberal Party, said that this discrimination was a nonsense, and I welcome the Labour Party to our view.

The hon. Member for Bodmin (Mr. Hicks) will probably agree that most of us from the South-West would prefer the area not to be over-dependent on tourism. We would prefer a much greater variety of employment. I do not like any area to be too dependent on tourism. In our climate it is inevitably a seasonal employment prospect in areas other than London.

We have the unfortunate situation in parts of Cornwall—almost the whole of the coastal areas—and in parts of North Devon, that for five months of the year we can offer employment, at ludicrously low wages, disgraceful wages in many cases, but that for the remaining seven months the only prospect available is the Supplementary Benefits Commission and, if people are lucky, unemployment pay for the first three years. For the foresee- able future we see the need for a much greater increase in the jobs in tourism, and for that reason the Clause is to be welcomed.

Tourism unfortunately seems to be destined under all Governments to be plagued by mice disguised as lions. For example, only last week or the week before, the Treasury announced loans for hotel fire precautions, but when we looked further into this massive new help for the tourist industry we discovered that it was very much a mouse, very much a poor thing. Today we are dealing with what has certainly turned out to be another mouse, Sections 3 and 4 of the Development of Tourism Act When a Section has only £1 million behind it we are bound to ask whether it was really worth the bother, because £1 million cannot be spread as thinly as the tourist board is trying to spread it. It is having little effect in increasing tourist facilities in the development areas or anywhere else.

:Income from tourism is increasing fairly rapidly. We are now major earners of revenue from tourism. Will the hon. Gentleman explain why it is necessary to subsidise an expanding industry with large inputs of foreign tourists' money? Why cannot the tourist facilities be provided out of the income from the tourists who come here? Where are they going if they are not going to the hon. Gentleman's area? Why is it that they do not seem to want to go where he is, if he is not getting the money in Cornwall that he would expect to get?

:Not all tourism is tourism by foreigners, nor is all valuable tourism tourism by foreigners. The industry which ensures that English people do not go abroad for their holidays is contributing just as much of a service to the community as the industry which attracts tourists here. We have all been happily going along with figures which for years have looked very good because they have shown a handsome balance on the tourist account, but the situation is changing rapidly. It will not be in balance very soon. We shall find next year, if not this year, that we need to attract far more tourist money into this country and that we need to provide much better facilities.

It is true, as the hon. Member for Bodmin said, that the far South-West is not part of the foreign tourist beat. It is unfortunate from our point of view, though perhaps not from London's point of view, that the great majority of tourists spend most of their time in London. They go to Stratford, but that is about as far as they go. We do not get a big share of the foreign tourists, certainly not a big enough share.

But the hon. Gentleman raised a valid point when he asked why the tourist industry needs the money. First, it needs it where it is basically seasonal, because there it has too short a period of the year to show a proper return on capital. That is very largely the reason for supporting it with Government money in the development areas, because they are inevitably those areas which must rely on seasonal tourism. It is no good suggesting that we should attract a massive weekend tourist industry for our hotels in the middle of January. I enjoy the North Cornwall coast in the middle of January but I would find it difficult to sell it. It is a long way for anyone to travel there for a weekend, and there is not a great deal of sunshine in January and February.

We need to create the jobs in the area, and in the foreseeable future we have no alternative to ensuring that we create them in the hotel industry, in the tourism industry.

:The hon. Gentleman referred to "the English people". May I ask him to amend that to "the British people"? I thought it was a slip of the tongue.

:Of course. I am so used to drawing the distinction and putting the Redcoats on the Tamar, that perhaps it was a slip of the tongue, although it has certain nationalist associations behind it. Perhaps it was a Freudian slip. I apologise.

I regard new Clause 4 as being just as important to us in creating a complete economy in the development areas. In the dispersal and balance of the distribution of offices we have a pretty hopeless story to tell under all Governments in recent years. The report of the Location of Offices Bureau, published in June, does not show a very handsome return for all its valuable publicity and great attempts. It is primarily concerned to move offices out of central London to outer London and the rest of the South-East. Very few of its activities are designed to move offices and office jobs to the development area. The whole policy needs a new shot in the arm.

We must consider what effect the present appalling increase in office jobs and office space in central London is having on London, first, in architectural and town planning terms; secondly, on the quality of life in the capital; and thirdly, on the rest of the nation, because it is not getting a satisfactory share of the office jobs. We need the new jobs in the regions far more desperately than London needs them. The residential population of central London is declining yet the jobs, particularly the office jobs, are increasing. This puts a strain on commuter train services to a point where the Government now have to subsidise those services. It is a crazy way to run a country. We should be able to distribute jobs more evenly to ensure that we do not have that appalling burden on the train services that bring the commuters into central London. The situation is also an absolute architectural and town planning disaster.

The Financial Times recently suggested that the best thing the Secretary of State for the Environment could do at his early morning meeting with his assistants that morning was to declare a total stop to all further office development in central London. More and more magnificent buildings are being torn down in London, all for the sake of the voracious demands of cars and office jobs. For the sake of London as a major city and architectural centre, the policy needs an entirely new shot in the arm.

The Government must start with their own offices. I hope that the Clause will at least serve to bring to their attention the pathetic nature of their attempts to decentralise their own offices. The Economist has suggested that we shift this place, the centre of Government, lock stock and barrel out of London. That is a very attractive proposal, though I am not appealing for it to be brought down to Dartmoor. I do not want it there. It should be north of a line from, say, the Wash to the Humber.

:The hon. Gentleman, like the hon. Member for Swansea, West (Mr. Alan Williams), draws attention in connection with these Clauses and Amendments to the need for dispersal of Government offices. I was bemused as I listened to the hon. Member for Swansea, West, and I am bemused as I listen to the hon. Gentleman, because I cannot see what the new Clauses, which suggest various extensions of the utilisation of the selective assistance provisions of Clause 7 of the Bill, can have to do with Government offices.

:This new Clause is aimed at increasing the dispersal of offices generally. It is not specifically designed to deal with Government offices and it might not in itself encourage any dispersal of Government offices. I am saying that the policy of dispersal needs a good shot in the arm, and this is no bad occasion to draw that to the attention of the Government. I hope that this Clause will do so.

The arguments put forward why businesses or Government Departments cannot move their offices are always the same—for example "There are no facilities", "It would be most uncomfortable for civil servants without lots of subsidised music and arts", "The roads and the aeroplanes are appalling" and all the rest. That is begging the question. I ask the Minister to imagine what would happen to the distribution of the Arts Council subsidies, to the new roads and new railways if his Department were to be moved to Camborne or Plymouth. Very soon all of those facilities would follow.

If we can get an effective policy of distribution and spread out these office jobs, they would bring in their wake new jobs and immense benefits to the regions. We need to develop complete communities in the regions. We do not want to be dependent on any one industry, on small manufacturing or on tourism. We want the other service jobs, we want the jobs that officers can bring. That is why I support new Clauses 4 and 1.

:As we are now discussing a substantial group of new Clauses I want to devote my remarks particularly to new Clauses 1, 4 and 6. To deal first with new Clause 4, I am sorry that the right hon. Member for Bristol, South-East (Mr. Benn) having paid a very brief visit to the Chamber, is no longer with us, because I would have liked to hear him explaining his activities as a senior member of the previous Government and their treatment of the service industries in the development areas. I would have liked to know the reasons for the profound conversion that he has undergone, as demonstrated by new Clause 4.

I wonder whether the hon. Member for Swansea, West (Mr. Alan Williams) realises—listening to his opening remarks I can only assume that he does not—that the largest single job loss in Scotland under the Labour Government was in the service industries. We heard from the right hon. Member for Kilmarnock (Mr. Ross) and others that the reason for the loss of 85,000 male jobs in Scotland during their period of office was due to the excessively fast rundown of declining industries, such as mining, heavy engineering, shipbuilding and agriculture. It is a striking fact that the biggest single job loss was not in any of the declining industries but in the service industries, which in every other advanced industrial country were growing fast. The reason for this was the Herculean efforts which the party opposite undertook at the behest and guidance of Professors Balogh and Kaldor to discriminate in every possible way against the service industries.

Alas, many of these discriminations remain. No doubt we shall be discussing them later today. There is, for instance, the discrimination with regional employment premium. What I find a little bit of brass nerve is for the party opposite to tell the Government in new Clause 4 that they must use the selective assistance provisions of Clause 7 to encourage the proper distribution of employment in the service industries! After their performance during six years of office we are entitled to a rather better explanation, with perhaps even the overtones of an apology from the hon. Member.

In many parts of the development areas—I think particularly of the Highlands and Islands of Scotland—the service industries are far and away the largest employers. The loss to the Highlands and Islands from the discriminatory application of SET to the service industries there was considerable. We are always grateful for the sinner who repents, but we might have had a little more acknowledgement of the extent of the sin and of the repentance.

New Clause 6 relates to the machine tool industry. My hon. Friend the Member for Hastings (Mr. Warren) doubted the wisdom of picking out special industries for particular mention under Clause 7. I confess that my anxieties about Clause 7 largely relate to the comprehensive nature of operations which my hon. and right hon. Friends can undertake under the aegis of the Clause. That too, is something that we shall be discussing later. What concerns me about the proposition in new Clause 6 is that we already have the example of a special scheme designed to assist the machine tool industry, and I am bound to say that it is not working very well.

We should pay some attention to what is happening with the present scheme which is taxpayer-financed to the extent of £16million and which is to provide machine tools for institutions coming within the scope of the central Government, whether they be universities, institutions of further education or Royal Ordnance factories. The remarkable thing is that with the universities and institutions of further education the average value of orders for machine tools placed under the scheme to date is running at substantially less than £3,000 per machine, according to a recent Parliamentary Answer.

As I have pointed out to my hon. Friends responsible for matters at the Scottish Office, machines at that sort of price are not much more than glorified "do-it-yourself" jigs. In so far as taxpayers' money is contributing to a scheme of this type, for the money to go on purchases of this kind must be largely a waste. In other words, if we are to have such a scheme the money made available by the Department of Trade and Industry on behalf of the taxpayer should be used for the purchase of more sophisticated machinery of genuine industrial application. To date we have seen precious little of that.

The operation of this scheme gives us little confidence that one such as that suggested in new Clause 6 could be expected to be put to good use. The £16 million scheme which ends in September has not proved a good precedent. I suggest that if we are to take full advantage of this scheme it may be necessary for the terminal date to be rolled forward. Many institutions of further education and Royal Ordnance factories are not being over-speedy in coming forward with proposals for orders under the scheme. The average cost of machines purchased under the scheme may increase substantially, so that we shall have to see that it is being used for the purchase of good machines.

I should perhaps declare a constituency interest. Machines of the most highly sophisticated and modern type for genuine industrial application are produced in my constituency. They are not the sort of "do-it-yourself" carpentry kits on which expenditure seems to be made under the scheme. The working of the scheme does not give me much confidence that the acceptance of new Clause 6 would produce helpful results in the machine tool industry.

I wish to say a few words about new Clause 1—the tourist board and hotel industry Clause. I confess to my hon. Friend the Member for Bodmin (Mr. Hicks) that, alluring as I found his arguments, I do not entirely share his conclusions. I have forgotten the phrase that my hon. Friend the Member for Canterbury (Mr. Crouch) used, but he indicated that depressed tourist areas in need of special assistance would not like assistance under the new Clause to go to parts of the country where the tourist industry competed with them. This is one of the grave problems that we face in all schemes of regional differentiation. I have a feeling that in due course the area surrounding Piccadilly Circus will be, if not a development area, at least a land clearance area, because in the end we shall not be able to leave out anything.

I draw attention to another argument that militates against the new Clause so persuasively moved by my hon. Friend the Member for Bodmin, namely, the activities of a body that is already operating and is spending substantial sums in giving financial assistance to the tourist industry—the Highlands and Islands Development Board. I was told recently that up to 8th June, 1972, the board had provided assistance to the tune of £3·1 million for supporting the hotel industry in the area that it covers. It is calculated that it produced a little over 1,000 jobs. I question the cost-effectiveness of this type of assistance.

An even more impressive figure was given recently. That is perhaps the sort of thing that one could expect to happen if we decided to give a Second Reading to new Clause 1.

:Does my hon. Friend agree that in the reply to which he has just referred it was indicated that the assistance covered 102 hotel projects which, it was envisaged, would later provide substantial additional employment?

:All that the reply said was that the board had nine projects under consideration which could involve assistance of about £70,000.

I did not propose to leave this matter without drawing attention to one of the latest projects of the board—the presentation of a cheque for £128,750 to Sir Charles Forte in respect of one hotel. Bully for Sir Charles, and bully for his shareholders; I hope that they get a good return from their £128,750. But how many jobs will there be in the hotel—15, 20, 25? Not more. Furthermore, I imagine that the likelihood was that Sir Charles would have built the hotel anyway. I wonder whether the taxpayer can be said to be gaining value for money from the expenditures of this worthy board.

I have not all that much more confidence in the ability of the various tourist boards to spend the taxpayers' money more wisely than the Highlands and Islands Development Board has been doing in giving assistance to the tourist industry. Therefore, I shall not find it possible to go into the Lobby in support of new Clause 1.

:I speak mainly to new Clauses 4 and 7.

It is fairly plain from new Clause 4 that there has been some kind of semantic conversion on this side of the House. I vividly remember voting for the selective employment tax. My defence—and I intend to defend nobody else—is simply the traditional one that it seemed a good idea at the time. There I rest my case.

But I am glad to see that there has been a change of attitude. We on this side recognise that a service industry is an industry. Hon. Members opposite must appreciate that among our constituents, many of whom are manual workers in heavy industry, there is still a psychological resistance to the idea of transfer ring from, say, coal mining, to a service industry because a service industry is regarded as being, in some strange way, an emasculating industry. Consequently there is psychological resistance in the regions and areas which the new Clause is intended to help, and that must be taken into account in the public pronouncements of the Secretary of State and all the other Ministers concerned with making pronouncements about the Bill when it becomes an Act.

My second point is very minor and it may give rise to the usual hilarity which occurs when I get on to one of my favourite subjects. I narrow my remarks to one word in new Clause 7—"ships" It is not unknown to the House that I have an interest to declare in an old form of transport which is being revived. [An Hon. Member:"Hot air."] I have no connection with hot air inside or outside the Chamber. Hot air is strictly for amusement. I am concerned with the infant airship industry which is again coming into existence in this country and is already in existence in other countries. It may interest the House to know that the firm of West Deutsche Luftwerbung, in West Germany, has already started on the first stage of creating a 30-ton helium-filled airship. I have been approached by the Mitsubishi concern, which is not led by idiots, about the prospects of constructing airships in British shipyards.

That brings me to the word "ships". I do not want to raise the question too hardly, as it were, in such a way that it must be answered this afternoon, because I prefer the Minister to brood upon it rather than come back with a snap answer, which almost inevitably would be "No". Snap answers in politics are almost inevitably "No".

I ask the Minister to brood on this proposition. If the Shell Natural Gas Corporation—here I declare an interest in one of the companies associated with it—goes ahead with its £350 million project to transport natural gas to this country by airships, there is only one place where those large ships can be constructed, and that, of course, is in British shipyards. I ask the Minister to bear in mind the possibility—I am choosing my words very carefully—that within the definition of "ships" he may have to include airships as well.

We are talking of the future, and no one can accurately foresee the future, though I do my best from time to time, but in so far as I can foresee the future it seems to me that there will not be very much difference between the construction of what I will call the Shell type airship and construction of the ship which will go to sea. I hope that this will be borne in mind when the Government accept new Clause 7, as I feel absolutely sure they will because it is such a sensible Clause.

:I would support the argument advanced by the hon. Member for Ilkeston (Mr. Raymond Fletcher) about airships, but I think that probably it would assist the dispatch of business if I confined myself to new Clause 6, in which hon. Members on the other side advance the idea that the Government should prepare a scheme to provide under Clause 8 of the Bill assistance for the machine tool industry. If I can I shall try to persuade the Secretary of State from going ahead with any such plan.

This matter was looked at exhaustively by a number of committees, one under Sir Richard Way who said:

"If further progress is to be made to the extent which seems to us vitally necessary, it will be mainly by means of efforts made by the industry, not by actions of the Government—important though this can be in certain spheres."

The House will know that there has been quite a number of committees looking into the machine tool industry—Mitchell, Layton, Way and Fielden—and they have all taken place in the last 10 to 15 years.

What the industry wants is buoyancy in the economy, available markets and increased export trade, where it is already making a substantial contribution. Less fragmentation of production, with more specialised machine tools could help.

I suggest that the late Government, through the IRC, did have a look at several companies to encourage them to buy machine tools. British Leyland Motor Corporation received some money for this purpose. Then there was investment in Herbert-Ingersoll which unfortunately was lost, and the reason for that way, and I quote the Financial Times:

"The volume of business available in the United Kingdom has been consistently disappointing and the total workload has not been sufficient to enable the company to trade at a profit."

I think that this type of Government intervention I would certainly not recommend.

Several other cases have been looked at and Herbert-Ingersoll went into liquidation. Loans were also made to Marwin (Holdings), Plessey Numerical Controls and Kearney Trecker.

What I am arguing is that while the Minister may have great powers under Clause 8, largely because the criteria are so wide, in the public interests and the interest of the economy he should take heed of the advice which has been given by experience here and in other countries. For instance, in Sweden a company known as Statsföretag, a State holding company, in October, 1968, formed a State-owned machine tool company and took over one of the subsidiaries from Volvo and another two companies from the Wallenberg group. That was in 1968. The consequence of this according to the Economist of December, 1971, was that the nationalised tool industry was making enormous losses and it proceeded to sack 20 per cent. of the labour force.

In the light of what happened to Herbert-Ingersoll, a company which is packing up completely, because it found it had misjudged the market and was producing the wrong machines for the market to buy; and in the light of the other example in Sweden, where the State machine tool industry is struggling for its existence, I would ask whether we should accept the recommendation, of the Amalgamated Union of Engineering Workers, that the industry should be nationalised. That I believe to be quite irrational, and all that previous experience does not commend the recommendations in new Clause 6, that a further scheme should be prepared for the British machine tool industry to be analysed, diagnosed and modernised by the State.

If I may advise the House I would make this earnest recommendation. Those reports about the industry having been made, the industry having already been analysed and investigated, it be left to the industry to put its own house in order. I would not suggest that any large tranche of money should be made available to this industry over and above what the Government have already provided.

:Briefly to make a few remarks, I would say, with respect, that I thought that the hon. Member for Bodmin (Mr. Hicks) did not advance his arguments from those which he put forward in Committee. In the discussion in Committee two points came out particularly strongly. First of all, there was the question of seasonal unemployment, which is extremely serious. I do not see that the hon. Member has explained to the House today how his new Clause would specifically help solve this problem of seasonal unemployment.

Secondly, what guarantees have we that this money will not go to those people to whom we really would not like to see it go? I made this point in Committee, that development companies, which are already doing extremely well in this country, might be the beneficiaries of this sort of assistance. Indeed, in Bristol at the moment we have an unseemly squabble going on about who is to pay compensation in respect of the Avon Gorge Hotel project, and an unseemly scramble to get the work under way before a certain date expires.

I should like to feel that the assistance which goes to the South-West really goes to the provision of jobs and the provision of a stable basis of employment for the people who work in that area. I fully support the hon. Member's remarks about that, and if that point can be met this sort of assistance will be welcome.

However, I am surprised that those three apostles of private enterprise who have put their names to the new Clause have not put forward any justification for that minimum sum of £20 million a year to be specified for that work. I would think that the whole essence of such a scheme would be flexibility, and that there ought to be more flexibility in it.

:I intervene very briefly to take up points made by the hon. Member for Bristol, South (Mr. Michael Cocks) and by my hon. Friends the Members for South Angus (Mr. Bruce-Gardyne) and Cirencester and Tewkesbury (Mr. Ridley) criticising the new Clause. It seems to me that one of the most powerful reasons for the new Clause is precisely the seasonal nature of the tourist industry, because it is a fact that in areas where the tourist industry is seasonal it is exceedingly difficult to raise normal commercial finance for hotel projects and it is precisely in those areas that the main groups—on the whole, the main groups—donot come to develop hotels. Certainly the experience of the Welsh Tourist Board has shown that the stimulus for the right kind of investment comes locally and not from the major groups which have been referred to today, and that it is local investment which has helped to extend the tourist season and to reduce the high levels of unemployment in the winter months.

My hon. Friend the Member for South Angus referred to the fact that in the Highlands Government grants had produced a comparatively low return in terms of jobs. I quoted in Committee on 4th July some figures to show that in Wales the expenditure of a little over £3 million of Government money had stimulated investment of the order of £18 million and had created between 3,000 and 4,000new jobs. It has been the experience of the tourist board in Wales that the cost of creating these new jobs has not been the £3,000 to £3,500 per job indicated by my hon. Friend the Member for South Angus, but well under £1,000 a job. That is not a high cost for creating new jobs and reducing the level of seasonal unemployment.

:This has been, through the selection list, about which I make no complaint, a very wide-ranging debate, and I shall do my best to answer all the various points that have been raised. But I first want to express my personal regret, and I am sure the regret of my hon. Friends, at the illness of the hon. Member for Barrow-in-Furness (Mr. Booth). We know what a valuable and active part he played in Committee, and we all wish him a very speedy return to good health.

:Hear, hear.

:I will deal first with new Clause 1, moved very thoughtfully by my hon. Friend the Member for Bodmin (Mr. Hicks). I know the great interest he has in and the great knowledge he has of tourism. I have a great deal of sympathy with the reasons which have led him to introduce the new Clause and which have led some of the speeches on tourism. There is absolutely no difference between us about the potential value of the holiday industries to many areas where other forms of employment cannot easily be introduced. I am well aware of the importance of hotels and of leisure facilities in making an area more attractive to incoming industrialists.

Nor is there any particular disagreement between us on the way in which any Government assistance should be administered. The wording of the Clause itself and the comments we have heard make it clear that my hon. Friend and other hon. Members regard the Development of Tourism Act, and the statutory bodies set up under it, as the right vehicle for dealing with the tourist industry. I assure the House, as I assured the Committee, that that Act contains adequate powers for the assistance of tourism, and that there is no reason to have recourse to further powers to be taken under the Bill.

But I realise that what really concerns my hon. Friends the Members for Bodmin and Pembroke (Mr. Nicholas Edwards) in particular is the amount of Government assistance to tourism in the assisted areas. I must remind the House that the total amount of assistance we are giving this year to tourism is likely to exceed the amount referred to in the Clause, and that next year's expenditure will probably be even higher. It is quite true that the lion's share will be in the form of grants to hotels under the incentive scheme, but the development areas will gain a substantial amount of benefit by way of hotel accommodation as a result. We estimate that under the hotels incentive scheme about £60 million will be spent on new hotels. It is therefore not right to suggest that the taxpayer is somehow being slack in his assistance for hotel building.

I know that my hon. Friends are looking beyond the time scale of the incentive scheme to developments which maybe needed in the future. It is too early yet to assess the full effect of this very considerable incentive scheme, although studies are now going on into future demands for and investment in hotels. A study is also being undertaken by the hotel and catering NEDC of the seasonal problem, and this may produce some very valuable and useful information.

I readily accept that there may be a continuing need for specific projects in specific areas both in the accommodation sector and in other sectors of tourism facilities to provide employment opportunities. That is why we have already provided some funds for assistance for selected tourist projects in development areas. I know that my hon. Friend the Member for Bodmin and other hon. Members think that the £1 million available under Section 3 of the Development of Tourism Act is not adequate, though others may take a different view, but it is important to remember that for the development of an area's tourist potential it is not enough simply to create hotel or other facilities:more people have to be persuaded to visit the area.

In some areas the quickest way to get more tourist earnings is to encourage further use of existing under-used facilities. So we also give support under the Development of Tourism Act for the promotional and marketing work of the tourist boards, which is an extremely important part of the whole concept of tourism. The House should know that the grants given to the various tourist boards have been increasing each year. The boards had another increase this year. A great deal of the boards' marketing effort is designed to encourage people to visit the less known areas which, to some extent, include the development areas.

There must be scope for reconsideration of the assistance we give under the Development of Tourism Act for projects. As my right hon. Friend said in Committee, the Government are now considering with the tourist boards, which will be putting proposals to us, the scope for increases in the level of assistance to tourism. We have rightly delegated this problem to the tourist boards. When all the proposals are to hand we shall consider them in the light of all that has been said during our debates and having regard to the regional changes that have occurred as a result of the Bill and the boundary changes. I hope that on that basis my hon. Friend will feel that I am sympathetic to the theme behind the new Clause, though I would not wish to have it written into the Bill when there are already powers under the Development of Tourism Act.

:Will my hon. Friend say something about the time scale involved in these discussions between the Government and interested parties? Would he also comment briefly on the possibility of extending this to intermediate areas which have a tourist potential?

:On the latter point, as I have indicated, this was one of the factors we took into consideration. But with the new assisted areas, we have a very considerable extension from the old development areas. However, that factor will be taken into consideration in the discussions we are having. As to the timing, the grant of £1 million per anum given to tourists projects under Section 4 of the Act is a matter which is reviewed annually in the normal way under the Estimates procedure. I imagine that it will be some time in the autumn that we come round to the Estimates. I hope that we shall be able to consider it before the end of the year. I cannot go beyond what I have already said, that we are discussing the matter at present.

On the question of offices and services generally, I had some sympathy with my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne), who, perhaps more in sorrow than in anger, drew attention to the slightly belated conversion of the Opposition to the concept of the advantages of the service industries. I welcome the contribution of the hon. Member for Ilkeston (Mr. Raymond Fletcher), who began with a very powerful mea culpa in this respect. He was so frank and honest in his view that it is only right that I should say that I will most certainly consider carefully his specific points about shipping. Nevertheless, we now are happily, if somewhat belatedly, all agreed that the service industries are a vital sector of our economy and that it is important for the development areas and assisted areas to have a proper balance between the service industries and manufacturing industries.

:The reason for the "conversion"—if that is the term the hon. Gentleman wishes to use—is demonstrated very easily in the north of England. Since the present Government came to office we find in the north of England five times the number of redundancies, a 30 per cent, increase in unemployment, 40,000 lost jobs, half the IDCs since 1969,a doubling in the number of manufacturing industries which have closed, and that vacancies are down and jobs in the pipeline are down.

:I was expressing delight that the Opposition had been converted, but after that intervention I am not so sure. I still give the Opposition the benefit of the doubt and say that I am pleased that we are all agreed that the service industries form a vital part of our economy.

We must recognise that by and large the service industries locate where there is the economic and industrial activity which will give rise to a demand for their services. So in the main they are essentially local and not susceptible to being moved, or mobile, in the same way as manufacturing industry. However, a large number of offices, for example, are located not only in London and the South-East but also in other urban complexes which have, from a work aspect, no particular strong ties with the area in which they are at present located. They could carry out their function quite as effectively in one of the assisted areas. Indeed, because there is an element of the service industries which is susceptible to mobility, we have made it clear time and again that the provisions of Clause 7 will be available for assistance where they can contribute to that end.

:Before my hon. Friend leaves the question of the scheme, may I put this to him? I am not sure that he has hoisted on board my precise point. I do not suggest that it follows automatically that every machine tool manufacturer should get a portion of this gravy boat. My point is that the evidence to date is that the average value of orders placed under this scheme has been absolutely minuscule—less than £3,000 a machine—and that the type of machine which can be purchased for that sum is little better than a do-it-yourself carpentry kit. I was hoping that my hon. Friend would be able to tell us that the Government would be using their influence to encourage this scheme to be used for the purchase of more sophisticated machines.

:My hon. Friend was guilty of exaggeration in an effort to make his case. The Government are anxious that sophisticated machine tools should be taken up by the universities and agencies. It is an exaggeration to assert that the scheme is of no use. That is not what the industry has told the Government, nor is it what the little "Neddy" for the machine tool industry has said.

Following the recent exhibition, there is a great deal more confidence in the machine tool industry than sometimes appears from political speeches. I am pleased at the note of confidence which has been shown by those who are concerned with it, in particular by the General Manager of the Machine Tool Trade Association who on 3rd July said this:

"I am absolutely convinced…that it will not be long before order books start to look healthy once again."

That shows the measure of confidence that there is in the industry, though we all recognise its long-term problems. It is to assist in overcoming these that we are taking the powers under the Bill. I advise the House that the new Clause is strictly unnecessary.

I come, finally, to new Clause No. 7, which relates to shipping, which is of great interest to many hon. Members on both sides. The Chamber of Shipping jointly with the Shipbuilders and Repairers National Association have made proposals for incentives to stimulate orders for new ships. The question of what form of assistance, if any, might be made available to the shipping industry is under consideration by the Ministers.

:Ha, ha!

:If my hon. Friend will be a little more patient, I may have something to cheer her somewhat. The question of assistance to the shipping industry was raised in Committee. Government spokesmen informed the Committee that Ministers greatly welcomed the fact that both the Chamber of Shipping and the SRNA had been able to act in concert in examining possible solutions to the problems facing the industry. We welcomed this. The suggestions of these bodies are receiving close and urgent consideration. This important matter has a wide range of implications for the Government and for the economy as a whole, and it is only right that it should receive close and careful scrutiny.

:When were these proposals first received by the Government?

:I cannot say exactly when that was, except that it was a relatively short time ago in view of the major importance of the subject matter.

My hon. Friend the Member for Tyne-mouth (Dame Irene Ward) quite rightly wanted to know, following her letter to my right hon. Friend and the assurance that there would not be any undue delay, when my right hon. Friend would reach a decision. My right hon. Friend will give an answer before the House rises for the Summer Recess.

Generally on the question of shipping, the powers under Clauses 7 and 8 are, as in the case of those relating to other industries, adequate to provide any selective assistance which it may be decided should be available to the shipping industry.

:Is there any delay in giving this answer arising from the currency dislocation? Has the Minister discussed with other OECD countries the answer he is likely to give?

:Nothing that I said should have indicated that there had been any unnecessary delay. I said that close and careful scrutiny was taking place. It would not be right in advance of any decision for me to pontificate on any of the points which are being raised in discussion.

:Can we have an assurance that, if the decision is made before the House rises for the recess, it will not be made in the form of an Answer to a Written Question but will be made in the form of a statement so that Members may question the Minister?

:My right hon. Friend will undoubtedly note what the hon. Gentleman says.

The Government are very much in sympathy with the points which have been made in this debate, particularly the expressed desire to encourage tourism and to attract service industries to assisted areas and to help the machine-tool and shipping industries. However, as my hon. Friends the Members for Bedford (Mr. Skeet), Hastings (Mr. Warren) and Canterbury (Mr. Crouch) pointed out, it would not be suitable to spell out particular industries in a Bill of this nature, which essentially must be broad and flexible.

As it is essential in a Bill of this nature to consider the overall economic position and regional problems as a whole, although I am in sympathy with much of what has been said in the debate, I hope that it will not be thought necessary to press the Clause, otherwise I must advise the House to reject it.

:On all the new Clauses the Minister has been rather more forthcoming today than Ministers were in Committee, and for that we are grateful. On all these matters some apprehension was expressed in Committee. It has been useful to have these matters debated today. The Government have existing statutory powers in relation to tourism; therefore, in a sense the new Clause relating to tourism is not necessary. However, it was important to establish that the Government were taking a continuing, active and enthusiastic interest in helping tourism, particularly in assisted areas. The 1969 Act was not specifically directed to the assisted areas, and the powers under it apply everywhere.

I shall not go over what the Minister said today. We shall wish to consider it carefully. On both sides of the House there is a good deal of interest in seeing that the Government help the industry in a way that will provide additional employment in the assisted areas and additional amenities for our own holiday-makers and those who come from overseas. We shall watch carefully how the Government's policy develops in this respect, and no doubt there will be later opportunities to come back to it.

In connection with offices and service employment, we put down our new Clause 6 because the answer that we had in Committee on the selective assistance provisions of Clause 7 made some of us feel that the Government did not regard the problem with sufficient seriousness and were apparently not fully determined to tackle it.

One recognises that there are difficulties in having offices moved from areas which firms regard as attractive to them—for example, there is a certain magnetism in central London—but it is nevertheless true that even from the strict economic point of view of the office employers themselves it is an extremely expensive business to be in central London. I see no reason why we should not continue to operate a stringent office development control policy in central London. Such a policy has now largely been abandoned by the Government, but if it were maintained there would probably be quite a lot of office employment willing to move out of central London and the South-East generally, and in these circumstances the sort of incentives that we have pressed on the Government would do an effective job.

The Minister has elaborated a good deal on what the Government have in mind—removal and settling-in expenses, new help with capital expenditure on office buildings, perhaps assistance with rents, rent-free periods, assistance with communications, and so on. Without wishing to be churlish, I have to tell him that if he had elaborated in Committee in that way we might not have felt it necessary to put down our new Clause on Report, because those were some of the matters that we very much hoped he would tell us about then. We are glad that he has told us now, and we shall watch the development of Government policy in the light of what he has said. We welcome his words, but we shall continue to pursue him on these matters in order to ensure that the Government put a proper policy into operation. Clause 7 will not be adequate without additional powers along the lines which we have proposed.

On the subject of machine tools, too, we have heard something more today, but it has not been anything like adequate to match the seriousness of the present state of affairs in the industry. The hon. Member for South Angus (Mr. Bruce-Gardyne) shows an enthusiasm for Government intervention in this sector that he does not show in others, I notice, but that is because he has a strong constituency interest. We welcome his interest none the less, and we hope to see similar enthusiasm expressed in support of problem industries in other parts of Scotland, though we have not seen it so far.

The Minister probably knows that there is a particularly serious situation in Johnstone, in Renfrewshire, with redundancies at Wickham Lang, a machine tool manufacturer there. My hon. Friend the Member for Renfrew, West (Mr. Buchan) would have been here today to emphasise the urgency of Government action, but being involved in that very problem in his constituency today he asked me to mention it. I assure the hon. Gentleman that the action that my hon. Friend has been taking will have the full support of his colleagues in the Scottish Parliamentary Labour Party.

We have made some progress on the subject of shipping, too. Hon. Members on both sides who have continued to press this matter on the Government will be grateful that we have been promised a decision before the House rises. We wait impatiently to know what that decision is. I shall not go over the various arguments which have been put—the Minister is well aware of them—save to say that there is a desperate need, for the shipbuilding industry's benefit to have the matter clarified and to provide incentives to British ship owners to put orders in British yards. I hope that when that statement comes it will match the urgency of the problem. I endorse what was said by my hon. Friend the Member for Greenock (Dr. Dickson Mabon), that the announcement must be made as a statement to the House and not sucked away in a Written Answer. Even supposing that it were an acceptable answer, that would not be right.

:I am grateful for the hon. Gentleman's support, but I think that I can probably arrange the matter myself with Ministers. I have access, and I have done quite a lot behind the scenes. The hon. Gentleman need not worry about hole-and-corner methods. I can register my own point of view and have the matter settled.

:We are grateful to the hon. Lady, but she is not the only Member with an interest in this matter.

:No, of course not.

:If, with her special nacilities for access to Ministers, she can arrange that the announcement will be made in an Oral Answer we shall be delighted, but one must make the point that several important statements—the Minister said that this was a major matter of policy—have been made by means of Written Answer, without notice to hon. Members, and it would be wrong if that were done in this case.

In view of the Minister's reply, we shall not press our various new Clauses to a Division.

:I agree that we have made progress in relation to the aims and intentions behind new Clause 1. When we originally submitted this proposal in the form of an Amendment in Committee we did not get very far. Then, in the debate on Clause 7 as a whole, we made a measure of progress. Today, the Minister has made one or two quite firm statements, including the announcement that discussions are taking place between the Government and interested parties to examine the future requirements of the tourist industry as a whole, both in the context of hotel accommodation and in the context of assisting desirable projects.

If the outcome of those consultations points to the conclusion that more assistance is desirable for the tourist industry, I hope that my right hon. and hon. Friends will assist in the campaign with the appropriate Treasury Ministers.

In the circumstances, I beg to ask leave to withdraw the new Clause.

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

:I suggest that it will be convenient to discuss at the same time new Clause 3 (European Economic Commission) and Amendment No. 42, in Clause 16, page 17, line 5, at end insert:

'(2) Any report prepared under the last foregoing subsection shall contain details of the way in which any of the provisions of this Act have been affected by the provisions of any treaty or international agreement entered into either before or after the passing of this Act'.

:We should in any event have wished to pursue this matter at some stage in the Bill, but it became the more important to pursue after reports in the newspapers on 18th July that the German Government had raised with the Commission the British Government's proposals in relation both to free depreciation, which applies not just to the assisted areas but over the whole of the United Kingdom, and to the capital grants system provided for in the Bill, and had told the Commission that they had doubts whether these arrangements met the obligations which Her Majesy's Government were accepting in acceding to the Treaty of Rome. Immediately the question is raised of how far we are able even now to determine our own regional policy and how far we shall be able to do that if and when we join the Common Market. The debate gives the Government an opportunity to clear up that matter.

Having read what most of what Ministers have said about regional policy since the question of accession to the Community first arose, it seems that there are two conflicting arguments. The first is that we shall have a common regional policy—we do not have one yet—and that it will be very much to Britain's advantage to have such a policy. The second argument is that we need not worry, that the provisions of the regional policy which we are operating now will operate under the Bill and that we cannot therefore be in any kind of danger from our entry into the Common Market.

Those two arguments cannot both be right. If we are to be in favour of a common regional policy and if we are to have such a policy, it follows, whether it is to our advantage or not, that we cannot say that the package of proposals which we are producing in the Bill is bound to survive exactly as it is at present and that no proposal to which hon. Members attach importance can possibly be in danger once we are a member of the European Community.

I am never sure about the logic of the common policy argument. The argument that a common policy can only be of advantage to the United Kingdom must presumably depend on what the common policy actually is. There is no logical connection between the proposition that we should have a common policy and the proposition that a common policy is bound to be a good thing for the United Kingdom. Whether it is a good thing will depend on the terms of the common policy. The Government hope that we shall get a common polcy which will be rather expensive and will involve spending large sums of money in the United Kingdom disproportionate to our contribution to the Common Market budget, and that we shall get back thereby through our common regional policy rather more than we put in. The Government hope that that will compensate for the considerable burdens being placed on the British taxpayer and consumer in financing what is the regional policy of the French, the common agricultural policy.

If that all happens, I dare say those of us who are most critical about accession to the Common Market will be happy with it. However, it is by no means clear that it will happen. It is clear that the French Government will do their damnedest to see that it does not happen. There will be a tremendous amount of opposition. Yet we have Ministers continually producing anodyne replies that we need not worry about a regional policy, that it will be all right in Common Market and that we shall benefit from it. I do not believe that is true, and that is one of the reasons why we have put down new Cluse 3.

Some aspects of our regional policy will be in danger when we join the Community. There are persistent reports from Brussels that the regionl employment premium will be looked upon with considerable disfavour by the Commission and other members of the Community. It is significant that the regional employment premium is being phased out, according to the new terminology, from 1974. The Government have not committed themselves to its replacement by another form of labour subsidy. A good deal of this matter is concerned with whether we shall be able to continue with REP when we are a member of the Community.

:The hon. Member for Glasgow, Craigton (Mr. Millan) should be congratulated on the Clause because it gives the House an opportunity to examine an aspect of the Bill which received scant scrutiny in Standing Committee. I say that in no sense of disrespect for or criticism of those of my colleagues who served with me on the Committee. We were all under pressures of time and a general anxiety was felt, perhaps more by some than by others, that the Bill should reach the Statute Book. But as so often happens, and it is one of the delights of the procedures of this parliamentary institution, the situation which attends a Bill on Second Reading and even in Committee is transformed by parallel developments outside the House. Therefore we are wise, even on a Friday afternoon and to the inconvenience of the Executive, once again to turn to the problem.

First we have to consider the precise constitutional implications of what has been happening. I do not believe there is very much here of substance to concern the House but at least it would be agreeable to resolve some of the residual ambiguities. I am still puzzled about the nature of the consultation which took place between the Treasury Bench and the Commission in Brussels. When did it take place and what was the actual form of the consultation? On Second Reading the right hon. Member for Bristol, South-East (Mr. Benn) was very quick to alight upon this point and he intervened about it in the speech of my right hon. Friend the Secretary of State. Needless to say, my hon. Friend the Member for Banbury (Mr. Marten) was also involved in the subsequent exchanges. My right hon. Friend said:

"the White Paper on which the Bill is largely based has been subject of consultation with the Commission in Brussels."—[Official Report, 22nd May, 1972; Vol. 837, c. 1011.]

So we were left in absolutely no doubt that there had been consultation in Brussels.

In Committee, in the brief period during which we touched upon the subject in the context of whether labour subsidies might be written into the Bill, I wondered whether the fact that the Government had resisted an Amendment to include such subsidies could be related to the fact that after discussing the White Paper and after views had been made known about it the Government had decided against the writing in of such provisions. What intrigues me is that when the issue blew up again on 18th July my right hon. Friend the Minister for Industrial Development said that the Bill was shown to the Commission as soon as it was available. At no time hitherto had it been suggested that both the White Paper and the Bill had been shown to the Commission as soon as they were available.

There was a significance for the House in the difference between a White Paper and a published Bill. Therefore this is not a piece of nit-picking, but is a point of substance. If the Bill was shown to the Commission as soon as it was available, as was asserted by my right hon. Friend, I think it may be no more than an oversight that that information had not been disclosed on Second Reading, but at least it is something about which we could be given more information now.

:Is the hon. Member aware that the German Ambassador in London has issued a Press release stating:

"Within the framework of consultations agreed upon with Great Britain, British parliamentary Bills are provisionally examined by the Commission…"

So that parallel and superior discussions are going on about Bills before the House is permitted to discuss them and in anticipation of that.

:That is an interesting and revealing intervention, and I hope that my hon. Friend the Minister will have a chance to elaborate on this when he replies. I do not have any more than a suspicion about this but if we are to formulate happy relationships between our law-making institution and the law-making institution within the Community, it will be for the benefit of all if we understand the position from the outset. The debate may therefore be valuable even within this very narrow—or perhaps it is not so narrow—constitutional point. If the point made by the right hon. Member for Bristol, South-East had been elaborated on Second Reading, the proceedings would have gone somewhat differently

The Bill is not only concerned with regional development. It is also about generalised assistance to industry. A great deal of the discussions about Clause 8 related particularly to that. It is here that we have an interesting prospect of the degree of manoeuvrability, of sovereignty and of freedom of action invested in the Government. To what extent is that a freedom in industrial affairs which is conditional only on our proceeding through the transitional period of Community membership? To what extent is it a freedom to be traded in or shared—I shall not use emotive language such as "surrendered"—from 1st January onwards? I speak about this in terms of Clause 8 and as one who does not admire it.

:We have noticed that.

:Such powers of advocacy as I have at least are recognised by one hon. Member opposite, and I am grateful.

I shall not be assuaged by being told that everything is all right because the Commission will do my job for me. I did not come to the House to give up my critical rôle to the Commission. If I make a case against Clause 8, this is the place where I shall make it. This is where I wish either to be overwhelmed or, perhaps on occasions, to triumph. I am prepared to take my fortunes here. I am not convinced by my hon. Friends who ask why I complain if the Commission take a more critical view of the powers which can be exercised under Clause 8. Critical powers properly belong to this assembly.

I also have information which supplements to some extent that given by the hon. Member for Craigton when he referred to Monday's newspapers in deal- ing with the relationship which seemed to be emerging between the Commission and the French Government. We have been without national newspapers for the last few days. I have been in Italy with the Select Committee on Nationalised Industries seeing, perhaps appropriately, how the Italians operate regional policy and how they have interesting organisations like IRI and ENI and a number of others—one could run through the whole gamut of initials once one starts and it is difficult to know where to stop. One of the by-products of that visit was that I was able to become a little more informed about what was going on in relations between the Commission and Italy than I would be with the help of the information provided by such newspapers as the Financial Times.

Perhaps the House will bear with me if I quote from the Daily American of 26th July.

:Not a reliable source.

:My hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) speaking from a sedentary position, says that it is not a reliable source. If he wants me to quote the Italian original from the Italian source, he knows perfectly well that to do so would not get past the Chair. I hope he will not disparage this as a source of information because what is about to be read into the record will be there for others to investigate and authenticate, and if I prove to be wrong I will naturally withdraw. The dateline is Brussels, 25th July, and it states:

"The European Economic Community Commission has moved to prohibit Italy from continuing to accord financial aid to its entire textile industry, an EEC spokesman said today.

The Italian aid consists of a 5 per cent. reduction in the amount of social benefits that textile companies pay the state to cover their workers."

:The hon. Gentleman must try to relate his remarks on the EEC to the Industry Bill.

:I shall be most grateful, Mr. Deputy Speaker, if I am able to direct your attention to Clause 8. It provides for general assistance to whole industries, whether they are within or without assisted areas. Therefore, the parallel of an entire industry which I am quoting—the Italian textile industry—could reasonably fall within the provisions of the Bill.

I hope you will understand, Mr. Deputy Speaker, that what I am seeking to demonstrate is that Clause 8 could provide for generalised industrial assistance and could, for example, enable the Government to offer a general system of help to the paper industry in its current difficulties, or to help the textile industry in its current difficulties, and that might be inadmissible. That is my interpretation. If that is not in the Government's mind and they can demonstrate that the Bill is worded as to make that wholly impossible, plainly they will seek the earliest opportunity to make that clear.

However, I do not want to prolong the proceedings and I will therefore conclude the quotation, because it is important. Most of the arguments being deployed about the Bill are understandably being deployed about regional policy. What I am saying is that the Bill goes beyond mere regional policy. Therefore, the generalised assistance which may be offered to industry also falls under the authority of the Commission.

:Would it not expedite matters if my hon. Friend confirmed his impression, which is my impression, that the form of aid which the Italian Government have been giving to the Italian textile industry—namely, reduction in contributions for insurance purposes—would not fall within the scope of the financial assistance to be given under Clause 7 or Clause 8? In that case, is not his example irrelevant to the argument?

:My hon. Friend will prolong my speech.

:I was trying to shorten it.

:Perhaps, but that intervention does not shorten it. What we are discussing is not the form of aid, but in principle whether any of the forms of aid which might be provided under Clause 8 would be deemed by the Commission to infringe the principles of fair competition. I am therefore unimpressed by the fact that the labour subsidy which the Italian Government have been practising and to which the Commission has taken exception is not referred to in the Bill. There are many other ways in which generalised assistance could be offered under the Bill which I am certain would cause eyebrows to be raised in Brussels if the Commission were determined to apply the principles of transparency of competition.

I complete the quotation:

"The EEC move is in the form of a procedure it has opened under article 93 of the Treaty of Rome. The procedure provides that aid be suspended until comments from interested parties are compiled.…

However, the commission didn't believe aid should be given to the entire Italian textile industry, and therefore decided to open the procedure. In Biella, Italy, Giancarlo Forconi, director of the Industrial Union of Biella, bitterly attacked the decision of the European Community…

In a telephone interview, Forconi said:'The EEC inquiry will take a long time, and by the time it is over, the textile industry here will be dead.' "

All of us with experience of the concern and anxiety expressed from time to time by the textile industry—and I say this under the expert eye of my hon. Friend the Member for Cheadle (Mr. Normanton)—will recognise the feelings contained in those remarks. All I am saying, although it has been somewhat difficult to say it, is that we need clarification whether, under Clause 8, there is any likelihood that what is envisaged are forms of assistance which cannot be set aside by the intervention of the Commission.

One could continue this argument a good deal longer because I could move on to the considerations of regional policy itself and the philosophic dilemma mentioned by the hon. Member for Craigton. However, in the interest of brevity I shall not do so.

But I shall not be bounced into brevity because the Government are trying to scramble the Bill through on a Friday afternoon and I shall not be bounced into brevity because this subject happens to touch on the relationships of the Community affecting this sensitive issue. It does not involve whether one is in favour of Community membership or against it. But unless the House at a reasonable stage is persuaded and is confident about the relationships that will be evolved between itself as a law-making body and other law-making bodies, I promise my right hon. Friends that the whole Community experiment will prove immensely sour.

:The hon. Member for Oswestry (Mr. Biffen) is right to say that issues are raised here whatever one's attitude to entry into the European Community. However, some of those who have listened in the past few months to debates about entry into the European Community may have been surprised to hear that the European Commission was capable of bringing pressure to bear on the French Government, and that may even prove to be a reassurance to some hon. Members.

The reassurance that I should like is the reassurance about the future of the Bill in the context of membership of the European Communities for which my hon. Friend the Member for Glasgow, Craigton (Mr. Millan) asked.

Both main parties in this country for a considerable time have thought it right that the United Kingdom should be a member of one European trading group or another. If it was not the European Economic Community it was the European Free Trade Area. My party was not opposed to membership of EFTA. We did not propose on coming into office in 1964 to renegotiate the Treaty of Stockholm. We thought that membership of EFTA was beneficial to this country.

However, European groupings of this kind take certain steps to achieve their objects. One common object of the two groupings was the promotion of competition. For that purpose there were provisions within the Treaty of Rome and the Treaty of Stockholm directed to harmonisation. I have no objection to harmonisation in principle, but an essential proviso, one to which the Government must have regard and to which all members of the European Community will have to have regard, is that harmonisation is not inconsistent with national full employment policies. There is a difference in this respect between EFTA and the EEC, because EFTA spoke only of competition. There was no element of social policy written into the Treaty of Stockholm, whereas an element of social policy is written into the Rome Treaty.

Regional concerns are matters of legitimate action by member Governments of the EEC. This is perhaps something on which this country can build when we become members of the EEC. There is nothing inconsistent in there being both a common regional policy within the EEC and national regional policies within it as a supplement to them. That is true in agriculture, where there are both a common agricultural policy and national agricultural policies operating alongside. Even if there is an effective common regional policy, we shall need national regional policies as a supplement to it—indeed, perhaps as the continuing major part of the regional effort of the member countries. On that we must build, and on that perhaps the Bill is an attempt to build.

When the Bill was introduced apparently there were discussions with the Commission, and the German Government have made certain inquiries about it. But I can state with certainty that if the Bill had been introduced while this country was a member of EFTA there would have been an uproar, as compared with the murmurs from EEC countries. Every member of EFTA would have demanded that the Bill be withdrawn. They would have asserted that it was in every respect inconsistent with the Treaty of Stockholm. Whether we should have stood up to that uproar, is a different question.

:Does the right hon. Gentleman agree that standing up to the uproar means welshing on our international treaty obligations?

:Not necessarily. It depends on those obligations. One of the points I am making is that within such international agreements it is sometimes necessary to stand up to the uproar. For example, there was the uproar about investment grants, which the Bill re-introduces. If the Government were reintroducing investment grants within the EFTA context, there would be complaints, just as there were about the investment grant system introduced by the last Government. The last Government stood up to the clamour and maintained the investment grant system.

We did not stand up equally strongly in the matter of the aluminium smelters. We agreed to cut their initial capacity by a total of 40,000 tons, and agreed that any expansion of that industry would be subject to a review within EFTA. We were prepared to make concessions for the purpose of maintaining relationships within EFTA. Under the Industrial Development (Ships) Act, 1969, EFTA shipyards were regarded as British shipyards for the purposes of the Act and for the balance of payments test which it made a condition of the investment grant for ships. There were complaints within EFTA about the activities of the Industrial Reorganisation Corporation.

The point I am making is that membership of international communities of the kind we are discussing involves a process of harmonisation, and issues may well be raised about the activities of national Governments in the pursuance of their regional and industrial policies. Those national Governments may decide in certain circumstances that it is right, for the purpose of the continuance of the Treaty and of obtaining the benefits under that Treaty, to agree to make certain concessions. By and large, I think the Labour Government were right. We stood by what we thought to be our rights under the Treaty of Stockholm, but we made concessions while standing up for the main principles with which we were concerned. I wish to have assurances from the Government that they will stand up for British interests within the EEC at least as strongly as the Labour Government did within EFTA when our actions were called in question by other member countries.

One specific point that has been raised several times during the course of these debates is the definition of the central area, the area within which there may be some control of the extent of investment incentives. We have been told, particularly by the Secretary of State for Trade and Industry, that that definition would be regarded as a matter of national interest. I have taken great comfort from that statement, because it means for my constituency and the development area in which it is situated that if there were any de-scheduling it would be a consequence of a decision of the British Government and not of any intervention by European institutions.

The main point is that within the process of harmonisation every national Government, and particularly the British Gov- ernment, in which we are mainly interested, must take the position that full employment and national policies for promotion of full employment come before harmonisation. What is being asked for in the new Clauses is a statement by the British Government that that is their attitude, that they will put national policies for the promotion of full employment before harmonisation, if at any point the two prove to be in conflict. That is the sort of reassurance I, too, look for from the Government, and I hope that they will be able to give it today.

:The right hon. Member for Birkenhead (Mr. Dell) got the right distinction, up to a point, between EFTA and the EEC, but then seemed to get lost, because he assumed that it was fair to break the rules of the EFTA Treaty. Although that Treaty frankly says that free and fair competition shall be the rule between all members, it had no machinery for enforcing that provision despite the fact that it said that it was binding. The rule in the Treaty of Rome is the same, that there shall be fair competition, without differential subsidy, between countries, but the Commission has taken powers to enforce it.

That is why I have always believed that to join EFTA with a lighthearted assumption that we do not have to stick to the rules if we get into trouble was a slightly dishonourable way to look at that association, and that is why I have welcomed joining the EEC because it seems there are occasions when we might even need saving from ourselves.

I also believe that there is little point in paying lip service to competition and not being prepared to accept the disciplines which it will exercise if we may be tempted to err from the straight and narrow. That is why I think it is right that we should accept the implications of the EEC and be perfectly frank about them.

My hon. Friend the Member for Oswestry (Mr. Biffen), who always delights the House, certainly he delights me with his eloquence and brilliance, was in something of a dilemma, a dilemma out of which he got admirably but one could feel the two forces within his breast struggling. We know on the one hand of his dislike of Clause 8, and on the other of his dislike of the EEC. He got out out of this dilemma with great skill and it was extremely brave of him to venture upon the topic at all. I congratulate him on what he said. He knows that on this side of the House there are doubts about how far along the road of Clause 8 we would like to go. It is difficult for him to attack the fact that the Commission will have powers to stop us going too far along that road when this is one of the few powers which the Commission will have which my hon. Friend would tend to welcome if it were in a different context.

I should have thought it was perfectly clear that the situation will be that any part of the regional or industrial policy of the Government will be subject to the approval of the Commission in so far as it does not contravene the rules of competition and subsidy which are laid down for the Common Market. I cannot see that this is an objectionable principle. If we are to have bidding-up all over Europe, if we pay X per cent. and the Belgians pay X plus 1 per cent., and the Italians X plus 3 per cent., then we have to come in again and pay X plus 4 per cent. That does not achieve anything in the regional policy context, it simply sets up a major distortion in the price at which the products in those industries are sold without giving anyone a competitive advantage. What is more, it escalates.

I should have thought that there was everything to be said for the Commission having power to stop this sort of thing, and I would unreservedly accept that this Measure could be over-ruled by the Commission if we go anywhere near to infringing the broad principles of competition laid down—with the savers for regional and social policy—which, as far as I can see, are being administered humanely and sensibly by the Commission in Brussels. I see no difficulty there.

Where I do see some difficulty is in this extraordinary distinction between capital subsidies and income subsidies. As has been said, the Italians have been prevented from paying an incomes subsidy by reducing the insurance contributions to be paid by workers in the textile industry. That is apparently taboo. If the Italians did the other thing and allowed their textile industry to run into heavy losses and if after a period of years the Government were to make a capital contribution to remove those losses, that apparently would be totally acceptable.

It does not make very much sense to say that income or wage subsidies are not allowed but capital subsidies are. We saw this with the British Steel Corporation when it was apparently permissible for us to write off the accumulated debt of the Corporation although not permissible for us to subsidise it as it went along. In truth there is no real distinction between these two at the end of the day. I hope that the Commission will address itself to these problems.

What is slightly unfortunate is that the Bill should be rushed through before 1st January to make certain that it is on the Statute Book before the disciplines of the Common Market apply. It would be wiser to view this Bill as though we were already members of the EEC otherwise it creates a suspicion that there is something illegal—that is a word I would rather not use—something inconsistent with the Treaty of Rome about the Bill. I have no doubt that there is not. In my opinion it should come within the scope of the Commission because I do not see what the difference is between an incomes subsidy and a capital subsidy. It would be better not to hasten too fast with this Bill but to allow these points to be discussed carefully and objectively and to obtain a full view from the Commission about the acceptability of what is being done.

Even then I do not think it matters, because this Bill is permissive. It gives power to the Secretary of State to do certain things and if at a later stage it appears that these things cannot be done, all that we have to do is to refrain from doing them. That does not seem to throw up any real difficulties or inconsistencies. I do not think that these Clauses are sensible. The House has given a Third Reading to the EEC Bill, and it is made clear in that Bill that the powers of the Commission to override our own domestic ideas in an area such as this are clearly within the competence of the Treaty of Rome. I welcome that. It is right and proper that it should be so, but we should see an advantage in this and not say that just because we have been told not to do something, or we could be told not to do something, this is automatically wrong.

There could be the possibility, and I ask hon. Gentlemen who are opposed to joining the EEC to recognise this, that there are advantages in harmonisation of regional policies and subsidies and the promotion of fair and equal terms of competition. The proposal seems to be immensely worth while considering on its merits. If, for instance we could extend the principle to the world as a whole—we cannot I know, but if we could bring in the Japanese, the Koreans, the Americans and everyone else so that we all stuck to the same rules—think how much easier our problems would be over a whole range of products, imports and exports, where international competition has been thwarted by one country or another. Even to extend this to an area the size of Western Europe is a major gain which the House should delight in and welcome rather than treat with the suspicion evident in this debate.

:I do not intend to go over the arguments relating to our entry to the EEC because we do not have time for that this afternoon. I am sure the Government are perfectly correct in wanting the Bill passed as quickly as possible. I do not agree with the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) and I consider that he has been less than fair to his own Government by inferring that the haste to get the Bill is somehow or other because they want it on the Statute Book before we enter Europe. I do not accept that at all. I followed the progress of the Bill in Committee and I am in a position to judge very accurately the approach of the Minister and the Under-Secretary of State. I am sure that both of them and the rest of the Government are sincere in wishing to get the Bill on the Statute Book for the simple and sound reason that the regions desperately need the help inherent in it.

:There has been a remarkable escape from reality about the way in which the EEC functions. There seems to be an ability to avoid the reality of what goes on and to concentrate on theory. My hon. Friend the Member for Oswestry (Mr. Biffen) has been inclined to fall into this trench.

I agree that the Bill goes beyond the question of regional policy; there is no doubt about that. I have to take my agreement with my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) a bit further and say that I do not think it was ever out of the mind of any hon. Member in Committee that we were dealing with a Bill which had to be considered in the context of what the EEC said and did. I agree with the hon. Member for Burnley (Mr. Dan Jones) that this matter is urgent. We cannot wait until 1st January because something needs to be done now. That supersedes many political dogmas which some hon. Members, particularly on this side of the House, have been nurturing for many years. The reality of what goes on in the Common Market has not been accurately postulated today.

The types of aid given by countries in the Common Market were considered by the Select Committee on Science and Technology when it was discussing the problems of the British computer industry. The Committee said in paragraph 245 of its Fourth Report:

"Despite the provisions of the Treaty of Rome, the French and German Governments have in recent years been supporting their domestically owned industry…".

It was estimated that in 1971 the assistance for the French industry was over £16 million and for the German industry over £34 million. This aid is being given at a time when it is believed that there is harmonisation to the disadvantage of particular industries and areas. There have not been complaints by any countries in the Common Market to the Commission or by the Commission to any Common Market country, notably West Germany and France, about this kind of aid.

If I may voice one criticism to my right hon. Friend the Secretary of State for Trade and Industry, it is nine months since that report was made. That is a suitably human period of gestation, and I hope that my right hon. Friend will make a statement similar to that which he promised to my hon. Friend the Member for Tynemouth (Dame Irene Ward) about the shipbuilding industry before the Summer Recess.

The Common Market Commission must live with the reality of regional development. Nobody can look at the common agricultural policy without realising it is a form of regional aid. That reality has been expressed today by the hon. Member for Glasgow, Craigton (Mr. Millan). I hope that the Government will not fail to reject the West German complaint to the Commission. The type of complaint made is spurious, but I draw attention to the Osbert Lancaster cartoon in this morning's Daily Express which shows that the types of complaint we should make are not exactly those which were earlier put forward by the right hon. Member for Bristol, South-East (Mr. Benn). The cartoon says:

"Don't forget, dear, the situation is never so bad that a few well-chosen words from Mr. Anthony Concorde-Benn can't make it ten times worse".

Throughout our consideration of the European Communities Bill in the House, nothing inhibited us from making protests or saying that we would wish to change Common Market policy either before we went into the Common Market or after we joined.

:It is only fair that the hon. Gentleman should repeat what he said a moment or two ago now that my right hon. Friend the Member for Bristol, South-East (Mr. Benn) has come into the Chamber.

:I am not sure whether Mr. Speaker will allow me to read it again, but if it is the wish of hon. Members opposite perhaps I can do so. I quoted the Osbert Lancaster cartoon in today's Daily Express which, in commenting about the right hon. Member for Bristol, South-East, said:

"Don't forget, dear, the situation is never so bad that a few well-chosen words from Mr. Anthony Concorde-Benn can't make it ten times worse."

Does that satisfy the hon. Member? I am grateful to you, Mr. Speaker, for allowing me to repeat that. Any other encores will be gladly supplied, but I think I must press on.

Article 93 of the Treaty of Rome has been referred to, but there is also Article 92 which makes it quite clear that the Commission shall, in co-operation with member States, keep under constant review all systems of aid existing in those States. Furthermore, it says that it shall be compatible with the Common Market to give aid to promote economic development areas where the standard of living is abnormally low or where there is serious under-employment.

In conclusion I would like to pass one comment on our relationship with the Community. I hope that my right hon. Friend the Secretary of State and his fellow members of the Government will make sure that all Ministers and officials who go to Brussels will actively battle on behalf of this country. I hope that, even if they come out with compromises, those compromises will adequately reflect the needs of Britain. There is nothing in the treaty to prohibit that. If we fail to have that assurance in our minds when we go away from this place today we shall have missed a very important element laid down in the Bill.

:What the hon. Member for Hastings (Mr. Warren) ought to have confessed when he referred to the Daily Expressis that a great many of us share a secret desire to be the subject of a cartoon by Mr. Osbert Lancaster. Very few have achieved it, but the Secretary of State has achieved it, and so has my right hon. Friend. The hon. Member for Hastings will never achieve such fame. The contribution we have heard from him today, that small lecturette, will make quite sure that he will never share the fame of his right hon. Friend and my right hon. Friend.

I am not so sure about the hon. Gentleman and the Member for Cirencester and Tewkesbury (Mr. Ridley). I think he is of a different frame and might well achieve this kind of fame.

:Order. This really is not the topic of this debate.

:Could the cartoon be circulated in the Official Report?

:You will know, Mr. Speaker, that I hardly ever ask your permission to indulge in any such references at all, but just a minute or two ago we had imposed on us about four minutes of this tripe and I thought that I might take 90 seconds to make a reference to it in passing, and that was all I was doing.

From the drastic logic of the hon. Member for Cirencester and Tewkesbury. probably the most drastic since Thomas Hobbes, I can see how he frightened his colleagues from time to time in the last few years, and how they must have been frightened when listening to him about his determination that the people of this country, in areas where unemployment is high, must be disregarded or put on the altar of competition, as he has explained again to the House this after- noon. It is indeed true that there were some from whom we had to be saved, and I am very glad that we have been saved from them. There are some others who are the same kind, but we thought that the Secretary of State had learned some of the lessons of the régime of the hon. Gentleman the Member for Cirencester and Tewkesbury and of his right hon. Friend who is now the Minister of Posts and Telecomunications, and that, abhorrent as we found it, and frightened of it as we were, we did not want the reintroduction of this same rigid policy in relation to the European Economic Community. Because this is what is at stake in this debate. It is indeed a serious subject, not to be treated with witticism or frivolity.

I would point out to my right hon. Friend the Member for Birkenhead (Mr. Dell), to whose speech I listened with the profoundest of interest, that although his case was quite consistent there was one difference he perhaps ought to have pointed out to us between EFTA and the European Economic Community, and that is that nobody can deny that the United Kingdom had in EFTA a position different in size and in importance compared with that of most of the other members and a position different from what we shall have in this Economic Community of the Six plus four. It is that distinction of size and influence and power that is the reality.

:My hon. Friend may find when he studies, as I am sure he will, the history of EFTA that the advantage or disadvantage was shown by the concessions we have had from time to time to make.

:We made those concessions because we valued the association and because of the purposes of the association, but we are not in a position to coerce the Community to make them. That is the reality of the situation, and anybody who has listened to the arguments of the Conservative Government until 1964 and of the two Governments since then up to 1970 will know that that is correct, will know that is true.

There is a big difference in belonging to a community where one can say sometimes, "We do want to amend certain policies, there are certain policies we wish to pursue, because we think the general purposes are in the interests of us all, and we, as the biggest Power in the association, make a deliberate concession". There is a big difference between that and entering a Community where the lines are so drawn that it will be to our essential disadvantage if this policy is continued a ľ outrance, which is suggested to be right.

:If the hon. Member says we are in a position to coerce the EFTA arrangements I suggest to him that he should have in mind that his hon. and learned Friend the Member for Lincoln (Mr. Taverne) had to get up in this House and explain that a specific undertaking given to ICI publicly that purchase tax would be eliminated on a particular product of ICI, a product produced in the Scottish development area, could not be honoured because of our EFTA partners, and we were forced to accept that.

:I am saying that, given the power and size of all the partners in EFTA, it would not be true to say that there was that kind of coercion to which we are going to be subject in EEC, and it cannot at all be compared with our situation in EEC. The argument when a Government decide not to do something, or to amend something it was proposed to do, must be as my hon. and learned Friend the Member for Lincoln (Mr. Taverne) put it. That argument is a genuine one, but nobody could deny the proposition which I am advancing, that we are entering a community wholly different from the association, with larger purposes and different aims, not at all to be compared with EFTA.

As the hon. Member for Cirencester and Tewkesbury said, the association we are now about to enter has got powers which it has taken unto itself, powers of enforcement, and I completely agree with the hon. Gentleman that that makes a real difference. That was the point I was advancing against the argument put forward by my right hon. Friend.

:I want only to remind the hon. Gentleman that the EFTA Treaty was quite specific and binding and that the only deviation or coercion could be by breaking our word. Is he really saying that it is better to join a community in which we can break our word and welch on our undertakings? Is that why he favours the EFTA Treaty?

:Not at all. I am saying the opposite. I do not know whether the hon. Member often attended the long Committee consideration of the European Communities Bill, but if he did he will have heard his right hon. and learned Friend the Chancellor of the Duchy of Lancaster always saying, what the Government have often said, "Once we are inside the Community we will deal with that". He was joined by my right hon. Friend the Member for Manchester, Cheetham (Mr. Harold Lever). My right hon. Friend the Member for Cheetham said exactly the same thing. He said. "There is nothing to worry about; once we are inside we shall see that things which are not possible we shall not have to do". My argument is the exact opposite. I support the new Clause because I want the Government to be clear open and frank about their attitude.

Here I come to the new Minister for Industry, who made such light work the other day of the Private Notice Question he had on the intervention by the German Government. During that very short period of question and answer he spoke of the position of the steel industry, which is why I am now intervening. The steel industry is a very decisive case in point for our future. The hon. Member for Cirencester and Tewkesbury said that there is no real distinction between writing off capital losses and making immediate current direct subsidies and in logic there may not be, but our debate is directly relevant to the steel industry under the British Steel Corporation.

We know that at the suggestion of the Secretary of State for Trade and Industry the board of BSC is at the moment preparing its development programme. We know that there will be arguments and discussions between Lord Melchett and his board and the Government. But far more important than any instances so far quoted is the future policy of the Government for the expansion of the steel industry. There may well have to be very considerable Government assistance for that industry in future. I do not know whether everyone on that side of the House supports that view, but we on this side are certainly in favour of seeing to it that there is no danger whatsoever of such assistance not being given.

I come from an area where the distinction between giving support to a particularly handicapped region and giving more general assistance is of the greatest possible importance. I do not regard this debate as dealing merely with high unemployment regions. There are those of us who come from constituencies where until a few years ago the level of unemployment was comparatively low. Unfortunately that is no longer true of South Yorkshire. We have with the utmost consistency pressed for special assistance for the regions, and have thought it our duty so to do. But one result has been a certain distortion of economic development. A result of giving special aid to the regions was that a number of firms which might have come to Yorkshire have bypassed us and have gone to development areas. We thought that we were right to press for special assistance for the regions, but there comes a point when as a result there is a lack of new investment in areas where unemployment until a few years ago has not been so high.

Therefore, if the Government have recently extended a certain amount of special aid to South Yorkshire, to the whole Yorkshire coalfield, we welcome it, but what is important is to recognise that further aid right across the country will be needed, and will have to pick out certain industries. We want to be sure that when such assistance is given under the Bill neither the German Government nor the Commission nor any other EEC Government will have the right to interfere with such policies if the British Government wish to pursue them.

Some hon. Members opposite have always been hostile to the kind of policies of economic assistance and of a certain amount of economic direction pursued by the previous Government, so why are they not honest about it? We know that many Government back benchers are deeply critical of the policies now being pursued by the Secretary of State for Trade and Industry. We know that there has been a great deal of criticism behind the scenes because he is now pursuing interventionalist policies, so their views are not relevant to this part of the argument. They are opposed to this kind of interventionalist economic policy in any case on doctrinaire and other grounds, and they are none the worse forthat—they are entitled to their views. We on this side have always regarded theirs as a mistaken, misguided and highly danger-our policy.

After two critical years in which we have seen the results of this disastrous policy of allowing the lame ducks to look after themselves and making competition king, after two years of bitter experience, we have seen a change. The change has been brought about not so much by what has happened in Parliament but by the people. It has been brought about by what Ministers have heard when travelling throughout the United Kingdom from local authorities, local industrialists and local trade unionists, who have drawn attention to the results of their policies. After two years we have just managed to persuade the Government to introduce certain changes in their policies, but now we hear that people outside, in the countries which make up the EEC, are beginning to criticise the legislation necessitated by the change. This is the real position, and it is no laughing matter.

We want to hear from the Minister for Industry a little more than we heard the other day when he replied to the Private Notice Question. We want to know whether the criticism was as limited as he then suggested. He made one believe that all that had happened was that someone had mentioned that there might be something wrong with the Finance Bill or with certain provisions of this Bill; that this suggestion had been answered; that there was nothing really to worry about, and that we were not really involved. We want today a much more detailed and careful account of this business.

Even more important, we want to hear about the Government's future attitude. This is not a matter of not looking after the Community. The Government are not selling their particular policy on entering the Community on the basis of the airy-fairy contribution of the hon. Member for Hastings. Senior Ministers have said that they want us to be in the Community because it will be in the direct economic interest of our people. That is their argument; not just a question of joining because it would be nice to join—

:If the hon. Gentleman thinks that mine was an airy-fairy contribution, will he not recall that I quoted Articles 92 and 93 of the Treaty of Rome as being the reality of how negotiations take place?

:The hon. Member gave us the old story about not looking at the theory but at the practice of what happens in the Community. That is precisely why his contribution was airy-fairy. He argues, as the Chancellor of the Duchy of Lancaster has argued for months, that all these provisions we are worried about just do not exist, but the fact is that this country, joining the Community at this stage, with our own distribution between agriculture and industry and with our own contributions to the Budget of the Community, will be put at a disastrous disadvantage. We cannot discuss the Community in theory. We cannot say that competition is king. We have to look at the kind of provisions that are being made.

The hon. Member mentioned the common agricultural policy. That policy is designed to do certain things for French agriculture and for a small section of the farmers in Bavaria. It is nonsense to say that the Community as set up on general legal grounds; that what was wanted was a good legal framework. It was not done in that way at all. Anyone who followed the legal negotiations, which took four and a half years before the EEC was ever set up, knows that the original six Member States took great care two adjust each other's economic interests; and that some States, like France, being more powerful than others, got into a position of certain advantage.

Therefore, we are only exercising the normal right that any of those countries, the original partners, would have claimed, to say that we must look after our special interests as they are now. The Government should hold up the negotiations and see whether, at the summit conference in October, these interests cannot be better safeguarded. They should at least give the House and the country an assurance that they will see to it that nothing that might be done in the Community will interfere with the provisions proposed in this legislation. I cannot see how any hon. Member—such as the hon. Member for Hastings—who wants these interests safeguarded can do anything but go into the Lobby in support of the new Clause.

We want answers to the questions asked in the debate. We want to know the reason why the Government will not accept the new Clause. I see no reason for that. The Government ought to accept it and thereby give some confidence to the House and to the country.

:No one can match members of the international Socialist brotherhood in producing a good burst of xenophobia from time to time. To listen to one like the right hon. Member for Bristol, South-East (Mr. Benn) on the subject of the inquiry from the German Government to the Commission the other day about some of the provisions of the Measure we are discussing, one would imagine that we were fully entitled and able to conduct our domestic affairs as if the world outside our borders simply did not exist.

I happen to agree entirely with the right hon. Member for Birkenhead (Mr. Dell) about the restrictions that were inevitably imposed upon us by our membership of the European Free Trade Area. But when my hon. Friend the Member for Oswestry (Mr. Biffen) referred to the possibility of the European Commission raising an eyebrow about some of the proposed arrangements in the Bill, I recalled our experience not in EFTA or the European Community but when we used to have those regular quarterly meetings and visitations from Mr. Richard Good of the International Monetary Fund. He used to raise an eyebrow quite frequently. We used to see the Labour Party slip out of one commitment after another as the eyebrow went up and down. It is totally unrealistic to imagine that we in this House can conduct our affairs as if our international relationships did not exist. That is why I agree with my hon. Friend the Member for Hastings (Mr. Warren) that so much of what we have heard this afternoon from some of the opponents of the European Community is somewhat lacking in realism.

My hon. Friend the Member for Oswestry said that he did not like Clause 8. I confess that I am not overwhelmingly enamoured of it myself. However, my hon. Friend, in his crucial point, said "I believe that criticisms which one may have of this Measure should be argued out in the House and I do not wish to have the restrictions imposed by the Commission in Brussels".

I have a good deal of sympathy with the attitude of my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley). Sometimes it is perhaps no bad thing that we are saved from ourselves by a certain amount of outside influence. But my hon. Friend the Member for Oswestry is a very powerful advocate of the causes he sustains, and we all admire his advocacy. However, the truth is that successive British Governments of different complexions have, under the aegis and pressure of Whitehall civil servants, pursued policies in this respect, such as those we are discussing, that neither he nor I find particularly compatible. I have not noticed that my hon. Friend's advocacy, powerful as it is, has prevented this from happening. I do not find it particularly easy to share my hon. Friend's convolutions about his attitude towards Clause 8 and the possible intervention of the Commission upon it.

I should like briefly to emphasise where it seems only logical that regional policies should be desirably considered in a wider context than the purely national context. Not long ago I was approached by the controlling firm of a factory in my constituency. The firm was deeply worried about the proposals for the provision of a large new IRC-type fund in Northern Ireland because it was afraid that assistance might be given by this fund to a manufacturer in Northern Ireland who was in competition with a subsidiary of the firm in my constituency.

This particular manufacturing firm in Northern Ireland had almost bankrupted itself—it had been trading at a loss for some time—by under-cutting the market for a particular product which was also produced in my constituency. The parent firm of the firm in my constituency said "If this body in Northern Ireland is to inject cash into the business in Northern Ireland so as to enable it to continue under-pricing the market at the expense of its liquidity, the likelihood is that the factory in your constituency will be forced to close". That is a small example of how we cannot consider regional development policies in a narrow national context.

Equally, I recall in the days of the Labour Government one of their very grandiloquent projects and the remarkable objective of a splendid petrochemical plant in the north of the Highlands of Scotland. When discussing this with the would-be management of this particular concern, I was told that if any difficulties were placed in the way of its obtaining Government assistance in this country it would go to Sardinia, where it could get an 80 per cent. cash grant. That seems to be regional development policy gone mad. It is highly desirable that we should have some co-ordination in a European context to prevent a sort of Dutch auction in regional development incentives taking off into the wild blue yonder. I do not share the anxieties of my hon. Friend the Member for Oswestry on this point.

:I shall use this intervention not to engage in a more philosophic consideration but only to touch upon the last point of the story, about which I am sure we would all like to know more. My hon. Friend said that as an alternative the firm could go to Sardinia. I have news for my hon. Friend. There is no likelihood, it seems, of the Commission being the great motive force for economic liberalism in this instance, because the Italian Government took the very good precaution of writing into the Treaty of Rome a protocol covering the Mezzogiorno, which includes Sardinia. So the reality of the situation is not that within the Community there will be a progressive dismantling of intervention. If anything, there will probably be an intensification of it.

:That leads me to the point I was about to make when my hon. Friend intervened. I was about to utter a word of warning. I am a little worried about the way the regional policies of an enlarged Community might loom under a certain amount of impulsion from my right hon. Friend.

:Not me.

:I said "my right hon. Friend". My hon. Friend has not yet reached that eminence.

At the beginning of the debate the hon. Member for Glasgow, Craigton (Mr. Millan) outlined what he foresaw to be some of my right hon. Friend's ambitions in terms of the evolution of the Community's spending. In that part of his speech the hon. Gentleman was not entirely wide of the mark. I can see superficial advantages from our point of view in ensuring that, whereas the first decade of the Community's operation was the decade of the peasants, the second decade shall be that of the lame ducks. There could be the expectation that this would enable us to recover not only our contribution to the agricultural fund but also perhaps a little extra.

I hold the rather heterodox view that the French have not been the prinicipal beneficiaries of the first 10 years of the Community's operation through the common agricultural policy but, on the contrary, have been the principal victims. The result of the enormous transfer payments, largely to France, on the agricultural side in the first years of the Community's operation has been that the transformation and modernisation of the French economy have been delayed, that France has suffered from a considerably accentuated degree of domestic inflation and that the French industrial market has been colonised by German industry.

If my right hon. Friend succeeds in transforming the next decade of the Community's development from the decade of the peasants to the decade of the lame ducks, our economy might suffer similar consequences in that decade to those which the French economy has suffered in the first decade of the Community's existence.

The whole structure of trade within the Community and the development of the Community shows that it is not only more godly to give than to receive, but that it is also more profitable. I should not be happy that any efforts we might be making in the direction of transformation of Community spending would lead to the adoption by the Community of a massive gravy-train operation. This would not be in the overall interests of any part of our economy. If the French are to resist this, as I have no doubt they will, I should not be altogether sorry to see them achieve their objective.

:I shall address my remarks in particular to Amendment No. 42. My hon. Friend the Member for Glasgow, Craigton (Mr. Millan) was not entirely correct in the points he made in his powerful submission. The important point about regional policy in any community is the amount that is devoted to the region and the differentiation which exists between areas which are to be assisted, be it in the United Kingdom or in the European Economic Community, and areas which are not to be assisted. The Government are in the dilemma that the totality of regional policy is related to proposals contained in this Bill and in the Finance Bill.

The Community is endeavouring to secure a comprehensive regional policy. I support that. It is a matter for debate whether our regional policy would be better inside or outside the Community. It is important that we exert pressure on the Community to secure the greatest amount of assistance possible for areas requiring assistance.

My hon. Friend the Member for Craigton was right in saying that the agricultural policy was a form of regional assistance for French agriculture. I see nothing particularly wrong about that. If agriculture needs assistance to transform itself, it must get it. It would be wrong for anyone to level complaints at us for trying to devote assistance to industries which require restructuring, be it shipbuilding, steel or coal mining.

To operate in parallel our domestic regional policy and a regional policy within the Community, we must seek to get the amount devoted by the Community to this purpose increased and seek to increase the amount that the United Kingdom devotes to regional assistance and also to raise the differential.

The differential is a matter of concern. Are any questions which are being raised at Community level about regional policy related to the 20 per cent. differential between assisted areas and non-assisted areas? Is the 20 per cent. the top figure? It may be the top figure in the mind of the Commission, but it may not necessarily be the top figure that should be in the minds of the Government of the United Kingdom.

I want the Government to be clear about the way in which their policy might develop after our entry into the Community, whether or not they are willing and capable of discussing with the Commission the question of raising the level of assistance above 20 per cent.

No criticism can be levelled at the German Government or at any other Government who want to question our regional policy. I, as a Scot, am perfectly entitled to question the level of regional assistance given to Wales, Northern Ireland or any other part of the United Kingdom. That is the penalty which is paid for being a member of an economic union. The obverse is true:I have every right as a Scot to seek to ensure that the level of regional assistance for Scotland meets the needs of my area.

It strikes me as passing strange that on this very day more than 400 of my constituents will be made redundant in a paper mill. However, some of them will be saved the ignominy of the employment exchange, not by a United Kingdom firm, but by a German firm. If it is true that our regional assistance has proved attractive in this one case to the German firm, I am grateful on behalf of my constituents for the regional policy which this Government have belatedly had to adopt. It cannot be argued, particularly from this side, that British regional policy because it is British is best.

We shall have the opportunity within an expanding Community—the Labour Party has embarked on a substantial study of this—to look at the experiments in regional policy in other parts of the Community, experiments like the IRI and the ENI. I hope that we shall make a contribution to the development of regional policy so that the Community may derive benefit from our long experience, going back to the 1920s and 1930s, in trying to ensure that, when economic changes take place, their ill effects are mitigated and that, when old industries decline, new ones come in.

Having said that, I add my support to Amendment No. 42. I regard it as in line with the principle of parliamentary accountability. If it seems possible that the provisions of the Bill may be affected in any way by any treaty or international agreement, it is right that the Govern- ment should report to the House and give assurances that our regional policies are not undermined. We ought to be willing to work in harmony with other nations, but we ought not to have our posture in relation to full employment undermined by treaty obligations.

:I realise that the hour is getting late and there is still much to do, but I think it right that we should spend a good deal of time on this group of proposals. My constituency is in a special development area, so that what has been said by my hon. Friend the Member for Glasgow, Craigton (Mr. Millan) and others touches matters of deep concern to my constituents.

We welcome the Bill, but my main reservation stems from paragraph 60 of the White Paper, Cmnd. 4942:

"In order to give industry the confidence it requires to invest, the Government intend to maintain the new system of incentives at least"—

this is the important point—

"at least until…1st January 1978."

That is the bit that worries me in relation to the Bill. It worried me in Committee, too. No one can say that we held up progress of the Bill in any way, although we did get a bit annoyed at the many CBI speeches we had to listen to, especially on the last day.

The hon. Member for Hastings (Mr. Warren) did not give the full position regarding Article 92, and this is the matter which inevitably worries us—the same goes for similar areas in Wales—because the Treaty makes clear that, where an arrangement conflicts with the interests of the Community, it will be regarded as incompatible with the Community. The Article goes on to cover the various situations which will be allowed, but it is important to note that paragraph (3) lays down that serious unemployment "may be considered".

The difference between "may" and "shall" has been the subject of many debates in the House. I am deeply concerned about it in this context. In paragraph (2) of Article 92, there are three references using the word "shall", but on the question of serious unemployment the word is "may". There is no guarantee.

My hon. Friend the Member for East Stirlingshire (Mr. Douglas)—he has to leave to catch a plane to his constituency soon—talked about having the best. I am not so worried about having the best; let us have a policy which is adequate to the needs of Scotland, where there are 138,000 unemployed, about whom we had such an unsatisfactory reply from the Minister last night. We are in no way mollified by the answers we have had hitherto. If anything is to come out of our debate on regional policy, let it be a guarantee that, when 1st January, 1978 comes, the situation in Scotland will not be at risk. The figures given yesterday by hon. Members stressing the seriousness of unemployment in their constituencies make the need for such an assurance only too clear.

In his comments on various aspects of Common Market regional policy which may have a serious effect on our policy, perhaps the right hon. Gentleman will reflect also on the removal of tariff and quota barriers, and say a little about the removal of restrictions on capital movements, since this also must affect our approach to regional policy. The same goes for proposals for monetary union, about which a great deal has been said.

I should like to hear, also, about the pricing policy of the European Coal and Steel Community. Common Market policy on this point insists that one must quote base points to which transport costs are added. The present practice of the British Steel Corporation is to quote a standard price for the whole country, a policy which makes it reasonably easy for Scotland to compete. If the Common Market practice is adopted, the Scottish steel industry, already suffering the dire consequences of 7,000 lost jobs, will be at severe risk in January, 1978.

We have heard a great deal about harmonisation in social policy. Misguidedly, perhaps, I have a strong conviction that all the talk about harmonisation is tending towards a negation of democracy as we understand it as a nation. It should be our purpose to have a regional policy which best suits the situation at any given time. On 11th July last year, the CBI was reported in the Sunday Timesas having admitted that the Common Market's approach

"would have very serious implications for Britain's regional policy."

I had intended to say a great deal more, but I am conscious of the time and of the number of matters still to be considered. The Government must give some firm assurances about regional employment. Too many Scots from my part of the country have been sacrificed on the altar of sheer competition, about which we have heard a great deal from the hon. Member for South Angus (Mr. Bruce-Gardyne). Any Government—any Commission—must have some regard to social consequences.

However late in the day, the Government can take a little credit for what they did about Rolls-Royce and UCS. After visits by the Minister and others to places such as Clydebank, they began to appreciate the serious social consequences.

If areas such as Glasgow and other parts of Scotland, and Wales, are to be prevented from having the good things in the Bill through regional policy, building up resources and encouraging by public investment some sizeable private investment, those who invest privately must know that public investment under the Bill will last a lot later than January, 1978.

:We have had an extremely wide debate on the Common Market and the possible implications for regional and industrial policies of our membership. I cannot recommend the acceptance of new Clauses 2 and 3 and Amendment No. 42. I understand that those who are opposed to entry into the Common Market, and still hope that we shall not enter want to see the new Clauses written into the Bill. However, they are clearly inconsistent with the European Communities Bill.

:The Industry Bill will be subject to our treaty obligations as many other Acts of Parliament will be so subject. That is understood by every hon. Member. Therefore, to write in new Clause 2 would be at variance with the European Communities Bill which the House has just passed. Similarly, new Clause 3 would clearly be inconsistent with the spirit of the European Communities Bill and with the procedures which have been agreed by Parliament. It would be inconsistent to dig out simply one Act of Parliament—the Industry Bill—when it is passed—and say that if it were amended as a result of any action taken as a result of our treaty obligations it should be done by an affirmative Resolution. It might well be, as those who followed the debates in the House on Clause 2 and Schedule 2 of the European Communities Bill will know, that any Amendment might well be by affirmative Resolution, but clearly I could not recommend to the House that in this Bill there should be a requirement on the Government to proceed by affirmative Resolution.

I can give a firm assurance that it will be the intention of the Secretary of State to include in the annual report the kind of material which is envisaged in Amendment No. 42, but it would not be sensible in such an Amendment to stipulate just one of the important matters which must be a part of the Secretary of State's Report.

The debate has been concerned with wider matters. One or two hon. Members returned to the subject of the inquiry of the Commission by the German Government. Not much was made of that today and I can understand why, although the hon. Member for Penistone (Mr. John Mendelson) and the hon. Member for Glasgow, Craigton (Mr. Millan) referred to it. Probably the right hon. Member for Bristol, South-East (Mr. Benn) recognises that there is not much to be gained from jumping in in the way he did the other day and suggesting that it was clear proof of how regional policy was going to be destroyed by membership of the Common Market. As the German Gov- ernment have made clear, it was an inquiry and not a complaint.

As a number of hon. Members on both sides of the House have made clear, if we want to have common rules and to be a member of the Common Market, we must recognise that such inquiries will take place. There will be arguments on occasions. As the right hon. Member for Birkenhead (Mr. Dell) rightly said, the same applies to membership of EFTA. It was a storm in a teacup and I doubt if any hon. Member was seriously suggesting that there was anything in it to cause alarm.

Underlying a number of some of the serious inquiries during the debate were questions, for example, from my hon. Friend the Member for Oswestry (Mr. Biffen) about the discussions which have taken place with the Commission in the course of presenting the Bill to Parliament. Both the White Paper and the Industry Bill were drawn to the attention of the Commission. Officials have explained the provisions of the White Paper and the Bill to the Commission. We do not believe, as we have explained on a number of occasions, that there is any conflict between our regional measures and the obligations of membership of the Community. That belief is borne out by the fact that our new measures have been public knowledge for four months without attracting criticism from the Commission or any member State.

It was open to the Commission and to the Community under the interim period consultation arrangements, which are described on page 128 of the Treaty of Accession, to ask for consultations. There have been no requests for consultations on the matter.

:Was the Industry Bill made available and shown to the Commission before it was printed and laid before the House?

:I do not wish to give a categorical answer to my hon. Friend on that matter. I do not see that there is vast significance in that question. [Interruption.] I have said that the White Paper was shown to the Commission after it was printed. My belief is that after the publication of the Bill the Commission saw it. It was drawn to the attention of the Commission, but whether the Commission saw it immediately before or after publication—and I believe it was after publication—the point is that under the procedures of the Treaty of Accession, there have been no requests for consultation.

We are convinced—and we are reinforced by the discussions which we have had over a long period with the Commission and members of the Community about regional policy—that there are none of the measures we are proposing in the Bill is inconsistent with membership. That is not to say—this point was made by my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) and by other hon. Members—that there are no actions which could be taken under the Bill which would not be inconsistent with membership. Clearly, it would be possible to use the powers under the Bill, as it would be to use the powers under a large number of other Acts, in a way which would be totally inconsistent with our Treaty obligations.

My hon. Friend the Member for Cirencester and Tewkesbury rightly and accurately described the way in which Community policy has worked over the years. My hon. Friend drew attention to the fact that there were what he described as "savers" for regional and social policies, and he said that these had been working well.

My hon. Friend the Member for Hastings (Mr. Warren) drew attention to the support which is given by the French and German Governments to their computer industries. We all know that in the Community assistance such as that to be given under Clause 8 is given by member states to their industries in order to support ventures in high technology for example ventures for which the market cannot provide. Provisions in the Treaty, for example in Article 92, could rule out some uses of Clause 8 because the Clause gives very wide-ranging powers. Therefore, ultimately the basic question before hon. Members, and it was one which dominated the debate, is whether or not it is an advantage to have common rules in any of these areas. That is the division between hon. Members but it is not a division between the two sides, because probably as many as half of those who have spoken from the Opposition side have argued in favour of such common rules and recognise that it is in the interests of the regions of this country as much in the interests of the regions of any other.

:Can the right hon. Gentleman give us some examples of the uses of Clause 8 which will be incompatible even with our Treaty obligations at the moment when no common regional policy has been adopted?

:I refer the hon. Member to the provisions of Article 92 of the EEC Treaty. As he knows these were interpreted by a Resolution of the Council of Ministers in October, 1971. Under that the Community is divided into central and peripheral regions and there is a limit on regional aid.

:That has nothing to do with the Clause.

:It is precisely to do with Clause 8 because it is to do with the central areas of the country. There is a limit on regional aid of 20 per cent. of the project cost in the central areas in order to prevent bidding up for mobile projects. The provisions would impose limits upon the amount of aid which could be given in the central areas but they would not apply in the peripheral areas. We have to exercise our powers under Clause 8 in the same way that we have to exercise our powers under many other Acts of Parliament in a way which is consistent with our treaty obligations.

:Is the Minister telling us that if the EEC took exception to all the provisions in Clause 8 the Government would brush aside those objections and that the provisions of the Clause would therefore be brought into operation.

:The hon. Member will know because he was a consistent attender at the Committee proceedings that the Government have substantial powers to assist industry in the regions. As members of the Community we shall have to exercise our powers in a way that is consistent with our treaty obligations. The hon. Member for Craigton asked me for an example of a Community regulation which would limit the assistance which could be given under Clause 8 and I gave him one.

:May I pursue the example a little further? Suppose that assistance to ICL was given under Clause 8—I know that was the Government's original intention but for reasons which have not been adequately explained they will now give it under another Act of Parliament—how is the 20 per cent. to be calculated, because in that case the help related to the particular expenditure being assisted is 100 per cent.?

:The 20 per cent. limitation on assistance in the central areas is imposed across the board upon the generalised grant system. Nothing in that provision would prevent us from giving the assistance to ICL under Clause 8. I can assure the hon. Member that the decision to give that assistance, which was for research and development support, under the Science and Technology Act, 1965 was taken for administrative reasons and not because of the Common Market. The reason is that we believe it will be more convenient to continue to give assistance for research and development under the Act and that as the general principle we should confine the Bill to those areas in which we do not already have powers. Similarly, as my hon. Friend the Under-Secretary said earlier, we shall be using the Tourism Act to support the tourist industry.

I recognise that there are deeply-held differences of opinion on the matter. Those who take the view that it is not in our interest to have a common policy on regional matters, to have common rules among our European partners, will be opposed to entry into the Common Market and will support the new Clauses which are clearly inconsistent with the European Communities Bill.

I believe that a number of hon. Members who have spoken, including the right hon. Member for Birkenhead, the hon. Member for East Stirlingshire (Mr. Douglas), my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne), and my hon. Friends the Members for Hastings and Cirencester and Tewkesbury, have made an extremely strong case for believing that it must be in our national interest and in the interests of any other European country to have such common policies and such common rules.

If there is unlimited bidding up between European countries it cannot be in the interests of any of us. It is not only the bidding up for mobile industries which would cause concern, although, as my hon. Friend the Member for South Angus said, that could be damaging to any region. If unlimited subsidies are given by competing regions in Europe it could damage the effectiveness of the assistance that we give. I do not believe therefore that the balance of argument this afternoon has gone in favour of those who have taken the nationalist line on these matters. Some may argue that they wish for total independence and suggest that they are appalled by the thought that we might have to co-ordinate our regional policies. I hope that, recognising that there is a fundamental difference of opinion on these matters, a difference of opinion which has been reflected in the course of the European Communities Bill, the House will reject these two new Clauses.

:The Minister and his colleagues would have simplified proceedings if he and his colleagues had been a little more candid at the outset about the implications of the European Communities Bill for the Industry Bill. The plain truth is that by a series of questions in Committee and in the House and by the new Clauses we have drawn from Ministers, steadily but reluctantly, a full account of what has really happened.

The fact is that the Government had reached the arrangement with the Commission that Bills would be submitted to the Commission. Now the Minister—and I understand a man in this difficult position—not knowing exactly whether it was discussed with the Commission be fore it was published, or after it was published—and if he wants me to give way so that he can give the answer I will do so—

:I was anxious that I should not inadvertently mislead the House on even a minor detail, but I can now confirm that neither the White Paper nor the Industry Bill was discussed with the Commission before publication.

:Not discussed before publication.

:Or submitted.

:The fact is that if there had not been this cross-examination of Ministers on this matter, the House would never have been aware that a parallel and almost certainly earlier form of consultation was taking place with the Commission before the parliamentary examination.

If we are suspicious, it is because for this Parliament it is the first time in its history that a Minister has come to the House armed with the views of an international body, views which have to be taken seriously, unlike those of EFTA, because, unlike EFTA, which may be disregarded and to which we can just break our word, to use the expression of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), when we are dealing with the Commission, we are dealing with our masters, and that is why we have to take the Commission seriously.

:In view of what the right hon. Gentleman has just said, what was he doing when Mr. Richard Good used to discuss with the Labour Government what they could and could not do?

:If the hon. Gentleman will allow me, I will come to that.

The key to the matter is that Ministers traditionally consult interests, national and international, but the decision is taken by Parliament. What has happened as a result of the Industry Bill, in conjunction with the European Communities Bill, is that the Government consult Parliament, but the decision is taken elsewhere.

:No, no.

:It is no good the right hon. Gentleman saying "No, no"; he has just told the House that the decisions of the Commission will be binding on this country. That is what it is all about. If that were not what it was all about there would be nothing for him to boast about in harmonisation and internationalism and so on. That is the issue.

When he rejected new Clause 1, which was designed for the avoidance of doubt—not that we had much doubt—and the other new Clause, to lay down in respect of the defence of our regional policy that there should be a special procedure, when all that is brushed aside, we know what the truth is, and the truth is that the Minister and his colleagues have agreed that the final decisions will not be taken by him.

The reason that his assurances are valueless to us is that his own legislation removes his own rô1e as the ultimate decision maker in regional policy. It is not a discourtesy to him or to his right hon. Friend to say that their assurances are valueless. Their assurances are valueless, because they are promoting legislation which will mean that they will require the assurance of the Commission. All they are doing is making highly informed and no doubt genuinely helpful attempts to comment on what might happen.

Raising the German case as I did the other day was enormously worthwhile. First, it drew to the attention of the House the fact that inquiries were already going on with the Commission and that the British Government had not been told about them. I asked the Minister why he had not told the House before Third Reading of the European Communities Bill that the Germans had communicated with the Commission, and there was a simple answer—he did not know:he said so in answer to a supplementary question that I put to him.

Now, in a desire to be helpful, which is always their characteristic, the Germans have put our statements saying for the first time Bills are now being discussed with the Commission, but the Government have never told us. That was the second benefit.

Finally, the Germans have told us not to worry, because they would not expect a statement before the recess anyway. They say:

"A detailed reply from the Commission could hardly be expected before the Summer Recess."

The Germans are thus still awaiting a reply from the Commission and whatever the Minister may say about his own expectations of his own marvellous legislation, and every Minister is allowed that, it will not be he who will decide whether the Act is compatible with the Treaty. Neither will he decide whether it may be used in certain cases.

He has told us that the Science and Technology Act, which was designed for some other purpose, is to be the instrument by which the computer industry is to be supported. We have had the Minister's own statement of his intentions and—

:Will my right hon. Friend give way?

:I am thinking about the time of the House.

:I should like my right hon. Friend simply to distinguish between science and technology and real assistance to the regions.

:They all come under the provisions of various Acts, but my hon. Friend will divert me into other channels if he pursues me on that matter.

The computer industry had been supported under the Industrial Expansion Act which in all relevant provisions is the same as the Industry Bill. It was necessary to use Clause 8 because it was general selective assistance not connected with the regions. Clause 8 has had to be timed to expire with the end of the transitional period. The Government were afraid that if they launched on a course of supporting ICL under an expiring Clause in a questionable part of the Bill, they might get into difficulties. I venture to tell the House that in my opinion the change to the Science and Technology Act was made for that reason.

It was astonishing that a Minister should announce £14 million assistance under one Act and then write to the man who had asked the question and say, "I ought to let you know that we have changed the Act under which we are giving support". If that was not connected with the application to join the European Community, I should be very surprised.

It is not a matter of raising fears, but a matter of defending our national rights to control these matters. It is a question of whether regional policy is to be under the control of a Minister accountable to Parliament. The reason why the CBI is not at all worried is that the CBI has an office in Brussels. The CBI does not bother to go to the Minister for it can go to the Commission direct or to the Council of Ministers. As the Secretary of State knows, the NFU has an office in Brussels. Plainly, the CBI will bring pressure to bear on individual Members. as will its counterpart in France, but the real power is to be in Brussels and that is where the CBI and other pressure groups will make their influence felt. This has been brought out very clearly in the statements made by Aims of Industry and others.

:It may be of interest to the right hon. Gentleman if I tell him that I am told that the staff of the CBI office in Brussels is one girl.

:The right hon. Gentleman should not laugh too soon. He knows very well that the NFU has already joined the international organisation of farmers in Brussels. He knows very well that Aims of Industry has announced that it will not be necessary to go to national Ministers, because decisions will be taken elsewhere.

In the course of this week, we have had a major debate about the need to obey the law. When we approach a new law promoted by Parliament, before we assent to it, we had better know how that law is made. If the Government come to the House with a Bill which has been through all its stages—Second Reading, Committee and now Report—and which is to be the law of the land, is that law, which Ministers will say the British people should obey, to be modified by the Commission afterwards without any shred of parliamentary examination?

The whole basis of the social contract upon which our system of government rests is that when we say to somebody "You must obey the law", that statement contains within it the provision that by democratic action he may change the law. If the Government now say that in respect of regional policy—which touches the lives, jobs and prospects of millions of our people—they may not be able to relieve the anxieties of our people because the Commission does not permit it, they are changing by that one process the whole basis of the social contract.

Regional policy has not traditionally been thought up by kind and generous Ministers. Although Ministers of all parties are human, and are concerned with human suffering, regional policy is a product of pressure from people who find themselves oppressed by unemployment; and that pressure produces a Government response. Why did the right hon. Gentleman change his "lame duck" policy? It was because the pressure from the people afflicted by it was so great that in the end the right hon. Gentleman's Cabinet colleagues said "We shall never win another election, Mr. Secretary of State, if you go on with Upper Clyde and all those policies."

Why does the House think that the Jones-Aldington Report has been produced on the dot? It was because the pressure of the people affected by unemployment produced a change of policy. I go further. Why does the House think that the Labour Government changed their minds on many matters, other than because they tried to learn from their own mistakes? [Laughter.] I warn the House not to giggle at the idea that we in this place are subject to pressure to which we try to respond in the development of our policy. If the House laughs at the idea that Ministers may listen to their constituents—[Interruption.] That is what the House is laughing at. The House is laughing at the idea that any Cabinet might change its mind because of public pressure. Yet time and time again Governments have produced policies to meet problems of unempioyment in the regions in connection with the docks, the railways, the mines and everywhere else. That is what the democratic process is about.

If we introduce into that cycle of pressure and response a wholly undemocratic element—an unelected element—in the shape of the Commission, we are fundamentally changing the relationship between Parliament and the people, and when the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) says that the straight and narrow path of competition must be preserved, and we had better have it done by somebody outside if the British Parliament is too weak to

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

:With this new Clause we might conveniently discuss the following Amendments:

:The new Clause and the associated Amendments are intended to re-establish a job creation criterion at the discretion of the Minister. We on this side have always maintained—we are glad that we now have the Government's active support for this—that the investment grant system was beneficial because it was predictable; because it gave direct aid to cash flow, particularly to firms in cyclical industries; because it could be counter-cyclical, by using variations in the rates at the correct time in the cycle, as we did in 1966; and because it is particularly suitable for long-lead industries.

:I find myself very much in agreement with almost everything that the hon. Member for Swansea, West (Mr. Alan Williams) had to say, although I shall come to a point where I think it will be demonstrated that his words this afternoon did not bear all that lose relationship with those of his own Administration. But that is not the first time. What I can say in general on his remarks is that I found myself very much in agreement with him, and I can well contemplate the desirability of supporting his new Clause in the Lobby. At the same time, I confess that I infinitely prefer Amendments Nos. 7 and 19, in the names of my hon. Friends and myself, to the new Clause itself.

I do not understand what the Clause means. I do not think that the hon. Gentleman understands it either, because he did not attempt to explain it. I can only think that it is an example of the brilliant and dynamic draftsmanship of the right hon. Gentleman the "Grand Communicator" in one of his Tolpuddle Martyrs performances. I rather wish that the right hon. Gentleman were here to tell us what he meant, because the meaning of the Clause does not exactly leap from the pages of the Notice Paper. That is a further reason for my preferring our Amendments.

The wording of our two Amendments, as my right hon. Friends will recognise, comes straightforwardly from the Local Employment Acts. Having read the Official Report of the Committee stage, I am still not very clear why my right hon. Friends should have decided that this was an opportune moment to remove the employment linkage of those Acts. My right hon. Friend the Minister for Industrial Development advanced, as I suggest, two main arguments for removing the employment link.

My right hon. Friend's first argument was the need to achieve immediacy and automaticity—if I can use some rather dreadful words at this hour of the day. He said that under the Local Employment Acts procedures there were terrible delays and that people were left wondering what was to happen. I know that there were lots of complaints of delay—that is indisputable—but I always thought from what I saw in my own area that they were somewhat exaggerated. The fact is that when people are expected to obtain substantial quantities of taxpayer resources it is inevitable that some careful scrutiny should be given to the way in which those taxpayer resources are to be used. So I do not think that we should carp too seriously at a certain amount of delay to enable proper scrutiny procedures to be carried through.

I argue that this applies with even greater force to Clause 7 than it does to Part I, and that brings me to the other distinction between the new Clause and our Amendments, in that our Amendments refer not only to Part I but to Clause 7. It is very desirable that the employment linkage should apply also in the case of Clause 7.

The second argument which my right hon. Friend advanced in Committee related to modernisation, to which the hon. Gentleman did not refer, although it is important, and is an argument which arguably has some merit. The point is that it is desirable on occasion that the Government should be able to assist firms in undertaking modernisation projects even when those projects do not involve any job creation but will, in the long term, safeguard jobs that might otherwise disappear.

There may be some merit in that case. On the other hand, I have not forgotten listening to the chairman of a substantial firm in my part of Scotland—a stauch supporter of the party opposite, by the way—when he explained how his company had undertaken a modernisation programme with investment costing £1 million. He said:"We would never have been able to go through with this without investment grants. That is why we want them back." His allegiance to investment grants was entirely right and proper in the light of his political allegiance. But he followed this up by saying. "It is perfectly true that as a result of this £1 million investment programme we are not employing any more people. In fact, we are employing fewer people."

I ask my hon. Friend and the House whether it is a very good use of taxpayers' resources to provide perhaps very substantial assistance to investment programmes calculated to reduce employment in areas which are suffering from high unemployment. That does not seem to be entirely logical.

Nevertheless, I accept the argument advanced by my right hon. Friend about how modernisation programmes may, in the long term, save jobs. But, apart from the question mark about the desirability of providing taxpayer assistance in order to have the end result of reducing employment in an area of high unemployment, there is the point that most of the evidence we have had, which at this stage I shall not go over in detail, is that on the whole the impact of all forms of investment incentive on investment decisions by industry is minimal in the extreme.

Those firms which can benefit from modernisation programmes of investment will be likely to undertake them regardless of whether they get investment grants. So we shall not forgo investment in these instances by saying that they would not qualify for investment grants or selective assistance, because not only do they not create additional employment but they actually diminish it.

There are some firms which ought to modernise and which do not do so. They put employment in their industries at risk as a result. Equally, on the basis of our past experience, I do not believe that they will be encouraged to undertake modernisation and investment, which they would otherwise be disinclined to undertake, by the existence of investment grants or selective assistance under Clause 7.