§ 3.6 p.m.
§ Order of the Day for the Second Reading read.
§ THE MINISTER OF STATE, BOARD OF TRADE (LORD DERWENT)
My Lords, I beg to move that this Bill be read a second time. This is a Money Bill, and I shall, as briefly as I can, explain the reason why we are introducing this Bill and give a short description of the Bill. The purpose of the Bill is to amend and enlarge the provisions of the Local Employment Act, 1960. The object of that Act, as its Long Title shows, is to promote employment in places where high and persistent unemployment exists or is threatened. The object is not to prevent migration from those areas, or to encourage growth points, though indirectly the exercise of the Board of Trade's powers under the Act may help both these objectives by making the areas they help more attractive places in which to live and work.
This Bill does not seek to change or redefine the areas in which assistance may be given, or the criteria for determining them. Nor does the Bill change the basic form of the principal benefits available to persons providing employment in development districts, as the areas of high unemployment are called. The three most important facilities available under the 1960 Act are, first, financial assistance for the general purposes of an undertaking; secondly, the provision by the Board of Trade of factories for leasing or sale on favourable terms; and, thirdly, grants for persons putting up their own buildings, towards the cost thereof. No change is proposed in regard to the first two of these facilities, which are probably the two most important. What the Government seek to do by this Bill is, first, to amend the method of calculating the building grant for firms providing their own premises; and, secondly, to introduce a new grant towards the cost of plant and machinery.
It will be convenient to deal first with the second of these provisions since it is expressed in Clause 1 of the Bill. Clause 1 empowers the Board of Trade, with the consent of the Treasury, to make grants to industrial undertakings towards the cost of equipping those 383 undertakings with machinery or plant. This power, like all the others, may be used only for the purposes of the principal Act, the 1960 Act—namely, to provide employment. It is, therefore, not available for the replacement of existing plant and machinery unless the applicant can show that in default of replacement he would be forced to dismiss part of his existing labour force. The grant is fixed at 10 per cent. of the cost of acquiring and installing the machinery and it may be made on expenditure incurred (that is, contracts entered into) on or after April 3, the date of the Chancellor of the Exchequer's announcement in his Budget statement of these facilities.
Unlike the other benefits provided by the principal Act, which are available to non-industrial undertakings such as hotels, offices and shops, the plant and machinery grant is limited to industrial undertakings. This limits the scope for abuse since many of the items required for commercial undertakings and capable of being described as "plant"—for example, hotel beds, office furniture, cash registers—are very easily moved. It is proposed also, with a view to avoiding abuse, to exclude by administrative action items such as vehicles and certain types of office machinery which could readily be moved outside the development district. Subsection (2) of Clause 1 provides that the Board may make a grant where they consider it expedient to do so and, as a matter of expediency, such items will be excluded; that is, those items easily moved. The limitation to industrial undertakings and the exclusion of readily movable items are in line with the limitations that will apply to the "free depreciation" scheme for plant and machinery also announced by the Chancellor.
Subsection (2) requires the Board, in making a grant, to impose conditions for securing that the machinery or plant will continue to serve the purposes of the Act. The intention is to avoid the taxpayers' money from being used to help the purchase of plant and machinery which will not go to provide employment in developing districts. The method of securing this end will be to require repayment of the grant in whole or in part if the plant and machinery 384 for which it was given ceases to be used for the purpose specified.
Clause 2 of the Bill alters the existing provision for calculating the building grant available to firms putting up their own building. At present, under the principal Act, the grant is fixed at 85 per cent. of the difference between the cost of putting up a building of the size required by the applicant and reasonably suitable for his purposes, and the value of such a building on sale in the open market. What is done in practice is that the Ministry of Public Building and Works estimate the cost of the kind of building required in the light of plans and specifications produced by the applicant, and the district valuer assesses the market value of this hypothetical building. The intention behind this rather complex provision was to give the owner of a factory an initial grant roughly corresponding to the benefit that a tenant of a Board of Trade factory gets from the favourable rentals (based also on current market values) on which these factories are let. But the present formula suffers the disadvantage that a prospective employer has no idea at the outset how much he will get. Moreover, the grants have tended to vary widely between one place an another and on average to work out rather lower than might be expected—about one-sixth of the building cost.
The Government, therefore, propose to substitute for this complex formula, which has proved so uncertain in its outcome, a standard grant of 25 per cent. of the actual cost of the building, excluding unnecessary or extravagant items. This will mean a substantially higher average grant that has hitherto been paid and, more important, one which the prospective employer will know from the start will cover a quarter of his reasonable building costs. The grant will be available for extensions and for adaptations of existing buildings, as well as for new buildings. Buildings are defined as including structures, so that developments such as docks will be eligible to be considered. The new method of calculation will be applied in all cases where an offer had not been made before April 3.
These, then, are the two main provisions of the Bill. They are designed to increase the attractiveness of the benefits available. The Government's view is 385 that the Local Employment Act has been a successful instrument for promoting their policy. In times when the economy is not expanding, neither these inducements nor any others would be effective to promote employment or arrest unemployment. But in times when the economy is more buoyant, experience has shown that the inducements are both adequate and appropriate to meet the need. The evidence for this is that, in the first two years of the operation of the Act, over £65 million was offered to provide 63,000 jobs. It is the Government's view that these two fixed grants, of 25 per cent. on buildings and 10 per cent. on plant and machinery, will do a great deal to assist the Board of Trade's steering of new industry to the development districts and will also stimulate the expansion of firms already in these districts.
The only other clause in the Bill to which reference need be made is Clause 3. This clause extends a provision in the 1960 Act, which enabled the Board of Trade to complete work in progress at the time when a locality ceased to be a development district. The amendment will enable the Board also to proceed where work had not yet begun at that time but where an agreement had been entered into. Thus where the Board have agreed with a firm to build a factory for them but have not been able to start work—possibly because of delay in acquiring the site—at the relevant date, they will no longer be precluded from carrying out their agreement. That, briefly, is the purpose of the Bill and why we have thought it necessary to bring it in. I will do my best to answer any questions which noble Lords may have to ask when I wind up. I beg to move that the Bill be now read a second lime.
§ Moved, That the Bill be now read 2a.—(Lord Derwent.)
§ 3.17 p.m.
§ LORD SHEPHERD
My Lords, we are grateful to the Minister for the detailed and comprehensive way in which he has introduced this Bill. We, on this side of the House, give the Bill a cool welcome. Certainly we must give it a welcome, if it is an instrument to deal with high and persistent unemployment. Our coolness towards it is due to the fact that over the years we have seen this cancer in our society growing, we have seen industries decline, while the Government have 386 failed to note those trends and take appropriate action.
We would suggest to the Government that, before this Bill, they had full powers which they could have used. For instance, they inherited the 1945 Act which, I would remind the noble Lord, Lord Derwent, we brought in as a permanent measure and not as a temporary one, as the Government introduced their 1900 Act and now this Bill. The Government have failed to use the industrial development certificates, and as a result we hear in the newspapers the slogan of "Two nations"—the rich in the South and the impoverished in the North. That is one of the reasons for our coolness towards this Bill.
Looking at the Bill itself, I am sure that the noble Lord, Lord Derwent, will agree that it is limited in time. It will die, with its parent Act, in 1967. I do not believe that the noble Lord will be courageous enough to say that the problem of unemployment in the North Fast of England or in Scotland will have been satisfacorily dealt with by that time. Last winter, we had 900,000 men and women unemployed, and if we look at the number of women who might have been working if work had been available, the figure would be considerably higher. We accept that during the past winter, over and above the usual seasonal problems, we had abnormal weather. But we attacked the Government and the former Chancellor of the Exchequer's financial policy, which must have played a considerable part in slowing down production and development.
With the summer, we have seen a satisfactory fall in unemployment. We hope that that will continue, but I think that it is well to remember that the unemployment figure of to-day is the highest for this time of year since the war. I would suggest to the noble Lord that perhaps now we are reaching the hard core of unemployment, the high and persistent unemployment, of which the noble Lord spoke. The real task of the Government is to reduce this.
On June 10, we were given the figure of 479,000 unemployed. I think the noble Lord would agree that about 300,000 will be found in the North-East, Wales and Northern Ireland. I would ask the noble Lord to consider particularly the position in Scotland, where there are 94,832 387 unemployed. To me the most significant thing is that 92,600 of them are to be found in the narrow pocket of the development areas. The noble Lord claimed that the 1960 Act has provided jobs for 63,000. I ask him to consider the effect of that Act in Scotland. In North Lanarkshire, in 1960, there were 8,000 unemployed. In June, 1963, that figure had increased to 12,000. In Glasgow, there were 26,000 unemployed in 1960 and this has increased to 39,000 in June of this year. In the small town of Dunfermline, the number of unemployed over the same period has increased from 2,000 to 3.000.
I criticised earlier the use of the Government's powers. During this period we have seen in South-East England a growth of the trend that has been evident ever since 1950, while there has been this growing unemployment in Scotland, North-East England, Wales and Northern Ireland. Because the Government have failed to use the certificate properly, we have seen this big increase in working space in London. I think the noble Lord, Lord Derwent, will agree that we are still building offices in central London; and merely those offices that are now in course of building or are planned and approved will facilitate another 80,000 jobs in Central London. Surely, if the Government had been able to use the 1960 Act and the certificates, many of these opportunities could have been placed in the development area. Not all the clerical assistance has to be found in London. We see many boys and girls in Scotland, who have received as good an education as you will find anywhere in the world, being forced to come South for work.
I now turn to the Bill. I certainly welcome the prospect of a 10 per cent. grant on machinery and a 25 per cent. grant for new buildings, but I do not believe this inducement will prove its worth unless the Government use their certificate powers more ruthlessly; and if there is to be greater effect in these particular areas, they must consider the matter of flexibility in regard to the grants. It is a fact that you can build an oil refinery and receive a 25 per cent. grant upon it, and 10 per cent. on its machinery, and this would involve the Exchequer in a considerable sum of money. But that 388 type of industry may produce work for perhaps only 200 or 300 local people. I would suggest that the Government should consider whether they could not give bigger grants to the type of industry which employs a large labour force.
When I was speaking of oil I had in mind particularly the question of coal used for the generation of electricity. I believe there is to be in Scotland (it has just been approved) a new generating plant, which will not receive any grant because it is for a nationalised corporation. But this power station will give employment to nearly 11,000 people. I think the Government must approach this matter with some flexibility. They must ensure, when they are making grants available, that they will be used, so far as possible, on those industries that will provide the largest labour force. This Bill is not to give money to private industry. This money is solely and simply to provide an inducement to industry to go to these development areas.
I would put this point to the noble Lord, Lord Derwent. In the old days these areas were called the distressed areas. I think that, with the Government approach to them to-day, when it is based merely on the percentage of unemployment—4.5 per cent., I think, is the figure—we are still regarding them as distressed areas. We are acting only because there is heavy distress and heavy unemployment. We have debated in this House many times the abnormal population growth in South-East England, and the denuding of Scotland and Wales of their populations. We have seen a heavy migration from North-East England. I suggest to the Government that, if we are to regard these areas as distressed areas, we should classify them as such, not solely on the basis of unemployment but because migration from a particular area is obviously denuding it of its working population.
I have in mind that the Government should endeavour to see that our working population is spread, so far as possible—obviously, not evenly—where work and industry can most effectively and efficiently be done. It cannot be that industry is efficient only in the South. It can be as efficient in the North, particularly if we can persuade the Government to see that the North has a transport system. I suggest to 389 the noble Lord that what we must try to do is to anticipate the decline in industry in a particular area. As soon as we see that an industry is declining, and that it is having a marked effect upon the society of the district, the area should be regarded as a development area, and the Government should then use what powers they wish to take to ensure that it keeps its working population—these dynamic societies, which I believe do exist—and let it flourish. I do not suggest that, in order to do this, we should have the standard rates which the Government give in this Bill, and you may decide to give them a lower rate. But I think the noble Lord will agree with me that what we must try to arrest are the heavy migrations which are taking place, particularly of those in the age group of 19 to 40. We cannot leave all these areas denuded of population.
One of the matters which have always given me concern is having these problems in which two or three Ministries are interested and have a responsibility. In this particular case the Ministry of Labour and the Board of Trade are concerned. The Government recognised this, perhaps, when they appointed the noble Viscount the Leader of the House to take special responsibility for North-East England. I wonder whether the noble Lord, Lord Derwent, can say whether there is an intelligence department combining the Board of Trade and the Ministry of Labour, which, when industries are declining—and they will see this from their own trade figures—and there is an adverse impact on local employment which would be obvious to the Ministry of Labour, can assess these trends, analyse the causes, and then make recommendations to the appropriate Minister for action. I suggest to the noble Lord that in future we do not wish merely to have legislation as a stop-gap to deal with a distressing position. What we must try to do is to anticipate these occurrences, because it is a good deal easier to deal with a problem as it begins to appear rather than when its full effect is felt. I am sure it would be in the interests of all if this looking into the future were undertaken by the Department.
With regard to the Bill, I hope that the Government will consider the advance that they made in another place in their attitude towards the nationalised industries. 390 In the first instance, on Second Reading the Government took the view that a nationalised industry, if it went into a development area, would not receive a grant. The Government have been saying for many months, if not years, that our nationalised industries must operate on a commercial basis. Many of these industries are competing with private industry. I would suggest that if that is the attitude of the Government, they should treat the nationalised industries on a commercial basis; and if they should decide to go, or could be persuaded, into the development areas, then the benefits of legislation should be available to them as much as to private industry.
In industry you have the fringe benefits: in coal you can have your chemicals. It might well be that the Coal Board could encourage an association of public and private capital for a particular chemical development in industry alongside a coal pit. As I see it, the Government might permit a grant to be made because they considered that the question of choice would arise. There are many respects in which industry will have a choice; but in the end, when a decision has to be made, the choice is easy to make because it is so obvious. In the case of a private industry that is in the development area and wishes to expand, it may have no choice but to expand there; and, therefore, according to the Bill they would receive a grant—and I am glad that they will. Surely, if a nationalised industry is already in the development area, and then decides to develop that particular part of their organisation in the development area, they are entitled to receive the same consideration as private industry.
It is true that nationalised industry receives its funds from public grants. But they have to pay the market rate. So far as I clan see, the nationalised industries do not receive any special consideration in regard to financial interest. Therefore, if the Government believe that the nationalised industries must pay, I would suggest that they should be permitted to enjoy the same benefits and inducements, because in this case the nationalised industries can be very big employers of labour.
My last point is this. I should like to see those local authorities in the distressed areas playing a bigger part in bringing 391 work to their areas. In North-East England a number of local authorities have got together and are supporting the development corporation under our friend George Chetwynd, and are doing a wonderful job. But if these local authorities were to act independently they might receive a grant (I think I am right) if they built the factory themselves and sold it. But if they can only get a tenant to rent it, then no grant will be available. I suggest that this is tying the hands of the local authorities too much. I believe that there will be a bigger inducement to industry to go to an area if tailor-made factories are available. Surely that is one of the reasons why the Government themselves, under the 1960 Act, are providing ready-made factories for industry. If local authorities could be encouraged to play their part, they could do a great deal to provide industry in their neighbourhood.
We give this Bill a cool welcome. It was described in another place as rather a puny instrument. I think it could be something more than that if the Government would, first of all, really prosecute and put their full energies behind this Bill; if they would see that these provisions are widely known; and if, when applications are made to them they will expedite the inquiries and make their decision as quickly as possible. This is one of the main criticisms I have heard in industry in relation to the 1960 Act. Above all else, this Bill is merely an inducement. The attractions of South-East England are still far too great, and the Government must try to put a curb upon South-East development and induce industrialists to go to these areas where, I fear, these unemployed are very much on our conscience.
§ 3.36 p.m.
§ LORD SHACKLETON
My Lords, the noble Lord, Lord Derwent, will perhaps be surprised that the Bill did not receive a warmer welcome from my noble friend. Frankly, I thought he was rather kind to the Government. But we really are very tired of urging the Government year after year to take certain action, instead of waiting until it reaches crisis point, and then producing a Bill the effect of which, in my opinion, is bound to be very slight indeed. I must, in fairness, admit that it has to be read alongside the other provisions in the Budget, and 392 we shall have a chance to discuss them on the Finance Bill. But it really is a feeble Bill. In the noble Lord's own words, the grants that have been running hitherto at an average rate of 17 per cent. of buildings will now rise to 25 per cent.
This is our complaint. In the past the Government had powers inherited from the Labour Government, and they had powers which they took under the 1960 Act and, one way or another, because of their general lack of philosophy in regard to planning, they have failed to produce results. It may well be that as "Neddy" begins to influence the Government—not that they will have long to make use of this influence—some improvements will take place. They have produced a confused measure, and some of the things they have said are confused. The noble Lord said that 65,000 people had obtained jobs (I may have misunderstood him) under the 1960 Act. In another place the President said 80,000. I do not know which figure is correct. Perhaps the Government can at least get this sum right.
Then the noble Lord indicated that certain of these provisions will apply only to industrial undertakings. Of course, under the 1960 Act industrial undertakings are widely defined. I imagine that somebody who runs a bacon-packing room is probably an industrial undertaking. I did not quite understand the noble Lord when he said that by administrative action grants for machinery will be limited to machinery that cannot be taken away. Is there to be a regulation made to this effect? When he talks about industrial undertakings, would not a computer rank for this grant; or does he reckon you can pick up a computer and walk away with it?
I hope that the Government will make it clear that benefits under this Bill will be extended to office buildings. One of the most important sources of employment in the North-East has been the big office development under the Ministry of National Insurance. I should hope that any form of activity of that kind will benefit, as I understand it will, at least from the building grants. We had hoped that when the noble Viscount, Lord Hailsham, took over the North-East we should see (and I rather thought, from what he said, that we were going to 393 see) some change in the fundamental geographical provisions of the Local Employment Act. I would repeat again that it is an absurdity that one side of the Tyne should benefit from this Act, and the other side should not.
§ THE LORD PRESIDENT OF THE COUNCIL AND MINISTER FOR SCIENCE (VISCOUNT HAILSHAM)
My Lords, the noble Lord evidently has not noticed that the whole of Tyneside, North and South, has been designated.
§ LORD SHACKLETON
My Lords, I had not noticed it, and I congratulate the noble Viscount. Of course, there are still other areas where there is this kind of distinction. But this is at last an advance towards what we were wanting, which is a return rather more to the concept of the development region rather than the small area.
There is only one other point I would make in relation to this Bill, although we cannot do very much about it as it is a Money Bill. There are other parts of the economy that are declining at the moment about which the Government are doing nothing and to which I wish the noble Lord would turn his energies. I also wish that we E ad some Minister like the noble Viscount who was really looking at areas of decay in this country and would produce something which is both specialised to meet local needs and sufficiently all-embracing as part of a national plan. One example, and a tragic one, is the decline of the shellfish industry in Cornwall. It cannot come under this Bill but, in fact, it is dying away and we are losing human resources which are important. We do not believe that the Government are serious in their determination to find fundamental solutions to the national ill, and I am only thankful again to repeat that I believe they will not for long be in a position to go on failing to do their duty.
§ 3.41 p.m.
§ LORD LAWSON
My Lords, I intend to say pretty much the same as my noble friend Lord Shepherd has said, which has been emphasised by the previous speaker. I also appreciate the fact that the noble Viscount the Leader of the House has given a good deal of time to going back and forth to the North and discussing ways and means of trying to meet this situation in one way or another. 394 It was my intention to say "thank you" for the Bill, but it will do nothing effective so far as the situation with which we are faced is concerned. There has been a revolution in the mining industry that has scarcely any parallel, and the sooner that is realised the better it will be for the communities that have helped to keep the mining industries going in the past. With the advent of coal-cutting machines—as will be known by anybody who has seen them and understands what they do—any Government might well look out for the kind of thing that is going to happen in the future, because this is one of the most striking inventions in the cutting of coal that there has ever been. It really is difficult for your Lordships or anybody outside the mining industry to understand what has happened, but I myself think that, having got to the stage of cutting coal mechanically, any advance in industry is possible.
I remember standing beside a coal wall in a mine with nothing but a bare roof overhead. It looked as solid as anything one could imagine, but suddenly it came down and missed me by the thickness of a sixpence. A man sitting close to me shouted, "By God! Jack's gone". I say that, when we have mechanical coal cutting in the mines, the Government had better make up their mind that it is more than a mere addition to what they are giving those who are asking for money.
A very striking thing is that these mining communities are now moribund. All round my home for an area of about 20 miles, from Newcastle to Consett, I should say that three-quarters of the mines have been closed. That is the situation with which we are faced in that area and also in Scotland, and it is going to take a long time to solve a problem of that kind. But there are immediate repercussions. After examinations in the County of Durham, I was given a paper showing that there are about 2,000 young people there out of work. They are boys and girls with a college standard of education. Some of them have been to see me. What are they asking me for? They ask `me for some small post under the council, or something of that kind. Boys and girls are losing the opportunity of a career and are going down to a mere pen job; that is about all. Let the Government understand that something worse than a mere 395 change in the mines is happening. Communities are changing, and I want to say that they are changing not only in Durham and Northumberland but right through up to Scotland; and if the situation is not met in some more direct way by the changing of the course of industry—for example, by the diversion of factories to those areas—the situation will become worse. It cannot be met by finance in the way the Government are trying to meet it, generous as I thought their efforts were in that direction.
I do not wish to take too long on this matter, but, as noble Lords and everyone else knows, I was practically born into the mining industry. It was heavy work, but I never bothered very much about it. I am glad that I have seen the hours reduced, for when I had my first twelve years in the mines I worked ten hours a day. But there is something to be done more necessary than that. We must extend industry to the North and to Scotland. I had the honour of being Lord Lieutenant of my County for something like ten years, and during that time I opened several factories. I opened a factory one day in the West of Durham at a place called A[...]field Plain. A great mass of employers, of businessmen, went from this part of the world to take part in the opening, and as they looked round the country I well remember one saying, "This is beautiful country. I never knew it was like this". The story among businessmen generally is that both the North and Scotland have nothing.
So I say it is time that the Government were facing up to this new industrial revolution. It is a bigger thing than apparently they dream of, and if it is not dealt with quickly in some way, particularly by the diversion of industry, and in other ways too, there are going to be sad communities in this country from one end to the other. I beg the Government to give serious consideration to the revolution that is taking place.
§ 3.52 p.m.
§ LORD DERWENT
My Lords, as I said at the beginning, I will attempt to answer noble Lords' questions, but I must confine myself to answering the questions that had to do with this Bill. The cool welcome given by the noble Lord, Lord Shepherd, was not quite as 396 cool as he said it was going to be. The coolness seemed to be on two grounds particularly; first of all, that this was not a major Bill. I never pretended it was. I said it would help the original Act of 1960 to do what we wanted, and I think it will have that effect. The other complaint he had was that this Bill was going to come to an end at the same time as the 1960 Act. The 1960 Act was deliberately given a seven-year life in order that Parliament should, in effect, be compelled to have another look at the problem after the 1960 Act had had a reasonable time to operate and there had been opportunity to see how it was working. The 1945 Act, I would remind the noble Lord, was allowed to go on for fifteen years, and things changed so rapidly that many of the provisions of that Act by the end of fifteen years were out of date. So this short-term policy in this connection is quite deliberate.
There was one other point he mentioned, which does not come into the Bill but he particularly referred to it. He said we were not operating industrial development certificates satisfactorily. Nobody seems very pleased, except, of course, those areas when they get new businesses; but we are told every day by various industries and firms that we are being much too tough, whereas the noble Lord says we are much too lenient. So I think it must be working rather well.
I will take note of various other things he said that are important but do not directly apply here. He mentioned oil companies and refineries which might not give much employment. No industry or project is going to get these grants unless it gives employment. Employment is the basis of the 1960 Act. I would add this. I apologise to my noble friend Lord Conesford for using a revolting phrase, but it has been in force for three or four years and it is too late to do anything about it: I refer to what are called "capital intensive projects", such as oil refineries. When one is considering whether to give these grants there are two things to be considered, and one of them is cost per job, as the noble Lord knows. Under this Bill, as under the 397 original Bill, the requirement to have regard to the cost per job would apply, but in the overwhelming majority of cases will not preclude us from making grants. It may well preclude us, however, from making grants in capital intensive projects. That is the basis of what the noble Lord was saying, and I thought I had better explain what the actual position was.
He raised the important point whether there was sufficient contact between the Board of Trade and the Ministry of Labour as regards what is happening in a particular area. I believe it to be adequate, because it is not a matter only of the Ministries in London; this happens in the regions and the regional officers of the Board of Trade and the Ministry of Labour are in almost daily contact. I think there is, from top to bottom, communication between the two Ministries which is very close—much closer than between most Ministries.
§ LORD SHEPHERD
My Lords, does it not follow, therefore, that when we have these declining industries their decline does not come as a great shock to the Government; but they merely failed to take note of it?
§ LORD DERWENT
Naturally decline in industry causes great shock. We were aware of it, but any action taken takes time to operate, and it is now operating. It is not that we were caught unawares.
May I say a word about nationalised industry, which the noble Lord also mentioned? It is an odd phrase to use, but I think this is the situation: they are eligible as "persons". We should not pay a grant to a nationalised industry where the project is undertaken as part of a statutory duty, as for instance, in the case of a new telephone exchange. But we should pay where there was a genuine choice of location, as with other industries. Where there was a choice and they went to one of these areas they would be treated as other industries.
§ LORD SHEPHERD
My Lords, if the Central Electricity Board were considering 398 setting up a generator which could be put in an area outside the particular development area but decided to move a matter of twenty or thirty miles into the development area, would they then rank for the grant?
§ LORD DERWENT
I cannot give an absolute affirmation that in every particular case that would be so, but it might well be so and probably would be so. One cannot give a closer answer until one sees the actual project. They would be eligible in the right circumstances.
The noble Lord also raised a question about local authorities. Grants would not be payable to the local authorities because they would not be providing the employment, but a purchaser of a factory from a local authority, provided the factory was not completed, would be entitled to the grant, and so better able to pay the local authority's price. The point is that a local authority would not be providing employment, and the rules are that it must be providing employment. In fact this has worked in many cases—in the case of development corporations and New Towns and so on. It is no good the noble Lord shaking his head, because it does in fact work.
Those were the only questions raised by the noble Lord directly connected with this Bill. The noble Lord, Lord Shackle-ton, made a fine electioneering speech, but I think he asked only one question dealing with the Bill. He did not understand what I said about certain types of office machinery. Grants will not be given for office equipment if it is easily movable. If it is not easily movable, as suggested by the noble Lord, the grant may be given. But if it is removed and therefore not used in the employment area for which the grant was given, then either the whole or part of the grant will be repayable. One cannot give a sweeping answer. Each case is taken on its merits. But that is the position; that will be arranged by administrative regulations. I think I have answered all questions dealing with the Bill.
§ On Question, Bill read 2a; Committee negatived.