Confidential report from Frederick H. Boland to Seán Nunan (Dublin)
'The British Government and Six County Unemployment'
(Confidential) (Copy)

The vigorous efforts which the Stormont Government is making to obtain British assistance towards the solution of the unemployment problem in the Six Counties have a considerable interest from our point of view. They involve the question how far the British government is prepared to go towards keeping the Six Counties economically viable and preventing the existing position as regards Partition being undermined by economic stagnation and unrest.

2. The authorities at Stormont have been working on this problem indefatigably for the past year or more. Lord Brookeborough, Mr. Brian Magennis and other Ministers have paid frequent visits to London to urge their demands on the British Cabinet. Stormont ministers have had several conferences with the Ulster Unionist members in the House of Commons to ‘brief’ them on the problem. The question of Six County unemployment has been brought up in debate in the House of Commons four or five times within the last twelve months. British ministers have been persuaded to visit the Six Counties to study the position on the spot. Some months ago, Lord Brookeborough came over to the annual meeting of the Junior Chambers of Commerce of Great Britain at Harrogate to urge British industrialists to consider the advantages of the Six Counties as a site for their new factories, and shortly afterwards he came over again to a joint meeting of all the Ulster Associations in Great Britain to ask their members to help in the campaign to bring British industries to the Six County area as a means of easing the growing unemployment. (Incidentally, neither of these speeches received any publicity in the British press). On top of all this activity, there has been the recent visit to the Six Counties of a Labour Party delegation comprising Messrs. Robens,¹ Bottomley² and Callaghan.³ No doubt, the primary aim of the proposals which the delegation has since made was to advance British Labour party interests in the Six Counties by highlighting the failures of the Unionist administration; but the general verdict here is that, by stressing the seriousness of the Six County unemployment problem and the need to do something about it, they have wittingly or unwittingly rendered useful service to the Stormont régime.
3. The opinion here among people familiar with the subject is that while the present level of unemployment in the Six Counties is only high by reference to the very small percentage of unemployment in England, the future outlook is anything but good. The Six County economy depends very largely on three main activities — agriculture, the linen industry and shipbuilding. Although Six County farmers are prosperous, employment in agriculture in the Six Counties has declined and is still falling. In his speech at Harrogate, Lord Brookeborough attributed this to increased mechanisation, but the fact is undisputed. The linen industry — like the textile industries in Britain — has certainly seen its best day. In March of this year, 8,000 of the linen looms in the North — over 30% of the total — were idle and the resultant unemployment, in the linen industry itself and in the related bleaching, hem-stitching and other industries, was estimated by an Ulster Unionist member in the House of Commons at 14,000 workers. This being the position at the height of a British export boom, the chances of any substantial improvement in future are slight; indeed, the likelihood of the position getting worse is very real. As regards shipbuilding, the Belfast yards can scarcely hope to fare better than the British shipbuilding industry as a whole, and the outlook for British shipbuilding is already causing serious concern here. The post-war construction boom is over; new launchings already show a decline; within the last nine months cancellations have exceeded new orders, and current order-books are now very considerably shorter than they were twelve months ago. So far as her basic industries are concerned, therefore, the Six Counties have little ground for complacency or optimism about the future.
4. The Six Counties, however, rank as a development area for the purposes of the British Government’s distribution of industry policy, and under the Industries Development (Northern Ireland) Act, 1945, the Ministry of Commerce in Belfast acts as the agent of the Board of Trade in carrying out the policy in the Six County area, the necessary finance being provided directly or indirectly by the British Exchequer. The policy, which so far as Britain is concerned is enshrined in the Distribution of Industry Acts 1945 and 1950, enables the Board of Trade to build factories in areas of special unemployment for letting to suitable industries; it also enables the Treasury to make loans or grants to undertakings which are unable to obtain finance through normal channels. In Britain, the policy tends in practice to be confined to the building and letting of factories at rents varying from about 1/6 to 4/- a square foot. But the Six County government have carried the policy much further in their own area. Under legislation passed at Stormont, new industries establishing themselves in the Six Counties are offered — at the cost of the Six County Exchequer, although ultimately, no doubt, at the expense of the British taxpayers — a whole series of additional inducements varying from the remission of rates to grants in respect of new plant and subsidies on the price of coal. The Six Counties have undoubtedly derived great advantage from this policy. Thanks to it, a considerable number of new industries, some of them highly successful, have been established in the North since the war. The policy has done a good deal to ease the unemployment problem in the industrial areas in the North, where it was particularly severe because people don’t emigrate so readily from these districts as they do from rural areas. Beneficial as the policy has been, however, it obviously hasn’t gone far enough to cure the basic weaknesses in the Six County economy. If it had, the government at Stormont would hardly be as clamorous about their unemployment difficulties as they are today.
5. It is clear that the present efforts of Lord Brookeborough and his colleagues are principally directed towards two principal objects, viz. to secure more co-operation from the British Government towards attracting new industries to the Six Counties and to obtain financial aid from the British Government, either directly or through British Railways, towards off-setting the handicap in respect of freight charges to which manufacturing industry in the Six Counties is subject as compared with its competitors in Great Britain. There are subsidiary efforts — efforts to obtain more Government contracts for Six County industries, to obtain more Admiralty orders for Belfast yards, etc. — but the main targets seem to be the two I have mentioned, and they are obviously closely connected one with the other. The remoteness of the Six Counties, and the ‘grievous disability of cross-channel freightage’, as Captain Orr, MP⁴ called it in the House of Commons, operate to deter British manufacturers from siting plants in the Six County area. No doubt, however, there are other deterrents as well. One of these may be the political instability of the Six County area itself. It is a tempting speculation to what extent Lord Brookeborough’s recent declaration that Partition would never be ended was intended to afford assurance on this point, and it is interesting that Mr. Magennis’ article on industrial policy in the Six County supplement just published by the ‘Statist’ concludes with a similar assurance.
6. It may be safely assumed that the Tory Ministers, almost without exception, are very sympathetic to Lord Brookeborough’s difficulties and would gladly go to great lengths to help him. They showed that in May, 1953, when they revoked all building restrictions in the Six Counties so as to enable the Stormont authorities to offer to build factories for new undertakings more quickly than can be done by the industrial Estates Companies in the development areas in Great Britain. But this concession was not long in drawing criticism from the Labour Party. On a motion to annul the relevant order put down by the indefatigable Mr. Bing, MP (largely on my suggestion), Mr. Leslie Hale, MP raised an important question of policy in the following terms:-

   ‘What is the principle behind this proposal? What is the principle that applies to Northern Ireland and does not apply to the rest of the Country? … The time is coming when this House may have seriously to consider the whole question of Northern Ireland and the whole question of legislation with regard to Northern Ireland. Nothing will speed on that consideration more than this habit of trying to make special concessions to that area, special provisions for that area and special licences for that area which do not apply to the rest of the United Kingdom’.

   This is an argument which Tory Ministers cannot afford to ignore. Indeed, it goes further than Mr. Hale put it. In both Scotland and Wales, the unemployment rate — although considerably lower than that in the Six Counties — is twice what it is in England. Both are suffering heavy emigration from their rural areas. Both are pressing the British Government for exactly the same sort of special assistance as Lord Brookeborough — more defence orders, lower freight rates to offset the factor of remoteness from markets, more help in obtaining new industries. If all these demands were to be granted, an economic burden would be placed on industry in England which would affect the competitiveness of British exports in foreign markets. Scottish and Welsh grievances are, therefore, likely to go unsatisfied. What seems to me rather unlikely, however, is that the British government will risk making these grievances worse by giving special treatment to the Six Counties which is denied to Wales and Scotland. The long-term effects of any such policy would be dangerous. In both Scotland and Wales, there are quite strong Home Rule movements which have their roots largely in the feeling that Whitehall is indifferent to Welsh and Scottish problems and that Scotland and Wales will never get a fair show until they have separate parliaments of their own. Dame Megan Lloyd George⁵ has recently formulated the aims of the Welsh movement in the demand that Wales should have a parliament with powers similar to that of the Parliament of the Six Counties. If the Six Counties were to receive favours which were denied to Scotland and Wales, the Home Rule sentiment in the two latter countries would inevitably be given a new impulsion. Ignoring the special considerations which apply to the Six Counties, the Welsh and Scottish nationalist leaders would point to the fact as confirmation of what they have been saying all along. A senior British official told me some months ago that, quite apart from their concern about marginal constituencies in Scotland and Wales, this is a consideration which weighs considerably with the British government.

7. In my belief, therefore, if the Stormont authorities think that they can rely on the British government to provide a solution for the Six County unemployment problem, their hopes are likely to be disappointed. There may be a small concession here and a minor financial adjustment there; but anything of this kind is likely to be cautious and niggardly; nothing of a nature to attract Parliamentary attention, and to provoke corresponding Scottish and Welsh demands, is likely to be attempted and, therefore, no special assistance capable of providing a radical solution of the economic problem in the Six Counties is likely to be forthcoming.
8. According to my information, which comes indirectly from the former Ulster Unionist MP, Mr. Harden,⁶ British Ministers made their attitude clear to this effect in the recent talks with Lord Brookeborough, Mr. Magennis and Lord Glentoran.⁷ They took the line that in their efforts to attract new industries to the Six County area, the Stormont administration must rely on the means already at their disposal, and can not count on differential treatment or special favours from the British Government over and above what is available throughout the ‘United Kingdom’ as a whole. I am reliably informed, however, that they threw out two suggestions. One was that it would help to solve the unemployment problem in the North if the Stormont authorities would raise the school-leaving age from 14 to 15, as it is in Britain. The other was that the problem would be very considerably eased if the National Service Acts were extended to the Six Counties, and perhaps the time had now arrived when this should be considered. I am unable to find out how seriously this latter suggestion was put and how hard it was pushed. It may have been provoked by the argument which the Stormont authorities are using nowadays, as a means of ‘pressurizing’ the British, that the recent signs of a revival of political unrest in the Six Counties are the result of unemployment. Neither of the two suggestions is new, however. Both have been put forward, by Tory as well as Labour members, when the question of unemployment in the Six Counties was under debate in the House of Commons. The likelihood of something being done about them can not, therefore, be wholly dismissed; and, of course, any attempt to put the second suggestion into execution, and to introduce conscription in the Six Counties, would precipitate a crisis of great seriousness from our point of view.