INDUSTRY IN SCOTLAND

HC Deb 18 July 1957 vol 573 cc1365-483

3.58 p.m.

Mr. Thomas Fraser (Hamilton)

I beg to move, to leave out from "That" to the end of the Question, and to add instead thereof: this House, having considered matters relating to industry in Scotland, takes note of the provision made for this purpose in the Estimates for the current year. We have had a number of searching debates into the economic well-being of Scotland in recent years and many helpful suggestions have been offered by hon. Members on both sides of the House. We have, however, had a good deal of party bickering in most of these debates—I am not blaming anybody, as I am just as blameworthy myself—and whether the debates have yielded anything helpful to Scotland is a matter on which I will not comment at present.

I go back to 1953, when a number of my hon. Friends made a very close study of the economic health of Scotland. They met a number of Ministers, I think all the Ministers with direct responsibility. They were courteously received, and very helpful discussions appear to have taken place. A very constructive approach was made all round. Then we had a two-day debate on the subject, in 1953.

In the course of that debate the then President of the Board of Trade, who is now Chancellor of the Exchequer, said: Scotland has 10.4 per cent. of the population, but she has 12.3 per cent. of all the new factory building which has gone on since the war."—[OFFICIAL REPORT, 15th July, 1953; Vol. 517, c. 2091.] I think that the right hon. Gentleman was seeking to say to the House that Scotland had done well in the attraction of factory building and the provision of employment in the years after the war. Our complaint then was that Scotland had been doing well when there was a Labour Government, but Scotland had not done so well since there had been a change of Government and in 1953, of course, the amount of factory building which had gone on in Scotland since the war was higher than Scotland's proportion of the total population. It was that kind of thing which led to a great deal of party bickering.

Speaking in the debate last year, the President of the Board of Trade, the present Chancellor, said: It is two years since I spoke in a Scottish debate. Since then, there has been a marked improvement in Scotland's affairs."—[OFFICIAL REPORT, 26th July, 1956; Vol. 557, c. 676.] Presumably, the Chancellor meant what he said. In his view, there had been a marked improvement in Scotland's affairs. Later in the same speech he talked of Scotland's vigorous, growing and expanding economy."—[OFFICIAL REPORT, 26th July, 1956; Vol. 557, c. 681.] What concerns us so much is that Scotland's economy is not as vigorous as the economy of England. It is not growing nor expanding at the same rate, nor anything like the same rate, as the economy of the country as a whole. I should have thought that that would be a matter of concern to hon. Members on both sides of the House.

The Minister of Labour, who, I understand, is to follow me in the debate this afternoon, has also expressed satisfaction that the employment trend in recent years has been in favour of Scotland. I remember putting a supplementary question to him following a Question by my hon. Friend the Member for Motherwell (Mr. Lawson) on 30th May, when it seemed to me that the right hon. Gentleman, like the Chancellor of the Exchequer when he was President of the Board of Trade, was much too easily satisfied with the economic situation in Scotland.

What is the position in Scotland as revealed by statistics one gathers from various publications of Her Majesty's Government? I take the years since this satisfaction was expressed with the position, the years in respect of which the Chancellor said there had been an improvement. Between 1953 and 1956, the total working population of Great Britain rose by 734,000. In the same period, the total working population in Scotland rose by 43,000. Scotland can go ahead and boast about having provided 43,000 additional jobs, but the fact is that Scotland had only 5.8 per cent. of the additional jobs provided in the three years 1953–56.

We have one-third of the land area of Great Britain. Scotland is half the size of England and Wales put together. When President of the Board of Trade, the Chancellor reminded us that we had 10.4 per cent. of the population—incidentally, our percentage goes down every year—but we got in the three-year period 5.8 per cent. of the new jobs provided. The increase in employment in Great Britain was 3.1 per cent. and in Scotland it was 1.8 per cent. In 1953, in Scotland, we had double the percentage of employment of Britain as a whole. One would have thought that we were going to do well and get more than 10 per cent. of the new employment created, but in point of fact we got 5.8 per cent. of the new jobs created since then. We may have been travelling fast, but not fast enough, because we are still losing.

If we had got the same percentage increase in employment as the Minister of Labour shows for Great Britain—not for the United Kingdom—3.1 per cent., 30,000 more jobs would have been provided. It would have taken those 30,000 more jobs provided in Scotland to enable us to keep our place and stand still. Inasmuch as we are that short of the average increase for Great Britain we have lost that amount of ground in that three-year period. Our share of the population as a whole has decreased correspondingly. In as much as we are still showing a percentage unemployment about twice the Great Britain percentage and were not showing a higher percentage than Great Britain over the three-year period, we still get about 5 per cent. of the additional jobs. That is clear evidence that Scotland is solving, or, at least, easing, her problem of unemployment by her workers coming south of the Border.

I have said this very often, and Ministers have never denied it, but they have made speeches which have given rise to the thought in Scotland that I have been talking through a hole in my hat. Will the right hon. Gentleman confirm or deny that Scotland's unemployment position has only been held, eased or maintained at a reasonable level in recent years by the export of her workers? I wish that today the right hon. Gentleman would confirm or deny that. I think it is an indisputable fact. Since we have one-third of the land area of Great Britain, with an increase in population such as we have in the country as a whole, our share of the population should be increasing rather than decreasing.

I should also have thought that all the sociologists who talk about breaking up huge conurbations would have taken the same view and that right hon. Gentlemen on the Government Front Bench would have taken the same view. I should have thought that a Government and Parliament which regularly and willingly spends many millions of pounds of the taxpayers' money to take people out of London, would, at the same time, take steps to prevent people coming into London, but they do not do so.

Factory building follows the same trend as the provisoin of additional jobs. The Chancellor, speaking three years ago, showed that since the end of the war we had had 12.3 per cent. of the new factories which had been built. I made speeches boasting about the new factory space provided between 1945 and 1951. That was true then. Many Conservatives talked about rigid and unnecessary control, how much better it would have been to have left it to the will of the industrialists, and so on, but in the last three years—1954 to 1956—the new industrial building approved in Great Britain amounted to 234 million square feet.

The new industrial building approved in the same period in Scotland was 15 million square feet. We had 6.4 per cent. In the last three years our percentage of 6.4 per cent. was perhaps a little better than half as good as what we got from the end of the war until 1953. If the period had been taken as from the end of the war to 1951, the percentage would have been better still than it has been under this Government in recent years.

I repeat to the Government that we on this side of the House believe in the policy of building factories in advance of having tenants for them. We believe in advance factories being built. When the Government say, "It was all right when there was a rush after the war, but advance factories are no good now", I wish they would not merely look at the position in London or some other already over-industrialised place, but would pay attention to what happens in the Development Areas and, in particular, the Scottish Development Areas. When a good factory is available for letting there, do they have any difficulty in disposing of it? Scottish Industrial Estates Limited tells us that it has a great number of applicants for every vacant factory. A year ago the former President of the Board of Trade, the present Chancellor of the Exchequer, told us the number of applicants for the factories which had been declared vacant the previous year. We have plenty of evidence that applicants can be obtained for vacant factories.

We have had debates in the Scottish Standing Committee when Ministers have told us that factory rent is not a consideration which will scare industrialists away. The Secretary of State for Scotland told us in the Committee that there was nothing to prevent local authorities from building factories because they could easily get an economic rent, and the Joint Under-Secretary made a similar statement about six times. I put it to the Minister of Labour and the President of the Board of Trade that if the Secretary of State for Scotland is right in saying that there is no difficulty about getting tenants for the factories and about getting an economic rent, they should agree to give authority to Scottish Industrial Estates Limited to go ahead and build some factories in parts of Scotland where they are badly needed.

The President of the Board of Trade can, at the same time, do something else which will assist greatly in getting tenants for the factories. He can refuse some of the applicants for industrial development certificates in London, the Midlands and elsewhere. I wonder why the Government have continued that system of certification, because it seems that an applicant is never refused nowadays. Does the right hon. Gentleman think that the position in Dundee would ever have been made bright after the war if the Labour Government had not refused industrialists who wanted to build in London? National Cash Registers did not say, "Please may we have a factory in Dundee? "They wanted to build a factory in London, but we said, "You will do nothing of the kind. You can have a factory in a Development Area, but not in London."

Mr. Stanley Allyn, President of National Cash Registers, has told the whole story of how the "wicked" Labour Government, as he thought, prevented him from building a factory in London and forced him to go some 450 miles away to what he regarded as an absolutely absurd place, but he now says how delighted he is that he was influenced by the Labour Government to go to Dundee.

Metropolitan-Vickers did not want to go to Motherwell. It wanted to expand at Old Trafford. We said "No. You must go to a Development Area."In due course, we forced it out to Motherwell. I could quote a long list of firms which wanted to build in London or the Midlands, but we refused permission. When we said "No" firmly enough they agreed to go into the Development Areas. We provided the factories for them.

The Government ought to do the same thing. Let them provide the factories where factories are needed. The alternative is to allow the present situation to continue, to allow Scottish unemployed to get back into employment by coming south of the Border. I do not mind people crossing the Border in either direction, but what is so bad is that Scotland's share of Great Britain's population should continue to decline in the way it has been doing.

We want a plan for Scotland. We realise that we cannot have a plan for Scotland without having a plan for Britain as a whole, and there is not one for Britain. However, we wish the Government would do their utmost to provide some kind of plan for Scotland. The alternative to providing a plan is to continue to pursue a policy of drift.

If inflation has been caused by over-full employment and over-investment, Scotland is utterly innocent and blameless, for she has never had overfull employment or over-investment. However, the people of Scotland share all the so-called anti-inflationary measures and devices. The building of roads in the Highlands and small piers in Shetland has been stopped. We experience restriction on essential works of all kinds, including factory building, and we also suffer high interest rates. We endure all these anti-inflationary devices without having enjoyed any of the causes of inflation.

It is high time that the Government paid some attention to these matters and told us what they propose to do about them. It must not be said that I have not stated what the Labour Party would do. I have described one or two of the things that we should do. We do not think that there is very much wrong with what the Labour Government did, and we should do a great deal more of the same kind of thing; and there is no reason why we should not get the same result, which was a great improvement in the prosperity and economic and social well-being of Scotland.

There have been many changes in Scotland's economy in recent years. The light castings industry in Falkirk and the surrounding area has been in the doldrums. Former types of castings, including those of cast-iron, have been giving way to aluminium and sheet steel. We have had a number of newer industries which would seem to have made up the leeway. We have lost some employment in the old industries, but there have been additions to our economic well-being. We are all delighted at the contribution made to the economic well-being of Scotland by the newer industries, including cash registers, adding machines, business machines, typewriters, and lawn mowers.

Before we get too carried away, however, it is as well to have a look at the Digest of Statistics. There, we find that the increase in production in those industries in England and Wales far outstrips that in Scotland. Thus, we think we have been doing well until we see what others have been doing, and then the comparison shows that we have not been doing so well.

Some of us have talked to the industrialists in the new industries. They complain about the price they have to pay for their sheet steel. No hon. Member can have discussed the well-being of the new industries using light strip steel without having heard the complaint that Scottish industrialists have to pay more for their strip steel than industrialists in the South. They have to pay at least £3 a ton more than their competitors in the South.

It is even worse than that. Some of them have complained very bitterly to me that they have to pay £3 or more per ton more for the steel than do even their associate companies in the South. They ask, "How do you expect us to expand this industry in Scotland while we work under this deterrent to expansion?"

Of course, there was difficulty about supplies. I am not so sure that they are suffering from that difficulty now, but during 1954 and into 1955—and I am not sure if it was not into 1956, but certainly into 1955—the industries using this strip steel were very short of their raw material. But their associate companies in the South—not only their competitors in the South, but their associate companies there—were getting it. This is a great incentive to them not to expand in Scotland. It is a great incentive to them to apply to the President of the Board of Trade for an industrial development certificate so that they can expand in the South and close their places north of the Border.

The graph of industrial production follows steel production in all manufacturing countries, and Scotland is no exception to this rule. In The Scotsman today there is a leader—with which, incidentally, I disagree—which starts with a sentence that makes the point. It says: It is no secret that there is a close connection between the standard of living of a people and its use of steel. We, in Scotland, have been producing a diminishing share of Britain's steel. We have been consuming a diminishing share of Britain's steel. We have been enduring a diminishing share of Britain's prosperity. There is one way, and one way only, in which to deal with Scotland's inherent difficulties in this respect and that is the construction there of a mill to produce this steel.

I believe that the siting of such a mill in Scotland is as important for our light industries as is Colvilles' heavy plate industry for Clyde shipbuilding. It will not do to call attention to the great expansion Scotland should enjoy as a result of Colville's development—including that mentioned by Sir Andrew McCance yesterday, to tie it up with shipbuilding on the Clyde, but to ignore these newer industries in Scotland that do not have, near to home, any source of supply of the steel they need for expansion.

Yesterday's announcement about Colvilles' development pleased all of us, inasmuch as it reported considerable modernisation there. We all welcome that, but let us not get too carried away with ourselves, too enthusiastic because we are merely modernising, and keeping in step with others, if, at the same time, we allow that enthusiasm and excitement to blind us to the absence of an industry in Scotland which is as essential to our light engineering industry as is the Colvilles' development to shipbuilding on the Clyde. Sir Andrew McCance is reported in the Press as having said, referring to the strip mill: The less said about that the better. I have no personal quarrel with Sir Andrew McCance, but I suspect that, when he said that, he meant that the less said about it the better for Colvilles'—not for Scotland.

It is a bit hard that we should get an industrialist in Scotland, no matter how important he may be, saying, "I should have a monopoly of this business in Scotland."These are the great anti-nationalisation people who say that nationalisation creates a monopoly, but they do not want any competition in Scotland. They will not produce the steel that the new Scotland really needs, but they are to make a demand for all our coking coal.

I would not so strongly urge the establishment of this strip mill in Scotland if I believed that we were so short of coking coal that this development would threaten the future of our heavy plate industry at Colvilles'. But I do not think that it does. We have the coking coal. Perhaps I might just get this into perspective by saying that I believe that industrialists in Scotland, other than Sir Andrew McCance, are of one mind about the need for a strip mill. It is not argued. Everyone says that, of course, a strip mill would be a great boon and a great blessing. All agree that there is a great need for it.

The case in favour of a strip mill is generally accepted. But there are some objections. It is understandable that some people would find reasons for not getting on with it. It is said, "You want an economic unit."It is said, "A mill of this kind would be economic only if it produced at least 1 million tons a year." And we say, "Why should it not?" It is said "The user industries in this country do not use 1 million tons a year." Of course they do not—and they never will if we do not have that strip mill. In any case, we should, first, expand our need for strip steel if we produced it in Scotland and, in addition, we could make some available for export. That would be better than having to import, as we do at present.

None of us is arguing in favour of a strip mill to produce only a quarter of a million tons a year. If we had a production of 1 million tons we should find a good use for most of it, and send some of it to Europe—where it will go, in any case. If we have this strip mill, perhaps the ships that bring the ore into this country from Scandinavia will find it more convenient to dump it in Scottish ports than to take it elsewhere.

That brings me to iron ore. It is said, "We do not have the iron ore in Scotland to feed this industry." That is true. We do not have it—but we do not have it in the United Kingdom, so that if the argument is that because we do not have the ore in Scotland we should not have a mill there, it is also an argument for not expanding the steel industry in Great Britain at all—because we do not have the iron ore. We import it in large quantities just now, and any addition to the demand for iron ore must be met by increased imports.

I repeat that a lot of this stuff comes from Scandinavian countries. There is a long association between some Scottish ports and the Scandinavian countries—Leith and Gothenberg, for instance. My hon. Friend the Member for Leith (Mr. Hoy) may very well develop that later. Be that as it may, there is no reason at all why the iron ore that is to be brought to the United Kingdom in any case should not be brought—does the President of the Board of Trade say that we do not have to import iron ore?

The President of the Board of Trade (Sir David Eccles)

One of the difficulties is to decide how much of the home ore will be used in the new mill. There is a new field of development in the Midlands which the hon. Gentleman may not know about.

Mr. Fraser

Oh, yes. We in Scotland know too much about Midland ore, because that is what led to the great exodus from Lanarkshire, when Stewart and Lloyd's found it better to transfer to Northamptonshire to be on top of the ore beds. They need coal too, do they not?

The right hon. Gentleman is now saying—or, at least implying—that since we are to use some home ore and some imported ore, it would be better not to build a steel mill in Scotland, because we do not have any hope—[Interruption.] Oh, he is not saying that at all? I do not know with whom he is arguing. What I was trying to make out was that any addition to the demand for ore in this country must be met by an increase in the importation of iron ore. When I asked the right hon. Gentleman, he denied saying "No" and said that he said "Yes". [HON MEMBERS: "Ask him now."] He does not know.

I do not want to take up time. The Ministers have heard me and industrialists know that what I have said is true, whether the President of the Board of Trade agrees or not. There are, no doubt, some industrialists who disagree. Sir Andrew McCance is probably one of them. We come, however, from iron ore to coking coal. There are people in Scotland who say that the coking coal is not there. I wonder how much coking coal is there. When I met some officials of the Divisional Coal Board, a little while ago, I asked them if we had at least 300 million tons of coking coal that they knew about. They replied, "Yes", they had at least 300 million tons of reserves.

I said, "May we not have a great deal more than that?" "Oh, yes," they replied, "but we have not provided in our ten-year plan for the winning of it." Of course not. Colvilles have been getting on very well with the National Coal Board. The Board has made a ten-year plan for the extraction of coal from underneath the surface of Scotland to meet the demands of Colvilles. This plan having been made, if one suggests that another couple of mines should be opened up to provide the coking coal for another steel industry, the reply is given that the plan cannot be interfered with. So the whole programme and economic policy of the Government has to be geared to suit the Coal Board plan for the winning of coking coal, a plan which was determined by Colvilles, of Motherwell. That does not seem to me to be very clever.

Then, I was told by officials of the Coal Board in Scotland that, in any case, the site at Grangemouth was obviously the wrong site for a strip mill. I asked why. In reply, the members of the Divisional Coal Board told me that to build a steel mill there would sterilise 50 million tons of the best coking coal.

I make a suggestion to the President of the Board of Trade. Let the site for the mill be shifted along a little bit, let them put down a big coal mine and they will get all the coking coal at the gates of the steel mill to keep them going for the next fifty years. That is all that needs to be done. The Coal Board says that the coal is there. Whether it will be won, I do not know; whether Colvilles want it we do not know, but the coal is there.

It was said that 50 million tons would be sterilised. That is a lot of nonsense, anyway. No such quantity would be sterilised. In any case, it would be madness to sterilise large quantities of coking coal by the building of this mill. It could be built, surely, on an adjacent site, not so far away, allowing the coal to be brought up just alongside the steel mill, thus saving all the transport charges which so much worry the Government and which are considered to be such a disability to the development of Scottish industry.

None of the objections which have been offered to the siting of a steel mill in Scotland will stand up. I hope that the Government will plan to enable Scotland to play her rightful part in our expanding United Kingdom economy. Other points will be raised about this during the debate. I seem to have spent long enough upon it already.

I turn briefly to the jute industry. I listened with alarm and despondency to the statement made yesterday by the president of the Board of Trade, and I ask him this question: Is this the beginning of the end? Are the Government writing off the jute industry of Dundee? The President of the Board of Trade made clear yesterday that the Government were to pay more attention to the needs of the area and see whether they could give more help under the Distribution of Industry Acts.

The Minister of Labour will know that there is about 5 per cent. of unemployment in Dundee now. Would it not have been better if the Government had pressed on with the provision of new employment and the attraction of new industry to the area before delivering the body blow at the jute industry which the President of the Board of Trade delivered yesterday? He forecast in his statement that the effect of the reduction in his marking up from 40 to 30 per cent, would be a reduction in demand and a falling off in employment. After we get a further increase in unemployment in Dundee, which is already considerably higher than the national average, the Government, therefore, are seeing whether there is anything they can do to attract new industry into the area. That is going about it the wrong way.

The decision announced yesterday was a decision of the Government. It cannot, therefore, be said that it was a wicked person who delivered the body blow and that it could not have been foreseen. It was the Government who made this decision. They have taken the decision which, the President of the Board of Trade believes, will lead to a further run-down in employment opportunity in Dundee and after the position has become desperately bad they will see whether they can do something to take new employment into the area.

I suggest to the Minister of Labour that it might not be a bad thing if, even at this late date, the Government were to appoint a representative independent committee to look at the position in Dundee and to see whether the jute industry can be saved. That is important. We ought not to write it off, as I thought the President of the Board of Trade was doing yesterday. We should have a committee to consider whether the jute industry can be saved. If, in the view of the committee, a decline is inevitable, and it cannot be saved, such a committee might make recommendations to the Government as to what the future of Dundee will be.

I am not asking that all the wonderful plans that the Government have in mind for the attraction of new industry should be put into cold storage while the committee does its work. Let the Government press on with any ideas they have. In fact, let them tell us about them today and we will be delighted to hear that the Government are taking the initiative, if, at last, they are doing so, in seeking to steer additional new industry into Scotland.

In any case, I ask the Minister of Labour and the Secretary of State for Scotland, together with the President of the Board of Trade, to consider the appointment of such a committee to study the matter closely. It will not, I hope, be a committee which lasts years, but should look at the matter closely and see whether the industry can be saved and, if not, what is the alternative.

It does not seem to some of us to be very clever to have closed the Dundee office of the Board of Trade the month before this decision was announced. I know that the Government closed a lot of other offices as well as the Dundee one, but if Dundee was an area which already had 5 per cent. unemployment, if there was already a lot of redundancy in the jute industry, if there had been some pay-offs and if the Government had in mind the making of yesterday's announcement that would make it necessary to look for alternative employment in Dundee, this does not seem to be the time to sack the organisation which otherwise the Government would have used to help them in this work.

I well remember the help I got from the office in Dundee when I assumed a little responsibility for this kind of thing. I much regret that the Government will not be assisted by this local office in Dundee. But, in any case, that is gone and done with. Let the Government consider some other suggestions.

Many people in Scotland are worried about the effect of the cuts in the defence programme upon our economy. None of us wants to go on manufacturing guns, tanks and ships of war and maintaining these things at all. We are all in favour of modifications of the defence programme and of disarmament, even if it leads to our constituents being put out of employment. We listened to the statement made the other day about the Royal Ordnance factories. We have many thousands of our constituents employed in such factories, in the R.E.M.E. depots, and in firms like Rolls-Royce and others, which are engaged largely on defence contracts.

We thought of Bishopton, which is to be maintained, but with no guarantee about the rate of employment in the Bishopton Factory, which is in the constituency of the Secretary of State. A great many workers from Greenock work there, and although the unemployment rate in Greenock has been about 6 per cent., my hon. Friend the Member for Greenock (Dr. Dickson Mabon) cannot be given any assurance at all about the level of employment in this factory.

An announcement was made about Dalmuir, which is to complete its present contracts and then be turned over to Messrs. Babcock and Wilcox. There is agreement in principle on that. The T.N.T. factory at Irvine, we understand, is to be closed. I mention these things not because I want to argue them at this time, but to say to the Government that we are all concerned about the workers who are being and are to be displaced. Where are they to find employment? I have heard the Minister of Labour answering many Questions about workers displaced in the motor car industry in the Midlands, and he always gives a ready assurance that there is alternative employment for those workers.

Where is that alternative employment for the workers who are to be displaced from these establishments in Scotland? Is it in Scotland, or is it south of the Border? Must they come to London to get a job? I hope that they will not have to come to London to get a job. I do not mind some of them coming to London and some London people going up there, but I do not want to see our share of the total labour force running down so constantly, as it does.

Then, we have to consider the effect on local unemployment in local areas of the running down, and the closing, in some cases, of naval bases, such as Rosyth and Invergordon, and, no doubt, there will be some effect at Donibristle. What is to happen to the workers in these areas? For far too long we have solved, or, at any rate, eased, our unemployment problem by exporting our workers, but I hope that it will not continue. We have one-third of Great Britain's land area, and our share of the population is still about 10 per cent., and it is still declining.

We live in a small and overcrowded island. I do not think that any of us is against the mobility of labour; I am not. I want to see labour mobile, and I have made many speeches in which I have encouraged my own constituents to be mobile. I think that I have perhaps the most mobile constituents in Scotland. My constituency was once regarded as a mining constituency, but it no longer is a mining constituency. It is only a constituency where many miners live, but they travel very long distances to their work, and a great many have transferred their homes to some of the developing coal areas, not only in Scotland but to a considerable extent in England.

I have encouraged my constituents to go to Fife, the Lothians, Ayrshire, and even into Dumfriesshire, but, in view of the new rent policy of the Dumfriesshire County Council, I will drop Dumfriesshire from the list.

In any case, I think that one can be sympathetic to the movement of population within the country, and can accept the fact of the population in a town or small community decreasing while the population of another town or community was becoming very much larger. This kind of movement is bound to go on all the time, but when we deal with Scotland as a whole and find that, year after year, our share of the total employment goes down steadily, none of us can accept it and remain complacent about it. But this has been going on.

When he replies to the debate, the Minister of Labour can give us his appreciation of the rate at which it has been going on. Let him confirm or deny whether it has been going on, and whether we have been solving or easing our unemployment problem by exporting our workers south of the Border. I would add that for sound social and economic reasons, as well as for strategic reasons, our expanding population should be reflected in Scotland's share of the population increasing rather than the reverse. At least, let the right hon. Gentleman demonstrate today that the Government will halt the drift.

4.46 p.m.

The Minister of Labour and National Service (Mr. Iain Macleod)

The hon. Member for Hamilton (Mr. T. Fraser) is a courteous and effective debater, and I think he has made an extremely effective speech this afternoon. It sets a good note for the sort of debate we are to have, one in which we can voice with anxiety, if we like, the problems that confront us in Scotland, but without being alarmist about them. The hon. Gentleman, I thought, gave less credit than he might have done to the Government, but this, in my view, is a common failing on the benches opposite.

In these debates, apart from comparisons with the present and past years, hon. Members often like to compare what is happening in Scotland with what is happening in England and Wales, and that thread ran through the whole of the hon. Member's speech. I am not complaining in the least; I will try to follow the same line myself. Another formidable practitioner in these debates is the hon. Member for Motherwell (Mr. Lawson), who will no doubt develop some of these points himself.

It may be that many years among Sassenachs have softened me, but I rarely take such a strictly comparative line as we have heard from the hon. Member for Hamilton this afternoon, but there is one comparison out of quite a lot with England and Wales that I should like to make at the beginning, because I think it is of great importance. It is what has happened in employment and unemployment over the last year.

We know that, although there has been an expanding employment over the last ten years, there was a check last year, and I think it is important to note, first of all, that although the long-term expansion slowed down in the whole of Great Britain, both unemployment and employment figures show that it slowed down less in Scotland than in England and Wales. For example, at mid-1956, the numbers in employment in Scotland were 4 per cent. higher than in 1948, and 2.6 per cent. higher than in 1951. Since June, 1956, the number in employment in Scotland fell by half of 1 per cent., and the decrease in England and Wales, at 0.7 per cent., was rather higher. As far as the unemployment figures are concerned, it is true that for many years our unemployment figures have been higher and the demand for labour lower than in most other parts of Great Britain, but, even so, in the last complete years 1955 and 1956, the average rate of unemployment of 2.4 per cent. was less in Scotland than for any year since the National Insurance Scheme was extended.

Mr. E. G. Willis (Edinburgh, East)

The workers have been migrating from Scotland.

Mr. Macleod

The check in expansion to which I referred affected the figures of unemployment. Comparing the first six months of this year with the same period of 1956, the average percentage rate of unemployment in Scotland was up by 0.25, while the rate for England and Wales was up by 0.4.

Though I would never base too much of a case on a few months, the importance of those two figures is simply that they seem to show that the great anxiety which we have all had in Scotland really does not appear, on that evidence, to be justified. People have always felt that if a check came to the prosperity of this country, as a check did come last year, it would affect Scotland first and more steeply than the rest of Great Britain. Taking both unemployment and employment figures, the evidence which I have given would seem to show that that is not so.

Mr. T. Fraser

I should have thought, and perhaps the Minister will consider this, that the check we suffered in this country last year was the result of Suez, and it affected the motor car industry more than any other industry. We have no motor car industry in Scotland, so there would be less effect in Scotland.

Mr. Macleod

No, not at all. The check I am referring to went a long way wider than the motor car industry, and it was affected primarily by no means by Suez, which had a very small effect on the economy, but by a number of factors, including; of course, the credit squeeze and Government policy. I do not seek to deny Government responsibility for the policies which had this effect.

Mr. Thomas Hubbard (Kirkcaldy Burghs)

Is the Minister not taking into account the drift south, which obviously had a tremendous effect on the Scottish figures?

Mr. Macleod

Yes, of course it has had an effect; but my argument was based on both employment and unemployment figures.

I have only one small quarrel, and it does not affect his argument, with the comparison the hon. Member for Hamilton made as regards Scotland's share of jobs. He used for his comparison the total working population. I do not think that is a good comparison to take, because the figure includes the Forces and also the unemployed. To take the increased numbers in civil employment in those years, there was an increase of 911,000 jobs in Great Britain, and Scotland had 61,000 of those, which is 6.7 per cent. It does not destroy his argument, but I think that 6.7 per cent. is a better figure than the 5.8 per cent. which he put forward.

In the Scottish Development Areas, just to clear up the point about employment and unemployment, in 1956 unemployment was lower than in any year during the last ten years, and in January of this year these areas lost the distinction—which we can well do without—of having the highest percentage rate of any Development Area.

If I concentrate, as I think would be right, on the problems, that does not mean that there is not a great deal of really encouraging news about Scotland and Scotland's economy, which I shall mention briefly at the end.

Mr. William Ross (Kilmarnock)

Will the Minister not give us any estimate at all about the amount of migration from Scotland to England, and the extent to which Scotland's unemployment problem is concealed or solved—whichever term he prefers—by Scotsmen coming to England?

Mr. Macleod

I do not propose to prophesy the future rate of migration—

Mr. Ross

Dodging the issue.

Mr. Macleod

I am not dodging the argument in the least. From the figures I have given, the increase of the numbers of jobs in Scotland has not been as substantial as in England and Wales—I concede that point to the hon. Gentleman—but I do not see how one can study the figures I have given, which the hon. Gentleman would, perhaps, look at again in HANSARD, and conclude that Scotland has not been extremely prosperous over these last few years.

Mr. Ross

Quite wrong.

Mr. Macleod

I want to take as the first of the unemployment problems to which the hon. Member for Hamilton referred, the pattern of defence expenditure and the changes which will arise from it. It is important to keep this matter in perspective, and I will remind the House of what I said in the defence debate on 17th April this year: The first thing that we must be quite clear about is that there is nothing very new in the situation that faces us … Indeed, in the last four years, the numbers employed on defence production have been reduced by 200,000, including a fall of no fewer than 70,000 last year. It is probable that the reduction this year will be a good deal less than that."—[OFFICIAL REPORT, 17th April, 1957; Vol. 568, c. 1942.] Hon. Members who represent Scottish constituencies will know that reductions of direct Government employment have been announced which will affect something like 2,000 or 2,500 workers between now and some time in 1959. Of course, it is always desirable, where it can be done, to ensure that factory space is not wasted, and it is good to know that the Dalmuir factory will probably be used by the well known private firm, Babcock & Wilcox. Of course, it is true also that it is not always easy to find a suitable tenant for some of these factories. Clearly, a factory which is tooled for tank production is likely to be more attractive than one which is equipped for a more specialised job such as, for instance, the filling of ammunition.

Another great advantage of the announcement made by my right hon. Friend the Minister of Supply is that it makes it possible for me, by having a really long notice of any redundancies that take place, to do everything I can through my local network of exchanges to find employment for those concerned. I know perfectly well that there will be substantial difficulties. The Greenock and Port Glasgow area worries me a good deal, and I hope to listen to what the hon. Member for Greenock (Dr. Dickson Mabon) has to say if he catches your eye, Mr. Deputy-Speaker. But all the information available to me seems to suggest that defence cuts are not likely to cause widespread unemployment in Scotland. We shall do everything we can to find other work for those displaced, a task, as I say, made a good deal more easy by the fact that, because we are the employers in many of these cases, we can give the long period of notice of redundancy which I always press upon private firms as being so important.

The hon. Member for Hamilton asked what jobs there would be for these people and inquired about possible vacancies. As the House knows, the position as regards skilled men is that there is comparatively little problem. General engineering has been expanding its employment, and there is, and will almost certainly remain, a shortage of skilled workers. For the rest, the task is a good deal more difficult, and it has to be tackled in those pockets to which I referred with special care and, if necessary, by making the sort of local arrangements which I sometimes am able to make if an area meets heavy unemployment difficulties.

The second main problem concerns the jute industry. Anyone who thought that this was an easy matter would have been disillusioned yesterday even by the very brief exchanges which took place after the President of the Board of Trade announced the reduction in the mark-up at which the principal types of imported hessians are sold. It is, of course, a very complex problem, as was admitted, I think, by one hon. Member who used the expression "admittedly difficult", though I do not suggest for a moment that he agreed with what was being done. The difficulty of the problem must be faced. Hon. Members for English constituencies put a very different point of view.

I am sure I need not tell the House that it was only after the most careful consideration that this step was taken. It was taken in the belief that, although it is bound to cause some immediate difficulty, it will be ln the best interests of Dundee in the long run. In talking about Dundee I do not under-estimate the difficulty, perhaps relatively even more serious than it is for Dundee, which may be caused in some of the other towns, like Forfar and Kirriemuir in the neighbourhood.

In all these discussions my officials and I myself have been concerned from the beginning, because, of course, nobody can pretend that this will not affect employment in Scotland. If one had done nothing—and there are often attractions to a Government in doing nothing—I think it would have become increasingly clear, as it seemed clear to the President of the Board of Trade and to me and our colleagues, that the present form of protection given to the industry was operating against the interests not only of the users of jute goods but also of jute as an industrial material.

Of course, there are several considerations one has to take into account. Although, no doubt. Dundee has first claim on our sympathy, we have also to consider the trading position of the Commonwealth countries. Nor need I emphasise that a very strenuous effort will have to be made if the industry is to remain competitive, and the firms in the industry know that very well.

I should like to emphasise what the President of the Board of Trade made clear, that we intend to do everything we can to intensify our efforts to encourage new industries to establish themselves, because whether one agrees or disagrees with the action which the Government have taken and this decision which has been announced, it is common ground that increased diversification of industry is the best prospect for the Dundee area. We shall do everything we can to push that forward.

Mr. A. Woodburn (Clackmannan and East Stirlingshire)

I am following with great interest what the right hon. Gentleman is saying, and I realise that he and his Department are always on the spot in foreseeing these changes, but he has repeated several times that the Government will do everything possible, and so I hope that before the right hon. Gentleman finishes his speech he will give us some idea of what those measures will be. He has this advantage, that this business is to take place during the next two years, which means that there is a possibility of making some plans. My hon. Friend the Member for Hamilton (Mr. T. Fraser) has made the suggestion, for instance, of advance factories, and things of that kind. I wonder whether the right hon. Gentleman can tell us whether by arrangement with the President of the Board of Trade, that is being planned, at the same time as calculations are being made about employment and unemployment.

Mr. Macleod

I shall be very glad to consider the suggestion the hon. Member for Hamilton made in opening the debate for the Opposition, but I know that the Secretary of State for Scotland, who is to wind up the debate, wants particularly to deal with that side of the matter himself, and so, with the permission of the House, I shall not go beyond the statement which I have made.

Another matter about which the hon. Member spoke—and he did so with great feeling, very understandably—was the question of the new steel works. It is a sore point in Scotland that steel-making capacity has not expanded there at the same rate as it has in England and Wales—a sore point, not just because of the extra employment such expansion would provide, but because people feel that steel-using industries would be, because of such expansion, more likely to be attracted to the neighbourhood, which was the telling argument the hon. Member made.

It is known that the industry's plans include a proposal for a new integrated works, including a strip mill to be set up on an entirely new site. It is known also that a number of sites have been suggested, including a Scottish location. What I would say in response to the hon. Member immediately is that this project is of first importance for the economy of the country as a whole, not only of Scotland but of all these islands, and, of course, it needs a very great deal of thought to be absolutely certain that the right place is chosen.

There are complex technical issues into which I am not qualified—few of us would be—to go, but there is also the question of whether the labour will be available for operating the plant. On all this we are trying to get the best advice we can, and I would assure the House that the advantages of the Scottish site, amongst which the labour supply prospects are important, will be given all due weight, and that no final decision on this matter has yet been taken.

Mr. Thomas Steele (Dunbartonshire, West)

Very poor indeed.

Mr. Macleod

The hon. Member would have been startled if I had announced any decision in any terms other than the ones I have used. However, I should like to leave that.

The hon. Member for Hamilton, still following his comparative path, talked on rather the same lines he did last year about industrial development, and he said that applications for industrial development certificates were never refused. That is not the position. They are not refused in Scotland. That was going to be part of my argument. It is not true at all that industrial development certificates are not refused elsewhere. In London, which the hon. Member mentioned, except for extensions, practically none is ever given. We do take every opportunity that we can, in discussions with firms from elsewhere which are looking for new quarters, to publicise the advantages of Scotland.

In the financial year which has just ended well over £2 million, 42 per cent. of all expenditure on factory building in the Development Areas, was spent in Scotland under the Distribution of Industry Act, and in the first three months of this current financial year Scotland's share, about £310,000, was 54 per cent. of the total. At 31st March, 1957, Government factories covering an area of 779,000 sq. ft., more than half the total area for Government factories in all the Development Areas, were being built in Scotland. As Scotland, in its Development Areas, has 31 per cent. of the insured employees and 34 per cent. of the people unemployed in all Development Areas, it is clear that Scotland in this respect is getting its share.

Of course, the House knows that approvals of Government financed building are now allowed only in cases of exceptional urgency and importance, and I need not emphasise the need for restraint in Government expenditure. The simple point I want to make is that, whatever the opinion may be about the amount we are doing as a Government, what cannot be denied is that Scotland is getting its full share of that, and, indeed, rather more than its share.

Mr. T. Fraser

When the right hon. Gentleman says that of the applications for industrial development certificates in London all were refused but those for minor extensions, he gives the impression that very few industrial development certificates were issued in London. Can he reconcile that statement of his with the information which one gathers from the Digest of Statistics that factory building in London and in the southeast of England is three times the amount of factory building in Scotland?

Mr. Macleod

That reconciliation was gone into in great detail by the present Chancellor of the Exchequer when he was President of the Board of Trade in answer to a similar argument by the hon. Member a year ago, and it is recorded in HANSARD. The words I used were "with the exception of extensions." I do not know whether extensions cover all I referred to. Admittedly, the statement I made was after a rather brief talk on the Bench with the President of the Board of Trade with the object of responding to the hon. Member. If there is any way in which it can be amplified, perhaps the Secretary of State for Scotland will be able to take the matter up at the end of the debate.

I would refer to two matters which affect my Ministry and which, I think, are of very great interest to hon. Members from the Highlands and Islands and crofting counties. The first is not exclusively a Highland matter, or indeed exclusively a Scottish matter. Some of the difficulties were brought to my notice by hon. Members on both sides of the House. I am referring to the training allowances scheme which was formerly known as the special aptitude scheme.

I think it is becoming clear that the scheme in its present form would not continue to serve its original purpose in the changed circumstances created by what is called the "bulge" in the birth rate which will soon be called the "school-leavers bulge." A number of letters have made clear to me that in some cases the scheme may work unfairly for lads coming from remote areas who wish to take up apprenticeships in large cities, where, by the very nature of things, there are almost certainly enough boys already, although conceivably not all of the same calibre as those who wish to come from the distant areas.

I have been studying this scheme and have come to certain preliminary conclusions. I put these ideas before the National Youth Employment Council at its meeting on Tuesday of this week. I am not ready—nor shall I be for some time yet—to announce the details of the changes, but I think that hon. Members might like to know that I am con- templating a new approach to this problem.

Secondly, I announced on 2nd July that, in consultation with my right hon. Friend the Secretary of State for Scotland and after considering the views of the Crofters Commission, I had decided to extend the arrangements for the deferment of National Service for crofters. Up to now they have had to satisfy the same conditions for deferment as other agricultural workers, but under the new arrangement they will be specially treated. I think this will be of real benefit to the crofting community.

Mr. J. Grimond (Orkney and Shetland)

I am very grateful to the Minister for giving way and apologise for interrupting him, but this special aptitude scheme is rather interesting. I take it that we may expect it to be announced by October, because that is a rather important time of the year.

Mr. Macleod

I think that by that time I shall probably be able to announce, any way in the classic phrase, the way one's mind is moving.

I propose to sum up in a moment, because this is essentially a debate in which one wants to listen to hon. Members putting their own particular cases and their own views of Scotland's problems and to try to learn from them. I should like to refer to a point which I made earlier. If we are discussing the affairs of the country—we need not remind ourselves, of course, that this is a country, but it is as well to remind other hon. Members that it is a country and not a region—there are bound to be both light and shade in the picture one paints.

I have concentrated, and of course the debate will concentrate, on the problems affecting Scotland, but I think it would be quite wrong to pretend that the situation is in any way an unhappy one, because the figures of employment and unemployment which I have given show quite cleary that Scotland is a prosperous country. Before I conclude, I should like to mention very quickly for the record some of the brighter spots in the picture.

Shipbuilding activity is at a very high level, and new orders for merchant ships are being placed in Scottish yards this year at a higher rate even than last year. There has been a very useful growth in the big engineering and electrical goods group of industries which continues to expand and during the last year—and this again, I think, has relevance to the analysis I made to the check to employment—employment grew to 163,000, an increase of nearly 1 per cent. and that at a time when the national figure showed an equal decrease.

In Scotland, we have twice as many skilled engineering vacancies as the number of unemployed. That, of course, is not a situation that prevails in the rest of the employment field. In the past year we have seen an increase of nearly 2,000 among the wage earners on colliery books in Scotland. That is the biggest increase in any of the National Coal Board divisions, except in the West Midlands where a special recruiting drive is proceeding.

There is, too, the very remarkable position in the Borders where not only is there full employment, but an acute shortage of labour in the area, which is an important centre for one kind of tweed and the main centre for knitwear. In the whole of the Border area last month there were only 176 unemployed people and only 700 unfilled places. [HON. MEMBERS: "What about Jedburgh?"] Yes, Jedburgh is a difficult place, but, even including Jedburgh, those figures hold. That is a degree, even taking into account the very strange position in Jedburgh, of a labour shortage unparalleled not only in Scotland, but in most parts of England as well.

Commander C. E. M. Donaldson (Roxburgh, Selkirk and Peebles)

I know that my right hon. Friend has interested himself in the problem of Jedburgh. There is a royal and ancient burgh running down because many are employed outside the burgh who were previously employed in the North British Rayon Mills. They are now too diversified. The merchants and the social amenities are tending to stream down, although there is no great unemployment in Jedburgh, and never has been. As the hon. Member for Hamilton (Mr. T. Fraser) mentioned, we have the factory available and we hope that somebody will put an industry into the site already available.

Mr. Macleod

I know the position which my hon. and gallant Friend has outlined. That is why I used the ex- pression the "strange position in Jed-burgh". Of course, if one looks at the figures alone, which is always a dangerous thing to do, there is no unemployment there, but there is a very real problem along the lines mentioned by my hon. and gallant Friend.

These examples could be multiplied many times. We could talk about hydroelectric and atomic developments. Even though today we are going to discuss our anxieties and our problems, I think that, at the same time, from the figures I have given and from what I have said in these last few minutes, from the record of Scotland as it was and as we all know it today, we can take a great deal of pride in the many successes which Scotland has achieved in recent years. I do not think that our anxieties over the problems should cloud our judgment of the very remarkable successes that have been achieved.

5.18 p.m.

Mr. John Strachey (Dundee, West)

Quite frankly, I rise on this occasion to deal essentially with a constituency point, the very grave threat, as we see it, which the Government's announcement of yesterday represents to Dundee. In doing so, however, I should like to attempt to relate it to the wider problem of Scotland and Scottish industry which we are discussing, because it seems to me only a more urgent case in point of a very much wider theme which has already been put forward from the Opposition Front Bench.

What the announcement yesterday by the President of the Board of Trade meant, as I understood it—and my impression was very much confirmed by what the Minister said today—was that the Government are beginning the process of exposing the jute industry which, as he well said, is not exclusively Dundee, but Dundee and the surrounding area, to the market forces of the world. That is the Government's general outlook and their general policy.

I think that the right hon. Gentleman will do us the credit of believing that we on this side know the arguments in favour of doing that just as well as he does, and just as well as his colleagues do. Of course, he does not need to tell us that if we reduce or abolish the degree of protection at present enjoyed by the jute industry in Dundee we shall cheapen the cost of production of, in this case, jute bags by a small amount and that that, in turn, will add a fractional amount to the cost of production of the things that go into those bags, and, therefore, will effect the economy of the country in general.

That is the classic argument for free trade, for laissez-faire and for non-interference. I will point out in passing, and I think that the right hon. Gentleman should note this, that the United Kingdom Jute Goods Association remarked this morning that it thinks, even from its point of view, that the actions taken will do very little to alleviate its position. Therefore, it is a very fractional benefit which is being claimed. However, that is the argument.

We are perfectly well aware of that, but what hon. and right hon. Members opposite seem never to be willing to note is that there is a counter-balancing argument, that we must weigh that gain in the cost of production throughout the economy, theoretically at any rate, against the social frictions and the social costs which will be inflicted by taking that action. This is a very extreme case where we have an industry which is concentrated almost completely in one town. I am not saying that this action has gone as far yet, but it is a case where if we destroy that industry we go far indeed to destroying that city. This is not just a theoretical calculation. Unfortunately, as everyone in Dundee knows, this is what happens. They know in Dundee from long and bitter experience between the wars that this is what happened when the jute industry was exposed to these forces.

We see no attempt on the part of hon. and right hon. Members opposite to weigh these two social costs one against the other—the gain in the cost of jute bags against the potential destruction of the very large quantity of social capital invested in a great city such as Dundee. I am not speaking for the moment in terms of the human suffering inflicted but only of the sheer economic loss to the community of rendering schools, houses and all the equipment of a great city unemployed or, in practice, underemployed, as it was in Dundee for twenty years together. I am not talking of investment in the jute industry itself for the moment, though I shall come to that, but of the vast social cost of rendering underemployed a large part of the millions of pounds of investment in social capital that has gone on in a great city such as Dundee.

Hon. and right hon. Members opposite seem totally to ignore this and do not seem to trouble to argue whether the gain in the production cost of jute bags out-weighs it. They are totally blind to the social cost when in a most doctrinaire way an industry is exposed to the unregulated forces of the market in this manner.

I should like to follow that with the specific point which the President of the Board of Trade raised, both in his statement and in his interjection to me, when he said in effect, "In any case this was done in the best interests of Dundee", which the Minister of Labour also claimed today, and added that anyhow Dundee was already suffering considerably from the competition of substitute goods, such as paper bags against jute bags. We in Dundee feel a certain bitterness when we are told that this blow is being struck at us in our best interest. What consolation is it to Dundee if now Indian hessians are allowed in and they compete effectively with paper bags? That will give not one man or woman in Dundee employment. There is absolutely no consolation in that.

The second part of the argument of the President of the Board of Trade was that, after all, the industry must bring down its prices. That may be so, but that conflicts with his view that the competition of paper bags is going on. If that is going on, it must be an effective encouragement to Dundee producers to reduce their prices anyhow. There is no need to let in Indian hessians if paper bags are already exercising strong pressure on the Dundee jute industry to reduce its prices. I think that they are exercising that pressure, but that shows that the continuation of a measure of protection for Dundee would not leave the industry in an over-protected condition in which it would have no competition to meet and in which it would get slack, with all the objections to that. On the Government's own showing, the paper bag and jute substitute competition is a quite effective spur on the industry.

When the President of the Board of Trade intervened and I asked whether this was the end of a period of steady prosperity for Dundee, as it certainly was regarded, the right hon. Gentleman said that I was quite wrong and that Dundee was already not experiencing a period of steady prosperity. The right hon. Gentleman was quite right. The prosperity is not so steady as it was a few years ago, but if the position is not so satisfactory, is that a good argument to strike a mortal blow at the industry? That seems to us to represent the view that when a man is down or half-down, that is the time to kick him.

The jute employers in Dundee by no means share the political opinions of those of us on this side of the House. We often have quite sharp discussions with them on labour matters and the rest, but we can sometimes see their point of view. Since the war, the jute employers have invested about £10 million in the modernisation of the industry, which for an industry of this size is not a bad record. It compares pretty favourably with other sections of the textile industry in the United Kingdom. The employers have done this against the background of repeated statements by the Government that they were continuing the present system of jute control. Those statements encouraged the employers to invest and to modernise their industry.

If that whole policy is now to be reversed, what will be the effect on other industries which the Government wish to induce to modernise and invest? I should have thought that the effect will be serious indeed in cases where the Government wish industries to produce modernisation of this sort, because it will be no very happy experience to employers who, whatever else we say of them, certainly have made very strenuous efforts at modernisation in their own industry.

I now come to the other side of the Government's case—on new industries in Dundee. Both the President of the Board of Trade and again the Minister of Labour today spoke of their desire to bring new industries into Dundee and of the importance of doing so. They revealed by that, quite clearly, that they recognise that what they are doing will make for contraction in employment in the jute industry. After that, it is quite impossible for them to argue that they are not striking a blow at the jute industry. It shows very frankly that their action was bound to cause immediate difficulties there.

We fully recognise and agree with the need to bring new industries into Dundee. The record of the Labour Government in that respect is one of the most successful cases of activity under the Distribution of Industry Acts. I repeat to the Minister, and I hope that the Secretary of State for Scotland will deal with the point, that at the very moment when, as the Minister has admitted, the jute industry is to be curtailed, rightly or wrongly, by direct Government action, and the Government says "We must bring new industries to Dundee", the Government close down the Board of Trade office which was the instrument through which new industries were brought into Dundee. It is no good the Secretary of State saying, "After all, what we are closing down is the local office. The whole thing can be done just as well from Glasgow."

I challenge the right hon. Gentleman to deny that in Dundee the local Board of Trade Office was considered the symbol of the intention of the Government to press on with bringing new industries into the City. Here I want to pay a great tribute to the succession of officials of the Board of Trade who ran that office in Dundee and who did very good work in that respect. Dundee has taken the closing down of that office as a sign that not only is the jute industry to be curtailed but at the same time the Government have lost interest in the question of bringing new industries into the City.

It is that double blow which is having so profound an effect on the psychology of the people of Dundee. This applies not only to Dundee but to Lanarkshire and to every area which was once a distressed area, whether in Scotland or not. There is a special psychology in these areas. One cannot go through the experiences that Dundee went through during the inter-war period without having a real terror of such a situation returning. When people see what has been happening both to their own staple industry and to the prospect of bringing in new industries, it is no wonder that there is a state of extreme apprehension in the City today. I am not saying that what has been done so far will totally ruin the jute industry, but everybody in Dundee takes it to be the first step in a course leading to the gradual dismantling of the jute control, and certainly the impression given by Government spokesmen today and yesterday can only be that.

If that is so, I ask the Secretary of State for Scotland what estimate he can give of what would be the effect on the industry if, and when, control is completely removed. At what size does he think the industry would settle down? I have heard responsible opinion which takes the view that it would settle down at about one-quarter of its present size, with three-quarters closed down, and that would he a catastrophe of the worst kind for the City of Dundee, which could certainly not be remedied by the introduction of new industries, at any rate in the short run.

All the anxieties we feel in Dundee are, as it seems to us, merely a case in point of the anxieties felt—and so well expressed by the spokesman from the Opposition Front Bench today—in the Scottish industrial areas. The figures quoted show this amply. They are vulnerable areas which, unless there is regulation of industry of some kind, are apt to fall hack into being distressed areas. In any policy of laissez-faire, in any policy of allowing market forces free play, there will he areas which will fall back into being permanently distressed areas, and a great many of them are in Scotland.

That is the law of the market. The law of the market is, "For whosoever hath. to him shall be given". Industry piles up where it is already deeply rooted. These areas, of which Scotland is a special example, will fall back towards the condition they were in before the war. I beg and pray the Government, if in the case of jute they have embarked on a return to a policy of allowing no consideration except that of sheer competitive costs, on the most doctrinal and classic argument, to consider the consequences for these Scottish areas.

Now a word about the policies which we would advocate there. In the case of jute in Dundee there are two. There is the far more drastic application of the Distribution of Industry Acts; not only the encouragement of industries to come to Dundee and such places, but the much more drastic action of preventing them from going elsewhere, which we did through the Labour Government.

We have expressed clearly our view that there should be a Government buying agency for jute and that its import into this country should be subject to Government regulation. I do not say that regulation should necessarily be used to give the Dundee industry a monopoly of this market; certainly not, but it should be used to regulate the position, to ensure that if there had to be contraction in the Dundee industry, it did not take place until alternative employment and alternative industries had been provided, in order to prevent the market forces having their will as they had before the war.

That is our policy. That is the natural policy for the Socialist Party to advocate. We believe that only by the application of those principles will a situation which has already begun to strike the greatest possible apprehension in the hearts of our constituents be resolved, and that only by those means will that apprehension be removed.

5.37 p.m.

Sir James Duncan (South Angus)

Apart from the party politics of the right hon. Gentleman, I do not disagree very much with what he says in his plea for the jute industry. However, I think he has exaggerated a little. He talked about laissez faire and the market forces of the world and striking a mortal blow at the industry, but I do not think he is fair to the Government in going as far as that, at any rate at this stage.

Before speaking of the jute industry, I will say one or two words of general application. We are discussing today an Amendment dealing with the Estimates for the current year, but it is fair, as everybody else has done so, to refer to the successes of the past year. It is right that Scottish people should have emphasised to them the great successes we have had in production—in shipping, steel, the output of tweeds, in particular, in electrical engineering and electrical goods and in whisky.

I give those as examples—there are others—to show that Scotland in 1956 was producing in many cases at a record level. Unemployment was very low, although higher than in England, and output was 2 per cent. higher than in 1955, whereas for Great Britain generally it was stationary. This shows that the experience of Scotland was more favourable than the experience of Great Britain. It is fair to say that in order to put the position in perspective. Anyone who reads the Report of the Clydesdale Bank will realise that Scotland had a good year in 1956 and that the prospects for this year, except for certain black spots, are good for the continuation of successful trade.

Mr. John Rankin (Glasgow, Govan)rose—

Sir J. Duncan

I do not want to be long.

Mr. Rankin

Nor do I. Would the hon. and gallant Member tell me whether the figures he has just given were derived from the Report of the Clydesdale Bank?

Sir J. Duncan

Yes.

I said that I do not want to be long, and I want to go straight to the jute industry. A blow has recently been struck at it, but not a mortal blow, and I want to find out the reasons which induced the Government to take the action which they took. As I understand the position, the imports of raw jute are roughly 120,000 tons a year, valued at £10 million; the production of jute yarn at home is between 2,000 and 3,000 tons a week; and the production of jute cloth is about 1,600 tons a week. In addition, there are imports of jute goods through Jute Control of about 1,000 tons a week.

The production in Dundee and district—and I wish to emphasise the words "and district"—has been static; it has been fully maintained through the years and there has not been very much variation. The contraction has been in the imported jute goods, which were roughly 16,000 tons a month before the war. Although there are big variations between different months, the figure since the war has been about 10,000 tons a month. That is where the contraction has occurred—in imports of jute goods, mainly jute cloth.

Is it not a good thing that the jute trade at home has been maintained in volume and throughput but that the protection given to it has reduced the amount of imports? There is a certain amount of export trade to set against the bill for imports, although I admit that the bulk of the home production is used for the home trade. The export figures are, jute yarn £500,000, jute bags £2 million, and other manufactures of jute £500,000. These figures all come from the Digest of Statistics. In addition, there is a very big export which is not included in the trade returns. I refer to other exports which are packaged in jute, for instance bacon. I do not know the figure for that but it must be considerable.

The Government have said that we are losing the trade to paper. What I am not clear about is whether Dundee is losing the trade to paper or whether the imported trade is being lost to paper. I cannot obtain any figures to show the production of paper bags in this country. I should like my right hon. Friend the Secretary of State to go into this question of figures to prove the Government's case, if he can, that there has been a switch-over to paper. Home deliveries plus exports of all paper other than newsprint were roughly 51,000 tons a week in 1939. That includes every form of paper other than newsprint. In 1956 the figure was 74,000 tons a week. In other words, there has been a very big expansion in the output of paper at home. How much of that is bags? That is what we are discussing today, because the Government allege that Dundee is losing trade because of the competition of paper bags.

The first point I want to put to the Government is this: if they say that the reason for their reduction in the mark-up is substitutes, what are the figures to prove it? What are the figures for the increase in paper bags? What is the reduction in the production of jute in Dundee and district, compared with the reduction in the imported jute goods, with which we should not be so anxiously concerned?

Next, I want to emphasise the importance of the jute trade to the district. I do not think that Dundee itself will be vitally affected by the present markdown from 39—if it is 39—to 30; at the moment the figure is flexible. I do not think that Dundee itself will be very much hurt. I feel, however, that in Kirriemuir and Forfar, and possibly other parts of Angus, Perthshire and Fife, where the run of the main 36–40–48l0-oz. jute goods are made, it may be much more serious, and I hope that everything which the Government are doing to help other industries to go to Dundee will be extended to the district, wherever there is unemployment because of the Government's action.

For instance, Forfar has 23 per cent. of its labour force engaged directly in the jute industry, and Kirriemuir has also 23 per cent. of its labour similarly engaged, and if those factories close down there will also be a very large indirect effect on the whole of the shopping community, for example. The factories are vitally concerned and cannot easily switch to anything else. They may switch to producing a different type of speciality jute, but their looms and workers are geared to the main run of production. I should therefore like to plead that if the Distribution of Industry Act is to be vigorously pressed in Dundee it should also be extended to the other towns in Angus, Perthshire and Fife if they, too, are affected.

I want, next, to deal with the effect of this mark-down to 30 on employment. My right hon. Friend the President of the Board of Trade said that he would make no estimate, but I have had an estimate made. The number of workers in the jute trade—not in Dundee but in the trade as a whole—is about 19,600. The number varies. On the same date that that figure was given in the Ministry of Labour Gazette, the number of unemployed was shown as 983. If we take a figure, broadly speaking, at 20,000 engaged in the jute trade, with 1,000 of them unemployed, then, on a 30 per cent. mark-down, my information is that 1,200 will be put out of work because of the switch-over to paper and 2,000 more will be put out of work because of the effect on the traditional jute production of the imported jute bags being sold more freely at a lower price. The total unemployment, according to my figures, will be 3,000 instead of 1,000.

My right hon. Friend the President of the Board of Trade said that he could make no estimate, but I think we must face the fact that there will be some unemployment, and the Government must make provision for overcoming the diffi- culties which will arise from that unemployment. I hope that they will do everything that they can to help those people who are put out of work. It should not be difficult. After all, there are ten women to every eight male workers in the jute industry; the proportion of the workers is eight to ten. It is quite possible that some of these women—for instance some of the married women—may not want to continue in industry. There may be an easement in that way. All the same, the male workers will want work, even if some of the women may not wish to continue in work, and it is important that the Government should do everything they possibly can to see that that work is found.

I am not raising today the question of protection. I am deliberately not doing so, because I do not believe that this problem has anything to do with the European Free Trade Area or the Common Market or anything like that. The Government have acted purely on the ground that doing nothing is hurting the jute trade and that unless something is done the trade itself will be hurt. I warn the Government that if they lower this protection any more, or if in connection with the Common Market and the European Free Trade Area this protection is lessened, I shall bring forward in this House pledges which have been made by Her Majesty's Ministers in the past and by leaders of the Opposition to show that this industry has been promised protection roughly equivalent to the jute control—pledges that this system of jute control will not be altered until some equivalent protection is granted in some other way. We in our part of the world wish to hold the Government to those pledges, because without them, I believe, as the right hon. Gentleman said just now, this industry will be ruined, there will be a very high rate of unemployment in Dundee and district and there will be a great waste of social capital and all the rest.

That leads me to the next question. Is this 30 per cent. to be permanent, or is it the beginning of the slippery slope? Unless the employers in the jute trade—and it is the employers that I am concerned with in this case—can be assured that the 30 per cent. will remain and not be further tinkered with because some one else thinks that it is not enough or that it is ineffective, as the right hon. Gentleman quoted from the report of the Jute Importers' Association today, there will be no possibility of any future for the industry from the employers' point of view.

The right hon. Gentleman used the word "psychology"—a word which I hate—but I have to use it in this connection. This is the psychology of fear. If in Dundee the employers are left with the impression that this is only a temporary step and that the protection may be reduced later because someone else wants it reduced, then there will be little hope of any reorganisation, modernisation, amalgamations or anything else that the employers might introduce to reduce costs in the future. They must have confidence, at any rate for the next three or four years, in which to replan their organisation to reduce prices to conform with the reduced mark-up.

Hon. Members opposite naturally talk for the workers, but I think that a word is due on behalf of the employers. Although not all of the older workers, who have been in the trade for a long time, can find other work, many of the workers can shift to other jobs. But let us look at this from the employer's point of view. He has his building and machinery and he has invested some £10 million in modernisation of the jute industry since the war. If this trade goes, he cannot switch to anything else. It is a dead loss. The worker can switch much more freely in many cases than the employer. I think that a word is due in their support at the present time, because they will be faced with enormous difficulties unless their position is maintained.

My right hon. Friend referred to Pakistan. It is all jolly fine to be very friendly with Pakistan, but what is it doing? Prices are varying from day to day and week to week. The policy of the Pakistan Government seems to be to create what, I believe, the Socialists call "planned scarcity". I should like to read a paragraph from the Clydesdale and North of Scotland Bank Survey. It says: As world demand generally for raw jute is increasing, concern is felt in Dundee over the future supply position, and the Pakistan authorities have been asked to relax control over the acreage planted and to establish lower and more stable prices. In March the chairman of the British Jute Trade Federal Council said that 'a continued policy of planned scarcity and high raw material prices will, sooner or later, result in the further inroads of substitutes and bulk handling into the traditional markets for jute goods', and this warning was repeated by the Chairman of the Jute Importers' Association towards the end of the year. That is exactly what is happening. Jute at one moment may be £83, and next week it may be £93. It has gone up as recently as May to £123. Part of that is export duty. At the present figure of £110 the present export duty is £9 a ton.

We have to prevent this planned scarcity and this seesawing of prices in such a way that the manufacturers in Dundee who buy raw jute for manufacture can obtain it at much more reasonable and stable prices, so that they can plan their price policy much more reasonably than when prices are seesawing in the way which they are.

I warn my right hon. Friend and the Government that if they go further, having taken this step on practical grounds and not on theoretical grounds, there will be past pledges brought up in this House which they will find difficult to overcome. Meanwhile, we have to accept this markdown from 39 or 40 per cent. to 30 per cent., and we shall watch its effect with very great interest and anxiety. We hope that the Government will do everything they possibly can to get over the evil effects of what they have done to Dundee and district, and that the Distribution of Industry Acts, the redeployment of workers and new factories will take up the slack and help to overcome the difficulties.

5.54 p.m.

Mr. G. M. Thomson (Dundee, East)

The House will be grateful to the hon. Member for South Angus (Sir J. Duncan) for the research that he has done in this matter. He has produced one most remarkable figure—his estimate of the expected increase in unemployment. I asked the President of the Board of Trade for this information yesterday. I assumed that it was an elementary question which any Minister would ask himself before taking this sort of decision. It is rather remarkable that it should be left to the hon. Member for South Angus to give a figure which the President of the Board of Trade was unable to give.

Sir J. Duncan

My figure is, of course, from private sources. If I am wrong, I shall be only too delighted.

Mr. Thomson

I understand that, and I am most grateful to the hon. Member for having produced a figure. It is, however, a grave reflection on the way in which the President of the Board of Trade has approached this very serious matter that he should have been unable to give any estimate of its affect en employment in the Dundee area.

I intend to be very brief and, therefore, I hope that the House will excuse me for concentrating on the subject of jute. This is much more than the ordinary constituency matter which faces us from time to time. Jute is literally the life of Dundee and district. It absolutely dominates the city, and if anything serious happens to jute it will be the end of the life we know in the district. The decision which the President of the Board of Trade announced yesterday is the first breach in the Government's jute control which has given the city and the district full employment since the beginning of the war. This protection was continued even by the Conservative Government, with its known views on matters of Government interference, because of Dundee's unique position.

The hon. Member for South Angus was a little coy about the various undertakings which had been given by the Government, and merely threatened to quote them. It might be useful if at least one of them was quoted in the debate. The President of the Board of Trade's predecessor, the right hon. Gentleman who is now the Chancellor of the Exchequer told me as recently as March, 1955, in reply to a Question that jute control must be continued. He said that it must be continued because of the heavy concentration of the industry in Dundee and its distance from the main centres of population. He said that if jute control were to disappear, … there would be a danger of continuing large-scale unemployment. He went on to use these words: It is in view of this position that Ministers decided that the industry must be safeguarded …. I hope that the Government will remember those undertakings.

The same right hon. Gentleman also made this comment on jute control: I would not say that I defend this as a method of trading. We on this side of the House understand that expression of view from the Government. He added: What I suspect is that if I tried to tinker with it and amend it, it may be worse for all concerned."—[OFFICIAL REPORT, 24th March. 1955; Vol. 538, c. 2243–5.] That is exactly what the present President of the Board of Trade has done. He has started to tinker with it and started to amend it, and I have no doubt that it will be worse for all concerned. This, as the hon. Member for South Angus implied even if he did not actually say it, is a breach of faith with the industry which, more than most industries, has responded to appeals from successive Governments to modernise its equipment and invest for the future. It did so on the basis of the undertakings.

It is very difficult to understand why the President of the Board of Trade should choose this moment to announce this first historic breach in a system of protection which has existed for many years. This is not a new problem. The competition of paper bags with jute bags has not suddenly sprung upon us, has not suddenly become acute in 1957. It is something which has been with us for a long time. It is a difficult problem, but it is not a new problem, and yet the Government have chosen the very moment when unemployment in Dundee is running higher than it has done over the past five years to make this decision.

I entered the House of Commons as a result of a by-election when there was a slight dislocation in the jute industry, a dislocation much less than the present one, but causing a great deal of worry in the whole Dundee area. In the five years I have been a Member, unemployment has never been higher than it is at the moment. In addition to the immediate unemployment in Dundee, there is general uncertainty about the future of the jute industry, because of the implications of the proposals for a European Common Market. I agree that this decision is not related to the proposals for a European Common Market, but it would have been much better if the Government had postponed the decision until they were in a position to make a general statement about their views on the whole future of the industry.

It would be interesting to know exactly why the Government have taken this decision. What were the representations made to the Government? We have not heard very much about them. Can the Secretary of State for Scotland tell us whether the Governments of Pakistan and India have made representations that this step should be taken? Can he tell us from where the representations from other parts of the country have come? I know that there have been no representations in this sense from the Dundee area—quite the reverse.

One is left with the feeling in this case, when dealing with the employment considerations, that the Scottish employment interests have been sacrificed to very much less important employment interests in other parts of the country. The President of the Board of Trade obviously felt uneasy when announcing this decision and said that he would make every effort to keep up the level of employment in the Dundee area by introducing new industries. It is a bit of a cheek for the right hon. Gentleman to use that sort of argument in these circumstances and to expect us to have very much faith in it. As my right hon. Friend the Member for Dundee, West (Mr. Strachey) said, he is the person who has closed the local office of the Board of Trade, along with other local offices throughout the country, and is also the right hon. Gentleman who has weakened the distribution of industries policy by refusing Government-financed factories to let, except in the most exceptional circumstances.

In a debate in another place a few months ago Lord Bilsland, a most eminent authority on these matters in Scotland, said that the distribution of industries policy had become a dead letter as a result of the actions of the present Government. We cannot have any great confidence that the present Government will be able to produce the new indus tries which will be needed in Dundee if the jute industry there declines. There is a growing conviction that the President of the Board of Trade, with his well-known doctrinaire dislike of Government interference, wants to destroy jute control utterl, no matter what the cast to Dundee.

I profoundly hope that I am wrong and that the Secretary of State for Scotland can give the pledge for which the hon. Member for South Angus asked this afternoon. The jute industry must have some sort of assurance that this will not be the first step of many, an assurance that the industry can go ahead and make its plans on the basis of some sort of assurance for the future, no matter how wrong this step may be.

I am told that although the industry has an excellent investment record, its investment plans are already coming to a stop because of the uncertainty. My hon. Friend the Member for Hamilton (Mr. T. Fraser) referred to the action of the President of the Board of Trade as a body blow to the jute industry in Dundee. It is a body blow. It is very serious in itself, but we are afraid that it is merely the first blow of a softening-up process before the right hon. Gentleman finally delivers a knock-out blow to the jute industry in the city and, therefore. to the whole life of the community in that part of Scotland as we know it.

I shall be as relieved as anybody if, by the conclusion of the debate, we have been given an assurance that that is not so and given a repetition of the guarantees made to the jute industry in the past. If those assurances are given, nobody will be more pleased than I. The speeches we have heard this afternoon indicate that this is not a party matter, although there are political differences on how to tackle the problem. In the general interests of the whole community in this part of Scotland, I hope that we can have a reassurance from the Government before the debate ends.

6.10 p.m.

Sir James Hutchison (Glasgow, Scotstoun)

A debate upon Scottish industry in general must, from the nature of things, take rather a special form. After one has examined the statistics and compared progress and advancement between Scotland and England—which was a technique employed by the hon. Member for Hamilton (Mr. T. Fraser)—one finds that the questions which affect Scottish trade, in general terms, are the same as those which affect the trade of the whole island, for our economies are so integrated—and long may they remain so—that we can rarely single out from the general picture a problem which is a specifically Scottish one.

Mr. Willis

The jute industry.

Sir J. Hutchison

That is not a general question. If the hon. Member will contain his ebullience for a moment I shall come to that aspect of the problem. Every now and again, either in respect of a whole trade or of a particular distinction, some sort of peak in the graph emerges which concerns Scotland more obviously than it concerns the country in general. So the debate tends to move from the general into the particular.

I have no complaint about that; it is just what I shall do myself. But it was under those circumstances that we listened to the interesting speeches on the plight of the jute industry made by the last three hon. Members. Perhaps they will excuse me if I do not follow them on that subject, because it is not a problem which particularly affects my constituency. It has been deployed with skill and eloquence already, and we must all he concerned that some solution to this grave problem will be found.

I want to pass on to a theme which has been mentioned by the hon. Member for Hamilton, not only today but on many other occasions, and by many others, namely, Scotland's need for diversification of industry. This is one of the distinctions which, in general terms, applies to Scotland more than it does to Great Britain as a whole. We have pressed for a diversification of industry because experience has shown that the heavy industries upon which we have been so dependent tend to be those which are hit first in a recession and which recover last after the recession is over.

But another aspect of the matter, which was a new one to me, was brought out in evidence given before the Estimates Committee by Mr. Allan Young, the Board of Trade Controller for Scotland. It is so new to me, and it is the first time that I have heard this explanation given by anybody of eminence, that I think the House may be interested to hear it. Mr. Young was giving reasons why Scotland suffers this stubborn and continuing excess of unemployment over the general average for the country. He said: The reasons, to put it mildly, are obscure. I think it is because we are still over-dependent on the heavy industries, the heavy basic industries like shipbuilding and steel, and very heavy engineering, industries which do not lend themselves to the breaking down of the skilled process to some simple assembly job that will absorb semi-skilled or unskilled labour; and the only way in which I can see the problem being solved is to bring in a greater number of those industries. The reason why you have unemployment reaching almost vanishing point in the Birmingham area and in London is because you have such a variety of light employment where the skill is transferred from the bench to the machine, and the operative, after a few weeks' training, is capable of doing some job and earning his wages. Now, we do not have a sufficient amount of that type of industry, in my opinion, in Scotland … I agree with that conclusion, but I have never heard it analysed in that way before.

Mr. Thomas Oswald (Edinburgh. Central)

Shame. There is nothing new about that.

Mr. Cyril Bence (Dunbartonshire. East)

We have been on about that for forty years.

Sir J. Hutchison

I have often heard the plea for a general diversification of industry because it would be for the benefit of the country, but I have never heard the argument put forward, in support of the case, that the shipbuilding and heavy industry find it more difficult to accept unskilled labour and put it on a job as the less heavy industries and light industries can do.

Mr. Bence

The point has been put in the House many times, in that manner and in another manner—a manner in which I have very often put it and in which I believe the hon. Member for Follok (Mr. George) has always put it. namely, that the diversification of industry is essential because, by diversification, the use of light industry and the conversion of metals by automatic machine processes, we can increase the conversion value of raw materials, thereby raising the standard of employment.

Sir J. Hutchison

That is another aspect of the same problem, and I am glad to hear it. All that has happened by my reading this evidence is that we find ourselves in general agreement, and it adds to the argument in favour of a general diversification of industry. Mr. Young went on to say: If you wanted to get a real footing in the vehicle industry in Scotland I think you would need to start at the bottom and the bottom is the diversification of the steel industry. The steel industry in Scotland is geared to the shipbuilding industry, and to heavy engineering. If we were making light steel sheet and strip, that at least might be one factor in attracting up there industries that would make use of that lighter material. This theme of the diversification of industry has been preached by Professor Cairncross in his Report, which is so often referred to and reiterated year after year by the Scottish Council and by myself whenever I have the opportunity. Only the day before yesterday there was an article in the Observer—a very interesting review of Scottish conditions—in which the writer once vain emphasised the importance to Scotland of the diversification of industry.

The main instruments for this diversification have hitherto been the Distribution of Industry Acts, about which we have heard so much this afternoon. Let us admit straight away that those Acts have had a considerable amount of success. The evidence is provided by the fact that American companies have come to Scotland and established themselves there. But a further opportunity for the diversification of industry in Scotland presents itself under the Housing and Town Development Bill, under which grants can be earned for the provision of factory premises. I hope that this will be taken full advantage of.

I am not frightfully impressed by the descriptions of hon. Members opposite of the calamitous results of the migration of some Scotsmen beyond the Scottish borders. Scotland has been greatly advantaged by the pioneering spirit of those Scotsmen who, wherever one goes in the world, can be found in positions of responsibility and very often making very great successes of their careers. Our prestige, wherever we go in the world, is immensely greater than that to which our simple size and population would entitle us. Those eminent Scotsmen have come to London and have gone all over the world, generally to establish themselves successfully and always to the advantage of Scotland.

Nevertheless, that leaves the unemployment question, and the need for improvement to be brought about. Since June, 1956, the Government have changed their policy under the Distribution of Industry Acts and will now make the provision of factories in Development Areas available only under special circumstances. I am at one with the hon. Member for Hamilton and his hon. Friends who think that the provision of a factory, made available upon a rental basis, plays a very big part in attracting industry to Scotland. It has been used by Lord Chandos in Northern Ireland with very great effect, and some of the baits that the Northern Ireland Government have offered to industry to go there have been extremely attractive.

If the Government have changed their policy in regard to the provision of factories in Development Areas—and there is justification for this change in regard to many of the Development Areas because many of them have now worked themselves into positions, because of the facilities given to them, where the unemployment is no greater than the general unemployment figure outside—they must make available that same system in pockets of Scotland which are not scheduled as Development Areas but where unemployment is excessively high. I think Greenock was mentioned today—I do not know whether the figure is accurate—as having an unemployment percentage of 6 per cent.

Dr. J. Dickson Mahon (Greenock)

It is.

Sir J. Hutchison

I understand that somewhere near Moray and Nairn the percentage is about 9 per cent. I consider that a system which has worked well in the Development Areas in building up the situation there, should be used in suitable areas outside the scheduled Development areas; not everywhere, but where there is a stubborn continuance of unemployment. The Select Committee on Estimates in its Report agrees, at any rate up to a point, with what I am saying, because it advocates that there should be a complete review of the present distribution of industry policy. The Government should use a medicine which has worked well where the sickness has been diagnosed, in the Development Areas. The same sickness can be discerned in places outside the Development Areas, and so I suggest that the Government should apply the same medicine there.

This question of the diversification of industry is linked with and leads me to my next point which was also spoken about by the hon. Member for Hamilton, and I agree with much of what he said. It is the projected steel strip mill. That would play a big part in the diversification of industry and the existing reliance on heavy industry in Scotland. Let us look at his problem for a moment. There are three principal contenders for this steel strip mill—the Grangemouth area in Scotland, Newport in South Wales and Lincolnshire. All three places have some advantages and some disadvantages.

Regarding Scotland, the main argument must rest upon this need for diversification which has been supported by nearly all the hon. Members who have spoken this afternoon, and by the eminent authorities which I have already quoted. The second advantage is—and it is linked up with the unemployment question—the available pool of labour, more available, I understand, than in the other competing areas. All three areas must import their ore, as has been said. All three areas will have to make provision for some additional housing and upon those grounds we are on level terms.

It is claimed for Scotland that they will be able to supply competitively steel strip for the whole of Scotland and as far South as Manchester. It is true that with the minimum economic size of mill, with an output of certainly not less than 1 million tons a year and probably nearer 3 million tons a year, that will not at once be absorbed in the area. One of the disadvantages for Scotland is that the demand for steel strip lies in the London and Birmingham areas. But after all, there is an export market, and Grangemouth is well situated to be able to take advantage of it. If the European Free Trade Area scheme comes about, I think we may justifiably hope that that export market will be expanded.

In Wales there are two steel strip mills already, and there is one just over the Border. Surely it would be ridiculous to put another there; at any rate, it would be ridiculous in the face of a general scheme for the diversification of industry all over Britain because it would be the very converse of diversification. Within all three places some expenditure on port facilities will be required if ships of 20,000 tons are to be the ore-carriers. Hon. Members will know well that the tendency is for all ships—particularly tankers, but also dry cargo ships—to go on growing in size, and so there is no great disadvantage to Grangemouth compared with the others in the port facilities proffered.

The main difficulty, as has been said, is that of coking coal. I believe that the programme of the National Coal Board was drawn up to make provision for the Colville expansion, and I agree absolutely that it would be foolish to try to withdraw coking coal from the Colville requirements from where the output would be absorbed, to divert it into something where the absorption of the product is more dubious. Therefore the Colville needs should be satisfied first. They are not really Colville needs, they are the needs for heavy industry all over the country, but I am using the phrase "Colville needs" for convenience.

As a shipbuilder, I know that we have been short of many sections and plates for a considerable time, but I do not believe it impossible for the National Coal Board so to adjust its programme as to be able to provide for the Colville requirements and also for a steel strip mill. Has not a seam been discovered in south-west Lanarkshire, and are not there thought, or indeed proved, to be considerable quantities of coking coal under the Forth? Therefore, I urge my right hon. Friend and the Government to call upon the National Coal Board to answer the simple question, whether within a reasonable period of time it could make provision for and produce the quantities of coal needed both for the Colville expansion and also for a steel strip mill in Scotland. Until we have a categorical answer from the Board that both cannot be done, I think that the whole position should be examined.

I wish now to turn to a somewhat lighter subject compared with that of heavy industry, the question of whisky exports. [HON. MEMBERS: "Hear, hear."] I notice with relief that hon. Members find this new introduction into the menu appetising.

Mr. James H. Hoy (Leith)

A bit more spirit.

Sir J. Hutchison

All right, a bit more spirit. We will see what we can do.

Everyone knows that whisky is a great dollar earner. It is also a most important industry in the Scottish economy, and, indeed, in the whole British economy. I think that it is being hit in an unfair way by our allies just across the Channel. For a number of years the value of exports of whisky into France have been at the rate of about £550,000 a year. That is really a trifling sum. But even this, by a recent enactment of the French Government, has been cut down to £110,000 a year, which is only a trifle. The question is all tangled up with the availability of foreign exchange and international exchanges, and so on. It is a complicated question relating to the internal economy of France. I do not propose to go into it, because it does not matter to me whether the whisky is bought by making sterling available at a premium to the importer, or whether it is a straightforward import-export business.

What I care about is that already a fictitiously small amount of whisky which was going to France has been cut to almost nothing. When at the same time we notice that the average value of imported French wines over the last three years amounts to about £4 million worth a year, and that the value of imported brandy from France is about £3 million a year, it makes the situation look almost ludicrous. I imagine that whisky exporters and distillers would be happy to trade a bottle of whisky for a bottle of brandy, and I do not think that that would be a bad bit of barter dealing. I suggest to my right hon. Friend, therefore, that he might approach the French Government on that basis.

Perhaps some hon. Members may have noticed that the British Medical Association has been meeting in Newcastle and some interesting remarks have been made about whisky. It has been said at that meeting that whisky is in some cases the best drug for the relief of pain. Professor Charles Robb reported: We put our patients on big and rapid doses of whisky up to the maximum tolerance in individual cases. Professor Robb is quoted in the Press as saying: The best treatment for this condition is rest. The best rest is sleep. The best way to get sleep is to relieve pain and the best way to relieve pain is to give whisky. I suggest to my right hon. Friend that the best way to sell whisky to France is to get Professor Robb into the Board of Trade. If any hon. Member is interested in knowing Professor Robb's address, may I say that he practises as Professor of Surgery at London University.

Mr. Rankin

Where is the hospital?

Sir J. Hutchison

I presume that it is nearby.

The third point concerns Prestwick Airport. Ever since the war we have been given to understand that Prestwick would be maintained as a first-class international airport. Recently, the Canadian user, Mr. McGregor, President of Trans-Canadian Airlines, was reported as saying that unless extensions to the runways at Prestwick were put in hand soon and completed within four years its principal transatlantic functions would cease.

Two years ago, the Ministry of Transport and Civil Aviation arranged that alternative runways would be laid down. That took place, but the main runways are still too short for the big Britannias which are due to come into operation almost at once, and a good deal too short for the new jet airliners which are planned to be used in the future.

I have received a letter from the Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation in which, I am delighted to say, he has stated that after the investigation into the situation at Prestwick by the panel which was appointed by the I.C.A.O., and after a visit by himself quite recently, his Ministry has decided that it will undertake the strengthening of the main runway and its extension from 7,000 to 8,000 ft. He states that if Treasury consent is given—I doubt whether the Treasury can withhold consent in a case like this—the work will start this autumn and will enable the big Britannias to land at Prestwick next year. This is an important and most welcome bit of progress.

As regards jet aircraft, the Ministry take the quite reasonable view that, of the Boeing and Douglas jets being built in America for Transatlantic travel, one has not been completely built and the other is still in the prototype stage, and that to ask for the runway to be further extended at a cost of some £5 million up to the 9,400 ft. which is required by the jet aircraft before we have any assurance that the aircraft will be able to fly, that some will be bought by the operators, and that the operators plan to use them at Prestwick, is asking the Government to go a bit too far. The Ministry tells me that it is in consultation with American operators to get answers to those questions. It is only reasonable that we should agree to wait until those answers have shown that such extension and lengthening of the runway is justified.

I would add a word of warning on the scheme. It may be too late to extend our runway after the aircraft has come into operation. When Stephen Leacock was asked the best recipe for making an asparagus bed he replied, "Dig a deep soil trench three years ago." That is the sort of thing which is needed if we are to hold on to the transatlantic service. We must have the runway ready ahead of the arrival of the aircraft otherwise they may be diverted and we may never get them back.

I welcome, as I believe the whole of Scotland does, the limited progress conveyed to me by the Joint Parliamentary Secretary to the Ministry of Civil Aviation. We welcome what appears to be a policy of recognising that. Prestwick must continue to be maintained as a first-class international airport. We hope that as soon as the Joint Parliamentary Secretary has information which shows that the runways must be further strengthened he will keep to his pledge, strengthen them, and be ready to receive the largest aircraft that fly.

6.35 p.m.

Mr. David J. Pryde (Midlothian)

Whatever the duties of the Minister of Labour are it cannot be gainsaid that he has painted the clouds with sunshine. Unfortunately, Scotland does not reflect the sunshine which has been portrayed. I am not exaggerating when I say that the keynote of the debate on both sides of the House is deep-seated apprehension.

It is well founded. We are told that the jute industry is in a bad way. The latest thrust at jute will react right throughout Central Scotland. It will affect Rosslyn, Bonnyrigg, Eskbank, Glasgow, Glenpatrick, Stirling, Ayr and the Kilmarnock area, as well as many other towns. On coal, we are told that there are more people employed today than previously. How many licences have been issued in recent years to allow private owners to operate surface mines etc., especially in Lanarkshire, Peebles-shire, West Lothian and Midlothian?

We are told that objections to the strip mill are that there is a shortage of coking coal in Scotland. In the early 1880's two companies in Midlothian had the sole contract for supplying the London County Council with coking coal. There are more seams of this coal in Midlothian than anywhere else in Britain and its calorific quality is higher than that of any other in Britain. We have square miles of the ingredient which is so essential to the making of steel—lime. All the minerals which are required in the process of making steel are nearer the Forth than they are to any other available port in Britain. It is in the Arctic Circle that we find these rare ores which are required for that purpose.

There is no good in people coming with the ghost story that Scotland is not well equipped and well placed for the opening of a great steel industry. One part of Scotland more than any other shows the inefficiency of having a Government situated in London. We had an industry employing 12,000 people and producing more than 3 million tons of rich shale. We turned a certain part of it into very-high-grade octane spirit and we produced also a very heavy supply of detergents and various other products. Today it employs only 3,000 people. The others have all gone from the district all over the world. I have signed many a paper protesting at this and asking why they do not stay. One authority said, "In the East of Scotland no people travel so far and extend their working day so much as people in the West Calder area." The shopkeepers tell me that in that area they are on the verge of bankruptcy because no one who used to he employed in the area now purchases anything from them. They have to go to Edinburgh and possibly further than any one else in the East of Scotland has to go.

The Minister mentioned the Border Counties as being a district which could be looked on with some degree of satisfaction. At least one of our factories in the Borders is equipped with what is probably one of the finest machines in the world, but it is circumscribed. It has no room for expansion. Here in London during the war it was dictated that those factories were not to be extended into Midlothian or West Lothian. They had to go further afield. It was rather ridiculous to send the extension to Arbroath or the Leven Valley when it could have been fulfilling a very necessary function by providing employment in the Calders area, which was the first area to be scheduled under the Distribution of Industry Act. Yet nothing has been done.

On the subject of jute I would point out that today the Board of Trade allows foreign manufacturers to bring cotton carpets to this country and sell them in competition with our own product in Scotland, yet the product of the foreigner is not of the same quality as the product of Scotland. A jute-backed carpet will sell anywhere, but when I put forward the idea that workers in foreign countries are not paid the same rate of wages as the Scottish workers I was told that is not the case. I was told that the wages are comparable. Then what about the raw material? Is it taken from the Congo by slave labour, or is it in the banking system of Belgium that a closely-guarded subsidy is poured into the industry and poured into the British market against our own product?

Every hon. Member, on either side of the House, who has spoken tonight has pointed out that the Government must do something. We have been told that the present situation has been caused because the Government have abolished the idea of building factories or financing their building. What is a Government for? Is not it for running the economy of the country? When things are going well, the Government of the day take all the credit. When things are going not so well, they search for excuses. There is no doubt that as things stand today this country faces a very black outlook. If there is such uniformity of opinion among back benchers on both sides of the House, why cannot Scottish hon. Members get together, no matter to what party they belong? I have heard it said tonight that this question is more than a party matter. Why then can we not say straight to the Government, "It is your job. You are the Government and you have to do something in the interests of all the people in Scotland"?

Would it not be to the point if we were to ask them to get ahead with the building of bridges across the Forth and the Tay and in the Highlands? The curse of Scotland is that she has no roads. The Borders have no roads suitable for anything like the traffic which should be pouring out of those counties, yet there is plenty of material to build such roads. In Scotland it should be possible to employ the most easy and cheapest method of construction of roads anywhere in Europe. Apparently we are still thinking in terms of the horse and cart in trying to implement plans laid down between 1945 and 1950 for an expanding industry. We require an expanded industry.

One wonders just how much the Common Market will affect the industries of Britain. We cannot expect Scottish manufacturers and Scottish workers to embrace the Common Market with enthusiasm, because we fear the effect it may have on our agriculture. I ask the Minister to institute a searching of the heart and mind of the Government and to try not to be prejudiced by the idea that Scotland gets more than its share. If all the accounts concerning oil were gone into, we should find that in Scotland we could produce oil more cheaply than anywhere in the world.

6.45 p.m.

Commander C. E. M. Donaldson (Roxburgh. Selkirk and Peebles)

The hon. Member for Midlothian (Mr. Pryde) referred to the Border area. One of the counties which 1 represent he previously represented, and it is one of the real Border counties.

Earlier this afternoon, during the speech of the Minister of Labour, I interjected in relation to the Royal and Ancient Burgh of Jedburgh. I wish to direct the main part of my remarks to the difficulties of that burgh. My right hon. Friend explained to the House that in the Borders generally there is a most remarkable condition in relation to employment. The official records show that last month there were 176 unemployed in the Borders. In the three counties I have the honour to represent there are something over 700 unfilled places. There are those vacants positions with no one to fill them. Jedburgh is in an entirely different position and it is a complete anachronism in the situation in the Borders, for there we have people not doing the work they used to do in the North British Rayon mill, but who are still employed in other industries. The provost, members of the community of Jedburgh and all Border people are concerned about the difficulties that face the burgh.

I have had occasion to be in contact with the Minister of Labour, the President of the Board Trade, the Secretary of State for Scotland, the Scottish Council and the leaders of the two main trade unions which previously had most interest in the North British Rayon mill. We have met together with representatives of the industry and the Scottish Council at a meeting in the town hall of Jedburgh. I have taken the trouble to go to Glasgow and talk with the official receiver, who is responsible for the residual part of the North British Rayon mill. The provost, members of the council and 1 have received nothing but sympathetic and interested concern from the Ministers to whom we appealed.

The Secretary of State for Scotland last week received the provost and the dean of guild from Jedburgh. They were satisfied with the courtesy of the reception and the understanding of the Secretary of State with the problem that faces Jed-burgh. I am confident that the other Ministries are conversant with the practical difficulties, but the fact that we have people fully employed does not detract from the fact that the burgh itself is in difficulty. Ten or twelve bus loads of womenfolk go to work in Hawick, Galashiels and Selkirk. The tendency is that they will do their shopping in Hawick or Galashiels where, perhaps, there is a greater selection in the shops than in Jedburgh.

The younger girls are invited to dances in the other burghs. For instance, they have dances in the Tower Hotel and other hotels in Hawick, and the girls return to Jedburgh late at night. The social amenities and the attractiveness of the community are therefore running down, which ought to worry all of us. It is strange that in the midst of plenty there is difficulty. I believe that in Jedburgh thirty good, new council houses stand vacant for the want of occupants because one mill, which was not in the tradition of the wool trade in the burgh, closed down.

What the burgh seeks is a further assurance from the Secretary of State and, through him, from the other Ministries that they will never desist from endeavouring to direct a company or companies to occupy the premises vacated by the North British Rayon Ltd. mill.—It is a splendid site, with ample power. I understand that most of the buildings have been cleared of the previous machinery and stand vacant and ready for occupation.

I am sure that we shall be given as much relief as possible by the Minister, but until some new industry is brought to Jedburgh, I shall continue to make the plea that my right hon. Friend must spare no effort to see that an industry is at least invited to go there. I believe that there are contacts to be made through inquiries in America about possible sites and sources of labour in this country. The only difficulty which I see about people contemplating a move to Jedburgh is that they might think that there is full employment in the burgh, whereas at least some hundreds of these people are willing and most anxious to work within the burgh rather than travel daily out of the burgh.

There should be no fear that a pool of labour will not be available. It is expert and loyal labour which, like other labour on the Borders, has not been involved in disputes.—It is known to have been loyal to its previous employers. This pool of labour is available.

I ask my right hon. Friend to assure the people of Jedburgh that this situation will never be forgotten and that he and the Minister of Labour will persist in endeavouring to persuade or direct some new employment to Jedburgh which will resolve this difficulty of a burgh which should not be allowed to run down.

6.53 p.m.

Mr. John Rankin (Glasgow. Govan)

It might surprise the House to know that if an individual in my division is working on repair, refitting, painting or any conversion work on a ship in dry dock he is amply protected by a code of regulations, but that if he is working in a wet dock in my division and is doing the same work he is without protection. I hope that the Minister of Labour will be even more astonished. In spite of the fact that when he is working on a ship in wet dock the danger is greatly increased, because he is subject to the movement due to the buoyancy of the ship and to the movement caused by the incoming or the outgoing tide, the man has no protection; where the danger is increased, the protection is diminished. I hope that that will surprise the right hon. Gentleman the Minister of Labour, whom we welcome here this afternoon.

What is even more surprising, in view of that situation, is that in 1950 one of the last acts of the then Labour Government was to draw up this code of regulations which I have in my hand, in order to try to bring wet dock operations into harmony with operations in dry docks. Unfortunately, before the regulations could be approved by Parliament there was a regrettable change in Government, and this code of regulations has been lying in the offices of the Ministry of Labour since the last Labour Government left office.

Yesterday I tried to obtain a copy of the draft regulations which the Labour Government had published. I received a copy only at five o'clock this afternoon. The reason for the delay was that no one in the right hon. Gentleman's office seemed to know anything about it. It is a very important matter, and I thought that I would raise it because in due course before the Session terminates I hope that the Minister will agree to meet those of us—not all of us—who are interested in the shipbuilding and ship-repairing divisions in order that we may talk over this matter and see whether we cannot convince him of its urgency and have the regulations which apply to dry docks extended to wet docks.

I want to say a few words on the subject of shipbuilding and engineering. We have heard a good deal today about Dundee, and very properly so. I am sure that on both sides of the House we want to see this team spirit. We want to feel, "If you hit one bit of Scotland, you hit the lot. We are a team."

Commander Donaldson

Celtic or Rangers?

Mr. Rankin

I said "hear, hear" when the hon. and gallant Member was speaking of Jedburgh.

Commander Donaldson

The hon. Member said that we were all a team. I asked him whether the team was Celtic or Rangers.

Mr. T. Fraser

It does not matter. It is a Scottish team.

Mr. Rankin

Yes, it is a Scottish team.

Both my hon. Friends from Dundee very properly dealt with the problems of Dundee. This is not merely Dundee's case but Scotland's case. I hope it will be of interest to hon. Members on both sides to be informed that in Glasgow we have a somewhat similar set up. In the City, there are 51,000 people engaged in the engineering industry. There are 12.000 engaged in the shipbuilding and ship-repairing industry. Altogether 60,000 people are engaged in all the other forms of productive labour in Glasgow. It will readily be seen, therefore, that the two major productive industries in Glasgow employ more people than all the other productive industries put together. That italicises the dependence of Glasgow on these two great occupations and the need for full employment in them. Because of that, the shipbuilder's order book becomes very important, and so does the output of ships.

Here, I must dissent a little from some of the things that have been said earlier, because, according to my figures, while the orders on hand are good, the numbers and the gross tonnage of ships for 1956 were down compared with 1955. My figures, derived from shipbuilding sources, show that in 1956 121 ships of a gross tonnage of 506,429 tons were launched, but that in 1955 131 ships of a gross tonnage of 569,235 tons were launched. On Clydeside, Tayside and Deeside output was down. Only on the Forth was there any increase. As I say, I have taken those figures from shipbuilding sources—

Mr. J. C. George (Pollok)

Will the hon. Gentleman mention the value?

Mr. Rankin

The value of the ships?

Mr. George

Yes.

Mr. Rankin

I must apologise to the House. I cannot give that information offhand. I meant to give the gross value later on, if the hon. Gentleman will just wait a little. What I want to emphasise at the moment is that in my division, which is so largely dependent on shipbuilding and engineering, and in the City of Glasgow as a whole, even a small fall in output sends a shiver through the older men, because memories of 1933 still persist.

In 1933, the gross tonnage launched on Clydeside was 56,000 tons, as against the 506,429 tons of last year, so that even though last year's output represented a fall from the previous year's, what a change it represents from the 56,000 tons of 1933. And what that change means in health, wealth and happiness to working people is not easy to put into words. Yet the advance that it represents does not blind us to the fact that Scotland—and Glasgow in particular—is still too dependent on the heavy engineering industries and too short of the lighter industries, such as radio, aircraft and the motor industry.

Moreover, the shipbuilding industry is not getting sufficient steel in proper sequence to hold its place in world competition. As a result, only once since 1945 have we reached a total output, in U.K. figures, of 1½ million tons of shipping. That was in 1954. Yet our shipyards today are equipped to produce 1¾ tons of shipping annually. We have the men; we have the materials; but deliveries are not forthcoming because of the shortage of steel.

While we congratulate the steel industry on raising its annual output to 21 million tons, I think it will be agreed on both sides of the House that there is still need for far more steel production. In that connection, I want to ask the Secretary of State to tell us how far the further extension and modernisation at Ravenscraig and at Clydebridge which have Just been announced will enable Scottish shipbuilders to get steel in sufficient quantities when they need it so that they can make the fullest use of their capital equipment and manpower.

I have no figures for the Scottish shipping industry's exact requirements, and I would urge the Secretary of State to try to put, either into the Scottish Digest of Statistics or into the Report that we are now discussing, a little more information—we have a good deal, I admit—on the statistical side. I am told, however, that the shipbuilding industry as a whole could take an extra 75,000 to 100,000 tons of steel per year, and I should like to know from the Secretary of State how much of that demand will be met by these two new projects.

The hon. Member for Pollok (Mr. George) asked if I could give figures of the value of our shipping output. Last year, the value was £200 million—which is, of course, a very important contribution to our wealth—and we exported £93 million of shipping. We must maintain that position, and to maintain it we must get more steel—but not at the expense of the light industries. We want the strip mill at Grangemouth. I support everything said by my hon. Friend the Member for Hamilton (Mr. T. Fraser) about that, though it is more sheet steel that I want and not more strip. I still want the strip, but I want it in addition to the sheet.

I was impressed by some statistics I read in the Digest which comes to us twice a year. I chanced to look at the page which deals with the population of Scotland by regions. I took 1911 as my starting point. That is purely an arbitrary date, and it does not matter, because I could have taken any year on that page and it would have shown the same sort of result. The population of the central counties in 1911 was 3,286,000. It had risen in 1956 to 3,748,000. By "central counties" we mean Ayr, Lanark, Bute, Stirling and Fife—that belt around the Forth and the Clyde of which we spoke a good deal during the Committee stage of the Town Development (Scotland) Bill. Therefore, in that area we had an increase in population over those years of 462,000.

I looked at what had happened in the Highland counties in the same period, and I found there was a decrease in the population of 64,000. I looked next at the figure for the Border counties in the same years and found that the decrease was 12,000. The north-eastern counties for the same period showed a decline of 4,000, and only in one little corner of Scotland, the south-western counties, taking in Dumfries, Stranraer and Newton Stewart, thriving, healthy and growing areas, was there any increase at all, and there it was but a very small one, only 4,000.

Had the population of Scotland been falling in that period, these figures would not have been remarkable, but the population of Scotland had risen from 4,761,000 to 5,147,000, an increase of 386,000. We are, thus, faced with the fact that, while the population is increasing in the central belt and, of course, we welcome an increase in population, it is decreasing steadily over whatever period of years one cares to choose in that report in other parts of Scotland. In two areas of Scotland, the Highlands and the Border, the decline has been particularly marked. Despite the fact that we have spent money—I will not say money galore—and have done a great deal—again, I will not say we have done everything we could have done—to arrest the decline of population which has gone on in the Highlands, yet it still persists.

One can go back in the Report as far as one likes. In 1851, the population of the Highland counties was 396,000, and the fall continues through every census year until December, 1956, when the figure became 278,000. In the Border counties, the same alarming erosion is going on, although not at such a high rate.

These overall trends show an unhealthy state of affairs in Scotland. We may be doing well in this industry or in that, but these trends in population, the decline which is taking place throughout these large areas in north and south, are not healthy signs. They call for inquiry. If the figures are accurate, as I believe them to be, they show that the sooner we have an overall industrial plan of development the better it will be for Scotland and the Scottish people.

I suggest that the Secretary of State should immediately consider the appointment of a planning commission for Scotland to deal with the diversification of industry, which has been mentioned, to deal with the housing problem, to deal with the industrial problem, and with the necessary dispersal of population which must take place if we are to have some of that variety to be found on the other side of the Border. We want big towns in these sparsely populated areas; we want them in north and south. We want industry. If we are to have those things, they will come not as a result of anything which private enterprise will do; because private enterprise is primarily concerned with making wealth in those parts of Scotland where it can most easily be made, namely in the central belt. The Government must, therefore, become the pioneer; they must prepare the way for the growth of a Scotland the parts of which will be more evenly balanced than they are today.

We just cannot afford only to expand around the Forth and Clyde basins. The wide open spaces of Scotland today are calling for new industries and for new towns. And this means action by the Government, I hope, therefore, that when the Secretary of State comes to reply tonight he will tell us that, at least, he will consider the proposition I put. If he refuses to do so, generations of Scotsmen yet unborn will live to regret the day when this Tory Government ruled in Britain.

7.16 p.m.

Mr. J. C. George (Glasgow, Pollok)

These debates show that the object of hon. Members on both sides of the House for the future of Scotland is to do everything possible to ensure its prosperity, but I deplore the use of the expressions which we have heard today—"a black outlook", "a state of apprehension", and "shivers down the backs of Scottish people". Of course, there may be one or two places where there are causes for anxiety, but, looking at Scotland in general today, we see a prosperous country.

I did not, this year, concern myself with garnering statistics, because I felt that those matters would be dealt with, as they have been in past years, very ably and fully from the Front Benches, but I have heard and read so much about our basic industries, as it were, failing Scotland, that I thought I should spend the Recess in ascertaining the true position in these matters. When I was a young man in Fife, it used to be said that when the riveters' hammers rang out on the Clyde, all Scotland was prosperous, for ships meant steel and steel meant coal, and we had good wages and reasonably full employment in Scotland.

I have heard it said, and seen in the records that in shipbuilding, as was pointed out by the hon. Member for Govan (Mr. Rankin), we are, in fact, losing our place in the world market. The figures for Britain show that, this year, we have only 25 per cent. of the world's shipbuilding in progress here, compared with 55 per cent. in 1938. I have seen records showing that in steel production we have been losing our place in United Kingdom output. We had third place in 1938, and we are now down to fourth place, and, while Britain as a whole increased its steel output by 98 per cent. since 1938, Scotland increased its output by only 40 per cent.

The other heavy industry, coal, has, on the industrial side and generally in Scotland, acquired an unenviable reputation. Taking Britain as a whole, it has a bad reputation, in that Scotland is the only district in Britain which is winding less coal today than it did when the industry was nationalised and, over the last six years, the Scottish mining industry has shown appalling losses.

These three vital industries appear to be losing their place vis-à-vis the world and vis-à-vis the United Kingdom, and I thought I should go round and make inquiries to see if anything more could be done by those industries to ensure our country's prosperity. After all, our principal object in these debates is to consider ways of increasing the prosperity of the country. In shipbuilding, it seems strange that, in these days of the tanker boom and of great world demand, we should be losing our position and, in fact, as the hon. Member for Govan said, be launching fewer vessels in the last few years than in the past. The hon. Member for Govan did not have available to give to the House the figures for value, which show that the money value of ships built was going up. In 1955, the value of ships sold was £63 million, and in 1956 the value was £83 million. I am sure that the hon. Member will be glad to hear these figures and to know that, although the tonnage is declining, the value is increasing.

Mr. Rankin

The reason I did not bother so much with detail was that I had raised this whole matter earlier this year on the Floor of the House in an Adjournment debate, and I had supplied a great many of those figures then.

Mr. George

I am sure that the hon. Gentleman just had not the details with him, and I am sure that he is glad to have them now and know that the figures are higher for 1956 than for 1955. It is the fact, however, that the tonnage is going down.

I went round the shipyards and talked to the people in charge and to the people working there. I found there that what the hon. Member for Govan has said was completely accurate—that they were extremely worried about the shortage of steel, and perhaps more worried about the sequence of deliveries than about the actual shortage. I also found an amazing position at one shipyard, the name of which is a household word in Scotland. I had a talk with the production manager where the hulls are put together on the whole issue of shipbuilding. He is a very experienced man. He made the remark to me, "If only we could get rid of restrictive practices in the shipyards, the output of that part of the shipbuilding industry would be increased by 40 per cent. with the present labour force." That is the estimate of a very practical man, steeped in shipbuilding, in which he has spent his whole life, and he is very worried about the labour situation there today. I know that talks are taking place with the Boilermakers' Union, the only union which is not a party to the agreement to deal with demarcation disputes, and great troubles are being caused on the welding side in shipbuilding.

Mr. Hector Hughes (Aberdeen, North)

I am greatly interested in shipbuilding, too, and I know a great deal about it. May I ask the hon. Gentleman if he realises that the greatest restrictive practice in shipbuilding in Britain today is the high cost of materials, and will he now urge that something should be done to reduce it?

Mr. George

I am coming to the high cost of materials in a moment, but I have listed the three points—the shortage of steel, the bad sequence of deliveries and the effect of restrictive practices. I found also that they were worried about the rising cost of steel and other materials used in shipbuilding.

The point that struck me most is that—and we have the Minister of Labour here today, and I wish him the best of luck in these negotiations that are now taking place—if we could find ways and means to get the Boilermakers' Union to allow more time and motion study or work study to take place and be applied, the effect on the export trade could be substantial, but I will say no more about that at present, because the matter is now under discussion.

I next went to a steelworks, and here I should like to say that Sir Andrew McCance has been subjected to the most unfair attack from the hon. Member for Hamilton (Mr. T. Fraser) today—[HON. MEMBERS: "No."] Yes, a most unfair attack. I charged the steel industry with failing to keep up with the needs of the country, with restricting exports and increasing imports, and being too late with the expansion of the industry in Scotland. I pointed out that we have been losing our position vis-à-vis the United Kingdom, and I asked why the shortages had taken place. Colvilles made no attempt to deny the fact that, because they had not expanded quickly enough, imports had had to be brought into the country and exports had been prevented from going out. The answer was given yesterday in the statement made by Sir Andrew McCance, who pointed out that, when they considered building Ravenscraig in order to keep their position in the United Kingdom, they came up against snags.

For instance, they applied to the National Coal Board in 1951 for a guarantee that coking coal would be available, and yet they received no guarantee for two solid years. Two solid years in planning development were lost, with the result that output was retarded, through the inability of the National Coal Board to give the guarantee that the coking coal would be available. Because of that, the project has been delayed for two years, though there were other factors operating against it, one of which was the delay by the Iron and Steel Board in reaching a decision. That project was delayed for between two and three years and that is why we have to import steel and why exports have been held back.

Mr. George Lawson (Motherwell)

I have myself been informed by one leading official of the trade union movement in Scotland concerned with steel that, right up to the last minute, there was a very great wrestling behind the scenes among the various steel interests as to where the development should go. I have been informed that it was touch and go whether this development came to Ravenscraig —a very different point, the pooling of the different resources, such as we are seeing now on the strip mill, but which had nothing to do with the question of not providing the coal.

Mr. George

That may well have taken place before this application was made to the Coal Board, or it may have taken place when the Iron and Steel Board was taking six months to make up its mind, but here is the information given yesterday by Sir Andrew McCance, when he announced the second stage of Ravenscraig, costing £32 million. He said: In 1951 discussions were inaugurated with the Scottish Area Coal Board regarding the future supplies of coking coal, and early in 1953 we were informed that additional coking coal would be available for another blast furnace in 1957 and that we would require to wait until 1959–60 before supplies would become available for a further furnace. There is the reason for the delay in increasing the output of steel in Scotland. The delay is caused by the National Coal Board failing—and I do not know the reason—to guarantee coal any sooner. Each new furnace needs half-a-million tons extra coking coal, and that is not easily got from any coal field. I can quite appreciate the National Coal Board taking considerable time to make up its mind where to get the extra half-million tons of coking coal, and then a second additional half-million. We know that the third stage of Ravenscraig is at present contemplated, but cannot be settled until a further half-million tons of coking coal can be guaranteed by the National Coal Board. While that company or any major industrial company is waiting to develop a major project, and to know whether it will get the coal required, for any reason whatever, the cost of that project must necessarily rise. The cost of Ravenscraig rose at the rate of 4 per cent. every year, and in the calculations of Colvilles the cost of the second project will increase by 7½ per cent. every year that it is being built or delayed. These are serious figures, and show the need for an urgent decision on very important matters of national importance.

Mr. Steele

I think we have all been following very closely the hon. Gentleman's examination of this question. He told us, first of all, that he went to the shipbuilding industry to get the facts, and that he then went to the steel industry to get the facts. We are now awaiting his examination of the coal position. Are we to assume that he did not go to the National Coal Board to find out why the failure occurred?

Mr. George

I can deal with only one matter at a time. I hope the hon. Gentleman will hold himself in patience until I come to it. I am dealing now with steel, and I will deal with coal later on.

Mr. Steele

The reason I interrupted was that the hon. Gentleman said he did not know why the National Coal Board had failed. I wanted to know why he did not complete his investigations.

Mr. George

I will answer that one later. The position regarding the steel industry was that there had been delay, but not only were they worried about delay, but also, as the hon. and learned Member for Aberdeen, North (Mr. Hector Hughes) said, all other industries which worried about continually rising prices. The cost of coal is going up every year, and the cost of power and gas is also going up, making it impossible to budget ahead. Coal is a double worry to this industry because of delay and rising costs. It was in continual uncertainty, and, quite frankly, some further guarantee of stability is immediately necessary if the industry is to be able to face the years that lie ahead. The question of a strip mill has been raised once or twice during this debate. I have tried seriously to ascertain the facts. I visited Grangemouth on more than one occasion to see the proposed site and to have an expert point out its advantages and disadvantages. I spoke to South Wales people, and to the steel people in Scotland. I should like very much to be supporting the demand for a strip mill in Scotland, but we do harm if we cry out loudly and continuously for a project if we have not thoroughly examined its basis.

Mr. T. Fraser

That cuts both ways.

Mr. George

That is the way I look at it. We do harm unless we are certain that the project which we advocate is a sound one. I have heard nothing from hon. Members today or from those who spoke to us upstairs to prove that it was a sound proposition.

It should be remembered that the output of a strip mill is at least one million tons a year. That needs 1 million tons of coking coal. It should be remembered also that the Scottish consumption of strip is only 150,000 tons. That leaves at least 850,000 tons to be sold elsewhere.

Mr. Fraser

It does nothing of the kind.

Mr. George

If 150,000 from one million does not leave 850,000, my mathematics are very far wrong.

Mr. Fraser

In the course of these investigations of his, has the hon. Member never discussed these matters with industrialists? Has he not been told by the users of strip steel that they would greatly expand their production of manufactures if they had more strip steel available to them, so that their consumption would exceed 150,000 if a greater supply were available?

Mr. George

If only hon. Members opposite would listen to what I am saying—

Mr. Steele

We are listening.

Mr. George

Hon. Members opposite do not appear to understand. The fault may be mine. I said that the present consumption was 150,000 tons, leaving 850,000 tons to be sold elsewhere. Some of it may be sold to existing users, but there remains 850,000 tons to be got rid of. We cannot lightly say that it can be exported or that we can get rid of it somewhere. We must speak with authority. It is not good enough simply to say that we can get rid of 850,000 tons. Where would the hon. Member for Hamilton sell 850,000 tons of strip? I want to be convinced on this.

The hon. Member for Hamilton said that 850,000 tons could be exported or sent down South. He probably knows that a new strip mill has been built recently in France and another in Germany, and that the export premium is rapidly disappearing. He should also know that the cost of transport to the London area is 92s. 6d. a ton. The steel industry, however, is allowed to make only £3 per ton profit, including depreciation. On my evidence, therefore—I shall be glad to be corrected if I am wrong—that fact is that it would be totally uneconomic, having regard to all the factors, to build a strip mill at Grangemouth.

Mr. Woodburn

My hon. Friend the Member for Hamilton (Mr. T. Fraser) and others have advanced some of the arguments in favour of the Government making a close inquiry into providing a strip mill for Grangemouth and have advanced its social desirability as well as the economic desirability for Scotland. The hon. Member seems to have gone out of his way to find all the arguments which have been produced by the South Wales steel people long ago. These were all put to us when we went on a deputation to the Prime Minister.

The hon. Member has produced no new argument. It may surprise him that one of the greatest experts on steel in this country took a quite different view of the possibility of disposing of the strip. I wish that the hon. Member had devoted just as much attention to finding reasons why the project might be made to succeed as he has to the contrary. He seems to have decided against it.

Mr. George

The right hon. Gentleman and most of those who have advocated the scheme seem only to have looked for the advantages. If we are pressing the Scottish case, we must get both sides. I heard the advantages from the other side, and I have tried to get the disadvantages and am putting them before the House for consideration.

In fact, I was told by the greatest steel expert in Scotland that Grangemouth is useless for a steel site for any purpose at all. The deep-water channel—

Mr. Steele

Who was saying this?

Mr. George

Let me finish—is on the Fife side and would need one to two miles of jetty, which would be a menace to shipping in times of fog.

We cannot lightly throw aside the question of coal, as did the hon. Member for Hamilton this afternoon, by saying that we can get the coal if the Coal Board will trouble to get it. The fact is that the area of coal under the Forth is not sufficiently proved for us to be able to say that it exists as a workable project or as coking coal.

I asked for an authoritative statement from the Coal Board concerning the supply of coking coal, hoping that the reply would be favourable. The production director in Edinburgh says: The Board's mining engineers have considered the possibilities and we are satisfied that if the anticipated future demand of the present users of coking coke in Scotland was increased by the amount of the suggested demand at Grangemouth there would inevitably require to be substantial imports of coking coal from elsewhere to augment Scottish production. That is the answer concerning coking coal from the N.C.B. in Scotland, stating that there would need to be imports from other areas. This means that in the Board's opinion, Scotland cannot produce the coking coal. It is just as simple as that.

Dr. Dickson Mabon

It is simple all right.

Mr. George

If that is not clear to hon. Members opposite, I cannot make it clearer.

Mr. T. Fraser

The hon. Member has merely said that the production engineer of the Divisional Coal Board in Scotland has told him what he told me: namely, that the Divisional Coal Board has not planned to meet any need in addition to the needs expressed by Colvilles. Did the hon. Member not ask the production director whether the reserves existed in Scotland to be worked and whether the Board could put down another couple of coal pits if it felt there was any need to do so and there would be an outlet for the coking coal when it was produced?

Mr. George

I cannot alter the sense of the letter, no matter how the hon. Member wants to do so. It states that The Board's mining engineers have considered the possibilities and we are satisfied that … there would inevitably — be substantial imports". That takes account of the whole position and of the increased demand. There it is.

I know that the vast area underneath the Forth of which the hon. Member for Hamilton spoke has been proved neither as a workable field nor as a deposit of coking coal. Because a coal is coking at one place does not necessarily mean that it is coking coal at the next place. I worked in that area and, in my time there, the coal changed its character from a coking coal to anthracite. There is no guarantee that it remains as coking coal in all parts of the area.

On our examination of the strip mill proposition, I think we should do well for Scotland now, and in the future, if we study our facts accurately and present not simply one side of the case. If we build up the position which has been built up today, leading the people of Scotland to believe that everything is right and ready for the strip mill here, and there is no reason other than stupidity by the Government for not giving it to Scotland, we serve no useful purpose to the country. If the project does not go to Scotland, it will be a shock to Scotland. That is why I am trying to put the other side of the case as fairly as possible.

In both the shipbuilding and steel industries, I. found great indignation at the rising price of coal and I decided to look into the position of our third great basic industry—coal. The steel industry has been studying the future performance of coal mining to see whether there was any chance of stabilising its prices in the years ahead. What we find in the Scottish coal mining industry is that after spending £70 million of capital since nationalisation, Scotland is the only area of Britain which is mining less coal than before nationalisation. The output in 1956 was approximately 1 million tons less than in 1947 and this year it is very little better. Secondly, in the last six years, we have lost £28½ million. In other words, more than the whole of the deficit of the National Coal Board has been lost in Scotland in the last six years. In the last year alone we lost £7.6 million. Counting up the figures I find that it would take an additional 2 million tons of output for the Scottish coal mining industry to break even.

Mr. Woodburn

The hon. Member is a great expert in mining. Will he not admit that he is misleading the House in giving these figures? He knows better than anybody else that most of these millions have been spent on sinking new pits in Scotland, and that one of the biggest, at Glenrothes, is only now just starting to produce, and that many of the old mines are becoming decayed and produce less every year because of natural causes. There may be some point in his argument, but it is exaggerated, and he is exaggerating to such an extent as to mislead the House in stating that £78½ million has been wasted.

Mr. George

I think it is an impertinence of the right hon. Gentleman to say that I am misleading the House when I am quoting figures produced by the Coal Board itself. [An HON. MEMBER: "Capital expenditure."] I am giving the profit and loss, and it has nothing to do with capital expenditure. These are figures from the Coal Board's accounts. I did not manufacture them. Hon. and right hon. Members can look them up for themselves. The coal industry in Scotland lost £28½ million on profit and loss in six years.

Mr. Woodburn

The hon. Gentleman is misleading the House—

Mr. Speaker

Order. The hon. Member for Pollok (Mr. George) has not given way and the right hon. Gentleman may not rise to interrupt if he does not.

Miss Margaret Herbison (Lanarkshire, North)

But the hon. Gentleman ought to know that he is misleading the House.

Mr. George

The hon. Gentleman is not misleading the House. He is quoting figures from the National Coal Board's annual returns.

Miss Herbison

He is putting his own interpretation on them.

Mr. George

In six years £28½ million were lost, and the total loss of the National Coal Board in the rest of Britain in ten years was £23 million.

Mr. Woodburn

The hon. Gentleman is at a little sharp practice again, because I did not refer to £28½ million. I accept that figure as part of the balance sheet. I spoke of the £78½ million capital expenditure which, the hon. Gentleman suggested, was not resulting in any increased production, which, he suggested, was money thrown down the drain, whereas, as he knows, it was spent on sinking new pits which are not yet in production.

Mr. George

I did not say anything of the kind. I said that, after spending £70 million in Scotland, output was 1 million tons down in 1956 and it is very little better this year. That is a fact. If I state facts I am misleading nobody. I cited the actual loss over six years—

Mr. T. Fraser

What was it spent on?

Mr. George

—and the deplorable fact, evident from the Board's accounts, that every area in Scotland is in the red—every single area in Scotland. One area, which I am sad to talk about in this connection, an area in which I spent so many years, has lost in the last six years £6½ million and somehow or another last year managed to lose 21s. on every ton it produced. These are facts.

We need to raise output in Scotland by 10 per cent. to break even. [Interruption.] Hon. Gentlemen do not like facts. These are facts. They are worrying the industry of Scotland. Industry in Scotland is looking anxiously to the future and wondering what will happen. Industry in Scotland was told by the National Coal Board in 1948 that if it spent £68 million in Scotland then by 1965 it would have an output of £30 million annually and would employ 77,000 men. Industry was told last year by the Board that the conditions were so difficult and things were going so slowly that it would have to spend £185 million to get not 30 million tons but 26.5 million tons and would require not 77,700 men but 85,500 men. That is the position.

That is the position that is worrying industry and which is worrying the steel and shipbuilding industries. The fact emerges—and this is very serious for the future—that we have been told time and time again that the coal trade of Scotland is being held back by the declining areas of Lanarkshire which are a burden upon the coal mining industry. When one examines the results of Scottish mine working in the last six years one finds that their results have not been the worst since nationalisation. It is the developing areas of Fife, the Lothians and Ayr that show the worst decline compared with 1941.

Mr. Hubbard

The hon. Gentleman must be aware that since nationalisation the working of the coal mines has been almost completely reorganised, and now the best of our young men have to do the job in the mines which ought to have been done years ago when they were privately owned. He must surely take cognisance of that fact. Not only labour but millions of pounds of money have had to be expended upon the mines since nationalisation because of the neglect of the mines when they were privately owned.

Mr. George

I am confining myself to a recitation of the facts, and the facts are as I have stated them. There may be something in what the hon. Member says. He knows the industry very well.

However, it is 10 years since nationalisation, and the public are getting tired and angry at the continual increases in prices and they wonder when their day is coming and when the tide will turn, and when they, who have given the money, will have some return for all the money they have spent and in return for the benefits the miners are getting and have been getting from the people of Scotland in these recent years.

Several Hon. Membersrose—

Mr. George

Let me finish. [HON. MEMBERS: "Hear, hear."] People talk about these new pits as though they will be the saviours of the coal mining industry of Scotland. Examining the position I wonder if they will be the saviours of the mining industry or whether the present position of the mining industry in Scotland, in which every area is in the red, is not to be a permanent one. Look at the cost of the new shafts, and the time taken for sinking them. By the time they come into production the burden of cost will be 30s. a ton for depreciation and service of the capital.

In my view these collieries will never pay, if the coal from them is to be sold at reasonable prices, and the steel industry and shipbuilding industry of Scotland have to depend upon the Scottish coal mining industry's giving them coal at reasonable prices. Bearing that in mind the future outlook for them is indeed black. [HON. MEMBERS: "Nonsense."]

I am glad to see the Parliamentary Secretary to the Ministry of Power here, and I suggest that the time has come when, with every area of the Scottish mining industry in the red, with the appalling losses which have been shown over the last six years, we should have a full-scale inquiry into the Scottish area management. I think hon. and right hon. Members opposite must agree with me about that, because in the Labour Party Report issued this morning it is stated that the nationalised industries should be thoroughly examined once every ten years, and it is ten years since the coal mining industry was nationalised. In view of the facts I have given, I think the time has come when we should have a full-scale inquiry into the Scottish district.

Shipbuilding is shackled by restrictive practices and the shortage of steel, but we have a chance to increase our exports substantially and so help the trade of Scotland. The steel industry has been hampered by delays in coking coal supplies, but in the future with rising output it can be profitable and prevent imports.

The position of coal, however, I find to be dismal and depressing, and I hope it will be looked into so that it may be restored to a position in which it can help and not hinder our economy.

Mr. Hubbard

The hon. Member should go back to the mines to help.

7.48 p.m.

Dr. J. Dickson Mabon (Greenock)

I am pleased to catch the eye of the Chair after such a vigorous speech from the hon. Member for Pollok (Mr. George). I have no doubt that the cockles of the heart of every Welshman will have been warmed by that speech.

Mr. Bence

Do not believe it.

Dr. Mabon

The hon. Member for Pollok is an expert in mining, but he has undermined the Scottish position in the view of the general public at the present time, largely because the technical arguments used by the hon. Member cannot be answered in this context without all the proper information available. Most of the arguments he has proposed could be countered by substantial arguments by men in the industry just as qualified and perhaps even better qualified than he is.

Mr. Hoy

The hon. Member for Pollok is jaundiced.

Mr. T. Fraser

Does my hon. Friend not appreciate that the hon. Member was not speaking for Pollok but for Colvilles?

Dr. Mabon

I do appreciate that. Indeed, another wicked thought entered my mind.

Mr. Lawson

The hon. Member for Pollok went to Sir Andrew McCance, and it was Sir Andrew McCance's story he was telling.

Dr. Mabon

I do not wish to be a transit market in exchanges in debates which do not include me. Apart from the allegations made by two of my hon. Friends regarding the point of view from which the hon. Member for Poliok was speaking, the wicked thought came into my mind that he may have been inspired by the Government to make it clear to us that we were not getting this mill. We were very hopeful when the Minister of Labour made his guarded and wellqualilied statement that in fact no decision had been taken, that we still had a chance.

The hon. Member for Pollok said that, unlike the rest of us who were all so terribly Scottish that we could not see the fairness of the situation, he was presenting a fair case, but he never once referred to the greatest factor in the argument which underlines this whole debate and ought to be one of our principal considerations. It has nothing to do with the mining of coal or of steel, but is the social fact that we ought to have more industrial installations in Scotland so that we can squash our chronic unemployment problem.

Mr. George

I was not speaking for the Government in any shape or form.

Dr. Mabon

I am more prepared to accept that assurance than the other about speaking for Colvilles. I have no wish to get entangled in all the other arguments which the hon. Member has mentioned, although I would have liked to.

I have some acute constituency problems which I must raise. I am grateful to my hon. Friend the hon. Member for Govan (Mr. Rankin), who earlier drew the attention of the Minister of Labour to the problem of the regulations governing wet docks. This is a matter which affects many of the men working in the shipbuilding and ship-repairing industry. I hope that the Minister will look into that. The Minister talked of painting a picture in black and white. He is fond of that metaphor. In this context such a picture is a silhouette which demonstrates the outlines but not the particulars. One of the particulars was successfully blurred in his broad sweep, when he said that there would be 2,000 or 2,500 people rendered redundant between now and 1959. That is seemingly not very much. It is two and a half years in which to absorb 2,500 people.

But in my constituency 900 of these people have been rendered unemployed within the last two months. An hon. Member opposite referred to the Royal Ordnance factories and criticised an hon. Member for saying, on the one hand, that we should run down the defence programme and, on the other, that we were not willing to accept the consequences of it. That is a superficial judgment. If there is to be any run-down of industry for any good reason there should be Government action taken at once to offset the social consequences.

Then there is the argument about the steel mills. We believe that we should act in furnishing the raw material. Socially we need it.

In Scotland, we have had double the unemployment of England ever since the policy of full employment was brought into being during the middle of the war. Before the war, we always had a substantially high volume of unemployment. It is not unfair to say that my constituency is the industrial barometer of Scotland. At the moment, it stands at 6 per cent., and it is still rising. In October, in Greenock, there will be 150 of the dock force of 250 unemployed because of the introduction of the bulk handling of sugar cargoes. The dockers welcome this advance in mechanisation. We are not Luddites in Greenock. But, in return, is it unreasonable that we should ask for more trade for the Port of Greenock?

This winter we could be reaching 7 or 8 per cent. unemployed. I am not content to listen to debating speeches from hon. Members opposite claiming that in Scotland as a whole we are worried about only one or two patches—not when I am a patch, anyway. If hon. Members themselves were involved, they would not look so complacently on the things that we are hearing about in Scotland.

Last year, in a similar debate, the argument on the Government side was, "All is well; we are doing fine", and on this side, "We are just holding our own and we should be expanding." This year things have changed. This year the Government side is saying, "All is well, we are holding our own", while this side is saying, "Things are black; we are going back". All hon. Members must concede that there has been a change in industry in Scotland during the last year. This not only applies to Greenock but elsewhere, including Dundee.

I do not consider that the decision concerning jute is an isolated case. I want to make two points which are worth thinking about in relation to the European Common Market. The interesting thing is that when the announcement was made yesterday the President of the Board of Trade, as the hon. Member for Dundee, East (Mr. G. M. Thomson) said, did not know the extent of the unemployment consequent on his decision. In other words, he calls upon the jute employers and the jute workers of Dundee and says, "This is the decision. We cut by 10 per cent." Yet he does not know what the consequential figure of unemployment will be. Does that mean that the President of the Board of Trade can take decisions without knowing what the consequences are in terms of unemployment. The Minister of Supply does that, but there is no reason why the President of the Board of Trade should do it.

The Minister of Supply can take decisions and render substantial redundancy in different areas in the country without steps being taken to find alternative employment. Although the hon. Member for South Angus (Sir J. Duncan) said that he will wave the pledges which the Government have given in their faces should they reduce the remaining 30 per cent. still further, the fact is that the Government have forgotten their pledges to industry even by this cut of 10 per cent.

This decision has only one good thing to commend it, and that is that every industry in Scotland will have to look more closely at the economic consequences of the European Common Market. We must know what will be the consequences of the European Common Market in Scotland, because we are the most vulnerable part of the economy of the United Kingdom. If we have to enter the European Common Market, very good reasons should be given, and alternative plans made for those workers who have to sacrifice their jobs in order to make the scheme work.

The anxiety of Scotland in relation to its strip mill to the problems of my constituency and those of any other Scottish constituency, and the consequences of the European Common Market, all end up on the shoulders of one unfortunate man, the Secretary of State for Scotland. The Secretary of State for Scotland is in the Cabinet to fight on every one of these issues for a big constituency interest, his constituency of Scotland. No matter how much anguish there may have been in his heart, I cannot help feeling that he could have successfully resisted the Dundee decision if he had put up a stronger fight. If he were willing to fight, even to the extent of dropping his extremely good manners and becoming a little rude and even boisterous in the Cabinet, I believe that Scotland would get the strip mill.

The right hon. Gentleman's constituency adjoins mine, and I do not have to remind him of a problem which concerns many of our local people. Having made a number of criticisms, I do not propose to sit down without having made some constructive comments. The Minister of Labour told me in answer to a Question on 3rd July that it was hoped that new projects, not yet fully manned, would in due course provide about 700 additional jobs in my area, but I understand that that is simply the natural occurrence of vacancies and does not relate to any other earnest effort by the Minister to find alternative employment.

I want to draw the attention of the Secretary of State for Scotland, the President of the Board of Trade and the Minister of Labour—if that is possible in one speech—to the Report on Development Areas from the Select Committee on Estimates. (1956–57.) The Committee recommended that: … the building of extensions to existing factories should be regarded by the Board of Trade, under present conditions, as their principal form of building for letting. The Board of Trade answer is that it has been and remains the policy of the Board of Trade to build new factories only in those parts of the Development Areas where the unemployment position is likely to become serious.

Does Greenock qualify? Does 6 per cent. unemployment qualify? If not, to what extent must unemployment in Greenock rise before we are entitled to this sort of help? Without mentioning names, I know that for nearly six months there have been intensive negotiations to try to get an extension of an existing factory in Greenock. I know from the management, in whom I have every confidence, that within two years the factory could provide 1,000 new jobs for people in my constituency. That would be a substantial contribution towards the solution of our unemployment difficulties. Now is the time for the Board of Trade to come to some satisfactory arrangement for this factory to have an extension.

The case made by my hon. Friend the Member for Hamilton (Mr. T. Fraser) was excellent. He pointed out that, while Scotland suffered the consequences of inflation, it had never enjoyed the advantages. We have never had over-full employment and never had high capital investment. That is true of Greenock. We have always had a chronic unemployment rate running above Lord Beveridge's 3 per cent. classic minimum. Our new industries have been welcomed in the town, but by no means are they the complete answer to the diversification of industry which we need.

In the main industries of shipbuilding and engineering we have looked to the Government to help to construct the proposed new graving dock, but since the Government have washed their hands of us financially, we have had to look to private enterprise and see whether it will be sufficiently enterprising to give Greenock the industrial component which would be to Greenock what a steel mill would be to the rest of Scotland.

8.4 p.m.

Mr. Graham Page (Crosby)

It is with some trepidation that I intervene in a Scottish debate, but there is one aspect of the jute industry in Dundee which has not yet been mentioned. I am more fearful about intervening because the hon. Member for Govan (Mr. Rankin) said, "Hit one bit of Scotland and you hit the lot."' I have found myself in disagreement with those who have spoken about the Dundee jute industry and my intervention is only so that the case of the customers of that industry and of the manufacturers who use hessian in their products shall not go by default.

There was much in the argument of my right hon. Friend the President of the Board of Trade when in announcing his decision yesterday he pointed out that the very high mark-up of hessian goods was already having a harmful effect on the Dundee industry itself by defeating its own ends. If it is not already happening, that industry must soon be losing to the substitutes. It is not merely a case of paper bags in place of sacks. Many other things in which hessian is used as part of the manufactured article are being affected.

An example is the seats of motor cars. Upholsterers who make motor car seats are losing to those using foam rubber and the same sort of thing must be happening in a number of products because of the high price of the hessian element in the upholstery. I am certain that the high mark-up of hessian goods is harmful to other United Kingdom industries. An example was given in a supplementary question by my hon. Friend the Member for Stroud (Mr. Kershaw) yesterday when he referred to the closing down of a carpet factory in his constituency. I have figures relating to the loss of exports through the high price of hessian.

Mr. William Ross (Kilmarnock)

Is the hon. Gentleman seriously suggesting that the cost of jute has led to the closing down of a carpet factory? Can he say what element of the cost of a finished carpet the cost of jute is?

Mr. Page

I was merely quoting a supplementary question put yesterday. I went on to say that I have figures relating to exports being lost. Those figures relate to an industry in the neighbourhood of my constituency.

Mr. Deputy-Speaker (Major Sir William Anstruther-Gray)

I do not want to interrupt the hon. Member for Crosby (Mr. Page), but the debate is about industry and employment in Scotland.

Mr. Page

Previous speeches have dealt with the effects of yesterday's announcement on the jute industry in Dundee and with whether there was good reason for the announcement. I was endeavouring to show why the mark-up of the price of hessian goods should be reduced and I was saying that the high price of hessian is having a harmful and damaging effect on other industries in Great Britain. To that extent I felt that I was in order in putting the point.

The firm from which I obtained certain figures manufactures motor car seats in particular, 60 per cent. of which are for export. That firm could have obtained, if permitted to import it, Calcutta hessian at a price 60 per cent. less than the price of the hessian from Dundee. In that case there was a 60 per cent. mark-up. At that time my right hon. Friend the President of the Board of Trade informed me that the average mark-up was 36 per cent. As the announcement said yesterday, the mark-up is now 40 per cent., reduced to 30 per cent., but on the figures that I have given this manufacturing firm had to put hessian into goods to be exported at 60 per cent. above world prices.

That seems to me to be extremely damaging to our export trade and also to our home trade. and to be inflationary in the extreme. This price, which is fixed by the mark-up, is not a Government-controlled price. The Government do not control the price; they merely control the sources from which the hessian can be obtained. Knowing that the customers cannot go elsewhere, Jute Industries Limited of Dundee can fix what price it chooses. A better example of a restrictive practice could scarcely be imagined.

Apart from the question of price, there is the question of delivery dates which, for a long time, have been very much longer than hessian obtained from abroad, and certainly hessian from Belgium. Yesterday's announcement was made none too soon. The Government have given the industry a long time—ever since the war—to put its house in order. In February, 1954, in answer to a Parliamentary Question, it was said that appropriate measures were being worked out with the industry. Yet the Jute Control and the high mark-up of hessian goods has continued, with all the trimmings of State control—the Jute Control's warehousing, storage, delivery cost, merchants' commission, and so on—in addition to the mark-up for the Dundee prices. Some time ago my right hon. Friend the President informed me that those extra costs of the Jute Control took account of only 1½ per cent. of the price of hessian. I cannot think that the figure was as low as that, but, even if it were, that 1½ per cent. is unnecessary.

There is the question not only of the Calcutta hessian, but of the Belgian hessian, and this is very much a point at issue here. The Jute Control is the sole importer of Calcutta hessian, but licences for imports of Belgian hessian are freely granted. I know that they do not cover a very wide market, because it is only on non-standards that the Belgian imports are concerned, but even with a 20 per cent. duty on Belgian imports of hessian it can be purchased here at 5 per cent. less than the Dundee price.

Dundee and Belgium are buying their raw material from exactly the same sources and at exactly the same world prices—

Mr. Deputy-Speaker

Order. I do not want to interrupt the hon. Member again, but speeches in this debate must be related to Scottish trade and industry.

Mr. Page

With respect, Sir William, I think that my remarks were directly to the point, because I was just about to ask why the Dundee jute industry produces hessian at a cost of 25 per cent. more than that of Belgian hessian imported into the country, when both Belgium and Dundee are paying the same for their raw materials.

Mr. Hubbard

What about wages?

Mr. Page

Cannot a greater efficiency be shown by the Dundee jute industry to bring the price down, and will not this reduction in the mark-up from 40 per cent. to 30 per cent. force that greater efficiency without necessarily causing any greater unemployment?

Mr. Hubbard

Is the hon. Member prepared to take into account a fact which is very germane in regard to Scotland, namely, that prior to the war the jute industry was the poorest paid industry in this country and that those who were engaged in it were mainly women who were forced to work in it because of conditions at the time? Since then the jute industry has become a very well-paid industry, which looks after its workers. The subject matter of the hon. Member's speech is not germane; it seems to me to be more on behalf of an industry than on behalf of Scotland. What is germane to this debate is what is to happen in the meantime to the people who have been made unemployed in Dundee? That is a more relevant consideration. Also, what are the conditions in which they will be unemployed?

Mr. Page

I was only wondering to what extent the industry could become more efficient in bringing down the price without causing unemployment. What has been said about unemployment in this industry must be exaggerated; the price can be brought down to the 30 per cent. mark-up without causing substantial unemployment, and where unemployment may be caused, as the announcement yesterday said: The Government, for their part, will step up their efforts to get new industries to go to the Dundee area. There is a valid criticism in that that might have been done a long time ago, for the discussions about the jute industry have been going on for a very long time. I am puzzled why these steps have not been taken before, although the announcement goes on to say: Over the past ten years, the new factories which have been started in the area have provided nearly 6,000 new jobs …"—[OFFICIAL REPORT, 17th July, 1957; Vol. 573, c. 1155.] Something has been done, but it is obvious that more ought to be done. While there was this high mark-up of 40 per cent.—in effect it was a mark-up of 60 per cent.—the whole system was inflationary; we were selling goods which contained hessian—linoleum, carpets, car seats, and so on—at inflationary prices.

I am glad that the Government have taken some action to stop the damaging effect upon our export trade; the damaging effect upon other United Kingdom industries and, I believe, the eventual damaging effect upon Dundee itself. I wish that more new factories could have been developed in that area so that the reduction in the mark-up could have been not just from 40 per cent. down to 30 per cent., but a lot more, in order to stop the damage to our export trade.

8.20 p.m.

Mr. Cyril Bence (Dunbartonshire, East)

Before the hon. Member for Pollok (Mr. George) made his speech and before the speech of the hon. Member for Crosby (Mr. Page) this debate had been to me one of the most interesting to which I have listened since I became a Member of this House. It seemed to me that hon. Members representing Scottish constituencies were getting together to criticise the Government in Whitehall rather than the Scottish Department in Edinburgh regarding what is happening in Scotland.

I was shocked by what was said by the hon. Member for Pollok. Generally on industrial matters regarding both organisation and the commercial side, and on the technical side, he and I have much in common. But some of the figures which he quoted today were, in the words of my hon. Friend the Member for Hamilton (Mr. T. Fraser), quite misleading and out of context when applied to the general European situation. After all, when one speaks of major industries like coal and steel, especially coal which is dependent upon the geographical location and the depth and quality of seams, it is unfair to make comparisons within such a small compass as the United Kingdom. Had the hon. Member for Pollok been fair, he would have related his figures regarding both coal and steel to the whole European area.

I was in Luxembourg a few weeks ago where I met the heads of the Belgian, German and French coal industries. They complained that, owing to the immense capital development in Great Britain and the circumstances of our State-controlled coal industry, British best quality coal was much cheaper than European coal, which resulted in British steel being much cheaper than European steel. In fact they gave figures which showed that in, I believe, the last two years European fuel and steel prices had risen by 13 per cent., whereas British prices had risen by only 6½ per cent. The figures do not really matter; it is the fact which counts. Fuel, transport and steel prices are rising faster in Europe, and have been over the last three years, than those for British coal and steel. These are facts which the hon. Member for Pollok should have quoted if he was honest.

We know that in one section of a coal field costs may be higher than in another. That is due to geographical and geological factors, the structure of coal seams makes it inevitable. I have been down mines in South Wales where the seams were 10 to 15 feet and where it was as easy to get out the coal as it would have been from a coal shed. But in others, where the seams were only 18 inches, it was a difficult and costly matter to win the coal.

The hon. Gentleman used another argument about strip steel production in Scotland and the lack of coking coal. He had been to Colvilles' to get evidence, but he had not been to the Coal Board. He had been to the shipbuilding industry and also taken the trouble to ascertain that on the Continent of Europe giant integrated strip mills were being put down. I propose to show the hon. Gentleman a memorandum which I have from the European Coal and Steel Community which states that coking coal and solid fuel is decreasing in quantity on the Continent at a faster rate than in Britain. It will not be many years before steel manufacturers on the Continent of Europe will be forced to find a way of converting iron ore to pig iron without the use of coal at all.

That is being done in the laboratory. Research is being carried out to produce good quality basic Bessemer steel, known on the Continent as Thomas steel, and it is claimed that it is possible to produce Thomas steel of a quality equal to that of open hearth steel. When that happens the question of providing coking coal will not enter into the matter at all. The provision of coking coal may be an important factor for the next four or five years, but we must think further ahead than that. As I have said many times before in this House, I am convinced that the time is fast approaching when the cost of putting down integrated production plant of any kind will be so costly that plant will be put down and technically improved within itself, rather than augmented by additional plant. That is why at the present time in the south of England the engineer and producer are enabled to increase production without increasing factory space by means of internal technological development.

There is but a short time in which to make the decision which the Government must make to direct industry to those areas of the country which can carry a heavier population. The traffic problem on our roads is getting worse. London is becoming almost deadlocked all because of the fact that surrounding it are hundreds of little factories, and some big ones, with a high rate of output into which are fed large quantities of raw materials. If we wish to open up our services we must spread our industries. Surely that is obvious. In my view that is a good reason why, when a major enterprise such as a strip mill is being contemplated the best place to put it would be in Scotland.

For three or four years it must be necessary to import coking coal from Durham, but I am convinced that eventually the scientists and steel men will give us steel which has been produced without the use of coking coal. That will result in economy in the use of solid fuel and economy in production costs. Therefore, I do not consider that the argument about the lack of coking coal is valid.

The main thing I want to speak about is the Royal Ordnance factory, Dalmuir. I do not want to go through all the arguments which I put before the Minister. My own trade union is deeply concerned about this factory. The problem of re-employment of the labour that is to be displaced is not a very simple one. It is not easy to think of re-employing them at Messrs. Babcock and Wilcox. Many of the men are established. The Minister of Labour is not here at the moment, but I hope that he will take note of what I have to say, and that the Secretary of State for Scotland will bring my suggestions to his notice.

These men have been long established and have enjoyed conditions leading to superannuation. When we think of the men being re-employed by large companies we must remember that most of these large firms have to comply with the general standards of employment insisted upon by their employers' federation. I could cite cases of companies in which I have been employed where the employers, although quite willing to concede improvements in wages and conditions to groups of workers, have said, "We cannot do this because the employers' federation would come down on us like a ton of bricks."

I mention this in connection with the remarks of the hon. Member for Pollok about restrictive practices. I can assure him that there is a lot more restrictive practice on the part of employers than of workers in the protection of their interests. If these men went to Messrs. Babcock and Wilcox, would their working conditions be comparable with those which they enjoyed under the Ministry of Supply?

Worse still, suppose that the men were not wanted by Messrs. Babcock and Wilcox. I suppose the Ministry would then offer them alternative employment in other institutions of the Ministry of Supply. They would be offered a transfer from Dalmuir to, say, Woolwich Arsenal, Leeds, Cardiff—if the ordnance factory there is to be maintained—or to some other place down south, according to their class of skill. If they refused, there would be superannuation and all the privileges they have acquired by service in that Ministry's employment.

I have no doubt that all these matters will be discussed, and that the men affected in this Royal Ordnance factory will be taken care of. They are all members of the Amalgamated Engineering Union, of which I am a member, and they all enjoy its benefits. I hope that the Minister of Labour will see to it that the men who are liable to be displaced or transferred to Messrs. Babcock and Wilcox are looked after, and if they are not transferred are given ample compensation.

They should not be taken advantage of by being offered transfers to places where there are no houses, or where rents are high, or which are out of their own environment, quite away from where their families may be attending high schools or grammar schools and so disturb their education. These are very human matters and cannot be ignored. I should feel very hurt if a man who was offered a transfer replied, "I have three children, aged 12, 15 and 17. One has just passed his 11-plus and is going to a secondary school in Scotland and we hope that the other will take his Higher and go to university. I would suffer an awful lot rather than have my family shifted to Cardiff, London or anywhere else. I would rather be unemployed and see my children have continuity of education than take them to strange schools where, perhaps, there is a different curriculum and a different form which would confuse them and perhaps frustrate their whole future." Some of us had experience of this in the days of unemployment between the wars.

I wish to make two points on the question of encouraging industry to come to Scotland. We have heard much complaint from hon. Members opposite and on this side of the House about the credit squeeze. If we are to avoid inflation in the country as a whole we have to use several methods or one of several methods of controlling the expansion of credit. From time to time the Government insist that they are doing everything in their power to encourage industry to go to Scotland and to leave built-up areas. We shall want industry to leave such centres as Glasgow and to go to Cumbernauld. In expanding industry one has to use money from the banks or insurance companies. The keen businessman never uses his own money. He forms a limited company so that, if anything goes wrong he is all right and is not liable for the loss.

It is the use of money which expands industry. If the Government are really anxious and keen to develop more industry in Scotland, in Wales and on the North-East Coast, to draw it from the Metropolis and the Home Counties where there is a tremendous jam of human beings and traffic, why do they not concede to those who will take industry to Scotland and to the remoter areas a financial incentive in the form of lower credit terms? I do not accept the answer of differentiation on that because it is being done by the Coal and Steel Community of Europe. That Community is having factories and steelworks sited in Europe and developed through the High Authority.

Through the banking systems of Europe it guarantees special credit terms and loans on low-interest rates to enable these things to be done. If a private company wants to build an industry just where it likes it is told, "You must raise the money yourself." We asked if such a company was able to get the money in that way. The answer was "No," because when the banks were approached the private company would be asked why the High Authority was not supporting the development. The Government talk about being keen to use monetary mechanism to control inflation, but the High Authority in Europe is using it to direct industry to places where it is wanted. I would support a Government which did the same thing here. Personally, of course, I should direct industry, because if we do not do that we must direct labour. If we do not move industry to where the labour is, we must move labour to where somebody has placed the industry. It is therefore far better to direct industry.

We are asking the Government to direct the strip mill to Scotland. I ask the Iron and Steel Board to put this industry in Scotland. The Government will obviously back the financing and the development of the steel industry, because ultimately the Government are responsible. In their position I should give special credit terms for the construction of this strip mill. I believe that it is only by that technique that we can bring about the necessary distribution of industry in Scotland.

In my opinion, the Government are not paying enough attention even to their own Reports. I do not want to see the heavy industries decay, and I do not think they will; I think that Scottish shipbuilding will always hold its own. It is holding its own today as well as it has ever done, for although the percentage of tonnage launched is lower, the Scottish yards are building the best highly specialised and equipped ships in the world, including merchant vessels, tankers and ships for mixed cargoes. Although the tonnage is smaller than it was, the values are higher.

I would draw attention to paragraph 108 on page 20 of the White Paper, "Industry and Employment in Scotland and Scottish Roads Report, 1956". It is headed "Fabricated Aluminium", and it reads: The production of sheet and strip, wire, foil and aluminium alloy ingot remained steady but the output of castings declined slightly. Everyone in Scotland knows that the iron castings and mouldings industry is on the decline, as it is everywhere in the world, because it is being replaced by steel pressings, which are used a great deal in conjunction with alloy castings of aluminium and zinc. I know of firms in Scotland which are buying alloy castings of aluminium and zinc from the South and are also buying strip steel. If this strip steel mill were built in Scotland, I am certain that there would be an expansion of the light engineering industries, which are consumers of both narrow and wide strip, as well as an expansion of the aluminium die-casting industry, because these two go together. Anyone who buys a modern refrigerator will find any number of aluminium castings in it, in conjunction with pressed steel.

When the Government are reconsidering this strip mill I ask them to appreciate that we have the problem of an industry in Scotland—the iron moulding industry—which is dying as well as that of an industry—the aluminium alloy casting industry—which has just been born, but which is now being killed because it has to bring strip steel from the South. One industry is dying and the other is being killed. I hope that when the Secretary of State discusses this matter with the Prime Minister, the Chancellor of the Exchequer and the President of the Board of Trade, he will impress upon them that action must be taken quickly. If this strip mill is placed in Wales and not in Scotland, we shall have lost what I believe to be the last opportunity in our lifetime for a major surge forward in Scotland.

Mr. George Thomas (Cardiff, West)

We want it in Wales.

Mr. Bence

I am sorry that my hon. Friend has said that. In Wales they have the whole of the tin plate industry and some of our biggest strip mills. They have the wonderful plants at Ebbw Vale and Margam. I have not lost my loyalty to Wales, but I am thinking of the United Kingdom as a whole, and I believe that too many people live in the South. I live within half an hour's journey of Loch Lomond. There is nothing I should like better—and I think my hon. Friend will agree with me—than to bring 1½ million people from the South and employ them in Scotland, increasing the population there to seven million. I am sure that the industrial workers would approve, because in a very short time the workers in that area can reach beautiful countryside. It would do the population good and would lower the incidence of disease if we could thin out the population in the South and take more people to work in Scotland.

8.45 p.m.

Sir James Henderson-Stewart (Fife, East)

I am in the difficulty in which many speakers find themselves at this time of night, in that much of what I had intended to say has already been said. This afternoon I had other duties, as had other hon. Members, and have not been able to attend the debate.

The hon. Member for Dunbartonshire, East (Mr. Bence) has, as usual, raised a great many topics, and has led us off on many attractive paths, and has baffled us—bamboozled us a little—by a spate of that technical discussion of which he is such a master. I do not pretend to understand the techniques of the steel industry as he described them, but if I am asked what I think about this vital problem of steel in Scotland I will frankly tell the House.

I accompanied the right hon. Member for East Stirlingshire (Mr. Woodburn) and others to meet the Prime Minister a week or two ago. I there did my part in impressing upon the Prime Minister how important it was that the fullest consideration should be given to the Scotland schemes. I still think that, but I think that, in the end, the other members of the deputation came to the same conclusion as I did, that the Prime Minister's response was the right one, namely, that this matter needs a great deal of thought, and cannot be settled at once.

There are so many considerations. While I still believe that it would be a good thing if this project came to Scotland, I say quite frankly to my Scottish colleagues that the first thing in my mind is that we do not damage the prospects of the great Colville enterprise that is now in progress. I issue that caveat, that warning, as an indication of my own slight anxiety, but, provided that I can be assured about that, I am 100 per cent. in favour of this great project.

The hon. Member for Dunbartonshire, East raised another very important point. I entirely share his anxiety about the closing of the Royal Ordnance factory, Dalmuir. I do not pretend to know anything of the technical problems relating to the men there. I recognise that those men are industrial civil servants and that if they lose that occupation and are not moved to another Royal Ordnance factory, they will lose certain things. That, of course, is a very serious matter for them.

I do not know the answer to the hon. Member's question—perhaps the Government will tell us—but I would assume that his union, which is highly qualified to deal with the matter, and the Civil Service authorities between them will come to a reasonable understanding. It would be against all the traditions of this House and of the Civil Service authorities if something underhand were done. Therefore, my hope and assumption is that a reasonable arrangement will be made. I see that my hon. Friend the Parliamentary Secretary to the Ministry of Supply is present and, knowing him, I am quite sure that he would not countenance any action in regard to these men that was not just and fair.

On the general position, I must say that I do not regret the transfer of these factories from ordnance to civilian work. After all, are not all of us in the House saying from time to time that we are spending too much on armaments, and would like to see that money directed into another channel? That is the common view. I, therefore, do not object to Royal Ordnance factories being closed. The fact that we are to have the great firm of Messrs. Babcock and Wilcox, with its tremendous reputation, coming to our country and offering prospects of steady employment I regard as very good for Scotland.

Mr. Steele

It is there already.

Sir J. Henderson-Stewart

I knows; I should have said "expanding." That is very good for Scotland. As we all know, Royal Ordnance factories are subject to changes and shifts of military opinion, but here is something which is steady. Therefore, in the long run, this is not bad but good for Scotland.

I have some concern with the jute industry. There are two jute establishments in my constituency, and I, therefore, have that direct interest. There is not time now and it is not for me here to discuss the matter in great detail, but I should like to put to my right hon. Friend the Secretary of State that, although there may be a case for reducing the mark-up fom 30 to 40 per cent.—I do not intend to argue for or against that—I am quite sure from information which has reached me within the last twenty-four hours that if the Government do not stand at 30 per cent. we are in for real trouble. The jute establishments in my constituency and in the constituency of my hon. Friend the Member for South Angus (Sir J. Duncan) are directly affected by this change.

I do not want to use too strong language, but I warn my right hon. Friend that, so far as I am able to judge, if we begin to fall away from 30 per cent. and make it 25 or 20 per cent., there will be real trouble in the east of Scotland. I do not want that. I am all for further diversification. I have sought that all my life in the House, and I advanced it as a policy when I was at the Scottish Office. It is a difficult matter, but there clearly is a case in Dundee and generally round about in the Angus towns and, it may well be, in Tayport that assistance will be needed. I should very much like to see another factory or two established in Tayport, but that cannot be done because it is not a Development Area. However, it may be that, because of this peculiar situation, the Development Area of Dundee may have slightly to be extended to areas in the constituency of my hon. Friend the Member for South Angus.

As my colleagues from Scotland know, I do not take the view that all the problems of Scotland in diversification will be solved by creating new Development Areas. I do not agree with that as a general policy. I do not think it is sound, though I shall not develop my argument now. I have already done so, and I have an alternative, as hon. Gentlemen know, which I expounded during our debate on the Housing and Town Development Bill.

I recognise that we have our difficult spots and our problems. We may go through quite troublesome times here and there. But it is not a general difficulty; it is a patchy difficulty. It is like education, where we have our good and bad spots. As I wrote the other day, in the part of Fife represented by the hon. Member for Fife, West (Mr. Hamilton) there is great difficulty in getting teachers, whereas in St. Andrews there is no difficulty in getting teachers. It is very patchy. So it is with industry. We have our very prosperous areas and we have the darker spots.

My clear impression, and I have followed this with very close attention for the last five years, is that the Scottish economy today is a bright economy. We have a prosperous outlook, and it is wrong and quite improper for Members of Parliament in this House to present to the world a picture that all is bad and black north of the Border. It is not true, and it does us all a great deal of harm, particularly those whom we are representing.

Mr. Steele

Who said it?

Sir J. Henderson-Stewart

We want to say to England and to the world at large that ours is a progressive, energetic economy, because these American firms are still coming in. If we all go about making these groaning speeches, we shall frighten them all off, and that is not helping Scotland, but doing Scotland harm.

Mr. Hubbard

Who made these speeches?

Sir J. Henderson-Stewart

I regret myself that some of us today have been far too pessimistic, and while I do not want in any way to disguise the fact that we have our real difficulties, I think that on the whole we are doing very well and that the prospects for the future are bright.

Mr. Lawsonrose—

8.57 p.m.

Mr. Malcolm MacPherson (Stirling and Falkirk Burghs)

I am not quite sure whether my hon. Friends are aware about the arrangements for the timing of the last two speeches. If they had intended to speak for a few minutes and then sit down, I must apologise, but it seems perhaps wiser to rise a minute or two before the time rather than be delayed for perhaps considerably longer.

Mr. William Hannan (Glasgow, Maryhill)

On a point of order, Mr. Deputy-Speaker? My hon. Friend the Member for Stirling and Falkirk Burghs (Mr. Malcolm MacPherson) started by indicating that the arrangements for closing this debate were known to hon. Members but that if anyone had indicated that he wanted to speak he would have kept his seat. My hon. Friend the Member for Motherwell (Mr. Lawson) was on his feet but did not happen to catch your eye. Can I intercede with you and ask if some extenuation could not be given to him?

Mr. Deputy-Speaker (Sir William Anstruther-Gray)

I am afraid not. In my judgment, there was not sufficient time for another speech to be made before calling the two speakers from the Front Benches.

Mr. MacPherson

I am glad to find, in spite of my hon. Friend the Member for Motherwell (Mr. Lawson) being left out, that my judgment coincides with yours, Mr. Deputy-Speaker. I was very dubious about it myself, and it is a little difficult to be sure about matters like this.

The hon. Member for Fife, East (Sir J. Henderson-Stewart) ran into the trouble which, I think, he deserved in his last remarks. He was not very enthusiastic in his praise of the Government, but then not very many of the people who have spoken from the other side of the House tonight have been very enthusiastic in praise of the Government. He described the economy as being patchy and ran down the people who talked about it all being black, when, as one of my hon. Friends pointed out, there seemed to be some doubt as to who were the people who had talked about it all being black. The hon. Gentleman's own description of the economy as being very attractive, bright and successful is not borne out by an examination of what is said officially in the documents published by the Government which his own side of the House sustains.

We have been discouraged today from making comparisons, but it seems to me that comparisons are very much in order tonight and I propose to make one or two myself. One of the earlier speakers, the hon. Member for Glasgow, Scotstoun (Sir J. Hutchison), referred to a very interesting article in The Observer last week-end. The whole point of that article was to compare developments in Scotland today with the situation in the 1930s. That sort of comparison of one period with another is extremely useful, but, in fact, there is a good deal more that can be done than that.

We are in a very different sort of situation from that in the thirties, but it is perfectly valid also to compare the economy of Scotland today with the whole of the United Kingdom economy. If the hon. Gentleman retains the doubts which he earlier expressed about the possibility of considering the economy of Scotland as a whole, I think it was he himself who referred at one time in his speech to Professor Cairncross, If the hon. Member looks up the little book edited by Professor Cairncross, he will find a fairly clear set of arguments adduced in favour of considering that Scotland has an independent economy with—I remember this one of his important phrases—a momentum of her own. It is that momentum which seems to us today, under the present Government, to be slowing down a good deal.

The hon. Member for South Angus (Sir J. Duncan) referred to the figures of the development of the economy of the United Kingdom and of Scotland. I should like to take the main figures and to put them rather more emphatically to the House than the hon. Member did. The index of industrial production, as given by the Government's own publications, for the year 1956—the last completed year—stands for Scotland at an improvement of 27 per cent. over the basic figure of the year 1948. Taken by itself, that is not a bad improvement, but the figure for the whole of the United Kingdom economy is an improvement of 36 per cent. There is, therefore, a considerable difference between the one economy and the other. It is true that in the previous year the difference was even greater. In 1955, the figures were 25 per cent. and 37 per cent.

As the Minister of Labour and National Service pointed out, these figures are themselves the product of a slowing down of expansion. I always like the phrases that Government speakers choose to describe some of the unpleasant things they do. As a description of the same operation, the right hon. Gentleman used the rather pleasant and certainly short and unobtrusive word "check." He said there had been a check in the economy.

Sir J. Duncan

Perhaps the hon. Member would be fair enough to point out that the black spot in that figure, taking 1948 at 100, was mining and quarrying, which stood at 93, whereas building and contracting was 127 and manufacturing industry 131.

Mr. MacPherson

I do not quite follow the point of that intervention. The year 1948 is taken as the base for both the Scottish and the United Kingdom figures. Furthermore, the main umbrella figure covering all the rest is later broken down in the Scottish Digest of Statistics, as the hon. Member for South Angus has pointed out, into one or two other figures, to some of which I propose to refer.

Sir J. Duncan

It is the miners who have let us down.

Mr. MacPherson

I am afraid it is not. If the hon. Member will wait for some of the figures which I shall quote, he will probably revise that point of view.

Mr. E. G. Willis (Edinburgh, East)

It is the Government who have let us down.

Mr. MacPherson

My hon. Friend's intervention is very much to the point.

The figures in both the United Kingdom economy and the Scottish economy for the present year are the product of what the right hon. Gentleman described as a check. They are the product of the deliberate policy, instituted by the Government for their own purposes and ends, which do not include, in a declared sense at least, the end of deliberately slowing down production, but among whose various results is certainly that effect. We are in an economy which is not going ahead as it should do, either in the United Kingdom or in Scotland, but in Scotland it is going ahead a good deal less than in England.

This is the situation that we found in the 'thirties. In those days, we had a period of depression and we found that Scotland was getting the worst of it. Now, we have a period of full employment, of activity and expansion, and Scotland still seems to be getting the worst of it in this kind of period as well. The right hon. Gentleman told us that Scotland's anxieties were not justified because Scotland depended largely on heavy industry, and heavy industry was not the first to be hit in the present—I am not quite sure what phrase he used, speaking as generally as this—the present "check," let us say.

It is quite true that this present halt in the expansion of the United Kingdom economy and of the Scottish economy is not due to the kind of causes which used to hit our heavy industries in the old days of cyclical depression. It is due specifically to Government policy. Therefore, one would not expect the same sort of effects to appear as appeared then. We have, therefore, what has been described many times in this House and also in Scotland, a "lagging" economy. It is lagging behind the economy of the United Kingdom.

The comparison is between the Scottish economy and the United Kingdom as a whole, and it is extremely interesting to find out how hon. Gentlemen opposite and, more particuarly, right hon. Gentlemen opposite react to that comparison. The right hon. Gentleman the Member for Moray and Nairn (Mr J. Stuart), in the debate corresponding to this a year ago, said: The hon. Member for Motherwell (Mr. Lawson) repeated more than once that Scotland was lagging behind. He went on to say: There is certainly a difference of outlook in viewing these matters."—[OFFICAL REPORT, 26th July, 1956; Vol. 557, c. 753.] There is a difference of outlook, there is no great doubt about that, a difference depending, as the right hon. Gentleman observed then, on which side of the House one sits.

In the same debate the then President of the Board of Trade, now the Chancellor of the Exchequer, in reply to a speech of my hon. Friend the Member for Hamilton (Mr. Fraser), who had been developing this scheme, said: We cannot have a complete equality as to what is happening to production or building in every section of the United Kingdom; it will vary. On occasions, one will go faster than another."—[OFFICIAL REPORT, 26th July, 1956; Vol. 557, c. 676.] That is a depth of metaphysical and philosophical comment we have not had in the debate today.

We are bound to comment on that, and on the emphasis the right hon. Gentleman put on the use of the word "comparatively" and the adjective "comparative". He described my hon. Friend as continuing to pursue "his comparative path" with the suggestion, certainly in his tone, and also, I think, in the very words he used, that one does not do such a thing. "Comparisons are odious". They can be odious. It all depends what is the substance of them.

When we begin comparing the Scottish economy today with the United Kingdom economy—and I am looking at this development over the last few years—one finds oneself comparing the period of a few years after the war with the period of the few years since 1951, and it is apt to lead one on to the very dangerous ground of comparing the doings of one Government with those of another—a very odious thing if one happens to be on the wrong side of the comparison.

Unfortunately for the right hon. Gentleman, the comparison will be made, if only for this reason, that the majority, not only of the voters but even of the right hon. Gentleman's hon. Friends on the back benches, are unable to contemplate figures and achievements in a vacuum. We all need some sort of handrail to act as a guide. We all need something to measure figures against, and we like to measure the figures of Scotland against the figures for the United Kingdom, and even if the right hon. Gentleman's hon. Friends are slow to make the comparison, I can assure him that this is a thing which the people of this country pick up quite clearly and easily, and we on this side will help them to pick up as much as we can.

I do not want to continue with this theme, but I would add to what my hon. Friend the Member for Hamilton (Mr. T. Fraser) said and to Professor Cairncross's book and its introduction, which was written in 1954, that Scotland's economy over the last years show signs of lagging behind. I shall not quote the article in the Observer, but it compares Scotland with Wales. There is not the same sense of future in Scotland. Scotland has a feeling of being behind and without. It lags behind in employment, housing, health and a number of things like that.

This a serious question. It seems to me that the Secretary of State for Scotland has got to apply himself to it. If he does not do so tonight, he and his hon. Friends will have to apply themselves to it within the next few years. This is not just a question being asked from this side of the House, it is a question being asked in the country. The charge is that, under the leadership of the right hon. Gentleman and his hon. Friends Scotland is falling behind and that it is no use the Government just turning their faces to the wall and muttering whatever phrases are appropriate for a Government to mutter on its deathbed. They will have to stand up and face this at some time.

I now turn to one or two particular instances of the difficulty in which we find ourselves. The world just now is in a period in which the demand for goods from the industrial countries looks like going through a very great boom. The demand for the kind of goods which will help under-developed economies to go ahead is very great, and it looks, so far as one can judge, like lasting for a very long time.

Scotland is still very heavily committed to heavy industry and to the production of capital goods. Scotland, in point of fact, is in a position in which, if its affairs are properly managed, its economy in the next decade or two could be extremely successful and prosperous. But when we try to find out whether heavy industry, the traditional kind of industry of Scotland, is producing enough, we get the same shock when looking at the figures as when we look at the total figures for the whole economy.

In the Digest of Scottish Statistics we find that in 1956 engineering, shipbuilding and electrical goods showed a 41 per cent. improvement over 1948. The figure for the United Kingdom is 50 per cent. against our 41 per cent. In the same way, when we look at the manufacturing industries in general, we find that the Scottish figure is still below the British figure. The general figure for the manufacturing industries is 31 per cent. improvement for Scotland and 40 per cent. improvement for the whole of the United Kingdom. In the face of these figures, it was rather surprising that when the Minister of Labour came to list his bright spots on Scottish economy—everyone on the other side seems to have agreed that Scottish economy is at least spotted and the hon. Member for Fife, East talked about dark spots—he could not find any; and his bright spots were rather odd ones.

First, the right hon. Gentleman mentioned shipbuilding. He said that it was at a high level, and that new orders were high. When we look again at the figures given in the Digest of Statistics, we find something like this: Merchant ships laid down in Scotland totalled £500,000 in 1954, moved down to £426,000 in 1955, and picked up again in 1956 to £509,000. When we looked at the orders for overseas owners, the export value of the shipping, we find that it is steadily moving down. In 1954, it was 201,000 gross tons, in 1955, 168,000 gross tons and, in 1956, 131,000 gross tons. The figures for those under construction showed a steady decline—I will not read out these figures—from 1952 right down to 1956. It is difficult to see in that situation how the shipbuilding industry, which the right hon. Gentleman considers to be one of the bright spots of Scotland, is really meeting the considerable under-demand which undoubtedly exists and which is likely to increase.

The right hon. Gentleman talked about the growth in the manufacture of engineering and electrical goods, but I have given the comparative figures. The growth is nothing like that of the United Kingdom industry. The right hon. Gentleman said that on the Borders there is full employment and an acute shortage of labour. In fact, Border manufacturers of woollen goods for export have had a shock in the last week or two which has made them begin to talk of filling their orders for a year's exports by July of that year. The difficulty, of course, is a change for the worse in the United States tariff. One would have expected the right hon. Gentleman to have touched upon that when he referred to the Borders, because that is a serious matter, more serious than the much more interesting matter of the empty Jedburgh factory.

Our production of engineering and heavy goods generally is not what we would expect the economy to produce. We are not exporting enough. We are given very little information about exports in the Digest of Scottish Statistics. In this kind of period it would be a great help to know what section of British exports come from Scotland. The few figures which are given are not very happy ones For example, exports of Scottish machine tools were £812,000 in 1953; £796,000 in 1954; £725,000 in 1955, and £676,000 in 1956. Yet the machine tool is as typical as can be of the best Scottish exportable goods.

Machine tools are a section of our industry where we are especially vulnerable. I was given a figure the other day for an increase in our imports of machine tools from Germany of 1,000 per cent. in the last three years. I do not stand by that figure, but I do stand by the criticism implied by it. In Scotland we are not producing anything like the amount of machine tools which an expanding economy would produce.

I will leave the subject of heavy industries and come to the new industries. In Grangemouth we have a very remarkable and lively centre of new industries. The most important is the oil refinery. That was laid down in the time of the last Labour Government. Since then several other refineries have been built in the United Kingdom. The situation now is that the Grangemouth refinery is about one-third or one-quarter of We size of the biggest of the English refineries and its total distillation per year is about 7.5 per cent. of the English figure. It is planned that by 1957 that figure will have dropped to 7.2 per cent. and any figure below 10 per cent. is most unfavourable for Scotland. Even if one takes that very modern industry one finds that Scotland is lagging behind again.

Let us take the figures for the chemical industry and its allied trades. Since 1948 there has been an increase of 26 per cent. in Scotland, but in the United Kingdom the increase has been 85 per cent. Neither in her old traditional heavy industries nor in the new science-based industries is Scotland strong, comparatively speaking. I apologise to the right hon. Gentleman for making these comparisons, but comparison means a good deal to Scotland. This is not the kind of thing that can be shrugged off upon the basis that comparisons are not pleasant things to make, and that we should therefore have nothing to do with them.

The reasons why Scotland lags behind are connected with the Government's development and direction of industry. I will not attempt to make any analysis of those reasons, in view of the time, but I want to make one comment upon a point which the right hon. Gentleman raised. He commented upon the unemployment figures which, at 2.4 per cent., are the lowest since we started to record them. But, when he says that, he is doing what he has done previously over the last winter; he is ignoring the other factors which affect redundancy in Scotland, or the creation of employment, and which do not enter into these figures.

He ignores the difference between the percentage of insured populations, as my hon. Friend the Member for Hamilton has expounded to the House on more than one occasion. He ignores emigration figures. When asked about this subject, he would not reply. My hon. Friend the Member for Kilmarnock (Mr. Ross) asked what was the rate of migration to England. There was no reply. My hon. Friend also asked him whether Scottish unemployment was being solved in England. and again there was no reply. Perhaps the Secretary of State will attempt to give some answer.

In the meantime, I would point out that one part of the answer to that question is contained in the current issue of the Ministry of Labour Gazette, which points out that the highest point of migration of labour in the United Kingdom is from Scotland, with more than half of the Scottish migrants going to London and the adjacent areas. That is the kind of traffic which, however much we may believe in the mobility of labour, we cannot approve of. Not all these Scotsmen become leading figures, managing directors, and so on. That is the kind of thing that we must try to stop.

The proposed new plans for steel have been the subject of a considerable amount of discussion in the course of the debate and I shall speak about them in a much less detailed fashion than many hon. Members have done. I notice that the right hon. Gentleman is still a little tentative about the form of these plans. He says that they perhaps include a strip mill. Whatever the plans may be; whether they include a strip mill or not, one presumes that the Iron and Steel Board will consider them in detail on technical and economic grounds, and that when the Cabinet considers them they will do so on very much wider grounds.

This is where I thought that the hon. Member for Pollok (Mr. George) was wrong. He gave me the impression—in spite of the fact that he reminded us at the beginning that we did not know all the facts, which is quite true—that he himself was trying to break into the technical and economic argument. I am afraid I got the impression that he became rather lost. The first rule for a politician, however much he may know about the details of an industry or occupation, is to avoid going into technical and economic details, because upon them he is sure to misjudge. He must leave those questions to the technicians; he must judge the matter very broadly.

Discussing the broader issues, and speaking as a representative of the region affected by possible plans for Scotland, I have to refer to labour. The right hon. Gentleman said that the question of whether labour was available would be taken into consideration. So far as any of us can judge, labour will be available in the Grangemouth region where, if a Scottish site is chosen, it is planned that the mill will be put. Apart from that, even in my constituency the real interest in this plan is not that it will absorb local redundant labour, but the effect it will have on the Scottish economy.

I wish to put to the right hon. Gentleman one or two questions which seem to me to arise in this connection and which must be considered by the Cabinet. There is the strategic question to begin with, which may be put briefly. Are we to add another strip mill in the location of the three existing strip mills in the South Wales area? Then there is the argument of equity. As is shown by the figures of broad economic progress which have been quoted both by myself and by other hon. Members, Scotland has not had enough "breaks" in industry in recent years. There is the bigger argument that in Scotland, for that very reason, there is a slack of economic capacity which could be taken up. A lot of it perhaps runs through the fingers, or across the Border; at any rate, it disappears from Scotland. But it would stay in Scotland had we a project there of this sort. We need a big installation, not only because of its own value, but because of its value as a stimulus to the Scottish economy.

If the mill goes to England or Wales, not only will Scotland lose the improvement in its economic position which would be brought about by the provision of a mill, but the comparison between Scotland and the rest of the United Kingdom will be even worse. The United Kingdom, with the exception of Scotland, will have added a strip mill to its present strength, while Scotland will have had no similar or comparable addition. I remind the right hon. Gentleman of the prospective future importance of the Forth as a trade estuary. Bearing in mind the probable development of European trade, it seems to me that the great addition this would give to the prestige and use of the Forth estuary would be to the good of Scotland's future development.

The question of the jute industry in Dundee and district has been examined and the run-down of defence installations and the consequent displaced labour has also been thoroughly canvassed. I will not attempt to go into details about that. I would remind the right hon. Gentleman that his hon. Friends were, to put it mildly, not happy about the Dundee decision. They indicated that every town in the Dundee area will suffer. I would also remind him that a number of important questions are concerned in the running down of the Royal Ordnance factories, and I will put just one to him. The right hon. Gentleman talked about redundancy figures of 2,000 or 2,500. The other day we were given the figure of 7,000 for the United Kingdom, and it seems that the figure for Scotland is disproportionately high.

Mr. Iain Macleod

Perhaps I may put that point right for the hon. Gentleman. If he will read carefully what I said, he will see that I included certain redundancies at Bishopstoun in particular, which go beyond my hon. Friend's statement. It is not 2,500 out of 7,000.

Mr. MacPherson

I am grateful for that statement from the right hon. Gentleman. It was a matter that ought to be cleared up. I must now make way for the Secretary of State for Scotland, and I, therefore, leave out a number of things I should like to have discussed, following the points made by some of my hon. Friends.

I come back to the point at which I started and at which a number of my hon. Friends started in earlier debates, the comparison between Scotland's position and that of the United Kingdom generally. The House of Commons is not likely to leave the Secretary of State for Scotland to carry on quietly and undisturbed in his work until he brings Scotland's figures nearer to the English figures. Scotland is not likely to be happy with a second-fiddle economy.

9.31 p.m.

The Secretary of State for Scotland (Mr. John Maclay)

The hon. Member for Stirling and Falkirk Burghs (Mr. Malcolm MacPherson) said just before he sat down that I must not expect to be left in peace until I did certain things. I assure the hon. Gentleman that I have not the slightest expectation of being left in peace as long as I am Secretary of State for Scotland. I should think it very surprising if I were left in peace for one minute.

Just to show that Scotsmen can approach matters as a whole without excessive party feeling running through our debates—as a matter of fact this debate has been a good example of that—and as we are, I understand, debating an Amendment to the original Motion, I will say now that we have considerable pleasure in accepting the Amendment, or will have, at the end of the debate. I hope that adds to the general feeling that we all, whatever our differences of view, are primarily, definitely and above all interested in the future of Scotland.

The debate has been extremely interesting. One always says that sort of thing when winding up a debate, but on this occasion it can be said with justification. I only apologise that I had to miss bits of speeches and one or two full speeches because there were occasions when I had to leave the Chamber for various purposes. I have tried to follow what has been going on right through the debate. The best way in which I can tackle the job of winding up is to deal not with the points of individual hon. Members, because most hon. Members touched upon similar subjects, but to try to group the points that have been made and to deal with them by subject. If I omit any points I will either deal with them by correspondence afterwards, or, if there is time and I am asked, I will deal with them on the spot.

I will start off with a word about defence cuts. We must all be concerned to some extent about their effect, whether in the closing of Royal Ordnance factories or the reduction in the numer of contracts and sub-contracts placed by the Supply Department with Scottish firms. I have been watching the position very closely, particularly the Scottish figures, and I am in close touch with my right hon. Friends who are more closely concerned with the application of these cuts. No one likes to see a fall in employment. I understand that the hon. Member for Greenock (Dr. Dickson Mabon) indicated when I was not here that if things had to happen patchily he would rather not be in one of the patches. I agree with him profoundly.

However, I hope that Scotland will be able to assimilate effectively the consequences of the defence cuts. The matter will require to be watched very closely indeed, but it is better that Scottish industrialists should be producing goods for the home and export market rather than that we should produce goods for the constantly varying demands of the Service Departments. If we get going with normal production rather than with defence production, quite apart from the implications of war and other things, it should build up into a much more stable flow of production. That is better than depending on the changing defence policies from time to time according to the international situation.

I think we are all extremely glad that Messrs. Babcock and Wilcox are taking over in principle. [Laughter.] I must use that phrase because it has been used once or twice. [HON. MEMBERS: "What does it mean?"] The details are not necessarily settled about ultimate arrangements. It will be very useful if a firm of the standing of Babcock and Wilcox with its connection with one of the nuclear consortiums takes over. There are great possibilities for the future.

Mr. Ross

Is it the intention to make the Royal Ordnance factory in Irvine available in the same way for some suitable enterprise?

Mr. Maclay

Every effort is to be made to try to find some firm to take over the factory. That is the intention, and work is proceeding on it. There is some time before it will actually be closed down, and every effort is being made to find someone to take it over.

I wish to deal with the point raised about employees at Dalmuir. I am informed by the Parliamentary Secretary to the Ministry of Supply that the existing machinery in the Ministry of Supply for dealing with problems of the people involved is the Joint Industrial Council, comprising representatives of the trade unions and the Ministry, who will be looking after this problem. The chairman of the Council is the Parliamentary Secretary to the Ministry of Supply. He assures me that his Ministry is anxious wherever possible to avoid hardship to employees. The problem if it exists—which cannot be certain yet—of hardship through movement of employees will be approached with the utmost sympathy.

Mr. Bence

I must pose this question because Messrs. Babcock and Wilcox has agreed to take this factory "in principle" and the Departments are negotiating with that firm. What are the principles to be? I hope that one of the principles will be, not only the terms of the lease and rent, but the terms on which ex-employees of the Ministry of Supply will be engaged by Messrs. Babcock and Wilcox.

Mr. Maclay

I am informed that it will be a phased operation. The worries which I think the hon. Member has in mind are very much in the mind of the Parliamentary Secretary and those who are responsible. I know that from discussions I have had with my hon. Friend before this afternoon and I have been checking with him in the last hour or so on the position.

On the question of jute, I do not think I need go again over the detail of what was stated by the President of the Board of Trade yesterday, but I shall try to go into some of the details raised by hon. Members on both sides of the House in this debate. First, as to the future. The position will be kept under very close review and in that review representations which have been made to the President and myself about the consequences of the reduction in the mark up will be firmly kept in mind. Of course there will be continuing consultations with all concerned. [An HON. MEMBER: "What does that mean?"] That means precisely what it says. I thought it was very clear and that for once the words were very clearly expressed.

Mr. Hoy

We are looking for the meaning.

Mr. Maclay

The meaning will be in HANSARD tomorrow and I think it will be clear from what I have said.

Mr. Steele

Is that what the Government have been doing all along?

Mr. Maclay

Yes, and we continue to do it. That is all I propose to say on that subject at present.

Mr. Strachey

If the right hon. Gentleman is leaving that point, may I ask if it means that he categorically refuses the request of his hon. Friend the Member for South Angus (Sir J. Duncan) and all of us on this side of the House that he will give a guarantee that the present reduction in the mark up is not the precursor of further reductions in the mark up?

Sir J. Duncan

May I remind my right hon. Friend that unless something better is said than that which he has just said, there will be no confidence among the employers in re-organising the industry to meet the new prices.

Mr. Maclay

I know that the right hon. Member for Dundee, West (Mr. Strachey) and my hon. Friend the Member for South Angus (Sir J. Duncan) realise that it is impossible to forecast definitely in the future anything in politics or anything in these economic matters. I have said that the position will be watched with the greatest care and that there will be continuing consultation with all those concerned, and I think I should now turn to the detailed points which have been asked about the Distribution of Industry Act and the steps which will be taken under it if unemployment develops.

Mr. G. M. Thomson

I wonder whether the Secretary of State will at least say that in the meantime he will implement the undertakings which have been given in the past that either jute control would be preserved or some other form of protection would be found for the Dundee jute industry.

Mr. Maclay

I am not prepared to go beyond what I have said. I think I have covered the point fairly.

Perhaps I should next deal with the point about the Board of Trade office in Dundee, which several hon. Members have raised. For a long time this has not been a big office and latterly it has had only one employee. I should point out that one of the main functions in the office was not so much the detail of the Distribution of Industry Act work and getting factories moved into the district but helping firms in the area in relation to the various controls which existed during the period of shortages. I am informed that in recent months, and even in recent years, the work has been greatly diminished. The main work in connection with the Distribution of Industry Act in the area has always been from the main office in Glasgow, working with the key people in the Board of Trade in London, possibly with the first contact through the Dundee office.

I can confirm this from my own experience when I was a Member for a division in that part of the world and when I did a lot of work wtih the Board of Trade on distribution of industry problems under the Act. While I always obtained great help from the Dundee office, and while there were certain things in which it could help, the main problem of getting new industries into the area had to be tackled from the main Scottish office, working with the Board of Trade in London.

Several hon. Members asked what measures we should take in Dundee and in the area. First, I assure my hon. Friend the Member for South Angus that it is firmly intended, if necesary, to extend Development Area treatment to areas outside Dundee. Some study remains to be done on that, but that is the intention if it is necessary.

Dealing with the question of factories, here I am repeating what is the normal Distribution of Industry Act procedure. It might help if I spelled it out in some detail. First of all, my right hon. Friend the President of the Board of Trade will take every opportunity to persuade firms to establish projects at Dundee or in the area. The Board of Trade will provide any extensions needed by firms already established in Government factories in Dundee and will be prepared to build new factories to let for any further projects which industrialists can be induced to establish in the Dundee Development Area which, as I have said, may need in due course to be extended outside the city limits.

The next point, Which has been discussed once or twice today, is that factories will for the present be provided to meet specific demand rather than advance factories, but consideration will be given to acquiring for re-letting one or two vacant privately-owned small factories now offered for sale in the City. As there was some argument abotu them earlier, I may say this about the advance factories. Immediately after the war—and for some yeasr after—firms were willing to move almost anywhere that would provide a building for them. That is not the position today.

It is mush more attractive to firms, and to big firms in particular, that are thinking of coming into an area, to be told, "If you come here we will produce a tailor- made factory for you." That is obviously more attractive. I do not deny that there may be conditions in which an advance factory might be a good thing, but, by and large, those conditions do not exist at present and I think that it is much more helpful to be able to offer what has come to be called the tailor-made factory rather than the pre-made factory.

One further point about the procedure. The Treasury will make of the Dundee area an exception to its present general policy of not granting Development Area Treasury Advisory Committee loans—known as D.A.T.A.C. loans. They will give sympathetic consideration to this kind of loan for some projects in an area requiring such help. These are loans, not only for the building of a factory but for allowing the operations to start.

Finally, every effort will be made to bring together the jute firms which may have redundant factories or redundant labour—or, possibly, capital—and the firms seeking factory space, etc. Everything will be done to bring the available facilities and help to the attention of the people who might possibly come.

Sir J. Henderson-Stewart

In considering the extension of the Development Area arrangements to an area outside Dundee, will my right hon. Friend consider Tayport? I do not ask for a promise.

Mr. T. Fraser

Since the right hon. Gentleman has described what the Government will do to help Dundee, is it not a fact that he is telling us what the Government ought to have been doing up to now in every Development Area in the country?

Mr. Maclay

I did say when I started that I would redescribe what is Development Area practice. Quite a lot of people do not seem to know it outside this House, and even inside the House some hon. Members may have forgotten what the full procedure is. I say to my hon. Friend the Member for Fife, East (Sir J. Henderson-Stewart) that, of course, I have noted what he said—

Mr. Rankin

What about steel?

Mr. Maclay

I am coming to that, but jute is an important problem, and I have devoted quite some time to it because I am concerned about the position, and no one could avoid being concerned.

Before I leave the subject, the right hon. Gentleman the Member for Dundee, West (Mr. Strachey) said that this was a case of doctrinaire laissez-faire against social values. I firmly and absolutely deny that. It is nothing of the sort. The problem was very well put by my hon. Friend the Member for South Angus (Sir J. Duncan), when he said that our view is that doing nothing is hurting the industry. That is the whole point. We believe that if we go on leaving things as they are, we should generally hurt the industry. That is why we have acted. There is no question at all about being doctrinaire.

The hon. Member for Dundee, East (Mr. G. M. Thomson) asked: "Why choose this moment when unemployment figures are high?" The very fact that unemployment figures have been rising in Dundee is proof that something is wrong—[HON. MEMBERS: "No."] Yes, it is definite proof that something is wrong. It is because we feel that this has to be tackled—tackled soon in advance—and that we shall not wait for disaster that we have acted as we have done.

Of steel and the strip mill, all I can say is that the representations which have been made so forcefully by deputations to my right hon. Friend the Prime Minister, to other of my right hon. Friends and to myself are, of course, being very carefully considered, and will be carefully considered when the time comes for a decision on the siting of the strip mill. In addition, of course, the speeches that have been made throughout this debate, with the balance of argument that has been produced, will be very carefully noted, and every consideration will be given to the Scottish factors which have been so ably expressed by a great many right hon. and hon. Members.

Dr. Dickson Mahon

Not the Welsh factor.

Mr. Malay

The hon. Member for Cardiff, West (Mr. G. Thomas) has left the Chamber.

The only part of the opening speech of the hon. Member for Hamilton (Mr. Fraser) which caused me a little distress, if I may say so, because he made a good, constructive speech which I listened to with great attention, was that part in which he was very much less than fair, I thought to Colvilles. I tried to note down his words, but I did not get them quite straight. If I remember aright, he implied that what Colvilles were doing in this very big new scheme announced this morning was merely modernisation and, though I do not think he meant to say it, he seemed to imply—I should like this to be put right, if he did not intend it, so that no false impression goes out about it—that Colvilles would not be producing the steel which Scotland really needs. That is what the hon. Gentleman said, as I took it.

Mr. T. Fraser

I want to have this right. Colvilles will produce plate for Clyde shipbuilding, but Colvilles will not produce one ton of the kind of steel for which Scotland has such a very great need.

Mr. Maclay

I hoped that there had been a misunderstanding; I could not think that the hon. Gentleman really meant what he appeared to mean. The fact is that Colvilles are producing steel now and are now expanding production of the steel which Scotland desperately needs. It would be quite tragic if our great existing Scottish industries of shipbuilding and all the others were in any way let down by our Scottish steel producers. There was an unfortunate emphasis which I thought the hon. Gentleman did not quite mean, and I wanted the thing put right. That is all right now; it is corrected.

In case there should be any misunderstanding, it is not just modernisation which the company announced this morning. I have got only what is in the Press, but, if I understood correctly, the new development will include the installation of a second blast furnace, a duplicate set of coke ovens, a new slabbing mill at Ravenscraig, and the installation of a four-high plate mill at Clydebridge, together with extensions and alterations in some of the company's other works. It is a very big scheme, and we ought to be very proud indeed that this great Scottish firm is moving on at this stage in a development like that.

Mr. Lawson

This is the second phase of a scheme which was declared some considerable time ago. It is not a new scheme. It will still leave Scotland very far behind its share—namey, 48 per cent.—of steel production in Great Britain.

Mr. Maclay

I have very little more time. I do not want to go into detailed figures and statistics. All I am emphasising is that this is a highly satisfactory development which we are extremely glad to know is taking place. It will produce some very valuable improvements in the availability of Scottish steel. Shipbuilding, which has been discussed and which I must say a word or two about, has suffered from a shortage of plate, and there have been delays. I think that there has been great damage done to our Scottish shipbuilders' reputation throughout the world because, though the ships they build today are, as always, the best in the world, our delivery dates have not been good.

Mr. Rankin

The steel shortage.

Mr. Maclay

Partly steel shortage, but there have been other factors. The steel shortage has been a major factor, and I hope that we shall, with this new development, really catch up with our steel deliveries.

Some concern was expressed about shipbuilding figures. It must be realised that to take isolated years is risky when one is dealing with launchings. Values are probably more reliable. Of course, from year to year, delivery dates must vary and the period of building must vary according to the principal type of ship built. If it is a tramp ship, it is not a big job; if it is a big tanker, that is another type of job, and if the ship is the "Queen Mary", it is a very long job. The figures must be studied carefully before one can form any very serious conclusions about actual launching figures in any given year.

Mr. Rankin

What does that mean?

Mr. Maclay

It means exactly what I said. It seemed to me that there were criticisms made, or that concern was being shown, about the shipbuilding figures recently, and I did not want any implication to go out from this House in any way that Scottish shipbuilding was falling behind.

Mr. Rankin

The issue there is between tonnage and value. If we build one ship worth £80 million, does that represent more than the corresponding tonnage?

Mr. Maclay

The issue was more than that. It was a question of apparently falling figures in shipbuilding. I have exactly three minutes more, and I am afraid that I have missed out quite a number of points which hon. Members have made, but the matters I have had to deal with are themselves very important. I regret it, but I will certainly look through the OFFICIAL REPORT very carefully, and if necessary write to hon. Members.

I should like to do as one or two hon. Members have done and try to draw some sort of balance sheet of what is happening in Scotland. I agree that there is cause for concern in many directions. I listened with the greatest interest to the winding-up speech of the hon. Member for Stirling and Falkirk Burghs, in which he drew statistical conclusions from a large number of statistics, but I think it would be a tremendous mistake if we allowed it to go out from this debate that, on the matters which we have very properly been discussing and the problems with which we are faced, there is no other side to the argument. I am not accusing any hon. Member of sounding too gloomy. The danger of the situation we are in is that, because we have problems of the jute industry, the Royal Ordnance factories, and the shale industry, all emphasis in public is on that side, whereas the other side of the picture is pretty good.

Great developments are taking place, and if we turn to page 7 of the Report we find matters of the greatest importance to Scotland. We find that we are well in advance with gas turbine propulsion, and that the first ship to be propelled by that means to be built in Britain will shortly be built on the Clyde. There is also very good news about the association of one of our Clyde yards with the nuclear propulsion of big tankers. I could go on through an enormous list. We have other firms associated with four out of the six nuclear energy consortiums, and we have our atomic energy stations for developing electricity production. In fact, if we are ready to seize and to go on seizing the opportunities now presenting themselves in Scotland, I have very little doubt how Scotland will fare in the future.

Question, That the words proposed to be left out stand part of the Question, put and negatived.

Proposed words there added.

Main Question, as amended, put and agreed to.

Resolved, That this House, having considered matters relating to industry in Scotland, takes note of the provision made for this purpose in the Estimates for the current year.

Committee Tomorrow.