HC Deb 10 December 1958 vol 597 cc432-42

8.4 p.m.

Mr. Cyril Bence (Dunbartonshire, East)

It struck me a little while ago that in order to have a better distribution of Members in the House it would be better if I went over to the benches opposite to give a little more balance. It seems extraordinary that when an important issue like this is raised by my hon. Friend the Member for Birmingham, Yardley (Mr. Usborne), ably supported by my hon. Friend the Member for Newcastle-under-Lyme (Mr. Swingler) and by the brilliant exposition of my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes), in support of an inquiry into an event which may well have had and, I believe, will have in future very serious consequences for the United Kingdom, no Minister is present. There is hardly a constituency which has not been affected by the loss of trade with the Middle East, and, in particular, Egypt.

It was interesting to note in the Press this week and over the week-end that certain interests in this country are clamouring for a renewal of trade with Egypt. At the present moment, Germany, Italy and France are capturing the trade which we had with Egypt before Suez. It is tragic that we should suffer a loss of reputation in trying to save the canal from being destroyed or from being inefficiently worked when every report from Egypt shows that the canal is being worked as efficiently today as ever before.

As a result of our action we have lost a good deal of respect in the Middle East and a tremendous slice of trade. Yet the Foreign Office makes, as my hon. Friend the Member for South Ayrshire said yesterday, a cowardly and vicious attack upon Mr. Randolph Churchill, and I think that everyone will agree that the Daily Express on this occasion, through Mr. Randolph Churchill, has made a great contribution to our democratic way of examining things done by the Government in the name of the people.

I was surprised to learn from my hon. Friend—and I accept it—that the main pressure was from the financial institutions of America to destroy the £ if we did not stop this little game in Suez. I was surprised that our American allies should threaten to ruin the country—they have the power to do that—because the British and French in collusion made this unwise attack upon the Suez Canal.

I want now to deal with the Government's policies generally as they affect Scotland. We have in my constituency about fifty refugees from Egypt. I believe that they received a few pounds compensation for their losses as a result of Suez, but some of them are still unemployed and are not likely to get employment. If one is over 40 years of age, it is becoming increasingly difficult to get employment in Scotland. For the first time, I am informed, the placing of skilled men into employment is becoming difficult and to get employment in some skilled trades is almost impossible. The Government, we presume, in order to stimulate employment and to try to create a climate in the country that will be favourable to them when they go to the country, which they will do some time next year, have created the idea that they are encouraging an intensification of production and a stimulation of trade. Good employment prospects may obtain in the South, but unfortunately in Scotland, notwithstanding all the Government's efforts, unemployment is rising. The removal of hirepurchase restriction and the encouragement of increased consumption is all right in an area where the unemployment rate is only 2.2 per cent. People feel a certain amount of confidence. They have jobs and perhaps are able to buy washing machines which they see in the shop windows.

Mr. Malcolm MacMillan (Western Isles)

On a point of order. In view of the importance of the subject which is now under discussion, at least from the Scottish point of view, I wonder whether it would be possible for one of the five or six Scottish Ministers to be present?

Mr. Deputy-Speaker (Sir Gordon Touche)

I understand that no notice has been given to the Scottish Office about this debate, and it is not my responsibility.

Mr. Fernyhough

Further to that point of order. Would you not agree, Mr. Deputy-Speaker, that even if notice had been given, if the Scottish Ministers had shown no more courtesy than the Foreign Office, my hon. Friend's point of order would have been purposeless?

Mr. Deputy-Speaker

I do not know what notice was given to the Foreign Office.

Mr. Swingler

On a point of order. Just after 6 p.m. my hon. Friend the Member for Yardley told the House that he had given notice to the Foreign Office that he would initiate this debate, since which time—

Mr. Deputy-Speaker

I cannot go into that.

Mr. Swingler

On a point of order. Is there not some responsibility to hon. Members who attend the House? Does not the House normally meet until 10 p.m. under Standing Orders? Are we to understand that no Ministers are available?

Mr. Deputy-Speaker

That is not a point of order for me.

Mr. Bence

In view of the matters I hope to raise—and I hope that my Scottish colleagues will also raise them—it is unfortunate that no Scottish Ministers are here. I appreciate, however, Mr. Deputy-Speaker, that you are not in a position to bring them here. If you cannot get them here and we cannot get them here, I do not know how, in the name of fortune, they can be brought here. I only hope that it will be appreciated by the public that if Ministers of the Crown cannot be here before the election, when important matters such as this are being discussed, they should see that after the election they are not here either.

I was talking about the employment position and the stimulation of employment by Government measures. While these measures are being taken, unemployment in Scotland has doubled. It has risen to 95,000 and is still rising. The Government's measures seem to have no effect at all and there seems no hope unless the Government take some drastic action immediately and reverse some past decisions. Apart from this, there seems no immediate possibility of any improvement in the employment situation in Scotland.

The tragedy is that we had a factory, the Dalmuir Royal Ordnance Factory, which we were told was not required by the Ministry of Supply because it did not want the tanks and the military equipment; it already had plenty. The factory was transferred to another company which employed only a few hundred men instead of 2,000. It is extraordinary to read from General Keightley's Report that when we went into Suez the troops had only eighteen L.S.T.s and eleven L.C.T.s and only enough aircraft to carry two battalions. The general theme of his Report on Suez is that the War Office and the Admiralty were short of every sort of equipment under the sun. That was after five years of spending at the rate of £1,400 million a year. We went into action in the Eastern Mediterranean against such a small country as Egypt, with the French, and those in command said that they never had the equipment.

Mr. Malcolm MacMillan

They had never had it so bad.

Mr. Bence

I agree; the British troops had never had it so bad. At the end of his Report the General says that the soldiers, sailors and airmen at least deserve some credit. Presumably no one outside the military activity were entitled to any credit. It seems hard to realise that Ordnance factories were being closed down all over the country while our forces were going into action without the material they needed to do the job.

I am told that the factory at Dalmuir cost £14 million. It could take 3,000 to 5,000 men on the floor. There are now about 500 to 600. The factory has been handed over to Messrs. Babcock and Wilcox Ltd. I have sufficient knowledge of production work and production costs to know very well that there is no company in the country which, on a commercial basis, could run a factory of that capacity and employ it only to turn out the output of 500 to 600 men.

Mr. James Carmichael (Glasgow, Bridgeton)

What did the company pay for it?

Mr. Bence

We should like to know. We have lost a lot of money on all sorts of ways, for example, through buying boots for the Services. We heard today that the Government have bought more boots and shoes than they need and have lost a lot of money. They said that they did not want this factory in Scotland, and it would be interesting to know how much was lost as a result of that. They disposed of the factory at the same time as military commanders said they could have done with the products of that factory and could not accomplish their task because they lacked the equipment they needed.

We also have the shocking position of the shipbuilding industry. The House was told today that there are five berths idle on the Clyde. At the same time the Foreign Office turns away an order for ships which might well have gone to the Clyde. The order has gone to German and Italian yards, which will make these vessels. By sub-contracting, these German and Italian yards are buying the propelling machinery and naval equipment from British engineering firms—but the Foreign Office has not stopped that. This seems to me a little crazy. It seems to me that one Department does not know what the other Department is doing.

These are the things which are affecting employment on Clydeside. Recently we were given the unemployment figures in shipbuilding for the Glasgow area. I do not believe they include Greenock and Port Glasgow, where there are some big shipyards, but perhaps some of my hon. Friends, who will follow me in the debate, know whether that is so. In the last two years unemployment in shipbuilding and ship repairing in the Clyde Valley has increased from 650 to 1,300. It has doubled in shipbuilding on the Clyde in the last two years.

The shipbuilding programme on the Clyde will be finished in two years' time and half the Clyde will be idle unless more orders are received. We have previously drawn attention to the American policy of very heavy subsidies for shipbuilding. Their subsidy for two passenger liners is almost 50 per cent. of the cost of the ships. Those are the conditions with which our shipbuilding yards are trying to compete. At the same time, when there is an opportunity to obtain orders the Foreign Office steps in and frustrates the British yards.

The British Government will allow British industries such as shipbuilding to decline because they will take no action to support the British industry against the Germans and the Japanese and, indeed, against the Americans, where Governments are encouraging shipbuilding in their countries. The British Government know very well—it is commonly known—that the American Government are determined to establish the United States and Japan as the great shipbuilding nations, because they are in the Pacific and in another world war it would be better from their point of view to have the shipbuilding in the Pacific. They are writing off Great Britain as a great shipbuilding nation.

This is common knowledge in shipping circles. The Americans are determined to write us off because of the strategic situation. We know what happened in the last war. The Liberty ship was designed in this country but it was built in America in Kaiser's yards.

Mr. Rankin

And we should not forget the flags of convenience.

Mr. Bence

My hon. Friend is right. The Americans were great sponsors of the flags of convenience to build up the Pacific fleets and transports and to draw the shipbuilding centre away from Europe. That would ruin Great Britain. The carrying trade, by both tramps and liners, is one of our biggest dollar earners and always has been. Our shipping services have always been vital to us. Anything which undermines shipbuilding and British merchant shipping cuts at the roots of Britain's prosperity.

While the Government are so reluctant to do what they can to face these methods used by our competitors in shipbuilding, at the same time they buy subsidised Polish coal. I cannot understand that. They buy subsidised Polish coal for the British Navy at the same time as they intend to close British coal mines. To me this seems a tragic thing to do. We may be able to buy thousands of tons of Polish coal in terms of money cheaper than we can get coal from our own mines, but surely we ought to weigh in the balance the social consequences to the people in our own country.

I am going to an area on Sunday in Scotland where a mine is being closed on which a village depends. I know from talking to some of my colleagues from Scottish coal mining areas that there are cases in which a village depends entirely on one or two pits and these pits are being closed. In Scotland we have empty factories and no firms to go into them. We hear a lot of talk about the war on want. If the Government wished to wage a war on want and against poverty in India and in the Colonies, I have heard it said by a Minister in this House and reported in the Press that we could easily make a contribution of 1 per cent. of our national income. What does 1 per cent. of our national income mean? We tend to think in terms of money, but we should think in terms of national resources. If we used 1 per cent. of our national resources we could send from this country capital goods for the cultivation of the soil and irrigation in India, and to Kenya, the Sudan and other backward areas, and we could bring all the resources that are now idle into full production. That is what it means in physical terms. In this country today 1 per cent. or 1¼ per cent. of our labour and its physical capacity to produce goods is now idle.

Mr. Fernyhough

Surely in the steel industry it is 25 per cent., and in the coal mining industry it must be about 15 per cent.

Mr. Bence

In the steel industry it is very bad indeed.

We have the extraordinary position that the output of the steel industry in Wales, which is still nationalised, is going up and capital investment in the steel industry there is going up at a tremendous rate. The whole of the steel industry in Scotland was denationalised; there is no nationalised steel in Scotland. Every pit is under private enterprise. The steel production in Scotland is falling under private enterprise and steel production in Wales is rising. Since 1952, the output of steel sheet in Scotland has fallen from 84,000 tons per annum to 36,000 tons. The output of sheet steel of Richard Thomas and Baldwin and The Steel Company of Wales has risen since 1952 by 60 per cent.

We have the resources of the steel industry being expanded because it is the Government's wish to expand them. In Scotland, however, where we have private enterprise, output is falling. Whether it is because of its geographical location, whether it is because that part of the country is looked upon by the Government in Westminster as containing of second-class citizens, certainly not the same as London and the Home Counties, or whether it is because of traditional or historic conditions it is looked upon as having something like Dominion status. I do not know, but it is a fact, which no one can deny, that the output of steel in Scotland has considerably fallen. We have the extraordinary position that Richard Thomas and Baldwins is a nationalised concern. It wants to put down a strip mill. The Steel Board agree.

Mr. Rankin

Stripping a strip mill.

Mr. Bence

You cannot split a mill, although one can split peas. It is a catchpenny when one talks about splitting a strip mill. I do not accept that. If anyone talks about splitting an integrated process, or two integrated processes, I do not accept it. To me it is most uneconomic.

Mr. Rankin

I said they are stripping a strip mill.

Mr. Bence

That may be. There was no question as to whether Richard Thomas and Baldwins could find the finance to build a strip mill near Newport. There was never any difficulty about how they were to get the finance; no one ever raised it. When it was suggested that Colvilles as a private enterprise industry in Scotland might do something about this strip mill no one would finance it. Colvilles made a tremendous extension at Ravenscraig. I visited there two or three years ago and was shown the area for the site. The company said that the land was available and that they were going to make developments in a few years' time. It told the Steel Board and the Government that it could not get the money to do it. It told the Treasury and the Steel Board that if they wanted it to extend or develop there they would have to give special financial terms.

I have spoken to many people as I am sure my hon. Friends have, including the honorary treasurers of local authorities in Scotland, and they have asked us if it is possible for the Government to give them some special loan terms, something different from the market terms, because they found it so difficult to carry on the administration in Scotland and the building up of resources in Scotland by being forced on to the money market. They could not carry on their work by borrowing from the money market. Colvilles said exactly the same thing. that they could not extend their steel works by borrowing on the market because the market would not lend the money. So it appealed to the Government.

The Prime Minister has been asked what are the special financial terms? What special terms in finance is private enterprise to get, and is it to get the same concession as Richard Thomas and Baldwins, the nationalised industry in South Wales? Are Colvilles in Scotland to get the same financial terms as the strip mill in South Wales? If so, the people in Scotland will want to know why private enterprise in Scotland can get special financial terms to carry out a difficult project while local authorities which are faced with immense problems in Scotland cannot get special financial terms but have to go to the open money market.

It is this sort of thing which annoys the people of Scotland, when they see exactly what this Government are doing.

Mr. H. Hynd (Accrington)

Is my Friend sure of his facts? He is accusing private enterprise of wanting, in effect, Government subsidies. Does he not know that private enterprise says that it does not believe in Government subsidies?

Mr. Bence

I do not agree with my hon. Friend when he says that private enterprise does not want Government subsidies. I have worked in private enterprise. I worked in private enterprise from 1917 until I came here.

Mr. Fernyhough

But my hon. Friend was excluding the farmers, was he not?

Mr. Bence

I worked for a very big engineering firm, and between the wars Government orders were to us as a subsidy.

Mr. S. Silverman

Money for nothing?

Mr. Bence

It was money for nothing, I agree.

If one had a private contract and were losing some money on it, one wangled the private enterprise job and switched it to Government account. That was a subsidy.

Private enterprise wants the Government to use their powers and their ways and means to give it a hidden subsidy. When we ask for special financial terms, a special low rate of interest, the Government always tell us that that is a hidden subsidy. If Colvilles are to get special financial terms, is not that a hidden subsidy? Is that not an action by the Government to subsidise private enterprise in Scotland?

Mr. Swingler

These facts are very important, especially to the increasing number of citizens in the country who are suffering from the misfortune of unemployment, as, unfortunately, a large number in my own constituency are, and so I would ask my hon. Friend what are the conclusions which, from this very interesting analysis, he draws about the future planning by a Labour Government for full employment.

Mr. Bence

My own view is that we should immediately nationalise the steel industry in Scotland.

Mr. Deputy-Speaker

I hope the hon. Member will not suggest legislation in a debate on the Adjournment.

Mr. Bence

I am sorry, Mr. DeputySpeaker. My hon. Friend asked me what I would do to ensure full employment in the steel industry in Scotland. We have been told by private enterprise in Scotland that if it is to expand industry the Government, the State, must come to its aid. So I would say that if you come to the aid of the baby you take the baby over. I imagine that that does not need legislation.

It is now half-past eight. I was hoping that some of the Scottish Ministers would have come along while I was raising these very important points. I am afraid that unemployment in Scotland has gone over the 9 per cent. mark. We have 6,000 school leavers unplaced. Much of this arises from deliberate Government policy over the last few years. Some of it we know on the Clyde arises from our loss of prestige and our stupid action at Suez. I am convinced that this House of Commons and this Government must do something either by legislation or by administrative action. I think something could be done by administrative action to direct work to the factories and shipyards in Scotland, and particularly on the Clyde. There is a factory not far from me which is to close down next week. It is to be empty the engineering works stripped from it.

Mr. Short

On the Clyde?

Mr. Bence

On the Clyde, although I know that that sort of thing is happening on the Tyne, too.

Unless something is done to improve matters I am sure that the people of Scotland will turn bitterly against the present Government. I am afraid that they may feel increasingly bitter against this whole institution down here, since it appears to neglect the interests of Scotland.