§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Legh.]
§ 11.35 p.m.
§ Mr. Malcolm MacPherson (Stirling and Falkirk Burghs)
I am glad to find that this debate is taking place a little earlier in the evening than one might have expected. I will try to compress what I have to say into fifteen minutes, although when I started out I am afraid that my speech ran to a great deal longer than that in the form of notes.
I want to speak about the industrial situation in Falkirk and Grangemouth. For Ministry of Labour purposes, the area actually includes Bonnybridge and adjoining parts, but it is Grangemouth and Falkirk about which I am specially concerned. Grangemouth, of course, is prospering, but there are two things that I want to say about it before going on to speak of Falkirk.
First of all, in Grangemouth we have a small shipbuilding yard which, like other small shipbuilding yards, has recently been experiencing difficulties. I do not want to over-stress this problem because although recently a number of men have been laid off from the yard they have for the most part been employed elsewhere in Grangemouth. Therefore, I would not like to make a song and dance about something which has not so far become a serious matter.
Of course, the shipbuilding yard in Grangemouth is in the position of a great many other small shipbuilding yards in the country. It has a big question mark hanging over its future. It is a good yard. It has an enterprising management and it has orders from all over the world. It builds ships for countries across the Atlantic and in the area of the Pacific. Its craftsmen have a reputation throughout the shipbuilding industry of this country. It will be a tremendous pity if anything serious happens to this yard.
I want the Government to keep their eye on the situation and to do what they can to help. I should like, for instance, to know whether there is any possibility at all of Admiralty orders for repairs, for example, going to this yard.
1232 The second question in regard to Grangemouth is perhaps more potential than actual. What is to be Grangemouth's part in whatever British-Russian trade may develop in the near future? Other Scottish ports will, I hope, together with Grangemouth take part in whatever such trade develops.
The point I want to make is simply that Grangemouth is a well-equipped port and can handle a considerable volume of overseas trade, and indeed does. I should like the Minister to make sure that Grangemouth is given full consideration in whatever arrangements the Government take part in about British-Russian trade in the near future.
Falkirk is uppermost in my mind. It depends on the light castings industry. In the last six years the labour force in that industry has been shrinking and foundries have been closing down. This situation is not confined to Falkirk. It is the same all over the country. The number of men employed in iron foundries in the country is the lowest since 1945. It has dropped from about 147,000 at its peak in 1952 to 116,000 at the present time. I am told that in the six months ending in March of this year 70 iron foundries closed and only two new ones opened. Therefore, Falkirk is not in a peculiar position as far as that industry is concerned.
I think that the problems of the industry call for rather more attention from the Government than they have been receiving. In Falkirk there has been continual unemployment and short-time working ever since 1952, and this has tended to follow a seasonal pattern. In the earlier part of the year the industry has been slack, and after the trades holidays, which are due shortly, the industry has tended to pick up again. But for a long time unemployment figures in Falkirk have run, at various parts of the year, around the 4 per cent. mark. For the area as a whole—Falkirk, Grangemouth and Bonnybridge—the figures have been just on the verge of the official critical figure.
When one has raised that sort of question, the answer in the past has always been, "Of course, you have got unemployment in Falkirk. The local industry is slacking off, but next door you have got the Grangemouth industries and surely they can absorb the people 1233 rendered redundant in Falkirk." That is true. If the Grangemouth industries had not been there, and if British Aluminium, a comparatively new industry, had not come into existence in Falkirk itself, the situation in Falkirk would have been tragic.
There is no doubt that the Grangemouth industries, British Aluminium and now Alexander's the coach building firm, take up the redundancy of the light castings firms. That process is not at an end. British Hydrocarbon Chemicals at Grangemouth is to expand and I have heard a high figure quoted. The expansion may run to 1,000 additional workers. But in the Ministry of Labour area of Falkirk, Grangemouth and Bonnybridge, the unemployment figure at the moment is over 2,000. in Falkirk itself the unemployment figure is about 1,100. It was about the same this time last year. There are rather over 500 unemployed men, and one has to add to that another 500 or 600 women. That is the answer to what is said about Grangemouth taking up the slack.
There is always and always has been a lag between the redundancies in Falkirk and the employment offered by Grangemouth and new industries locally. The question is what should be done to remove that lag and to make sure that everyone is brought into employment. The light castings industry has been doing a great deal to explore new possibilities in recent years. There are new types of work being done and there are new possible avenues for selling their products. One of the most recent, for example, is through the workings of the Clean Air Act giving rise to the necessity for smokeless appliances, of which I understand the majority are likely to be in cast iron, and of which there are normally two to a house. That is a useful new market for the industry, and the industry is not neglecting this. Nor is it neglecting other lines of production.
But even allowing for the fact that there is a good deal of life in the industry, there are a number of specific things which should be done. First, there is the, problem of selling what the industry makes. As I understand it, the industry's sales methods have improved in recent years, but these ought to be reinforced by some sort of preference on the part 1234 of some of its buyers. If only Scottish local authorities would give some sort of preference to goods produced not just in Scotland but in any area in Scotland suffering from unemployment, if they could give such preference to housing scheme products, that would make a great deal of difference to Falkirk. The policies of Glasgow, which is by far the biggest buyer of these things, could make a considerable difference to Falkirk industry.
There is a further point which, again, concerns Glasgow. When the first Clyde Tunnel was mooted and it was being put out to contract, a Falkirk company, the Carron Company, tendered for the cast iron work, but its tender was simply not considered, although it was the lowest. If a second tunnel is to be built, and I understand that this is now being mooted, the Government ought to make absolutely sure that that sort of thing does not occur again. The Carron Company ought to receive fair and equal treatment. It is not simply a matter of some other company from over the Border; it is a matter of the other company being in an area in the United Kingdom where employment is high competing with a company from Falkirk where employment is not nearly high enough and where, indeed, there is a good deal of unemployment.
The Government have not been very ready to encourage new industry to come to Falkirk. A few weeks ago, the Parliamentary Secretary to the Board of Trade gave a very discouraging reply on this subject. He said:My right hon. Friend "—that is, the President of the Board of Trade—is not prepared to steer industry there "—that is, to Falkirk—when the need in other parts of Scotland is so much greater."—[OFFICIAL REPORT, 3rd February, 1959; Vol. 599, c. 36.]That was a very objectionable reply.
There are in this area now 2,000 unemployed. If there is an industrial project capable of employing 100, 200 or 500 people, it cannot do more in another area with 10,000 unemployed than it can do in Falkirk. It can employ only the same number of people, wherever it is established, and it will do exactly the same amount of good in providing employment. The hon. Gentleman ought 1235 to dissociate himself and his Department from that statement. Further, I hope that Falkirk will benefit to some extent from the ancillary industries which will follow the establishment of the strip mill.
I have a specific point to put to the Minister about the raw materials produced locally in Falkirk and Grangemouth. In Grangemouth, the new chemical industry based on the oil refinery produces the raw material for plastics, synthetic rubber, and that sort of thing. There is a material called Styrene—I am afraid it remains only a name to me, for I am a layman in matters chemical—which, I gather, is a very important industrial raw material. In addition, British Aluminium in Falkirk produces at its rolling mills sheet aluminium, which is the raw material for aluminium products. Most of these raw materials go from Grangemouth and Falkirk to places in the South. The raw material for synthetic rubber produced in Grangemouth is being sent to Southampton. Why should not these raw materials, and others, which are produced locally be processed in Falkirk?
Does the Minister consider that the rule-of-thumb criterion for the distribution of industry policy, that is, the existence of a high and persistent rate of unemployment, the figure at present used being 4 per cent., is a really completely satisfactory basis? Would it not be better now and in the long run to say that we have here raw materials produced in a particular area, and we have also unused resources in the form of human beings and industrial sites and, perhaps, buildings near at hand, and why should not the one be married to the other?
Further, I put to him the point which was recently made by Lord Polswarth when he stressed that although the steel strip mill was not going to Grangemouth, the claims of the Forth Valley for considerable industrial expansion still held good. I hope that he Government still feel that the claims of the Forth Valley, and this corner of it in particular, are strong, and that meeting them would strengthen the economy of Scotland and of the United Kingdom as a whole.
The outlook for Falkirk in the long term I believe to be good. Its com- 1236 merce is very lively. The iron founding industry is exploring some new avenues. The likelihood is that the industrial world in general will agree with Lord Polswarth that the Forth Valley could be built up. It has a very attractive site geographically, and Falkirk is at the nub of the area. I think that the long-term prospects for Falkirk are bright, but the short-term problems are difficult and the Government have given too little attention to these problems.
After all, this year and last year there were about 1,100 unemployed at this time of the summer and yet we have simply been told that the Government are not to steer industry to the area. That is the problem to which I hope the hon. Gentleman will apply his mind.
§ 11.51 p.m.
§ The Joint Under-Secretary of State for Scotland (Mr. Niall Macpherson)
It is a pleasure to have to answer an Adjournment debate which is not one long dirge. The hon. Member for Stirling and Falkirk Burghs (Mr. Malcolm MacPherson) has shown that he is by no means without optimism in this matter, at any rate for the longer term. Tonight he has raised the question of industry and employment in his constituency with special reference to one part of it, the Burgh of Falkirk.
The hon. Member started by referring briefly to Grangemouth and to the prospects of the shipbuilding yard there. He said that there was a big question mark hanging over its future and he implied, quite rightly, that there was a big question mark hanging over the future of shipbuilding as a whole.
He may be aware that an order for one ship has come to Grangemouth Dockyard recently. Work is likely to start in August and should give employment to all departments of the Grangemouth Dockyard until August, 1960. The dockyard is at present engaged in fitting out a 2,130-ton vessel which was launched last February.
Although the dockyard has had to lay off many employees—in that, I am sorry to say, it is in line with dockyards elsewhere—the position is at any rate no worse and in some respects better than that in some of the other dockyards in the country.
The hon. Member asked about British-Russian trade. The question 1237 of how the trade to take place between Russia and this country will be arranged will be settled on normal commercial lines. I should not myself have thought that it was a question into which the Government need go to any great extent. Indeed, the fact that a new liner service was inaugurated just after the present arrangements with Russia were published has given the impression that that was as a result of the arrangements. In fact, the arrangements for this new service were completed before the recent trade talks between the Governments of the United Kingdom and the U.S.S.R.
The use of any particular harbour will undoubtedly be dictated by normal commercial considerations and the Government would not normally intervene in the matter. On the other hand, my right hon. Friend is sure that the British Transport Commission, which owns the Port of Grangemouth, will do what it can to ensure its maximum possible use.
§ Mr. Malcolm MacPherson
The Ports of London and Hull have been specifically mentioned by the Government in connection with this trade, and it is because of that Government interest in those ports that I simply asked that Grangemouth should not be overlooked in whatever arrangements were made.
§ Mr. N. Macpherson
The point I was trying to make is that the reason why those ports have been mentioned is that this service involving London and Hull—which was not arranged by the Government—had been set up before the trade talks. It was not a Government arrangement, and the question of the way in which any trade that develops is carried on, and the ports from which it is carried on, will be determined by normal commercial considerations.
Apart from that, I should have thought that Grangemouth was very well situated to conduct trade with Russia. The east coast ports of Scotland have been traditionally associated with Baltic trade. We have been sorry to see that trade diminish and dwindle over the years, and I should be very glad to see it developing again. I hope that that may be one of the effects of the recovery of British-Russian trade.
From the point of view of employment, as the hon. Member said, not only 1238 Falkirk and Grangemouth but Bonny-bridge, Denny, Polmont, Larbert and Stenhousemuir form part of one employment area, and are treated as one area for the purpose of Ministry of Labour statistics of unemployment. It represents one travel-to-work area, with three separate offices of the Ministry of Labour. As the hon. Member indicated, the area contains a remarkable mixture of the old and the new. That, in itself, is a great strength. Falkirk has the oldest surviving iron industry in the United Kingdom—it is 200 years old this year-side by side with the new aluminium rolling industry to which the hon. Member referred.
The area is showing considerable adaptability and capacity to adjust itself to a changing world. If the light castings industry or the shipbuilding industry declines there are other industries, such as the petroleum refinery industry, which are expanding. But the unemployment rate remains higher than the national average—3.9 per cent. on 10th June and 3.6 per cent. over the last twelve months—although that is lower than the average for Scotland. The hon. Member, representing Falkirk and Grangemouth as he does, has every right to explore means of reducing it.
Unemployment is relatively heavier among women than men in this area. This phenomenon is by no means peculiar to Falkirk; it affects most of the mining areas, and it shows that there is scope for enterprising industrialists to found consumer industries based mainly on female labour in the district, such as the industries to which the hon. Member referred—industries associated with synthetic rubber or plastics. The hon. Member suggested that it was up to the Government to steer industry to Falkirk, and he criticised my hon. Friend the Parliamentary Secretary to the Board of Trade for having said that the President of the Board of Trade is not prepared to steer industry there. The reason my hon. Friend gave was that the need in other parts of Scotland is so much greater. He pointed out that any industrialist who wishes to set up or expand in Falkirk is at liberty to do so. He will get his industrial development certificate.
I would ask the hon. Member to bear in mind two things that are frequently 1239 forgotten. First, most industrialists know where they want to go. Their decisions are based on commercial considerations including the availability of supplies of suitable labour in all ranks and, as the hon. Member said, the availability of materials. They do not have to ask the Government for their views; all they have to ask for is an industrial development certificate, and they will get it for Falkirk whereas they would not get it for London or Birmingham.
Secondly, the number of industrialists who do not know where to go, or mind where they go, is always small, and in the last year or so, owing to the recession, it has been smaller. There are towns like Greenock and parts of Lanarkshire with twice the unemployment of Falkirk, and the Government are obliged to have regard first to the areas of high unemployment.
The hon. Gentleman mentioned some particular steps which might be taken, for example that preference be given to Scottish products by local authorities. He gave two instances. He mentioned the Carron Company's tender for the supply of cast iron linings for the first Clyde tunnel, which was not accepted by the contractors. The reason was that, apart from the fact that the company could not quote for all the items required, it had not done similar work before and would have had to reorganise production considerably to do such work. There was a risk of teething troubles and delays which the main contractors would not accept. They were under a time penalty and responsible for the entire job, and so they preferred to accept the tender of an English company which had done a great deal of this sort of work before.
It would be quite contrary to established procedure for a local authority to instruct the contractor, let alone for the Secretary of State to instruct the local authority. Indeed it would be dangerous for an authority to do so, for if anything went wrong the main contractor could repudiate responsibility. So when the tenders for the second Clyde tunnel come to be settled it will be for the Carron Company, if it tenders, to convince the main contractors that it can supply goods of comparable quality at the right time and do the job entirely as 1240 well as any other contractor. That is part of the consideration which any main contractor must have in mind when he puts out his sub-contracts. One would hope that the contracts would come to Scotland, but these things must be dealt with on a proper commercial basis.
§ Mr. Malcolm MacPherson
But surely the main contractor is not the final authority. The main contractor is responsible to the local authority for which he is contracting—in this case the Glasgow Corporation—and the Corporation has an interest in what the contractor does. It seems to me perfectly possible to insist that a Scottish firm should have at least equal tendering rights with an English firm.
§ Mr. N. Macpherson
It would be possible to insist, but the authority would have to take the consequences which I have already indicated.
The hon. Gentleman referred to the practice of housing authorities in Scotland which do not necessarily give preference to Scottish goods as such. Part 5 of the Scottish Housing Handbook, dealing with tenders and specifications for local authority housing, contains a general recommendation that:
due consideration should be given to the use of available local materials and to local methods of building.That is by way of advice, and it is a matter for each housing authority to determine whether to support home industries even if it costs the ratepayers a little more, or to buy elsewhere. But I hardly think that the hon. Gentleman would wish the Secretary of State to introduce regulations, even if he had the power to do so, compelling local authorities to buy in Scotland, irrespective of cost, type, quality and so forth. It would not be to the economic benefit of Scotland in the long run if he did so. It is a matter which must be left to the judgment and discretion of Scottish local authorities. Other things being equal, I think they would buy Scottish.
I am sure that the hon. Gentleman does not wish to give the impression—he did not do so—that Falkirk is stagnant from the point of view of industrial development. I should like to mention one or two things which have happened in the past two years. I.D.C.s have been issued for four projects in Falkirk, with 1241 a total area of 147,000 square feet. It is estimated that these project will provide 105 new jobs. New jobs will be provided not only in new factories. I understand that the British Aluminium pay-roll has been maintained. Alexanders, the coach builders, have recently obtained an order for 150 new vehicles from Scottish Omnibuses. A firm of caravan builders has been expanding its output and the firm of R. and A. Main has doubled its output of gas cookers in the past eighteen months and increased its manpower from 500 to 800. This is particularly significant because about 30 per cent. of the cookers which are turned out are sent to England, which shows 1242 that a Scottish consumer goods industry can overcome the disadvantages of distance if its products are right. The production of gas cookers was originally closely related to the iron foundry industry, but now it is turning over to the pressed steel industry which is another point mentioned by the hon. Gentleman.
§ The Question having been proposed after Ten o'cock on Tuesday evening, and the debate having continued for half an hour, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.
§ Adjourned at five minutes past Twelve o'clock.