HC Deb 11 March 1959 vol 601 cc1416-26

Motion made, and Question proposed, That this House do now adjourn.—[Mr. E. Wakefield.]

11.27 p.m.

Mr. Hector Hughes (Aberdeen, North)

Her Majesty's Government have great powers under the Distribution of Industry Act and otherwise for the distribution of industry in Britain. I am concerned with the share that Scotland gets of it. The Government are responsible for the unfair distribution of industry and employment throughout Britain. They are, therefore, responsible for the unfair concentration of industry and employment in the South and Midlands of this island to the prejudice of North-East Scotland where trade, industry and employment are very badly needed.

In North-East Scotland the rate of unemployment is more than three times that in London and South-East England. In North-East Scotland it is 5.4 per cent. as against 1.7 per cent in London and the South-East. In my submission, Her Majesty's Government are not fully using the statutory powers which they have, and, as a consequence, the nation and the workers are suffering.

I want to present a reasoned case showing why Her Majesty's Government should alter this very injurious policy under which Scotland has suffered ever since they came to power. The high rate of unemployment which afflicts Scotland today is an offence to the individual. It is an avoidable loss to the nation and a mark of the grievous failure of the Government to govern properly.

Every able citizen has, in my submission, a right to do productive work, to eat, live, raise a family and feed them and to make his contribution to his own wealth and that of the nation in a free society. For him to be forcibly deprived of these rights without fault of his own by being dismissed from the work in which he has invested his life is an obvious and elementary injustice. That is the position in Scotland today.

I am not alone in holding this opinion as is evidenced by the expressions of distinguished thinkers and distinguished newspapers. That independent newspaper, the Observer, only last Sunday pointed out that this is a social and industrial problem of a broad nature. I will quote one sentence from its article. It said: Whether the firms in the industry do not lave a collective responsibility to compensate the older people, at any rate, who have invested a large part of their lives in a particular form of work is a major consideration. In my submission, it goes further and extends to all workers, apprenticed or trained, in any technique who, at a loss to themselves and the nation by enforced unemployment, are denied the opportunity of using their skills.

The Aberdeen Press and Journal, a distinguished newspaper in my constituency, stated in a leading article on 5th March, on the subject of the injury inflicted on school-leavers who find themslves unable to get work: There has recently been a considerable amount of uneasiness about the prospects of youngsters leaving school … There can be no relaxing of the special efforts being made in certain regions in Scotland. The work of the conference (on unemployment) to be called in Aberdeen is as important as ever. In my submission, it is the duty of any Government to rectify these disparities between the various citizens, but this Government have not done so. The total number of persons registered as unemployed on 12th January of this year was, for Britain as a whole. 620,786; in Scotland as a whole, 116,510 and in Aberdeen, 4,939. That is the largest figure reached in Aberdeen for many years.

These figures contrast with the figures under the Labour Government of 1945–50 when Britain had full employment for the first time in history, full productivity, and records in exports and in the import of foreign currency wherewith to buy foreign commodities. Today Scotland is at a terrible disadvantage compared with the rest of Britain. The percentage of unemployment is higher in Scotland than anywhere else in Britain as is shown by the figures which I have already quoted.

Why is this? The answer lies in bad administration in relation to Scotland by the relevant Ministers since this Government came to power. The Ministers I particularise are those at the Scottish Office, the Board of Trade and the Ministry of Labour and National Service which have neglected Scottish interests.

In 1945–50 the administration of the Scottish Office was optimistic, constructive and practical, and it developed Scottish industry and employment with success and prosperity. Since 1951 until now the administration of the Scottish Office, as I shall show, has been pessimistic, non possumus and impracticable. Industry has been allowed to slacken and unemployment grows. Only the other day the right hon. Member for Moray and Nairn (Mr. J. Stuart), a former Conservative Secretary of State for Scotland, indicted the Tory Government and made clear the argument I am adducing. In a speech in Glasgow he said: The talk of enticing manufacturers to the Highlands"— and we are always trying to get manufacturers and industry to the Highlands and increase employment there— so far as consumer goods are concerned, is just eyewash … Great play has been made of the benefits which would accrue from the application of the Distribution of Industry Act, but to put it brutally, very little had happened and the Act had never really been put into force. In my submission, this is the fault of the present Government. That right hon. Member went on pessimistically to point out other difficulties confronting Scottish trade, industry and employment such as Scotland's geographical position far to the north, away from the large consuming centres of the South and with the lack of a flat rate for transport.

This House knows that for years I have tried to induce the Scottish Office to take steps to introduce a flat rate of transport charges for commodities from Northern Scotland. I have put it to successive Secretaries of State and other Ministers of 'this Government, but always they have put difficulties in the way and the difficulties frighten them. Industries have not been fostered sufficiently, trade has languished, no flat rate has been granted, and today we see, as yesterday and the day before, unemployment increasing in North-East Scotland. It is the same today and always has been under this Government who discriminate against Scotland because their hearts and their investments are in the South instead of in Scotland.

Contrast this with Northern Ireland where success is being achieved though the geographical position there is worse than in Scotland. Distances from the large consuming centres in England are longer, freight charges as a consequence are expensive and unemployment is greater, yet Northern Ireland is successful in attracting British, American and Canadian industries by the positive policy of its local Parliament, which is to make grants to build factories, to let them cheaply at a mere fraction of London rents, to buy machinery and assist research, to buy fuel and to build special roads, power stations and workers' houses. Is not this a striking example to the three Ministries I have indicated to do something of the same for Scotland, if they really mean it?

I shall crystallise the questions I ask the Ministers to deal with. First, have Her Majesty's Government any plans on the Northern Ireland lines for North-East Scotland in general and Aberdeen in particular? Second, what are the plans of Her Majesty's Government for Aberdeen (a) to build advance factories and (b) to extend existing factories? Third, do Her Majesty's Government intend to reduce unemployment in North-East Scotland in general and Aberdeen in particular? If so, how are they attracting new industries there, and will they offer lower factory rents in order to attract them?

Fourth, how do Her Majesty's Government intend to use their great powers for industrial development? Is it by preventing the building of additional factories in congested areas like London and the Midlands? Is it by encouraging industries to go to Aberdeen and North-East Scotland? Does the Minister realise that no factory or extension exceeding 5,000 square feet can be built without an Industrial Development Certificate from the Board of Trade? Does the Minister realise that Aberdeen offers great advantages of water power, electric power, clean air, plenty of open space and available labour?

Fifth, what steps are Her Majesty's Government taking to provide a flat rate for the transport of goods? Sixth, what steps do Her Majesty's Government propose in order to give the workers security of tenure in work and compensation for dismissal without fault on their part?

It is right that I should mention that before I rose to make this speech, I gave that set of questions to the Minister so that he could consider them and give a satisfactory reply. I hope that the Minister will give constructive answers to these questions to prevent the creeping mould of unemployment tarnishing the glittering glory of Aberdeen, the silver city by the sea.

11.39 p.m.

Lady Tweedsmuir (Aberdeen, South)

I listened to every word spoken by the hon. and learned Member for Aberdeen. North (Mr. Hector Hughes) and I did not hear any suggestion of a constructive nature to tackle the problems of Aberdeen today. Indeed, when one looks at the record of the Labour Government and remembers the 2 million unemployed in 1947 and recalls that the Labour Government said over and over again that had it not been for America there would have been millions on the dole, one is not encouraged by the prospect of a future Labour Government. I am convinced that there would be a flight of capital from this country just because of the vague ideas on the ownership of industry held by the Labour Party.

We know perfectly well that the cause of our trouble can perhaps be summarised in two ways. First, our troubles are a result of the ending of a post-war boom and a demand for goods at any price and of any quality. This affects countries all over the Western world. Secondly, they are in part a result of the Government's policies of credit squeeze which were adopted for a deliberate purpose in order to tackle the problem of inflation which we all knew perfectly well had to be tackled if we were not to price ourselves out of world markets.

We talk, naturally, with anxiety of how we are to bring industry to areas far away from London, but we do not ask what are the markets for those industries. A great deal has been done in Scotland by the Scottish Council for the Development of Industry, by local chambers of commerce and by the Board of Trade, but the fact remains that in a country which at present does not adopt either direction of labour or direction of industry, it is a question of partnership between Government, management and those who work within industry.

I therefore ask the Government whether they will say tonight that they will consider whether it is feasible or practicable to adopt for a short period a subsidy on the lines of that granted by the Northern Ireland Parliament for a specific period of unemployment. I ask not that the economy should be distorted to the detriment of existing industry but that we should consider granting a subsidy for short periods to the extent adopted in Northern Ireland, which has a sea passage and has 10 per cent. unemployment.

Secondly, I ask what has been done to stimulate the work already being undertaken by local authorities in the clearance of sites and construction on sites for future house building. I am certain that the March unemployment figures in Scotland will show that the seasonal problem, particularly in the building industry, has greatly improved. I remember making speeches long ago, back in the early days of the 1945 Parliament, saying that a time of difficulty was the time to stimulate public works and similar building and a time of boom was the time to take a rein on the economy in order to hold inflation.

In the present period of difficulty it is of the utmost importance that we should not distort the economy of Scotland to such an extent that it is not able in steadier times to continue the steady growth which we all desire. I am certain that in the April Budget we shall see the relaxation of those credit restrictions which have been unpopular with all of us but which were necessary at the time. I am certain that with that stimulation of the economy we shall see a steady growth of employment in Scotland throughout the summer.

11 44 p.m.

The Parliamentary Secretary to the Board of Trade (Mr. John Rodgers)

I am sure that we all regret the absence of my right hon. Friend the Secretary of State for Scotland who has influenza and who otherwise. I am sure, would have been here tonight, possibly answering the debate.

I am grateful to the hon. and learned Member for Aberdeen, North (Mr. Hector Hughes) for the eloquent way in which he has advanced the claims of the silver city. At Question Time week after week he assiduously probes for more and more information on this important subject and he is therefore in possession of most of the facts about the industrial situation in the Aberdeen and Buckie-Peterhead areas. I have very little new to say, because all these things have been revealed to him week after week on Tuesdays and Thursdays, in answer to his Questions.

I was interested to hear the hon. and learned Gentleman's analysis of the situation overall in Scotland, and in particular in North-East Scotland. The figures undoubtedly show that this is one of the areas where, throughout the period since the war, the level of unemployment has remained too high. I assure him that we are by no means complacent about these figures. It is true that even in recent times they have worsened, and, as he said, in Aberdeen the latest figure is 5 per cent., while in other parts of North-East Scotland it is much more serious.

This is obviously a situation which no one likes, and which any Government would do their best to try to solve. But it is a travesty for the hon. and learned Gentleman to try to hold this or any other Government responsible for the vast growth of the London conurbation, as opposed to the movement of population in Scotland. This has been going on for a long time, and has baffled successive Governments. It is true that we have had our power over the granting of industrial development certificates, and we are applying this power wherever possible in as tough a way as possible, to try to winkle out firms from the congested areas such as London and the Midlands, and persuade them to go to these areas of high and persistent unemployment, such as his constituency.

However, we must bear in mind, as my hon. Friend the Member for Aberdeen, South (Lady Tweedsmuir) said, that production is not the only answer. Markets are equally important, and it is no good producing goods which cannot be sold. Therefore, we must pay some notice to the efficient operating of a firm, and this policy of the granting or non-granting of an I.D.C. must be flexible. Wherever we can, if it is a new project, we refuse a certificate in London, but we are bound to grant applications for certain projects in these congested areas—for instance, for the service industries to be found there, or sometimes because these are merely extensions of existing plant. It would be harmful to the efficiency of a partciular firm if we tried to truncate a part of it which depends on the whole firm—just as if we were to cut off a man's arm from the rest of his body. But if we can steer rather than direct a firm to one of these areas, particularly to the hon. and learned Gentleman's area, we try to do so.

On this side of the House, whatever the hon. and learned Gentleman said in his eloquence, we all regard unemployment as a great human tragedy, and we all wish to see people being enabled to use their talents in the service of their fellow men. I was brought up in the North of England, and well remember the mass unemployment of the 19291930 period. No one wants to see a return to that, and no one really believes that that is likely to be the case, but I think the hon. and learned Gentleman should give us some credit for the measures we have taken to try to deal with the situation. Successive Conservative Governments have shown their concern in this matter. It is on record that we are the only Government who have passed any Acts of Parliament dealing with the location of industry—in the 'thirties, in 1945, and again in 1958. These are all Conservative Measures.

Mr. Thomas Fraser (Hamilton)


Mr. Rodgers

This is a matter of historical fact, and although this is not the place for me to go into historical facts, I would say that there will doubtless be an occasion not far distant when we can debate whether these Measures were introduced by Conservative Administrations or not. They certainly were, but I will leave that for the moment.

I will give figures. A White Paper was produced in 1944 by the National Government.

Mr. Fraser

The National Government. yes.

Mr. Rodgers

But the Act was passed by the Caretaker Government in 1945 before the Labour Government came into office. We passed in 1958 the Distribution of Industry Act which was specially designed to give help to areas such as those not covered by the 1945 Act and places where there was urgent need for new industry. Under this new Act projects which can bring employment to places where the level of unemployment is high and persistent are eligible, as the hon. and learned Gentleman said, for assistance by the Treasury. The Treasury has a committee of independent business men and one trade unionist, I think, and an accountant to advise whether a project is likely to provide employment and will be viable after the assistance has been withdrawn.

All the areas of which we have been talking tonight are among those considered in this context which are in need of new employment. I can assure the hon. and learned Gentleman—I am sure he knows this—that it is the constant effort of the Secretary of State for Scotland and of my colleagues and myself at the Board of Trade to attract new industries to these areas.

So far we have been disappointed at the number of applications received by the Committee for assistance under the Act, but there are indications that the new expansionist climate in the country is encouraging more firms to revise their plans at the moment and to consider setting up manufacturing in places such as the North-East of Scotland and other parts of Great Britain and Northern Ireland which are in need of diversified industry.

The hon. and learned Gentleman mentioned Northern Ireland and referred to the success they have already had there. Nevertheless, their unemployment rate is far higher than Scotland's—between 9 per cent. and 10 per cent. I was over there the other day. I am full of admiration for what they have done, particularly in view of the great difficulties of transport, but they have by no means solved their unemployment problem despite the steps which they have taken to overcome their difficulties.

I hope that the one firm in the area for which a loan has already been recommended by D.A.T.A.C. will be followed by many more, to bring the new employment which is needed in the area. Four more applications for D.A.F.A.C. assistance are under consideration at this very moment.

As well as the 1958 Distribution of Industry (Industrial Finance) Act, the Development Commission has powers to build factories in rural areas in certain parts of Scotland and Wales, and they are being used to help the Buckie and Peterhead area where unemployment is particularly serious. Since 1947 finance has been provided through the Development Fund for three new projects two of which have already had extensions and the third is now also being extended to provide employment for 694 people and to cover 133,000 sq. ft. Industrial Development Certificates have been granted for 14 projects in this area and 28 in the Aberdeen area which alone should provide employment for 1,236 and 400 people respectively. These figures are for the last five years. I was going to catalogue the various new industries which have been introduced into these two areas of Aberdeen and Buckie-Peterhead but I shall not do that now.

There is no easy solution to the unemployment problem of the area. It is perfectly true that many firms consider that this area is remote and that they feel they would benefit more by being nearer to their markets. We do our best to correct this attitude. I appreciate very much what the hon. and learned Gentleman said about the water power and hydro-electric power, the clean air, and the availability of open spaces, which are an attraction. I am immensely encouraged myself that in a town as far north as Fraserburgh an engineering firm is established which maintains a labour force of over 1,000. Equally, in Peterhead there are two American firms which are prospering and expanding at this moment. All these firms are used as evidence by the regional controller and by the rest of us to persuade other firms to follow their good example.

To answer some of the questions would be wide of my responsibilities and not possible on this Adjournment debate. I am sure the hon. and learned Gentleman realises that the whole question of transport rates, and whether they should be flat throughout the country, is a vast subject which could not be dealt with on a debate about the unemployment situation in North-East Scotland. It is a much wider subject than that. I am sure, however, that it is a subject which my right hon. Friend has considered and is considering.

We intend to do all we can to provide new employment in this area. We intend to use our powers to stop development of the congested areas and to steer firms to Development Areas without damage to British industry wherever possible. We shall encourage firms to go to Scotland. We have had considerable success in Scotland, though, I agree, not enough. One only has to see the fine new factories going up, many of them taken over by American firms. As soon as Ravenscraig is in operation new industries will be attracted to Scotland, and in this context I would point out that nothing succeeds like success. The more firms that go to these areas the more we shall persuade other firms to go there. But we must not minimise the difficulties.

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at three minutes to Twelve o'clock.