SCOTLAND (INDUSTRY, EMPLOYMENT AND ROADS)

HC Deb 12 July 1960 vol 626 cc1195-310

4.17 p.m.

Motion made, and Question proposed, That this House takes note of the Reports on Industry and Employment in Scotland and on Scottish Roads. 1959–60 (Command Paper No. 1045).—[Mr. Maclay.]

Mr. Hugh Gaitskell (Leeds, South)

It is with a due sense of diffidence and modesty that I rise to open this debate on industry, employment and roads in Scotland. I would not have dared to do so had I not been honoured by an invitation from my right hon. and hon. Friends who represent Scottish constituencies.

I can offer two reasons in justification for accepting this invitation. First, I am only half English. I am half Scottish, and, if we had a system of matrilineal instead of patrilineal descent, I should be Scottish and the Prime Minister would be American. The other reason is more serious, namely, that perhaps my presence at this Box indicates the deep concern of all of us, whatever constituencies we represent, about the situation in Scotland today.

I emphasise that inevitably, compared with other right hon. and hon. Members who have taken part in the debates of the Scottish Grand Committee and in earlier debates in this House, I approach these matters very much as an outsider. I can only hope that the point of view of an outsider may be of interest.

Standing back and looking at the Scottish economy over this last decade, no one can deny that certain salient facts stand out. First, although Scotland has, in round figures, 10 per cent. of the population of Great Britain, she has 20 per cent. of the unemployment—one-tenth of the population, one-fifth of the unemployment. Secondly, the population of Scotland during the last decade has been increasing, but at less than half the rate of the population of Britain. Thirdly, from 1951 to 1959 there has been an actual decline in civil employment in Scotland compared with an increase of nearly 500,000 in Great Britain. There has been a steady drift to the South and Midlands of England away from Scotland and from the North and North-West of England, with the largest decline of all in Scotland.

Migration from Scotland appears to amount to between 20,000 to 25,000 persons every year. Of the graduates emerging from Scottish universities, 60 per cent, of those with science degrees have to find employment outside Scotland and 40 per cent. of those with engineering degrees. Finally, if one looks at the production figures, while, since 1953, production rose in West Germany by 62 per cent., in France by 59 per cent., in Italy by 58 per cent., and in Britain as a whole by 20 per cent.—we were the last but one in the European league—in Scotland production rose during those years by barely 9 per cent.

These are sombre figures. It is impossible—again, I speak as an outsider—to avoid the conclusion from them that Scotland, compared with Great Britain as a whole, has not kept pace in industrial progress and employment and, still less, has kept pace with the rest of Europe, that it is a declining rather than an expanding part of the British economy and that, at least up to 1959, no sign of any improvement in the relative economic position of Scotland in Britain as a whole was to be seen, but, on the contrary, the decline was continuing.

I will come to the causes of this situation a little later. Let me say at once, however, that I do not think that anybody, whatever his antecedents may be and whatever constituency he represents, would wish to suggest that this was in any way due to lack of skill, lack of brains, lack of hard work or lack of thrift on the part of the Scottish people. On the contrary, it its well known that when people speak about Scotsmen going abroad they do so in terms of flattery, because of their capacity for hard work and their technical ability. Nor do I think that this can be ascribed in any fundamental sense to a lack of materials in comparison with Britain, to a lack of port facilities, or to anything of that kind.

I have said that that was the position up to 1959. Now, I should like to turn to the Report which we are considering this afternoon and to begin by looking at the "Historical Review of 1959." There is, indeed, little comfort in these first chapters for any of us who are concerned with the problems of Scotland. On page 7, for example, at paragraph 7, we see the table of the distribution of unemployment showing those who were out of work for a long time and those who were out of work for a shorter time. It will be seen how very much higher the proportion of long-term unemployment in Scotland is compared with England.

If we turn to the next page, and look at paragraph 12, we see the figures of the ratio of vacancies to those seeking work. I quote from the end of paragraph 12: For every 100 vacancies at the end of 1959 Scotland had 922 unemployed as against 163 in Great Britain as a whole and 62 in the English Midlands; by April 1960 the position had further improved to the extent of reducing Scotland's figure to 619 and those of Great Britain and the Midlands to 125 and 46 respectively. Still at the point of the boom, virtually the height of the boom, there were in Scotland six times as many people looking for jobs as there were jobs available.

If we turn to paragraph 14, on the following page, we see that more young persons were unempoyed in 1959 than in 1958, the monthly average being up by 1,400. If we pass on to page 10 and paragraph 16, we see that over the year as a whole 1959 output was less than 1 per cent. better than in 1958 as against the United Kingdom's increase of about 5½ per cent. Although there has been improvement over the year, the increase in the fourth quarter of the year in Scotland was 4½ per cent. or slightly less than half the United Kingdom's increase in that quarter. Turning to individual industries, confining myself, as I do, to those with a weighting of over 3 per cent. of the index, there is again little for our comfort. I begin with shipbuilding and marine engineering. Here the Report says that the total volume of work done declined sharply in the first half of 1959 and, unlike output in many other industries, showed little sign of recovery towards the end of the year. In paragraph 25, we read that Over the year as a whole employment in marine engineering averaged nearly 10 per cent. less than in 1958 and … total activity was down by about 6 per cent. There is a rather better account to be given of general and electrical engineering, a decided improvement—much the best—in whisky production and sales and a somewhat better picture in textiles, but when we have gone through those industries and return to the others, the picture is almost uniformly gloomy.

In the metal manufacturing industries, output in 1959 was 10 per cent. less than in 1958. In vehicle manufacturing, we are told that the group had a relatively poor year in 1959, output being just above that of 1958. In the paper and printing industries, there was an increase of about 1 per cent. In the chemical industry, we read that This group of industries failed to recover in 1959, and the rate of output at the end of the year was still below the corresponding period of 1958. I quote only one other passage from this part of the Report, and it is from paragraph 76, on building and contracting: Despite the increased work done, the industry was not fully employed, and the unused capacity, especially in Glasgow and the west. kept competition keen for new work. It also did something else: it allowed fewer houses to be built.

It may be said that by concentrating, as I have done in the last few minutes, on the "Historical Review of 1959", I am hardly being fair. The Secretary of State for Scotland may say that the prospect is much brighter, and certainly when one turns to the later chapters in the Report there is a rather brighter outlook. I must, however, point out that before the Report was written, before the year 1959 was reached, from whose experience I have been quoting, right hon. and hon. Members opposite had been in power for eight years. What I have just said, the figures I have given and the quotations I have read from their own Report is a report on their activity after all these years. We must be pardoned if we feel a little sceptical of optimistic promises once again being made, because we have heard them so often before.

For the rest, when we turn to the Report and look at the prospect ahead, we get, inevitably, little beyond vague phraseology. Of one industry, it is said that "the long-term outlook is favourable", of another that "the upward trends will continue", and of another that "the outlook is good". We should not, I suppose, expect to get figures, although it would have been nice to have had a more precise estimate—perhaps the Secretary of State or the President of the Board of Trade can fill in the details—of how much they think that production will increase in Scotland over the year.

Not only that; although we have these vague phrases of a more cheerful kind about a number of industries, they do not apply to all of them. I draw attention to paragraph 169 of the Report, dealing with the shipbuilding industry, which says: For the immediate future the industry must work mainly on its dwindling backlog of orders on hand. The tonnage under construction at the end of 1959 was 13 per cent. less than a year earlier, and overall activity this year is likely to be on a reduced level. Nevertheless, I do not question that, compared with this time last year, there has been an improvement in the industrial situation in Scotland, but I ask myself and the House whether this is the only comparison that must be made. Should we not compare the change in Scotland with the change in Britain? If Scotland continues to lag behind Britain, there is still something wrong. There is still a relatively depressed situation in Scotland. It is all very well for the figures for Scotland to go up now and then down again, but if, whether up or down, Scotland remains continually behind, the problem has not been solved. The Scottish economy needs not merely to follow the variations of the British economy; it needs to be jerked altogether on to a higher level.

Against that background, I should like to draw attention to something which the then Parliamentary Secretary to the Ministry of Labour, now the right hon. Gentleman the Minister of Power, said last year. He was explaining that he thought that there was a much better chance for Scotland to flourish in an atmosphere of general expansion. That was a perfectly good point. The idea is that we raise demand generally, and in the circumstances of a high level of demand it is easier to induce firms and businesses to move into Scotland and similar areas.

The right hon. Gentleman said: What we should all no doubt agree is that the policy of redistribution of industry should be pursued in times when industry is expanding just as vigorously as, if not more vigorously than, in times of economic slackness. If, therefore, in the months to come, the heavy industries in Scotland follow the present quickening of activity in the consumer goods Industries, and if the unemployment figures there fall considerably, as I hope they will, it is then, when industry is expanding and more ready than at present to move into new areas, that we must actively and energetically take the opportunity to secure a greater density and diversity in industry in the remote areas of Great Britain that either have little or no industry at present or depend too much on one or two industrial concentrations."—[OFFICIAL REPORT, 3rd June, 1959; Vol. 606. c. 224.] I have no quarrel with that general argument, but we would then expect, if this indeed were the case and Scotland's hope was general industrial expansion, that as in Britain we moved towards full employment Scotland's share in the total of unemployment would decline. If one read that the level of unemployment in the Midlands and the South had fallen to 1 per cent., and below in certain areas, one would expect that after that there would be a rapid decline in Scottish unemployment until perhaps the same low level had been achieved.

In fact, the actual figures show precisely the contrary trend. Whether we take them over the last years or the last few months, it is the same story. For instance, in 1955, which would be generally regarded as a boom year, when the percentage of unemployment in Britain as a whole was 1.1, the figure in Scotland was 2.4 per cent. and the Scottish percentage of total unemployment was 22. In 1959, when Britain's percentage of unemployment was 2.2, the Scottish level was 4.4 and the Scottish percentage of total unemployment was 20.

The latest figures show the trend even more clearly. For instance, in January of this year the Great Britain percentage of unemployment was 2.1, the Scottish figure was more than twice at 4.5, and the Scottish share of total unemployment was 21.3 per cent. There is a more or less steady rise throughout the year in this figure of the percentage of total unemployment to be found in Scotland, until in June, when the Secretary of State for Scotland was so proud to be able to announce to the Scottish Grand Committee a further decline in the total of unemployment in Scotland to 69,000, the percentage figure for Britain was 1.4, but for Scotland it was 3.2, and the Scottish share of the total unemployment in Britain had risen to 22.8, which was one of the highest figures that we have had in recent years.

The right hon. Gentleman the Secretary of State for Scotland, in that speech, also referred in somewhat glowing terms to the figures for the last quarter. He said: Taking the figures for the months March to June … the reduction in the total number of unemployed this year is 22,300, which is nearly double the average reduction for the same three months of the previous five years."—[OFFICIAL REPORT. Scottish Grand committee; 23rd June. 1960, c. 47.] It sounds wonderful until one see what was happening to the British figure in that period. It will be found that it is just as true of Britain as a whole as it is of Scotland. During the last three months. the decline in unemployment in Britain was 108,000—certainly more than twice the average of the previous five years.

It is the same story if one takes the latest production figures for the United Kingdom and Scotland. For instance, the Secretary of State again claimed with great pride that Scotland's production index—and he produced the figures for the first time in that debate the other day—showed that in the first quarter production was up 6½ per cent. on the first quarter of the previous year. One might suppose that Scotland was doing very well compared with England, but the corresponding figure for Britain as a whole was not a 6½ per cent. increase but a 12½ per cent. increase.

Therefore, from the figures which have reached us, whether of production or employment, we can conclude that certainly there has been an improvement in Scotland but that it has been a smaller improvement than that which has taken place in Britain as a whole. Scotland still lags seriously behind. There is no sign whatever in these figures of a fundamental adjustment in Scottish employment and industry but only of a belated recovery from recession which is well behind that of Britain as a whole.

What has gone wrong? As industry has expanded in Britain, why has there not been greater improvement in the movement of employment, new business and factories into Scotland, so as to solve the problem of the relatively high degree of unemployment that exists there? First, the plain fact is that the Government over these last years have never been really tough enough in refusing I.D.C.s in the heavily congested areas of England. They have never been willing to use such controls as they have over the location of industry to induce and push industrial firms into Scotland. There has been a general absence of planning of the location of industry over the country as a whole, and this has created very grave problems in England as well as in Scotland.

It is this that in large part is responsible for the ghastly spread of Subtopia in the Midlands and the South of England. It is this that is helping to create the problems that should be worrying the Minister of Housing and Local Government, and it is this that is indirectly one of the reasons for the immense rise in land values. It is this which has created at least a certain amount of the traffic congestion.

I am certain that one of the lessons of all this is that we shall never solve the Scottish problem and never solve the English problem of congestion in urban areas unless and until the Board of Trade accepts its responsibility, not just for tinkering with the problem, but planning the location of industry as a whole. I hope that no hon. Members opposite will suggest that I want to direct industry or direct labour. I am not proposing that, but there are very powerful instruments at the Government's disposal—and always have been—by which they could set about making the adjustment which has to be made.

The second reason for the Government's failure to solve the fundamental problem of Scotland's unemployment and need for industry is that, as soon as shortages of labour appear anywhere, it is the policy of the Government to stop the boom everywhere. That is exactly what has happened in the last few weeks. Worried about the balance of payments and fearful lest the pull of the home market should be too strong, the Chancellor of the Exchequer increased the Bank Rate to a crisis level of 6 per cent., imposed severe restrictions on the banks' power to lend, and froze public investment.

I do not want in this debate to go over the ground which was covered yesterday. It is not always easy to see precisely what the Government's arguments are in this respect, but I think that the President of the Board of Trade, with whom in the old days I have frequently argued about this subject, will agree that the intention of the credit squeeze is no more and no less than to reduce home demand generally in order that more resources are available for exports and, at the same time, there is less pressure to import additional commodities and raw materials. The whole point of the plan is that it should be general and depress the general level of demand with the hope that in that way export demand will take hold, as it were, while home demand is cut down.

How does this operate? Why is it suggested that the combination of a Bank Rate at 6 per cent., the restriction on the banks' lending and the freezing of public investment will produce this state of affairs? It is because it is hoped and believed that these measures—I need not go into all the technical intricacies—will lead to fewer orders being placed. That is the simple fact of the matter. Whether it be for consumer goods, with which the specific measures to restrict hire purchase are intended to deal, or whether it be with investment, it is the general restriction on demand which the Government attempt to secure.

Just as we get to the point where the economy is expanding and where it would be easy at last to divert firms to set up and expand in Scotland and similar areas, the general market for the commodities produced by those firms is artificially depressed. The inevitable result when such a general instrument is used is that because there is a tightness of labour in the Midlands and the South of England, Scotland must still be depressed.

There is another aspect which must be brought into the picture. I have spoken of the idea of the Government generally restricting demand, and I gather from what the President of the Board of Trade said yesterday that that is their intention. However, I do not think he will deny that if there is any distinctive effect of such measures—high interest rates, the credit squeeze, freezing public investment—it is likely to be especially hard on heavy industries.

The President of the Board of Trade (Mr. Reginald Maudling)

indicated dissent.

Mr. Gaitskell

The right hon. Gentleman shakes his head and so I shall be interested to hear his views.

If they believe that rates of interest have any effect at all and that the restriction of bank lending has any effect—and personally I am not very dogmatic about those things and I am never one of those who say that the rate of interest has no influence—most economists take the view that its influence is felt by investment orders, by the orders which go to the heavy industries. It is those industries which are far more likely to be affected than the consumer and lighter goods industries.

Faced with that situation—and I do not think that they will question the accuracy of my analysis, that is to say, that it is at the moment when there is a shortage of labour in the Midlands but still quite a degree of unemployment in Scotland that the squeeze comes on—are the Government preparing to take any steps to protect Scottish industry and employment from the effects of the credit squeeze? I give them the opportunity to answer, and I hope that we shall have answers, because the people of Scotland are interested in whether they are to have what one might call specialist treatment, which I believe they need, or whether they are to be subjected to the same blanketing policy which affects the country as a whole.

That brings me to one part of the measures, one particular type of measure, on which I wish to spend a little more time, the freezing of public investment. This, presumably, covers, on the one side, the investment plans of the nationalised industries and, on the other, the direct expenditure by the Government on various social services and other Government activities.

What effect is it expected that the freezing of the plans for investment in the nationalised industries will have on Scotland? Does this mean that the plans for expanding the production and distribution of electricity from the hydroelectric schemes, chiefly in the North of Scotland, although to some extent elsewhere, are to be interfered with? Can we have an answer to that? Does it mean that the gas industry, which has made many advances through the technical advantages of large-scale production, closing down inefficient and small works and so on, is to find all that work has to be curtailed?

What is the likely effect on industry as a result of the freezing of the nationalised industries investments as a whole, whether the National Coal Board, the electricity authorities or the British Transport Commission? Scotland happens to be a rather large producer of mining machinery. What are the consequences to be on that industry of the freezing of public investment?

It is also a producer of boilers and turbines in a big way. Those industries are very much dependent on the orders of the electricity industry and of the nuclear power industry. What about the effects on orders for locomotives, so far as the firms concerned are capable of producing the locomotives required by the Transport Commission? What about the effects on steel? Have all those things been taken into account in compiling this very optimistic report?

While we can do little more than ask questions about the consequences of freezing public investment in the nationalised industries, we know rather more about direct expenditure on housing, education, health and roads. I want now to say a few words about Scottish housing.

I must confess that, speaking very much as an outsides, I have been astounded at the story which has unfolded itself as I have read the figures for Scottish housing. I thought that my own constituency in Leeds was as bad a part as any for intolerable housing conditions, but I must confess that when I went to Glasgow and discovered what was happening there I had to concede to Glasgow the dubious honour of being easily the worst housed city in the country.

We cannot and must not forget these figures. In 1959, almost half the houses in Glasgow had only one or two rooms, and more than 400,000 people were living in them. In central Glasgow, about two-thirds of the houses had only one or two rooms and 90,000 people in Glasgow were living more than three to a room and of those 34,000 lived more than four to a room. Those are ghastly figures. They should make everyone of us feel ashamed that such conditions are tolerated. I ventured to say in my speech in Glasgow that I did not know how the people there tolerated it.

I turn now to sanitary conditions. Less than half the families in Glasgow have baths in their houses, and more than one-third share a W.C. In the Gorbals area, now being cleared, only 3 per cent. of the families had a bath and only one in five had a W.C. inside the house. To say that they live like pigs is no exaggeration.

This situation has been allowed to continue year after year. I could understand it if the Secretary of State was able to say "We have had frightful difficulties in Scotland; we had a great accumulation of arrears"—which is certainly true—" but we are doing our hest, housing output is rising year by year and we are making a great effort to catch up." But, of course, the extraordinary fact is that the number of houses completed in Scotland has been falling year by year. I could hardly believe my eyes when I read the following figures: in 1953 the total completed was 39,548; in 1959, it was 27,293—a fall of more than 12,000, or nearly one-third. The figures for local authority houses were 36,938 in 1953 and 23,057 in 1959. It is true that in the last year, according to the Secretary of State's figures, there has been some slight increase, and that the total number under construction at the end of the year was up by about 1,000, but no more than that.

I want to know exactly what the freezing of public investment in Scotland will do to housing there. After all, the Government cannot get away with the idea that it is not necessary to build more houses in Scotland. After the figures I have given of the situation in Glasgow, the Secretary of State cannot get away with the pretence that the reason for this enormous decline in the number of houses being built is simply that houses are not needed. Yet he went very nearly as far as saying that not long ago in the debate in the Grand Committee.

What has actually happened is that high interest rates, the slashing of the subsidies, and the further slashing recently announced by the Secretary of State and debated in the Committee the other day, together with what I can only describe as discouragement of local authority housing, has produced this result. I ask the Secretary of State very seriously what he has in mind. Does he expect housing to tail off further, particularly local authority housing, or would he regard it as his bounden duty quickly to increase the amount of housing built in Scotland?

The record in the school building programme may be somewhat better than in housing, but we want to know whether that will go on. In most of these programmes there is supposed to be a general expansion—not for this year, we were always told, but for the next year. Now, however, it is to be frozen—or is Scotland to be immune? What about hospitals, and, above all, the roads programme? I did not know whether to say that the roads problem is worse in England than it is in Scotland. I know what my Scottish hon. Friends will say, but it is very bad in both; and we will all agree that if we are to get Scottish industry jerked on to a higher level then all the facilities necessary for industry must be made available. If we are to develop the Highlands as a tourist area, we must have a proper road system.

Finally, exactly how is expenditure under the Local Employment Act to be affected by the freezing of Government expenditure? Are we to assume that the plans that one hopes the Government have in mind for building more advance factories, for instance, in these areas are to be cut back? I hope that the Secretary of State and the President of the Board of Trade will give clear answers about that. Presumably there have been discussions. The Secretary of State must have been a party to the Chancellor of the Exchequer's announcement that public investment was to be frozen. How will it affect Scotland, and what steps is the Secretary of State taking to protect Scotland from the rigours of the Chancellor's policy?

Even the most ardent Tory cannot deny that over the past eight years the Government have failed to solve the problems of Scottish industry and employment. It is hard, indeed, to detect any improvement. The percentage of unemployment has remained, and remains today, more than twice as high as in Britain as a whole. Production has lagged behind, and still does so. Migration continues.

There is no doubt about what needs to be done. It is, of course, to arrange that more employment of a varied but permanent character goes to Scotland so that its lack of balance can be corrected. We must think in terms of a large industrial area developing in south-west Scotland, because readily I admit that this has to some extent a cumulative effect. The attraction of industry to an area is, to some extent, dependent upon the types of skills and employment already available there. Although I would not wish upon Scotland the problems of congestion and lack of planning facing the Midlands, there should be a broad industrial development, and I think that I carry the House with me in that.

In addition, it is necessary to provide special treatment for other parts of Scotland which, I shall not say are isolated—though some are—but are not contained in the broad industrial belt in the South.

The Government may say, "We agree, but it takes time." The fact remains, however, that until this year the process had scarcely begun, judging by the figures I have given. It is plain that the Government's location policy was not determined enough, nor were the inducements sufficient, nor was the general level of demand consistent continuously at a sufficiently high level or long enough and, above all, in the field where they could have acted directly—particularly in housing and roads—the Government have failed lamentably to do so. There is a treble case for public expenditure here. Firstly, for the absorption of unemployed workers; secondly, for the meeting of desperately urgent needs; thirdly, for the provision of the social capital which is necessary for that new industrial development.

The only important recent contribution has been the strip mill at Ravenscraig and Gartcosh and the B.M.C. factory at Bathgate. These are welcome; but two swallows do not make a summer. In the Scottish Committee, my right hon. and hon. Friends suggested that there should be further direct Government action in the sense that, if required, Government factories should be set up. I was surprised and rather entertained to find that the only answer to that which was forthcoming from the Tory benches was that this might conflict with the point of view of the Leader of the Opposition. Members opposite do not do their homework very well. In the somewhat controversial speech which I made at the Blackpool Conference. I specifically said: We may be more concerned in the future with other forms of public ownership, and there are many other forms of public enterprise, such as State factories in the development areas. I said that I would love to see that happen and that it would make a profound difference to the outlook of the ordinary man upon public and private enterprise. I hope that we shall hear no more such nonsense from the benches opposite.

I cannot understand why the Government should be so prejudiced. They pour out money for Colvilles; they pour out money for the textile industry, and they are quite prepared to give money to the shipping industry. What is wrong with direct Government investment as well? The truth is that it is they who are the doctrinaires in these matters. They prefer that Scotland should languish rather than that they should soil the purity of their private enterprise creed.

The truth is that Scotland's problem can be solved only by Government intervention and initiative. If the economy is unplanned, or is to be managed only by way of a general instrument, like the Bank Rate, the Scottish economic decline will continue. It cannot be halted without specialist treatment, a positive planning of industrial location in the country as a whole and a determined effort to speed up and not cut back the provision of badly needed social services, and the continued growth of public investment.

5.1 p.m.

The President of the Board of Trade (Mr. Reginald Maudling)

Today's debate is taking place in an atmosphere a little different from that of yesterday's debate. Then we had the primaries, which were vigorously contested among hon. Members opposite, and today we have had a very thoughtful speech—as we would expect—from the sitting tenant.

Dr. J. Dickson Mahon (Greenock)

Be serious.

Mr. Maudling

We listened in silence to what the right hon. Gentleman said, and I was hoping for the opportunity of replying to what he said. I still hope to do so, with the co-operation of hon. Members opposite.

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

We are waiting.

Mr. Maudling

I shall do so. I wish to speak about the experience of 1959, as shown in the White Paper before the House—

Mr. Willis

We know that.

Mr. Maudling

—to which the right hon. Gentleman referred. I hope to point out that in some of his references he did not put forward the broad picture quite clearly enough, and in as unbiassed a manner as he might have done.

During 1959, we saw a considerable expansion in trade and industry in Scotland. It is true that this took place later than it did in the United Kingdom as a whole. That has been the experience in the past also, as the right hon. Gentleman says. The re-expansion of trade and employment in Scotland started later than it did in the rest of the United Kingdom, and by the end of the year it had certainly not gone as far as it had in England or Wales. Unemployment, although decreasing, remained a serious problem, as it remains today, especially in the development districts.

The experiences of 1959 underline the basic problem of the Scottish economy, which is its very great reliance upon the heavy industries—coal, steel, shipbuilding and heavy engineering generally. The answer is that all these heavy industries either recovered later than the light or medium industries or, in the case of shipbuilding and coal—which I shall speak about later—did not recover at all. Looking at the picture for 1959, one finds that that is the main reason why the recovery in Scotland was neither so early nor so great as the recovery in the United Kingdom as a whole.

It is true that a great deal of gain was scored during 1959, but at the same time other serious problems arose. In respect of new industries coming into Scotland, and the expansion of existing industries—both factors being of equal importance; the point is to get more employment and business, whether from new or existing industries—there was a considerable addition of employment and expansion of business in 1959. But on balance the gains made in the year were not enough to provide all the additional jobs required. What I have seen in recent months of the problem in Scotland, with the aid of hon. Members opposite, has led me to the conclusion that a special problem is the absence of adequate employment opportunities for juveniles. The advice that I have received so often from Scottish Members is that this problem of finding not only jobs but other than dead-end jobs for juveniles is a very serious one.

Towards the latter half of 1959 there was a considerable improvement in the Scottish picture. Of course, as the right hon. Gentleman said, it was not as great as that in the United Kingdom. Comparing 1959 with 1958, Scottish production was up rather less than 1 per cent., whereas it was up 5½ per cent. in the United Kingdom as a whole. Looking at the United Kingdom figures, however, one thing that stands out clearly is the fact that only two industries showed a downward tendency—shipbuilding and marine engineering, and mining and quarrying. The clear answer to the question why the Scottish experience was different from that of the United Kingdom is that it was in precisely the industries most important to Scotland that the general experience was less favourable than it was over industry as a whole.

In 1959, the Scottish economy started on a declining trend, but that trend was reversed during the year, and 1959 ended with a vigorous expansion. Let us take the various industries referred to by the right hon. Gentleman and mentioned in the White Paper. The three biggest groups of industry in Scotland all showed an improvement. The output of the first and most important group mentioned in the White Paper—engineering, shipbuilding and electrical—last year reached record levels, despite the very serious problems of the shipbuilding industry, which shows that in general engineering and electrical engineering there was a considerable improvement. Food, drink and tobacco, which are very important industries for Scotland, showed a considerable gain, and the same was true of textiles and clothing—especially the woollen knitwear section. All those groups—the three biggest in Scottish industry—showed a gain in 1959.

The next three groups in order of importance showed a reduction. I should like to consider each in turn. First, in metal manufacture, the decline arose mainly from the decline in steel production. By far the biggest factor in metal manufacture in Scotland is steel production. But by the end of 1959 we were seeing a very vigorous re-expansion. Vehicle production also showed a decline, mainly owing to difficulties in the locomotive industry and in the field of Scottish aviation—both particular but important difficulties. The other main industry showing a relative decline was the chemical industry. There the problem was very much one of the production of explosives, which fell off considerably during the year. Those are the main elements in the industrial picture in Scotland. The two other big employing industries on the trade side were building and contracting, which showed an improvement, and mining and quarrying, which showed a decline.

That was the general picture for 1959. It started on a downward trend, recovered during the year, and showed an improvement at the end of the year which, although it covered the main industries, was not fully extended throughout the whole of Scottish industry.

What are the prospects as we look at the situation at present, with the experience of six months of 1960? Let us first take the engineering, shipbuilding and electrical industries. We must recognise that the shipbuilding problem is still a very serious one. The simple fact, which no one in this country can alter, is that world shipbuilding capacity is about twice what is needed to replace the marine fleets of the world on a normal obsolescence basis. That is a fact which we have to face, and I think that conditions in shipbuilding are bound to get more, rather than less, competitive.

Here I think we should all pay tribute to the work of many of the Clydeside yards in the considerable job of modernising which they have done recently. 'That modernisation, and the investment and effort involved, is, I am happy to say, beginning to produce results, and many of our Clydeside shipbuilders are now getting orders in competition with Continental yards on a competitive basis. It is an encouraging thought that that is so, but I do not want to minimise the problem, which must be a large one, in the whole world picture.

In the rest of heavy engineering, the prospect is much better than it was. I am glad to see that in heavy engineering, which is so important to Scotland, order books are looking healthier and the general outlook is more promising than it was. Paragraph 173 of the White Paper, which deals with boiler plant, sugar plant, rubber plant, refrigeration plant and such things, shows that the heavy end of engineering has been picking up and is likely to be better than it was last year.

As regards food, drink and tobacco, here, too, I think that progress is certain to be maintained. People sometimes say that this is a small employer, and I agree that may be so in some cases, but in general terms of the Scottish economy it is nevertheless very important and is a large contributor to the general balance of payments position of the United Kingdom in which Scotland clearly has a very close and intimate interest.

In textiles, it seems again that the outlook is encouraging, and in certain cases I believe that there are difficulties in obtaining adequate labour, particularly in parts of the knitwear industry.

Metal manufactures showed a marked improvement towards the end of last year, and in the course of 1960 we look forward to a record steel output.

Vehicles are showing interesting new developments. For example, in aeroengines, and there is the big new B.M.C. development project at Bathgate, to which the right hon. Gentleman referred, which we hope will be in production before the end of next year. I agree that it will not make a contribution towards employment this year, save in construction work, but nevertheless there is the beginning of an important development which we hope to see in Scotland. It is our hope that the development of vehicle manufacture in Scotland will lead to the entry into Scotland and the development there of component manufacture.

I believe that there are a number of projects which are being considered and thought about at present. Indeed, I can give one example. I understand that the Dunlop Rubber Company is thinking of increasing its activities in Scotland. This will lead to increased employment, and I hope that other component firms will do the same.

Finally, in chemicals, as the House will have seen from the White Paper, I.C.I. has transferred explosive work from England to Scotland. That will help to counteract the tendency we saw last year. Grangemouth is also developing as one of the great petro-chemical centres of the country. That will be of great advantage to Scotland.

Mr. F. H. Hayman (Falmouth and Camborne)

I am interested in the transfer of the explosives works from Cornwall to Scotland. If that is done, will the right hon. Gentleman do what he can to provide additional industries in my constituency to prevent hundreds of people losing their jobs during this year and next?

Mr. Maudling

That shows how hard it is to do good in this difficult world. Should any of these things that are taking place appear to be affecting the activities of the hon. Gentleman's constituency, he should remember that the Local Employment Act enjoins on us that when employment is provided in one development district we must have regard to the effect on other districts. I think that the point is covered by legislation.

In the course of 1960, construction and building will expand. With regard to mining, once again, without going into the details of the mining situation, which is an enormous problem, we must look forward to a further slight decline in coal output in 1960.

Mr. Hector Hughes (Aberdeen, North)

The right hon. Gentleman mentioned construction and building. Is he aware that the agreement with the Six, of which he is so much in favour, has struck a disastrous blow at construction and engineering in the County of Aberdeen? A great paper-making factory there planned an extension of its premises. The extension would have cost £750,000, but it had to be abandoned because of that agreement.

Mr. Maudling

I do not know the particular case which the hon. and learned Gentleman has in mind, but one or two things I propose to say will prove that his worries are a little unfounded.

The general picture in the middle of 1960 is of a continuation in Scotland of the increasing activity which we saw in the latter half of last year. That is reflected in a further fall in the unemployment figures. I think that we can fairly say that the general industrial picture in Scotland—I say general, because there are exceptions—is one of vigorous activity. As I said, in the textile industry there is a shortage of labour, and the paper firms tell me that they have very good order books at present.

The latest unemployment figures show a fall to 3.2 per cent.—still higher than we want. We will not argue about that, but, nevertheless, there has been a considerable decline on previous figures, and there is further evidence of continued expansion and activity in Scotland.

The right hon. Gentleman referred to the general economic policy of the Government and suggested that our policy might have a harmful effect on employment in Scotland. He is wrong about this. He said that the purpose of the credit squeeze was to reduce home demand. That is not accurate. I tried to make it clear yesterday that we want to see home demand expanding, but not expanding too fast for the expansion of our production. If the party opposite cannot see the difference between a declining and a rising curve, it cannot deal with these serious economic subjects. The right hon. Gentleman knows that to reduce the rate of expansion from 10 per cent. to 6 per cent. a year is not the same as to turn it downwards.

The right hon. Gentleman spoke about the economy generally, which is what I am doing. What we are doing is to try to prevent home demand outstripping production, with bad effects for everyone. The measures we are taking will help Scotland.

The right hon. Gentleman argued that the rate of interest has its main effect on heavy industry. My experience, and the view expressed by the Radcliffe Committee, is the opposite. The main effect of increased interest rates is not on heavy industry, not on investments and fixed assets, but on stocks, on consumers, and on the flow of hot money between one capital and another.

What we believe will happen as a result of our measures is that there will be a cut back in demand in the consumer goods section. For example, the number of things bought on hire purchase will be reduced, and the result will he to provide more opportunities in the heavy industries. I quoted figures yesterday to show that the expansion of business in this country is now spreading and has spread back to heavy industry. The capital goods producing industry shows a 13 per cent. increase in output last year.

We have been told for some years that the problem in Scotland is one of too much heavy industry and too little light industry. Now that we are taking measures, the effect of which will be to hold back light industry, the obvious corollary is that they will be more helpful to Scotland. That is a pure mathematical factor. So long as the general level of demand is high enough, as it is and will be, to maintain full employment in the country, one can permit greater production in capital goods and heavy industry only by having some restraining influence on consumption, which is what our measures are doing. I am convinced that that restraint on the power of consumption in the lighter industries will enable the demand to make itself felt on the heavier industries, and that will be of great importance to Scotland.

Mr. Willis

Why was it that the previous effort of the Government to restrain consumption by raising the Bank Rate, particularly when it went up to 7 per cent., was so harmful for Scotland?

Mr. Maudling

I cannot see that it was harmful to Scotland.

Mr. James McInnes (Glasgow, Central)

The right hon. Gentleman knows nothing about it.

Mr. Willis

That is one of our problems now.

Mr. Maudling

The effect of the measures will be to reduce demand in the lighter end of industry and enable the expansion that is now taking place in the heavy end of industry, as shown in the White Paper, to continue. That is important to Scotland. These are simple facts which hon. Members opposite cannot deny, but about which they make a noise.

Mr. Thomas Fraser (Hamilton)

Is not the right hon. Gentleman aware that in the debates twelve months ago Ministers informed the House that the reason for the high level of unemployment in Scotland shown in the Report published in 1959, which related to 1958, was the curb on industrial production which had been imposed at the end of 1957? They said that it was capital goods which suffered most, which was why Scotland had more than its share of unemployment, and they said that, by the same token, the expansion in our economy which we were now enjoying would bring greater improvement and relief in Scotland than in other parts of the country?

Mr. Maudling

And the expansion has taken place and is going on, and the restraint on expansion will fall more on industries making lighter goods than on industries making heavy goods.

In this field, as in the field of the Local Employment Act, we are perfectly happy to be judged by the results that we get. In regard to the Local Employment Act, I hope to produce a few results which may convince hon. Members opposite that we mean what we say. As we said during the discussions on the Local Employment Bill, our policy is to encourage the expansion in Scotland of both existing and new industries by offering the inducements available under the Act and by operating vigorously our powers of prohibition upon the expansion of industry in congested areas.

The right hon. Gentleman the Leader of the Opposition will surely agree that there must be limits to the exercise of these powers. We are facing a very big competitive struggle in the export trade, and we must think very long and very carefully before imposing additional production costs upon any business. I agree that to prevent people expanding in an area which is commercially most suitable for them and to force them to go elsewhere was socially desirable. But what we are doing, in accordance with the wishes of the House, is to impose on them, in many cases, a competitive handicap of a certain size. [Interruption.] If we tell people that they must expand their production 200 miles away, and they have to carry components to the new factory, the cost of carrying those components is bound to add to the unit cost of production.

We must look at the sheer facts of production costs. If we make people divide up their productive facilities we add to their total cost of production. We are facing that and accepting that it is right to do that because of social requirements, but it is wrong to pretend that there is no economic cost involved.

Mr. Willis

It does not apply to Scotland. That is the trouble.

Mr. Maudling

The hon. Gentleman does not think that anything applies to Scotland. Logic applies as much to Scotland as it does to England, and that is what determines it. We have been supporting the work which the Scottish Council has been doing, and we have had considerable help from the Council. The Council very vigorously puts forward the point of view of Scotland, but I have always found it amenable to reason and logic, unlike certain people to whom I do not propose to refer.

Mr. Hector Hughes

The right hon. Gentleman is putting forward an argument against Scotland on the ground of its remoteness. That has not been found to be a sound argument in Northern Ireland.

Mr. Maudling

I am merely saying that if a company produces a line of motor cars in the Midlands and produces all its axles on a certain set of machinery, if it produces new vehicles in Scotland it has to carry the axles that distance. That is what adds to the cost of production. That is a simple fact.

Mr. A. Woodburn (Clackmannan and East Stirlingshire)

Is the right hon. Gentleman aware that the Ford Motor Company gets it axles from Lanarkshire, 400 miles away—from the Clyde Alloy Company?

Mr. Maudling

The Ford Motor Company is probably the most integrated of all the motor companies in the United Kingdom. All I am saying is that if one has to carry components hundreds of miles it puts up the cost of the finished product.

I was endeavouring to say that, despite the fact that an economic handicap is involved—I am sure that no one can deny that—we have been making vigorous efforts to get industrialists to go to Scotland and expand there. I will give a few figures to show what results have been achieved. As we said during the debates on the Local Employment Bill, we are content to be judged by the results.

The figures are: 1958, projects approved 3.9 million sq. ft., nearly 5,000 jobs; 1959, 6.1 million sq. ft., more than 7,000 jobs; the first half of this year, 4.6 million sq. ft., some 13,000 jobs. Those last figures are the biggest six months' record ever achieved in the history of this policy. It is much bigger than anything achieved by the Labour Government. The figures have been exceeded for a complete twelve months only on three occasions—in 1946 during the Labour Government, and in 1954 and 1955 during the Conservative Government. I should have thought that Scottish Members were rather pleased to hear these things.

As I have shown, in the first six months of this year we have had the biggest number of approvals in respect of both factory space and jobs involved that has ever been recorded. The present jobs prospect is: work under construction should employ about 7,500 people; projects approved, but not yet started, should employ another 16,300. That is, altogether, a total of 23,800 jobs. Those are projects for which approval has been given. As I have said, they are either under construction or have been given approval but have not yet been started. I cannot say what the position will be at Bathgate when it is finally built up, but the figures which I have given are in respect of firm projects for which approval has been given.

The House may be interested to know that the division between the origin of application is: Scottish firms 8,500; English immigrant firms, as they are called, 10,500; and North American firms about 4,800. That shows a wide spread. This does not include the Rootes project or anything attached to it, but I very much hope that it will go ahead. Nor does it include a number of other projects about which we know. I have included only projects which are firm, projects for which I.D.C.s have been asked and granted. They will provide nearly 24,000 jobs.

The other projects of which I have been informed, which may go forward, will involve another 15,000 jobs, giving altogether 39,000 jobs against a total Scottish unemployment of less than 70,000. We are perfectly happy to be judged on that record. If anyone in Scotland says that that is not a substantial contribution to the problem, I do not know how he can argue that.

I want to make it clear that the 15,000 jobs to which I have referred are not firm. They are possibilities which we hope will come about, but I can give no guarantee at all about them. I would emphasise that we hope they will come about. The 23,800 jobs are firm, and we hope that the 15,000 will be added to them. That seems to me to be the biggest contribution to Scottish employment that any Government has yet made.

Dr. Dickson Mabon

How can we believe these figures in the light of other examples which the right hon. Gentleman has given us previously? In November last year he proved to me in a letter that he had 2,900 jobs coming to Greenock. None of his claims has ever come true—not one.

Mr. Maudling

If the hon. Member believes that I have deceived the House with information, I hope that he will provide evidence, but I have no reason to believe that. I am merely giving the figures that my Department has. When we are asked for an I.D.C. we are given an estimate of the square footage and an estimate of the employment. I am giving the House the numbers of people involved in employment in projects for which we have been asked to give permission and for which we have given permission. I am sorry that Scottish hon. Members opposite seem so disappointed to hear that Scotland will do so well.

In case anyone says again that the Government do not give enough attention to Scotland, let me give one or two figures about Government factories. Of the existing Government factories, 30 per cent. of the floor space is in Scotland and 36 per cent. of the employment is in Scotland—72,000 people. As the right hon. Gentleman said, 10 per cent. of the employment in the country, and 20 per cent. of the unemployment is in Scotland. So is 30 per cent. of the Government factory floorspace and 36 per cent. of the employment in Government factories. Furthermore, of the 3.6 million square feet of Government factory space under construction, more than 50 per cent. is in Scotland. In face of these figures, no one could possibly deny that the Government have not given a fair share to Scottish interests.

There are, however, other development areas in the country. There are Northern Ireland, Merseyside and the North-East Coast, and there are many other development districts scattered throughout the country. All I am saying is that out of all the Government building, financed by the United Kingdom Exchequer, now going on in the development districts, over 50 per cent. of it is going on in Scotland, and that seems to me to be a fact of which Scotland should, and I hope will, be aware.

There are at present four Board of Trade factories immediately available for occupation in Scotland. They are being shown to industrialists who are interested in going there. There are another four factories that will be available in the near future, and I hope that we shall soon find a good tenant for the advance factory which we have been building in Coatbridge. Generally, I wanted to lay before the House these figures to show as evidence, on which we are quite prepared to be judged, the extent of the efforts which the Government have been making and the extent of the success we are achieving in these efforts.

Mr. Frederick Lee (Newton)

Will the right hon. Gentleman say in what way the passage of the Local Employment Act facilitated this, whereas it could not have been done under the Distribution of Industry Act?

Mr. Maudling

We argued that at great length in the discussions during the passage of that Bill. There are such things as the building grants, different provisions about derelict areas and a whole range of things over which we argued for a long time during the passage of that Bill. We are quite happy to be judged on the results which we get under that Act, which seems to be the important matter.

The continuing problems for Scotland should be clear to all of us. First, as one hon. Member said, there are a certain number of jobs which must be provided to keep the position steady every year. Secondly, there is the very important problem of juveniles and the opportunities of providing skilled and advantageous employment for them. Thirdly, there is the problem that as new firms come in some other units are bound to go out. There are the special problems of shipbuilding and mining, in both cases problems of competition. There is a very serious problem in shipbuilding. While we know that the Clyde can build as fine ships as anywhere else in the world, the fact is that the world has too much capacity, and the fight to retain our orders will be vigorous and difficult for many years to come.

Mr. John Rankin (Glasgow, Govan)

Surely the right hon. Gentleman is not going to dismiss what he has to say about the shipbuilding situation by telling us that it is purely a matter of competition. He knows that there are other factors, and I think that he ought to mention them.

Mr. Maudling

Of course, it is a matter of competition, and no one can stop it being a matter of competition. Our problem is to make our yards as competitive as possible, and that is essentially a matter for both management and labour. I cannot help feeling sometimes that there is scope for more effort on both sides of the industry to make our own yards more competitive. Some of the Clyde yards are now quoting competitive prices, and are doing a fine job. Many of them have modernised their methods. But unless we can continue to offer prices and firm and reliable deliveries in competition with the Germans, the French, the Italians and the Japanese we shall not maintain the position in this industry which our traditions and the great skill of Clyde-side should enable us to maintain. That is the position in shipbuilding, and there is no possible escape from it. Unless we are competitive, we cannot maintain our position.

To sum up, the general prospects for Scottish trade and industry are good, and could be encouraging. But there are certain things that must be done. First, we must all, wherever we may be concerned in industry, combine to keep costs down. The export trade, on which so much depends, is becoming more and more competitive, as was said so often in the debate yesterday. Only by keeping costs down can we keep employment up, and the job of keeping costs down is a job for mutual effort on both sides of industry. Secondly, I hope to see the maintenance of the increased will of Scotsmen to invest in Scotland. I am very glad that we can get English and even. North American firms to go to Scotland, but some of we non-Scotsmen would like to see even more determination on the part of Scotsmen, of whatever scale or station, to invest in the Scottish economy.

Finally, if I can say so without offence, I should like to see more promotion by Scots people of the virtues of investing in Scotland. It is perfectly right for hon. Members opposite to chase me and other Ministers all round the House of Commons, complaining about this, that and the other, but do not let them give the impression that Scotland is a lost and forlorn country. Some of the things that are said—I say this quite seriously, because we all have the same object, which is to try to help—might give the impression that Scotland is lost and forlorn. Of course, it is not. Far from it. Let us have criticism, the more the better, but let us give the impression that Scotland has immense possibilities for people who wish to invest there, a fact that will be witnessed by all those. Americans and others, who have already come to Britain to invest there.

I know that everybody will agree about this, though they will not agree that things are better in Scotland under this Government—we believe it, but the party opposite does not believe it. What we are all agreed upon is that there is, at present, an encouraging prospect. Let us all, by our efforts and by selling the virtues and advantages of Scottish industry, make sure that we really take advantage of that prospect.

5.38 p.m.

Mr. A. Woodburn (Clackmannan and East Stirlingshire)

We have listened to a very interesting speech by the President of the Board of Trade. His economic theory sounds very convincing, but, in the long run, economic theory must give way to practical experience, and practical experience, I am sorry to say, has not borne out all his ideas as to what would happen. The Minister was quite right to speak about the relative disadvantage suffered by Scotland and described in the masterly survey which my right hon. Friend the Leader of the Opposition gave, and I was very interested to hear that he did not attempt to question, as I am sure he would not, any of the facts of the position outlined by my right hon. Friend.

Let me say right away that we welcome without any qualification whatever the efforts which the Government have made to get the British Motor Corporation to go to Scotland. I hope that that will be a growing point, as it used to be described. As the right hon. Gentleman says, there may be other feeder industries following the parent industry. I also hope, as the right hon. Gentleman hopes, that Scotsmen and Scottish industries will show more enterprise in taking advantage of the B.M.C. coming to Scotland. I agree entirely with him that over the years there has been a great lack of Scottish enterprise in trying to solve this problem, and Scottish investors, I am also sorry to say, have tended to play safe and go for security and safe investments rather than take any chances by investing in new enterprises in Scotland itself.

Unfortunately, Scotland's industrial inhabitants are mainly old industries which grew up under the giants of men who built them. I am old enough to remember some of these giants of Scottish industry who would have held their own in any country of the world. But I am sorry to say that their sons and their families did not follow in their footsteps. They went to Oxford and Cambridge and became English gentlemen, marrying English ladies, and they got stuck with their wives' parents down South.

Mr. T. Fraser

And they came back as English Members of Parliament.

Mr. Woodburn

They became absentee landlords so far as Scottish industry is concerned, and it was used as a dripping roast to supply the needs of their luxurious life down there. That has been the ruin of Scottish industry.

In modern days we cannot start an industry with a small amount of capital as was possible in the old days, because modern industry requires a great amount of capital. The Scot is not prepared to risk big blocks of capital in starting up industries in Scotland. Unfortunately, even the Labour Government had the greatest difficulty in persuading Scottish industrialists to show enterprise in this direction. In some cases we had almost to compel them to be enterprising. The right hon Gentleman is right in his criticism of Scottish industry and perhaps I can express the same opinion a little more strongly than it is possible for him to do as an outsider.

On the other hand, we have to be careful to pay respect to those who brought, from abroad and elsewhere, industries which have stimulated our employment. The right hon. Gentleman will be surprised to know that this is not something new. As I said in the Scottish Grand Committee, the biggest employers in Scotland are two American firms which came to the country nearly a hundred years ago, the Singer Sewing Machine Company Ltd. and the North British Rubber Company Ltd., in Edinburgh. Scots continued to manage them and the country benefited greatly from their coming.

Some of the shipbuilding firms came from the South, including Thorneycrofts. Harland and Wolff Ltd. came from Belfast. There has always been a flow of firms into Scotland because, like the Americans, these firms discovered that they could get as good workmanship and hard workers in Scotland as in any other country in Europe. Even the Scottish miners had to work harder than those in England to make a living. It is like what used to be said of the old British Army. It was not the fault of the soldiers, but the poor officers that they had to lead them. Industrialists looking for hard workers would find them in Scotland. The Americans are getting hard work out of the workers just as they did in Crawley.

Until recently, the workers have always been treated as the old British Army "bob-a-day" private used to be treated. No civility was extended to them, no courtesy. I remember a Select Committee, mostly composed of English hon. Members, which was horrified, on going through works in Scotland, to discover how people spoke to each other. When I took the chair, as a Minister, at a meeting of the best of the trade unionists and the best of the employers in the country, plans were discussed about how to teach management, and how to teach foremen to manage and to handle men. The Committee settled these things to its satisfaction, but I said, "You have missed out one essential feature—how to teach men to be managed."

I know places in Scotland where, if the foreman said to a worker "Good morning, John," the man would drop down dead with surprise and shock. I told the Select Committee the story of the Glasgow school teacher who was teaching the children how to be polite and suggested that they should say, "Good morning, father" and "Good morning, mother". The teacher was under the impression that she would improve the manners of the children. The next day she said to one child, "Did you say 'Good morning, mother'?" And when the child said, "Yes", the teacher asked, "What did your mother reply?" and the child told the teacher that her mother said, "Some folks are getting hellish polite".

Bad manners in industry, bad manners on the part of employers, are among the things which have helped to drive people South. I was told, when I was on the Select Committee's investigation, that it would be difficult to get miners to return to the mines after they had worked in munition factories, because in the factories they had been treated as human beings instead of cogs in a wheel. The Americans are bringing in modern methods and conditions and this will have a profound effect on Scottish industry. The old industrialists will have to treat the workpeople as human beings. B.M.C. will bring in these methods of modern industry and this will prove quite different from the attitude to the workers adopted by the old industrialists.

I wish to deal with a point made by the right hon. Gentleman about the credit squeeze. When the Chancellor of the Exchequer introduced the credit squeeze he made a distinction and gave banks in Scotland the privilege of having smaller deposits with the Bank of England than English banks. I do not know what were the economics of that idea, but it seems to me that the right hon. Gentleman must have thought that the banks had the unemployment in Scotland. The President of the Board of Trade will agree that that has nothing to do with providing credit to Scotland. The Chancellor should allow Scottish and English banks to be free of restrictions in giving credit for the development of enterprises in Scotland—that is the way to deal with the matter—and not give Scottish banks preference over English banks.

Tomorrow, I propose to ask the Secretary of State for the Colonies to give some details of his proposals for Malta. I do not know whether the President of the Board of Trade is aware of it, but his right hon. Friend the Colonial Secretary has a wonderful scheme for Malta. He proposes to relieve industry which goes to Malta of the need to pay Income Tax. The Colonial Secretary will give credit for the development of industry in Malta.

I suggest that the President of the Board of Trade might consult his right hon. Friend to see whether some of these provisions which are so wonderful for Malta might be applied to Scotland. We should not have the slightest objection if some people in Scotland were given a ten-year holiday from Income Tax to encourage other people to go there. That would be one way of overcoming some of the handicaps which were mentioned by the President of the Board of Trade.

The right hon. Gentleman did not reply to the questions put to him about how to distinguish between the application of the credit squeeze in England and Scotland. I have mentioned one way it could be done, that banks should have no restrictions on the supplying of credit in Scotland. Another way would be for the Government not to impose in Scotland the credit squeeze on housing development which is being applied all over Britain. Another way would be for the Secretary of State not to restrict road development. Economically, there is nothing so stupid as to have men being paid unemployment benefit and to have road-making machinery standing idle and at the same time to cut the road-making programme. I will give way to the right hon. Gentleman if he can show any economic sense in that course of conduct.

I challenge the Secretary of State for Scotland to deny that this year his road programme will be less than last year. More than that; because of the B.M.C. taking away a share of the road programme owing to the extra roads which will have to be made, the Secretary of State has cut the rest of the programme all over Scotland, which is economic madness. I cannot understand why he has not put up a fight about this and got on with the programme of road-making in Scotland and made use of the labour we have available.

I wish to make another suggestion regarding something which has been practised. When Woolworths and other firms send goods about the country, they have an equal railway rate all over the country. If British Road Services were brought into this they could get rid of a lot of the handicaps regarding distance which were mentioned by the right hon. Gentleman. These handicaps have been much exaggerated. As was pointed out by my hon. Friend the Member for Hamilton (Mr. T. Fraser), who has travelled throughout the United States, Americans send their goods for thousand; of miles without experiencing any handicap on efficiency. At one time Fords, in London, got their car axles from Scotland. It would have been as easy for Fords to build their cars where the axles were made rather than taking the axles from Scotland. Fords were proposing to come to Scotland at one time with a production factory just as B.M.C. has come. They would get as good labour and as efficient production as in the South.

I suggest that the question of bringing in the British Road Services and the provision of some sort of equalisation of charges should be considered. We adopted this idea during war time, when fertiliser was carried all over the country. Lime was conveyed at a uniform rate and the people in the Highlands got it at the same price as other parts of the country.

I was very sorry that the right hon. Gentleman did not say anything about the European market in relation to Scotland. We have been informed that there is a danger of our losing American firms which are in Scotland and of other firms being discouraged from coming there if Britain is to be outside the walls of the European market. I wish that he had been able to give us some reassurance on this point, because that might threaten all the promised development he spoke about.

The chemical industry developments at Grangemouth are very welcome, but that constitutes a very small employment of labour. Largely, it is a question of someone turning valves off and on. The capital cost is great, but the amount of labour concerned is relatively not very great once the industries are constructed.

Scotland has a great many small industries. Some are very valuable and are completely specialised. My right hon. Friend mentioned coal mining machinery. We have some relatively small firms compared with others which have been mentioned, but they are first-class in their way. A great many small firms in Scotland cannot take part in exports because of the cost of getting agents abroad and being sure of their money. That makes it impossible for them to take risks. I wish the President of the Board of Trade would get an organisation set up abroad to take care of that for these firms, apart from giving them help through the Export Credits Guarantee Department.

Take, for instance, the question of Shetland wool. That industry had an export quality which was so attractive that the Turks wanted to order £70,000 worth. There are not enough sheep in Shetland to produce that amount of wool, but a little of many such exports going to every town in the United States would make a boom in our industry. As has been said, it is much more important to develop indigenous industries than to try to bring in new ones. I have always been an advocate of the Government directing some of their orders to firms in Scotland. Firms in Fraserburgh have shown that, once they had a blood transfusion of orders, they could develop and hold their own against any competitors.

We have no doctrinaire objections to private enterprise. When I was in office my hon. Friends and I tried to induce private enterprise to come to Scotland, but we have to agree that we did not get enough to come there. There is still a gap. In spite of all the promises, neither the President of the Board of Trade nor the Secretary of State for Scotland can give any assurance that this continual process of going one step forward and slipping two steps back will not be the kind of progress which Scotland will make for the next twenty or thirty years. There must be some overall plan.

I suggest that the Government ought to get down to the question of what they are to do to ensure a stable development in Scotland. The situation has gone too far to be cured by private enterprise. It is ridiculous to expect private enterprise to start business in Scotland and lose money for the sake of the nation. With all the good will in the world there are not many people who can afford to do that.

The hon. Member for Caithness and Sutherland (Sir D. Robertson) went to Caithness as its Member of Parliament and, because he is an enterprising man and saw that things could be done if someone would put his back into it, he revived a coal mine and started a brick works. He got a lot of things going. That is what one man can do. I do not think that he lost money over that, but he took that risk. We cannot expect people to take these risks merely because Scotland needs industry. Therefore, there have to be inducements to private enterprise to start industry there. We have to give guarantees and perhaps freedom from Income Tax for ten years so that a firm may start up in a development area or in the Highlands. With all the advantages offered, so far we have not succeeded in solving this problem.

The next thing that we have to do is to induce Government - controlled agencies to come to Scotland and to start industries. That has been successful in the case of the Hydro-Electric Board, which deliberately placed orders in Scotland and stimulated quarries and engineering. Engineering firms which took this up have now developed hydroelectric engineering capacity which will live on because it is efficient. A great deal could be done by the Government-controlled agencies and it should be done as a definite piece of planning. Where that fails, as it is bound to fail, even in the Highlands, it seems that the Government must put industry down.

I wish the Government could find out what is happening in other countries. I was asked to go on a Parliamentary delegation to Spain. The Government of Spain is Fascist and a dictatorship Government, but it has established an organisation whose business it is to consider in what parts of the country industry is required and to start industry there. When the industry is in operation, if private enterprise wants to buy it over it can be sold, but projects like mines and steelworks and a whole lot of others have been deliberately placed in different areas in Spain to develop industry where it is required to improve the social life of the people.

I do not say that these things can be developed in the Highlands, but, unless some parts of Scotland have deliberate Government action of that kind applied to them, we shall have to go on facing decline. We on our side have no doctrinaire ideas about private enterprise. All we ask is that the Government should get rid of their doctrinaire ideas about public enterprise, and should not decry it. The Secretary of State has shown an excellent example by going to the Highlands and developing a nationalised shipping industry—since the General Election.

Mr. A. C. Manuel (Central Ayrshire)

Against his election pledges.

Mr. Woodburn

His common sense got the better of his prejudices and he actually established a nationalised industry in the North of Scotland. That is the sort of thing that we would welcome from the Government and we want to give them every encouragement to do that.

A great many of my colleagues want to take part in this debate, but I must say something more. I think that the President of the Board of Trade was a little complacent about one or two things. The coal industry will need to have a lot of readjustments made. It may be that in a matter of twenty years the industry will suffer greater shocks. Here is a whole population which has to be readjusted and someone has to think ahead for it. It is no good waiting until the mines are closed; someone has to foresee the situation.

The right hon. Gentleman mentioned the shipbuilding industry. It is no good waiting until it falls to bits. Plans have to be made because, as he said, there may be more capacity than there are markets. I wish I were satisfied that the British shipbuilding industry was pulling up its socks to the extent which is required. I am told that in Japan and elsewhere methods have been adopted which have got rid of the traditional handicaps to quick building and they are using modern methods. If that is the case, someone should be looking into that question here. If anything happens to the shipbuilding industry the Clyde will be sunk, and not only the Clyde but a great part of Scotland and Northern England which depends on the industry. [Laughter.] It will be sunk in the Clyde, anyway.

Mr. Cyril Bence (Dunbartonshire, East)

It will be silted up.

Mr. Woodburn

It will become a dead-end waterway.

What we want is not that we on this side of the House should propound all the solutions, but that the Government should take this seriously as a job which requires long-term planning. This is another bogy of the Tories; they will not have long-term planning. I bet that they plan all their investments very carefully, that they plan all their own businesses very carefully and that their wives plan their economy at home very carefully. I cannot understand why we cannot do publicly what they do privately. To refuse to do so seems senseless to me. We need a plan for Scotland which foresees the difficulties.

We welcome what the Government have been able to do, and we are sorry that it has not been enough even to make up the leeway. I hope that they will get down to the problem and that when another debate on this subject takes place we shall have not only a post mortem into what happened last year but some foresight from the Government about what will happen not only next year but far into the future, because this requires planning for twenty years ahead.

6.2 p.m.

The Earl of Dalkeith (Edinburgh, North)

May I be allowed the privilege of addressing the House for the first time? I should like, first, to express my appreciation of the very cordial welcome which I received on my arrival here from hon. Friends on this side of the House and from hon. Members opposite. I feel most honoured to be here as a representative of the fair city of Edinburgh, and it is fitting that I should make my maiden speech as a Member from the capital city of Scotland on this subject of utmost importance to Scotland and her future.

I should also like to pay a tribute to my predecessor, the former Lord Advocate, now Lord Milligan. I know that he was a most popular figure in the House and that he is greatly missed by his many friends on both sides of the House. But what has been Westminster's loss has been the gain of the Scottish legal fraternity. This is probably the first time for many years that North Edinburgh has had a representative who is neither honourable nor learned.

I have been advised to be unprovocative and non-controversial, and I welcome this advice most particularly because I am convinced that in a debate of this sort, if we are to do any good to the Scottish employment and industrial situation by talking about it, we shall do good only if we present a picture of Scotland as a harmonious place and not as a place filled with discord. We must show that as a race we are hard-working, industrious, peaceful and not querulous grumblers permanently engaged in inter-clan warfare.

I wish to do two things in the course of my speech of a few minutes. The first is to try to put some of the problems before us into broad perspective and the second is to suggest what seems to me to be a constructive approach to these problems. For many generations now Scotland has produced more people than she has been able to absorb into her own economy and into her own industries. These people have been particularly renowned for their high qualities and degree of integrity. They have had a strict Christian upbringing and have been educated to standards which have long been the envy of the rest of the world. During the last few generations these people have gone out into the world and have made Scotland's contribution to it, and it is these people, I submit, who more than anyone else have built the British Commonwealth.

The same is true today; many people leave our shores and go elsewhere in the Commonwealth. I believe it is because Scotsmen are to be found in every part of the world today that the Commonwealth is such a united and unique family of nations. I believe that if we look at these facts not in the narrow spirit of parochial jealousy but by recognising that Scotland is an integral part of the United Kingdom, of the Commonwealth and indeed of the world, we shall begin to get the problem of the Scottish economy in correct proportion.

Naturally it fills us all with anguish—I certainly have this feeling—that so many of our young people have to leave Scotland to seek jobs elsewhere. I entirely agree with those feelings. But at the same time we ought to rejoice in the knowledge that to Scotsmen there are very few artificial barriers of nationality in the world such as afflict so many unfortunate people who live in lesser nations than our own.

There are various problems of Scottish unemployment, such as the fact that it has been roughly double that of England for the last fifty years. It is not a new problem. The rate has always been double, and we deplore that fact. To hear some people speaking today one would think that it is a new problem which has suddenly cropped up, demanding panic measures for its relief. I think that if we adopted that attitude we should not find the right answer.

The answer is obviously a long-term one. I entirely agree that it is bad that our unemployment percentage should be higher than that in England; this shows that it could be reduced. On the other hand, if we look at it in relation to the pre-war period, we see that the Scottish unemployment percentage today is, on average, a quarter what it was then.

Furthermore, not the whole of Scotland is afflicted with unemployment. This is an important point because when we are trying to convince a would-be industrialist that Scotland is a good place to which he should come, it is natural that he will be put off if he feels that the whole of Scotland is smitten with unemployment, because he naturally assumes that if that is the case there must be something wrong with Scotland.

It is certainly, and fortunately, true that there are many parts of Scotland in which the unemployment percentage is well below the average which we hear quoted so frequently. In Edinburgh it is well below 2½ per cent. and in the whole of the Borders of Scotland it is well below 1 per cent. I can give examples of certain of the largest burghs in the Borders of Scotland, such as Hawick, where the unemployment percentage is 0.6 per cent. It is important that we show industry that it can prosper in Scotland.

I do not want to be interpreted as being satisfied about the unemployment position in Scotland. I am very far from satisfied about it, and I should like to take this opportunity of blowing sky high the charges made by some people that we on this side of the House are complacent about the unemployment position. I am sure that one of the first duties of a Government in a modern civilised community is to do their utmost to ensure full employment. Of course, we want more jobs and more industries. We have been wanting them for a long time. The problem is how to get them other than by the measures which the Government have already introduced.

This is where I want to make what, I hope, is a constructive suggestion. If the problem of industry and employment in Scotland is to be solved in the future it will depend very largely upon our ability to sell Scotland. This is a subject on which I believe a little self-criticism is fully justified and might possibly be helpful. It is generally agreed that as a race we are bad salesmen—for the nicest possible reasons. We are too modest and do not like blowing our own trumpets. I have a feeling that I may be taken to task for saying that by some of my hon. Friends representing English constituencies, who, according to the feeling of home rule for England which I detected when I arrived at Westminster, may feel that the Scottish Members they see are not exactly a model of reticence.

This debate gives us a unique opportunity for good salemanship. It enables us to stress Scotland's good points and to point out the enormous advantages which we have to offer and the abundant opportunities that we can give to industry. I warn Scottish Members most strongly against giving wrong impressions. We should not give the impression that Scotland is down and out and has no future. Scottish Members should not go on harping about and exaggerating the bad things, the misfortunes and the difficulties of Scotland. We have so much to offer industry.

There are so many things in Scotland which are not available to expanding industry in many parts of England. For instance, we have an availability of good sites which are not over-congested. We have ample water supplies, good power supplies, coal, electricity, gas, and so on. We have relatively uncongested roads and harbours. Harbours are essential for the raw materials to be brought in and the finished goods to be exported. We can stress the advantages of having fresh and unpolluted air and room to spread when businesses want to expand.

Above all, we have the skill and craftsmanship of our people. In the same way as many parts of the world have become famous for the type of goods they manufacture, the people of Scotland have, above all, become famous for their skill and quality of production. I can give examples in the field of textiles—the tweed industries, the knitwear industry and the hosiery industry. In the field of food and drink, we produce the best beef and mutton in the world. I do not think that anyone would argue about the quality of our whisky. I have even been assured by those who like the stuff that the vodka we are now making is considerably better than what can be produced in Russia.

In engineering, where precision, strength and reliability matter, Scotland is the place. It does not matter whether it is heavy machinery or very delicate precision machinery. Among the best examples which I can give of that is Rolls Royce, which, as we all know, is now finding aeroplanes and airliners all over the world to take its engines.

If all these virtues were fully known all over the British Isles, industrialists would fall over themselves in trying to get to Scotland while the going was good, in the same way as the B.M.C. has shown its wisdom in taking that decision. One of the interesting features in the Report is that so many of the new industries which have come to Scotland have already become so satisfied that they have decided to expand. This is a point to which further publicity should be given.

On the whole question of general salesmanship, I should like to pay a tribute to the Scottish Council for Development and Industry, which has been doing a magnificent job. The National Union of Manufacturers' Advisory Service should also be praised. We should do all we can to encourage greater support for that organisation. We should not pass over the fact that very valuable service was done by Peter Sellers in the film, "The Battle of the Sexes". That film should be seen by many people.

Finally, we should do more to help ourselves. The Government have taken action in the way of financial inducements and powers to guide industry to the places where we want it. It is up to us to follow up what the Government have done by encouraging all our own people and our friends to co-operate together—to work together with the Government and with each other. I am thinking of local authorities, businessmen, employers, employees, trade unions, and even political parties. If we can work together, remembering that this is a delicate problem and that what we say and how we say it matters, I am confident that the already promising prospects for the future can be made more promising.

6.15 p.m.

Mr. James McInnes (Glasgow, Central)

It falls to me to extend our congratulations to the noble Lord the Member for Edinburgh, North (The Earl of Dalkeith) for having overcome what we all regard as a terrifying experience in making our maiden speech. He has done so very efficiently indeed, and I have the maximum possible pleasure in extending to him our congratulations for what I regard, in an alliterative term, as a concise, candid and clear speech. He spoke with a deep sense of understanding and sincerity, which makes us all feel that we shall look forward to him making somewhat similar contributions to our debates on many more occasions.

I am sorry that the President of the Board of Trade has gone, because I was somewhat dissatisfied with his performance this afternoon. The right hon Gentleman has appeared in several of these debates during the last three years. On each occasion he has painted for us a picture of Scotland's expanding economy and conjured up before us all the jobs which were in the pipeline, but they have never materialised. He gave a similar exhibition today.

The right hon. Gentleman said that we in Scotland, and particularly Scottish Members of Parliament, ought to ask our Scottish industrialists to make some contribution themselves to the Scottish economy. I agree with that. There is one thing of which I am certain, namely, that we shall not emerge from our present economic malaise if we continue simply to depend upon the importation of industry from other countries and at the same time go begging to the Government for Governmental aid.

Scotland's future, industrially and commercially, must to a large extent depend upon Scottish industrialists themselves. Of the 131 major developments which have started in Scotland since the end of the war, no less than 66 per cent. have come from England, 23 per cent. from America, 4 per cent. from Canada, and 3 per cent. from Holland. We Scots have been responsible for less than 1 per cent. In other words, our industrialists have invested even less in Scotland than have the Swiss and the Italians.

In our Scottish industrial estates alone, we have 44 English firms, employing 27,000 people; 24 American firms, employing 18,000, and seven Canadian and Dutch firms employing over 6,000. We also have firms from all those countries in parts of Scotland outwith the Scottish Industrial Estates, and these figures do not take any cognisance of the motor car industry that we hope soon to attract to Scotland. The importation of these new industries will provide us with about 100,000 new jobs. I shudder to think what the Scottish economy would be like without them.

I warmly welcome English or American capital, or capital of any kind, being invested in Scotland, and I recognise the need—and I emphasise this—for Government inducements and Government facilities for the distribution of industry, but I can never regard these as a substitute for home-grown initiative and enterprise. They may be supplementary, but they are nothing more.

What disturbs me, and what I regard as, perhaps. Scotland's greatest weakness. is the failure of Scottish industrialists themselves to invest there. One of the classic examples is the graving dock at Greenock, for which my hon. Friend the Member for Greenock (Dr. Dickson Mabon) has been battling for many months, if not years—and battling, if I may say so, somewhat tenaciously.

If Scottish industrialists are not prepared to invest in their own country, can we wonder that our unemployment figures are always double those of the rest of Britain? Is there any reason to wonder that Scottish industry stagnates when the rest of Britain is booming? Very few industries in Scotland in the post-war period have been pioneered by Scottish industrialists. I recognise, of course, as, perhaps, we all do, that we have some forward-looking managements, lively boards of directors and top executives who never let up, but there are not enough of them. There are far too few of them.

Why is it that among the vast majority of Scottish industrialists there is this lack of initiative, this unwillingness to risk involvement and investment in Scotland? As my right hon. Friend the Member for Clackmannan and East Stirlingshire (Mr. Woodburn) has said, there is no lack of brains, there is no lack of workers, there is no lack of capital, but there is a lack of bold and imaginative enterprise on the industrialists' part.

It is they whom I regard as the guilty men of Scottish industry. These are the men who are so smug and complacent that they cannot see what is happening around them; men too slow to realise that we are living on borrowed time; men who have failed to catch up with the new scientific and technological age in which we live. They are men who do not even seem to realise that self-help is a better philosophy than self-pity. These are the guilty men.

Let us look a their approach to the present scientific and technological age, and, in particular, to research. Located in Scotland, with 10 per cent. of Britain's population, there work only 3 per cent. of all the people in Britain engaged on research. Let us look at the industrialists' approach to day-release. All are agreed that the training of technicians is a matter of vital concern, yet, out of 162,000 youths under 18 years of age, only 17,000, or 11 per cent., have day-release courses.

That compares with half a million youths, or 22 per cent., in England and Wales released for the same purpose. That is the situation. Despite the efforts of the Secretary of State for Scotland, the efforts of the Scottish Trades Union Congress, the efforts of the Scottish Board for Industry and the efforts of the Scottish Council for Technical Education, we can achieve a day-release figure of only 11 per cent.

Need we wonder, therefore, why six out of every ten students who graduate in science and four out of every ten engineering graduates leave Scotland to find employment elsewhere? One might be tempted to say that the success of the Scot abroad has been at the expense of the homeland. Apart from our scientists and our engineering graduates, we must also take cognisance of the fact, as the President of the Board of Trade pointed out this afternoon, that each year between 20,000 and 25,000 Scots emigrate. The important thing is that two-thirds of the emigrants are between the ages of 16 and 24, and this, I should imagine, is the age-group on which the future prosperity of the nation very largely depends. These young and able-bodied people go year after year. The social implications of this emigration are disagreeable enough, but the industrial and economic consequences are even more serious.

The attitude of Scottish industrialists towards Scotland generally is deplorable. They will not invest in their own country. They are not capable of catching up with the scientific and technological age. Their attitude has resulted in the past in the best of our young people going away. If Scottish industrialists are not prepared to awaken to the realities of the situation, if they are not prepared to invest in Scotland, the demand for more public enterprise will inevitably grow. Indeed, in the present state of our economy, that demand is justified, and to that extent I support the view expressed by my right hon. Friend the Member for East Stirlingshire.

One two occasions today, it has been said from the benches opposite that we on this side are the moaners, the grumblers, the people who denigrate Scotland. It is said that we are too gloomy on this side. We can do no more than express our own view. I hope that the Secretary of State will himself deal with the position of the industrialists and, at the same time, take the opportunity to appeal to them to make a contribution towards the prosperity of Scotland.

6.33 p.m.

Mr. Patrick Wolrige-Gordon (Aberdeenshire, East)

The hon. Member for Glasgow, Central (Mr. McInnes) concentrated most of his speech on an attack or, at any rate, a criticism of industrialists in Scotland. I am bound to say that I agree to some extent with much of what he said. It was, of course, a generalised attack, which certainly does not apply all round, but without doubt the dynamic effort we need in solving the employment problem of Scotland is not always present. I thought that my noble Friend the Member for Edinburgh, North (The Earl of Dalkeith) was absolutely right, in his excellent maiden speech, when he said that we need a certain amount of self-criticism in finding where we nave gone wrong in failing hitherto effectively to solve the problem. I do not, of course, accept that it is entirely the responsibilty of the industrialist—all concerned, I think, have made mistakes—but we certainly need to put things right.

The particular aspect of the matter on which I wish to concentrate is the problem we find in the most distant areas, which have more specific difficulties in the sense that they do not suffer from the much wider difficulties of the greater industries. In parts of the country like the Highlands or Aberdeenshire, we have a system of administration which depends upon co-operation between local industry and Government assistance. In the schemes which are administered under B.O.T.A.C., for example, everything seems to go exceedingly well until one arrives at the point when the money has to be paid over.

I have just concluded a series of meetings in my constituency with all the different interested bodies which deal with this matter and are directly affected by it; a series of meetings to discover exactly what the difficulty is and where it lies. It seems to me to be an administrative difficulty rather than a legislative one. I have been trying to achieve a united approach so that we can tackle that particular difficulty decisively and effectively.

What is the most effective way of spending Government money, often quite small sums, with the firm and in the area where it is most needed? Piecemeal patching is inadequate. We have had that already. In many cases, the story is a sad one of frustration and disappointment, particularly for the smaller family firms, whose existence and success are extremely important in our small country towns where there is a high level of unemployment and a great need for the continued successful existence of such firms.

This is an overall problem requiring an overall approach. The need is to develop the local economy on integrated lines but with a view to increased expansion in the future, particularly with an eye to European markets and other markets in the Free World. I am thinking especially of South America. I make that point because, until now, we have concentrated on trying to dam the flow of manpower leaving the northern areas to go to the steel towns, the Midlands of England and so on. We have tried to dam the flow, but we shall not do anything really effective until we think in terms of building up much more forcefully and reliably our economy in the North and keeping all those men and their children there as part of growing communities. We must build up the economy there in very vigorous fashion and on lines which are after all, native and natural to the areas in question.

Miss Margaret Herbison (Lanarkshire, North)

The hon. Member has told us that everything possible should be done in the North to have trade and commercial connections with Europe and the free world. He is surely aware that, in the North of Scotland, there has been considerable trade with what he would not call the free world, namely, with Russia. Must not our aim be to have the greatest possible trade and commerce with every part of the world?

Mr. Wolrige-Gordon

Our aim is to see that Scotland and the North of Scotland, in particular, with which I am more closely concerned, is prosperous. I wish to consider how we can make our efforts more effective.

Miss Herbison

This is a very important matter. The hon. Gentleman has not answered my question, and I am sure that the people of the North will want to know. Does he wish to limit the trade of the North of Scotland with Europe and the free world, or is he willing to have trade between the North of Scotland and countries which are considered to be not free countries?

Mr. Wolrige-Gordon

I myself have nothing against trade with any country in any part of the world. I hope that answers the hon. Lady. [HON. MEMBERS: "Hear, hear."] That has put that right.

The first necessity is knowledge. By knowledge, I do not mean the general statistics which are of use to nobody but the civil servant. I mean exact knowledge, exact in the details about every area which is in need. I have in mind particularly exactness about an area's potential for development. This seems to me to require specific action by people on the spot and also a certain amount of simple, honest co-operation. What we really need to do in the distant areas is to obtain and collate all the details and relevant information on wages, housing sites, transport, projected development and so forth.

To give an indication of the way in which my mind is working, let me take, for example, the case of the labour that is available. I wonder whether it is possible for us to know from the labour exchanges exactly who are the individuals who have had to leave an area, what is their capacity, and what are their jobs. I do not mean that we need definite information only about the people who are actually drawing unemployment benefit at the time. I am also concerned about the large number of skilled people who have to leave an area and who would like to return there to get work if it were available to them.

The point I am making is that when an industrialist comes to the area to investigate its potentialities it would be a tremendously valuable asset to have on the books information about the men who would be ready, able and willing to go back if they could be included in the kind of industry that the industrialist was thinking of setting up. We need that information to be very precise. This is a specific problem, often a small problem, in the sense that £1,000 could make all the difference between a growing business and one which goes on the rocks.

Mr. Bence

I know of five draughtsmen and three automobile engineers who were not compelled to leave Scotland. They were not unemployed. Four of the draughtsmen have gone south and doubled their salaries, and two of the automobile engineers have got increases of 75 per cent. in their income with Fords.

Mr. Wolrige-Gordon

There are bound to be differentials in wage rates, but I am thinking very much of men whom I know, electrical engineers, for example, who have had to go south and who would prefer to go back to work, for example. in Peterhead for a lower wage if they had the opportunity.

Mr. Bence

A lower wage?

Mr. Wolrige-Gordon

Yes, that is true. It is a very attractive area.

At the moment, when an industrialist is thinking about development in Aberdeenshire he has very great difficulty in finding out quickly everything that he needs to know. He can find nothing cut and dried when he goes there. It is very necessary that we should have some kind of organisation or office set up where he can get the information he needs decisively, accurately and quickly, so that he can make up his mind more sharply than he is able to do at present.

This knowledge also could be the key to the success of Government participation in helping an area, which is what B.O.T.A.C. really amounts to. I am not satisfied that all is as it should be at the moment with that scheme. An application comes and then various teams of people come to an area to try to appraise the situation. They go back and then, more often than not, a reply comes from the Board of Trade, "For reasons we cannot give, this application cannot be granted." That is bad. I do not begin to accept that the Board of Trade cannot tell their reasons privately to the man in question; not least because I think it would be of great benefit to him if he could have the advantage of expert advice and helpful criticism on what he is trying to do. I should like to be much more sure that the Board of Trade is able to help a firm more constructively. If it had its finger on the pulse of the economy of the different areas as they develop, it would be in a position to take remedial action when the pulse rate slowed down. That could be achieved in one of two ways. Either we could have a large staff in Glasgow or a resident office in Aberdeen, because it needs men in the area who know what is going on at the time. If that were done, they would know much more accurately when applications for assistance came in, what those applications were worth to the economy as a whole, and not only to a particular business. I believe that the administration of their aid in that context would be far more helpful.

Mr. John Strachey (Dundee, West)

Is the hon. Gentleman aware that the Government have closed down the local offices, in Dundee, for example, which we very much deplore? I entirely agree with his plea that they should be opened up again in Aberdeen, Dundee and other cities. But he should use his influence on his own Front Bench in this matter.

Mr. Wolrige-Gordon

That is a point of view which I have been trying to impress, because I think it is of some importance.

Mr. William Ross (Kilmarnock)

The hon. Member says that he has been trying to impress people with his point of view. Does he not remember that we had the Local Employment Bill and that we on this side of the House said that the Board of Trade should have a Scottish Committee which would be au fait with what is happening in Scotland. He did not vote with us. Would it not be better for him to do something practical instead of making speeches like this?

Mr. Wolrige-Gordon

I am trying to do something practical now. I see some kind of system whereby an information office in an area, which has all the relative facts about the situation and knows the individuals and industries concerned personally, could co-operate and work with representatives of the Board of Trade, not only for the benefit of a particular firm but in the wider context for the community as a whole. The Aberdeen Chamber of Commerce, in a move which I heartily commend, has set up a North-East of Scotland Development Committee and its aim is to have every local interest represented on it. This seems to establish in a practical form the vital aim of simple co-operation between industry and the local authority which is so important. I am asking that we should move a step forward to a relationship between this body and the Government which can solve the problem altogether. In this problem it is the executives who really interest me, the people who are concerned to solve the problem in a practical way. They need to be only one or two individuals. The effectiveness of their administration in any one area could have an incalculable effect on its prosperity and on the increase of that prosperity for the distant communities in Scotland.

6.49 p.m.

Mr. A. C. Manuel (Central Ayrshire)

I am sure that we all agree that this debate affords a most important opportunity to Scottish Members of Parliament. We should try to approach the Report and the problems of industry and employment in a realistic fashion. I am disappointed with some of the arguments which we have heard from hon. Members opposite. Obviously a new fashion is growing up. In order to repel argument and to try to get away from the questions posed from this side, hon. Members opposite say, "We will tell them that they are moaning too much, that they are talking about unemployment too much and are running down Scotland". This is the alibi.

Why have we in Scotland this deep-seated and long-standing problem of prolonged unemployment? This is a Tory-inspired problem. Deep-seated Toryism, restricted in its thinking and working, has caused the present situation. To whom was my hon. Friend the Member for Glasgow, Central (Mr. McInnes) appealing when he asked people of economic power and resource to do something about this problem? Who was he asking to show some initiative and foresight and to do something? He was, of course, appealing to the Scottish Tories who command strength in the Scottish Tory Party.

I wish that Tory Members who make glib references to the pain, suffering and humiliations of the unemployed in Scotland would go to their local associations and tell them that it was time that they did something about unemployment in Scotland instead of bleating and saying that we are talking too much about these humiliations. They know that that is wrong and I hope that they will alter their line of reasoning and argument.

Pages 8 and 9 of the Report which deal with area unemployment pinpoint the fact that the rate of unemployment in Scotland is double that of the rest of the country. But it goes further. It shows that in Scotland there are certain areas of persistent high unemployment. Part of my constituency is suffering from this. Part of the constituency of the hon. Member for Bute and North Ayrshire (Sir F. Maclean) is in the same position.

Mr. Ross

But we must not talk about it.

Mr. Manuel

I would not be doing my job if I did not try to do something to help the people residing in these areas. In Ardrossan and Irvine and district, according to the latest return, the percentage of unemployed is 6.3, with 1,633 people out of work. We must do something about this.

I tried repeatedly to point out this problem to the President of the Board of Trade during our discussions on the Local Employment Bill. I hope that the Government are seized of the importance of what I propose to say. When skilled tradesmen and craftsmen become unemployed they do not go to the employment exchange, draw unemployment benefit and wait until jobs turn up. They leave Scotland. Some go abroad. We estimate that about 20,000 go to England each year. Obviously, these men are right to leave Scotland in order to earn a full wage and to give their families the education and standard of living which they should have. I regret this tendency very much, but inevitably it happens.

The pools of high unemployment are composed, in the main, of unskilled labour. At a late date the Board of Trade try to induce firms to go to such areas, but then there are not the necessary craftsmen on which to base industry because prolonged persistent unemployment has made the areas bereft of skilled workers.

What are we to do in this situation? Obviously, we must start thinking along new lines. It would appear that the hon. Member for Aberdeenshire, East (Mr. Wolrige-Gordon) has been thinking seriously about it. It is well that he should think that possibly there should be inducements from the Ministry of Labour to encourage workers to return to Scotland if there is suitable employment for them and if they can be paid suitable wages. The problem of persistent unemployment in these areas is becoming very difficult to solve, and I hope that we shall have some now thinking on it.

On page 9 of the Report there is something in which I am particularly interested, namely, the question of unemployment among juveniles. In thinking about Scotland's future and the sort of nation which we want to mould, we must think much harder about this aspect than we have in the past. Paragraph 14 of the Report states: More young persons were unemployed in 1959 than in 1958, the monthly average being up by 1,400. Unless there is a great and radical change, the problem of juvenile unemployment will be very much worse in future. I should like to know whether the Secretary of State can give us the number of those who will leave school in 1961 and 1962. I have the figures for Ayrshire, but it would be revealing if we could have the figures for Scotland as a whole. We know that the bulge year is approaching and that in 1962 a large number of young people will leave school. The present position indicates that the vast majority of them will have no jobs to go to.

I should like to indicate the position in Ayrshire. The number at school in the 15-year age group for the year 1960–61 is 5,200. The Education Department estimates that 1,560 or 30 per cent. of them will remain at school, leaving 3,640 looking for jobs. In 1962, 6,575 will be leaving school. Only 1,972 of them will remain at school and 4,603 will be looking for employment. What is the Scottish figure, based on the situation which I have indicated for the County of Ayr? I hope that, in winding up the debate, the Minister will give us a responsible statement to indicate how we are to cope with this situation.

To move on to another aspect of our unemployment position, the Report also deals with the road programme for Scotland, such as it is. We have been saying repeatedly in the House of Commons that we should have a national road plan for Scotland. If the Government claim that they are opening up Scotland for the tourist industry and that hotels are being modernised and chalets, motels and goodness knows what are to be provided to deal with the influx of tourists from America, England and France, ought we not to have the roads to enable the tourists to get there?

The Government's road programme is short-sighted. There are large Highland areas where double-lane traffic is impossible. Surely, when we have high and persistent unemployment in the Highlands, it is all wrong that machinery should lie idle and that the Secretary of State should deliberately cut down the programme for the future.

I have recently visited Ireland and seen what is happening, not only in Northern Ireland but more so, perhaps, in Southern Ireland, a supposedly poor country with much poverty. From one end of Eire to the other, a national road programme is obviously in operation to provide for four-lane traffic. Wherever possible, new roads are being driven through and obstacles overcome. Such a forward-looking programme is attracting more tourists.

I hope that hon. Members on the Government side will help us to try to get better roads for Scotland. I hope that instead of backing up the Secretary of State in evading the proposals which we put up continually from this side, hon. Members opposite will try to aid us to put Scotland on the map by having a national road plan for Scotland.

Mr. Forbes Hendry (Aberdeenshire, West)

Will the hon. Member be good enough to say whether he will support my plan to build a road through Glenfeshie?

Mr. Manuel

Yes, certainly—in fact, to build roads anywhere. I go even further. It is quite wrong to have some of the extortionate ferry charges over narrow sea lochs which could be bridged by roads. When we are trying to attract tourists, it is utterly wrong to have such great diversions around the narrow sea lochs or, alternatively, to face interminable delays and heavy charges for the carriage of motor vehicles by these short ferry journeys.

It would be wrong not to say something in this debate about the rundown of the coalmines in 1959. This tendency is continuing and has caused a reduction of 6,396 miners in the industry. I know that the coal industry is undergoing a particularly painful period of reorganisation, but there are certain things which could be done to help it. To take the local position as it interests Ayrshire Members, I ask the Secretary of State to use some influence with his right hon. Friend the Minister of Power—or, possibly, the Parliamentary Secretary to the Ministry of Power would be the most hopeful approach—to restore our shipments of coal from Ayr harbour to Northern Ireland. The people of Northern Ireland want these shipments resumed.

It is a costly business to take coal from the East Midlands to the port of shipment on the English coast. In Ayrshixe, we can do the rail hauls for one-third of the cost from the coalfield just behind the town of Ayr down to Ayr harbour. I have taken in the trains myself and I know what I am talking about. The Secretary of State may steer the ships, but I have driven the trains. At least, I hope that the right hon. Gentleman steers the ship of State clear of the rocks in the coming year and steers us away from even heavier unemployment. I ask the Secretary of State seriously to help to restore these coal shipments. I understand that there is a possibility that they may return. I have had a half promise and, possibly, a little shove could help to restore the former position.

I should like to say a word about the closure of railway branch lines, which is related to the question of tourism in the Highlands. I am sure that I shall have the support of Highland Members when I say that far too little thought has been given before decisions to close branch lines have been taken. If we are to have tourism in the Highlands, we must have these branch lines. We cannot consider railway branch lines purely from the economic aspect. There is also their social impact which should be recognised.

Furthermore, we need light industry in the Highlands. The closure of a branch line may mean the destruction of the very link that could sway the introduction of light industry to an area in which there is unemployment. I ask for a greater measure of thought and consultation between the Minister of Transport and the Secretary of State for Scotland before taking hard and fast decisions which may mean a great deal to the Highlands and which, once they are taken, kill the economic possibilities of an area.

However much we may moan or however much we may try to bribe industrialists to go into them, there are certain areas in Scotland where we will not get industry, and we might as well be definite about it. There are certain areas of coal decay and areas in the Highlands where industry simply will not come voluntarily. Hon. Members on the Government side must face this. Unless they want continued unemployment, leading to ultimate depopulation, hon. Members opposite must support our proposal for Government - sponsored factories in these areas to enable them to retain their economic life.

If because of political antipathy the Government close their eyes to these suggestions they will be writing off certain areas of Scotland. They will be telling people that they may as well go South to the more congested areas. This, however, is not a good thing for Scotland. I ask support from the whole House for our suggestion that in the areas where coal is dying out and in the remote areas of the Highlands, the Government should be pressed unceasingly to provide Government-sponsored factories, for the operation of which the Government should also be responsible, so that we may retain the life and the vigour in these communities which continued employment would give.

7.10 p.m.

Sir David Robertson (Caithness and Sutherland)

Our debate today was enriched by the presence of the right hon. Gentleman the Leader of the Opposition and by the masterly speech that he made. I felt that that speech was well matched by the President of the Board of Trade in his reply, which I found more encouraging than I had expected when I entered the Chamber.

The right hon. Member for Clackmannan and East Stirlingshire (Mr. Woodburn) had some very hard things to say about industrialists and the sons of industrialists. He remembered their fathers. He referred to them as giants who built great businesses, but said that when the sons came along they married women from the South and settled there.

That might have been true in one or two cases, but it is not generally true. Many of the sons of these men did not come back from the First World War and their grandsons did not come back from the Second World War. No country suffered more in the First World War than Scotland. The percentage of losses in that war was not only the highest in Great Britain, but the highest in the Commonwealth. No small country like ours could afford the number of casualties that we suffered. This is one of the things from which Scotland has suffered ever since.

Three other hon. Members who have spoken have also found fault with Scottish industrialists. They should remember that migration has hit us more than it has hit any other part of the country, and they should realise that taxation today is the most discouraging factor to anyone who wishes to invest money and set up industry. This is a hard economic fact of which I can speak with some knowledge.

There is a tremendous amount of good will, however, among industrialists not only in Scotland but all over the world. We find it among the Americans who come here. We should not worry about them or anyone else coming in. We should rejoice in the fact. Many of them are descendants of our own people. All the colonels with one exception in Washington's Army which took the surrender of Yorktown from Cornwallis were Scotsmen.

The right hon. Member for East Stirlingshire spoke of what he remembered of 'the industry of his youth. I remember the Anchor Line as the equal and rival of Cunard with a weekly service to Boston and New York. I remember the Allan Line with a weekly service to Canada. I also remember the time when services were run by the Donaldson Line to North and South America. Surely the country that did so much in pioneering the North Atlantic and Eastern shipping too is capable of running its own shipping companies today.

Fares are very high on the Atlantic run and there is a wide-open door for competent men to form companies in Glasgow and get back into the trade for which they did so much. Today, in Newfoundland, there are people who remember the old Allan Line skippers, the legendary men who kept shipping going in the dangerous fog-bound seas which people who know St. Johns appreciate.

My right hon. Friend spoke about many thousands of new jobs. I think that he mentioned 39,000 jobs offered or a fait accompli.

Mr. Manuel

No.

Sir D. Robertson

Was that the maximum figure?

Mr. James H. Hoy (Edinburgh, Leith)

Before the hon. Member uses that figure, may I tell him that what the President of the Board of Trade said was that out of the 39,000 there were 13,000 new jobs which he could not be held for, but which he hoped would arise.

Sir D. Robertson

They were in the pipeline. Is that what my right hon. Friend said? [HON. MEMBERS: "No."] They were at least forthcoming in the foreseeable future. Apparently, hon. Members did not find my right hon. Friend's speech as encouraging as I did.

I found the speech very encouraging, because we have had just cause for complaint in the past and we have now every right to rejoice. B.M.C. is coming into Scotland. A strip mill is to be established, and Rootes are courageously coming to Linwood. They will need more shipping than is available to take their cars to the nearest port to the market. I met Sir Reginald Rootes some time ago and he emphasised that one of his disappointments was that he could not obtain nearly as good a shipping service from the Clyde as he was getting from the Bristol Channel and in the South and in London area.

Dr. Dickson Mabon

Some of us had the pleasure of having a word with Lord Rootes this morning. He confirmed that the shipping service was still not available. Do the Government intend to try to improve the shipping service on the Clyde in this respect?

Sir D. Robertson

I regard shipping as a private enterprise occupation, but I felt that it was very regrettable that the Clyde could not compete with the Bristol Channel and with other ports in this country.

Sir Reginald made it clear that competition is so intense in the selling areas in America that it is no good landing motor cars in New York or Philadelphia only. If cars have been ordered by a buyer in Florida they must be taken to the nearest possible point, to economise on inland transport charges. It is not a matter of putting a load of cars on board at Greenock to be delivered in New York. Separate orders making up the total must go to the nearest point possible for disembarkation. Anyone who knows anything about shipping and about costs of unloading and transport charges will realise how essential is that consideration.

We can rejoice also in the Government's change of policy about coal. It is bound to help Scotland. The slowing-down of the atomic energy programme and the decision to rely more on our coal resources should help Ayrshire. I agree with the point which was made so vigorously by the hon. Member for Central Ayrshire (Mr. Manuel) about getting coal exports to Northern Ireland back to their traditional place—Ayrshire. The boats from Northern Ireland used to go there. I shall be glad to help the hon. Member, if he wants my assistance, in bringing this about once again.

Secondary industries are Scotland's weakest point. We have been devoted to heavy industries, and too many of our young men also have gone into the professions. A man is entitled to enter what occupation he likes, but secondary industries are our greatest need. Sauchiehall Street and Princes Street are shop windows for the South and the Continent and elsewhere. If anyone went into one of the great stores on these streets and even into the shopping centres of our lesser towns he would find great difficulty in buying a Scottish-made man's suit off-the-peg. He would find difficulty even in buying a Scottish-made shirt. He could, possibly, buy shoes made in Kilmarnock, but he would probably find in the shops more shoes which has been made in Northampton. Greater attention should be paid to this matter.

Mr. Hugh Fraser could render greater service to Scotland in that respect than he will ever render in the Highlands. I welcome him in the Highlands as I welcome any effort made to improve matters there. Nobody could do better there than Hugh Fraser, but why should his capacities not be used where they could be best exercised in Scotland—in the clothing industry? He would soon stimulate Scottish industry. I have asked him to open up in my constituency, and he is thinking about it. I wanted him to use our wool, our greatest of all indigenous supply of raw material.

I am mentioning these things because I find cause for satisfaction so far as the lowland areas are concerned. The President of the Board of Trade mentioned refrigeration machinery. I wonder whether any hon. Members present have heard of one of the greatest of all firms producing refrigerating machinery, L. Sterne & Company, Ltd., of Glasgow, an American firm which came to Glasgow about seventy-five years ago. It has made tremendous strides in building up refrigerating plant of all kinds, not only little domestic refrigerators but the massive compressors required for cold storage, low-temperature freezing, and so on.

I now want to say a word about the Highlands. I am an Independent Member of Parliament solely because of the appalling unemployment situation in my constituency. There are greater numbers of unemployed in the big places, but no part of the mainland of Great Britain endures the constant unemployment that we have in my constituency. We had a figure of more than 20 per cent. unemployment when I became an Independent Member. I have been labouring for more than ten years to persuade the Government to do the only thing that will keep people at home—to give them an opportunity of earning their living there.

There is no town of similar size anywhere in Europe, or even perhaps in America, that one can name which has greater facilities than Wick. But we have not a single industry there. We have there a harbour which was built by Robert Louis Stevenson's father, one of the finest harbours on the East Coast of Scotland, possibly second only to Leith. We have a main line railway, and we have good roads. It is true that there are better roads than the A.9, but it is still a good road. We also have abundant electricity.

We have fine people, who are not work-shy. They are mainly unemployed or under-employed. I should think that our history in migration could not be equalled anywhere in Great Britain. Everywhere one goes in Australia and Canada, and even in England, one finds people from the Highlands of Scotland. We have been drained far too much. The great County of Sutherland, of over 1 million acres, has been drained down to a population less than that of an English village—a shameful state of affairs.

I have been told that the average for an English village is 15,000 people. In Sutherland, we have 13,000. It is getting too lonely to live there. It is not much good calling for industries to go to the country areas because there is no labour there, but in towns like Thursoe, Wick, Invergordon, Inverness, Dingwall and Tain we can take industry.

I would remind the House that Northern Europe is developing rapidly. When the Prime Minister entertained Mr. Khrushchev in Moscow, in the spring of last year, the Prime Minister said that the greatest development in the history of the world was the Russian development from 1917 to the present time. Everyone knows that that is true. A nation which can hit the moon at the place it wants at the time it wants has made great advances from the down-trodden peasant nation that Russia was in 1917.

Sweden is going ahead rapidly. Sweden has been aided, of course, by being clear of two world wars. Sweden is a hard currency country, and it is developing. Norway is also developing. I was in Oslo a few weeks ago. I was last there twenty-five years ago. I was amazed to see the industrial and housing development there. The old city seemed to have changed completely. Mr. Trygve Lie, the first Secretary-General of the United Nations, is now ambassador-at-large for Norway. He opened his campaign here in London and made a speech extolling the virtues of Norway for the purpose of attracting industries. I think that he is now in America. The Norwegians could not have a better man for the job. That is the sort of thing that is being done by Norway. Even Iceland is developing.

This is something for us to think about, because we in North Scotland belong to Northern Europe. It is nonsense to think that we could not earn our own living. If there was the will on the part of the Government to do the job, it could be done. I introduced a Bill—the North of Scotland Development Corporation Bill—three years ago. It was backed by every Highland Member. It was not a bad Bill; it had much merit. It was an attempt to provide the machinery to do the job. Unfortunately, the Govern- ment did not want it and were not willing to risk a vote, so they arranged for it to be talked out, which was a very shabby way to treat such a Bill. However, I am prepared to forget that as long as the Government are prepared to tackle the Highland problem.

We may not be able to get industry into the glens, but let us have it where there is a possibility of its succeeding, in the towns. If we can do that, we shall be able to provide employment for the children of the crofters and for the farmers and agricultural workers, too, and then the kind of thing that we all visualise for the Highlands will come about: we shall cease to be an area dying from depopulation and decay.

7.25 p.m.

Mr. William Baxter (West Stirlingshire)

I have listened with great interest to most of the speeches today, and no speech, I think, has shown greater sense than the one we have just enjoyed from the hon. Member for Caithness and Sutherland (Sir D. Robertson). He has given us a very clear example of why we should look at this very difficult problem in the broadest possible sense.

I agreed with most of the things that the hon. Member said. I agree that the Leader of the Opposition gave a masterly performance, and, like the hon. Member, I agree that the President of the Board of Trade gave a very effective reply. The President's reply gave me some degree of hope that we had turned the tables on unemployment in Scotland, and, quite sincerely, I think that we have.

I feel that one of the great problems of the House of Commons is that hon. Members are, unfortunately, very prejudiced by past thoughts and beliefs. On the one side, we apparently thoroughly believe in private enterprise. On the other side, we apparently thoroughly believe in nationalisation. As a result, I sometimes despair whether we shall reach a solution acceptable to us all which will help to put our country on the right road.

I am very much disturbed about the attitude of the Minister of Power. When the mines in Scotland were nationalised—most people will agree that fundamentally that was a very wise and desirable step to take—we had three by-products works. One was at Carnoch, and that was closed. Another was at Plean, and that has been closed. Another was at Kilsyth, and that is likely to be closed in the not far distant future. It is very difficult to say whether the decisions about those closures were arrived at because of prejudice or not. I hope that they were not arrived at because of prejudice against a nationalised undertaking. Most of us will agree that the future of coal lies not only in the burning of it in our furnaces and grates but in its scientific exploitation. Consequently, it is my belief that the nationalised undertaking should have played a greater part in this development than it is at present proposing to do.

It is true that there has been encouragement by the Government, as a result of public opinion, of the development of by-product work at Colvilles. It is true that through public finance we have helped to develop the steel strip mill at Ravenscraig. It is a good departure from the bigoted point of view that public money should not be utilised for the development of private enterprise. We have seen that take place. However, we hope that the building of the byproducts works at Motherwell is not being done in an attempt to undermine the nationalised coal industry.

Like most people, I have been greatly concerned with other matters which have come before the House of Commons since I became a Member. I have listened with great interest to the arguments for and against the new Local Employment Act. I cannot but think that its implications are similar to those in the provisions for the distressed areas and the old Distribution of Industry Act. It is an old-fashioned method, adopted because of conditions after the war, to try to alter a particular set of circumstances. I have not seen any new ideas or any new light from the Government Front Bench on this very difficult and dangerous problem of unemployment and recession in Scotland.

I have heard the President of the Board of Trade and the hon. Member for Edinburgh, North (Earl of Dalkeith) speak about whisky and its qualities. May I remind the House that in 1793 an Act was passed not unlike the Location of Industries Act, but it was worked in a different method, with different methods of taxation. A higher degree of taxation was put on whisky that was distilled in the Lowlands of Scotland—the line was drawn from the south of the River Forth—and a lesser degree on the whisky distilled up in the northern parts of Scotland. That was done for a purpose. It took more than a century for the industry to recover in the Lowlands. It was not the special qualities of the water in the Highlands that made whisky distilled there so good for some people to drink. The circumstances of the 1793 Act compelled the whisky distillers to go north and develop their industry there.

It may have played its part in keeping the Highlands even slightly developed—though not as much as we want—but it undermined the industry in the southern part. The lesson does not appear to have been learned. We think that we can keep artificial lines of demarcation round particular areas and that we shall be able to push industry into those areas. In my opinion, industry should have a greater degree of freedom than that. The whole of Scotland should be designated as a development area.

I say that advisedly, because Scotland is a very small nation. I represent West Stirlingshire, and in the area, Bal Fron, Lennoxtown, Kilsyth, and Dennyloanhead, there is practically no industry at all. Most of the people in those areas have to go into other areas which are now designated as development districts—into Glasgow, for instance, and Airdrie and Coatbridge, where there are large numbers of unemployed. Does building a factory in Glasgow or Coatbridge cure the position of the people of Kilsyth or Lennoxtown who have to travel there? The whole conception of the Local Employment Act is fundamentally wrong, but apparently it is the only idea that the Government could bring out at this time to develop the industrial wellbeing of Scotland.

The hon. Member for Caithness and Sutherland (Sir D. Robertson) mentioned something which is rather important. It is true that very competent and capable people, many of whom could have developed Scottish industry, are no longer with us. It is also true that the system of taxation has a very detrimnetal effect upon anyone who desires to build an industry or to develop a present industry.

The natural tendency, even for Members of this House, is surely to say: is it worth my while to invest money in a new industry and take all the risks involved? We must put that question to ourselves. If we have spare capital, what will we do with it? Most of us, if we have it, will consider very seriously whether it is desirable, from our point of view, to invest in some business that has been established for many years rather than use it in the establishment of a new industry, or even in the development of a small industry which already exists. One has all the worries and difficulties without any tangible return in the long run.

That is a factor which must be taken into consideration when we think about how to devise ways and means of furthering the development of Scotland. We can have academic discussions as to whether nationalisation is better than private enterprise, but that will not alter one iota what is to happen in the next four years. The people have spoken. The die has been cast. We can only appeal to the Government to utilise their good offices to try the best of both worlds. We can have a marriage of convenience for the time being. We should adopt the best of private enterprise and the best of nationalisation.

Let us have a joint effort, not only between the Government and the employers, but between the Government, the employers and the trade unions, not for the benefit of the employers or of the trade unionists, or of the Government, but for the benefit of the nation as a whole. Surely it is desirable that we should combine and help to start new industries? Let us also help the old industries and harness the initiative of private enterprise within the orbit of our national economy, even if it necessitates the financing of some projects by the national Exchequer.

We in Scotland have great opportunities, and I am with those who speak of the wonderful opportunities of our country. There is no doubt that easy access to the sea is of paramount importance to any industry which seeks to develop in Scotland. Scotland's highways, canals and railways run into first-class ports. Our roads require repairs and development, but do not let us tell people that they are not good enough for a bigger industrial development. I believe that we can get the industrialists to go to Scotland, or at least induce the Government to support private enterprise to develop parts of our own country.

As one who has been closely associated with the development of water supplies in the County of Stirling, I am aware that throughout Scotland there is, on the whole, first-class water supply for any industrialists who seek to go there. Drainage schemes are going on by leaps and bounds for the purpose of taking away effluent from the new factories which may be established there. There is cheap electricity for power. Where is there greater opportunity for electric power than in Scotland? Coal is at the door, at the cheapest possible rate. I can see nothing but the greatest opportunity for industrialists to go to Scotland.

Then there is the development of the arts, We often hear that industrialists' wives want to stay in London because the arts and crafts and the beauty of man's techniques are in that part of the world, but little do they know of the great development of the arts in Scotland. Little do they know of our beautiful towns, cities, and countryside. If only they would come and see them, I am sure that many industrialists would change their minds.

There are great opportunities for trade and commerce in Scotland. Like other hon. Members, I have given much consideration to the question of the Outer Seven free trade agreement. I am more worried about it than the President of the Board of Trade appears to be. I am concerned about its ultimate effect upon the paper industry of Scotland, for example. It is true that the industry today is expanding, but it is also true that the nullification of the 16⅔ per cent. tariff on the importation of paper to our country will soon take effect, and that will mean our industry losing a protectionist tariff worth £7 million a year. As I read the signs of the times, it is possible that the paper industry in Scandinavia will greatly expand so that it will ultimately be very competitive with our native industry.

All these matters will have to be taken into consideration. But the die is cast: the free trade agreement has been signed, and we must accept it. Even though great problems are associated with it, there are also great opportunities not only for trade with the Outer Seven but also with Iceland, Russia and East Germany. I had the opportunity of speaking to one of the representatives of East Germany, and I was interested to note that he was most anxious to obtain an agreement with this country for a greater supply of yarn and also electrical goods. He would place an order today for 150 bulldozers. We require these orders in Scotland. There is no doubt that the doors are beginning to widen. Scotland is well placed to take full advantage of the opportunities available for trade with the Outer Seven.

Not only that; America and Canada are at our door. The great demand of these countries for goods produced in Scotland is never satisfied. I see the possibilities of a great development in Scotland, if only we have the initiative and will power to put it into operation. It is imperative that the Government, in conjunction with Scottish chambers of commerce and the trade union movement, should set up a scientific research organisation. We should have a national scientific research and design organisation in Scotland, so that small established businesses and new businesses would be able to take advantage of the kind of first-class knowledge and advice which is apparently available to English industrialists through the auspices of the Board of Trade. We must consider this problem from the Scottish angle.

It is imperative that Scotland should have an encyclopaedia of trade and commerce in relation to world requirements. We should not allow industries in the remoter parts of Scotland to die out because they have not the "know-how" of what is required by Africa, America or Australia. This encyclopaedia should be freely available to anyone seeking to establish or develop industry in Scotland. The time is opportune for the Government to try new methods. They should seek to establish in Scotland a central organisation, if not to establish new industries on their own in the depressed areas at least to encourage them to do so by grants or in some other way. There should be a committee of experts to help to guide anyone seeking to develop new industry in Scotland.

We have a great opportunity. We have a great nation, with all the national resources of men, women and materials and with all the gifts that nature can bestow upon a nation. All we require is a Government with the initiative and will power to see that they push forward with new schemes and with new techniques to meet competing world trade and to establish in Scotland, once and for all, a unification of purpose between nationalised ideas and private enterprise ideas—a unification for the benefit of our country. If we could do that I am positive that this problem of unemployment would never rear its head again.

7.46 p.m.

Mr. J. A. Stodart (Edinburgh, West)

First, I would like to say that the speech of the hon. Member for West Stirling-shire (Mr. Baxter) was one which, for fluency and vigour, will be remarkably difficult to follow.

The first thing that comes to mind in considering the Report "Industry and Employment in Scotland" are the unemployment figures. The unemployment situation in Scotland has for long brooded like a dark cloud above whichever Government have been in power. I hope that it will be accepted that no one, in any political party, wants unemployment, and that we have all tried our best to dispel it. Hitherto, success—or perhaps I should call it failure—has been fairly equally distributed. As my hon. Friend the Member for Edinbugh, North (Earl of Dalkeith) said, in his maiden speech, this is not exactly a new problem.

I want to examine what I hope are relevant and dispassionate figures of unemployment in Scotland since the war. They show a remarkable similarity under the two Governments. During the period of the Labour Government the annual average figure of unemployment was 63,263 and during the Conservative Government, to date, the average is 62,268.

Mr. T. Fraser

Will the hon. Member say up to what point in time he has made his calculation?

Mr. Stodart

The hon. Member for Coatbridge and Airdrie (Mr. Dempsey) said that his figures had been checked in triplicate. I have checked mine, and unless my division is hopelessly wrong my figures are applicable to the period up to the end of 1959.

Mr. Fraser

The figure that he has just given is an accurate one up to the end of 1958, but if he had taken into account the last eighteen months he would find that his figures were inaccurate.

Mr. Stodart

I deliberately left out of my calculations the first seven months of 1946, because I was advised that that might weight the Labour Government's average unfairly. The average in the first seven months was slightly higher than it was in 1947. That was due to the effects of the war. At the peak of unemployment the figure was 6 per cent. under the Labour Government and 5.4 per cent under the Tories.

Mr. Willis

What is the point of these comparisons?

Mr. Hoy

Where did the hon. Member get his figure of 6 per cent.? He first got mixed up with the years 1946 and 1947. We excuse him for that. But where did he get his second figure?

Mr. Stodart

The peak figures were in 1947 and in 1959.

Mr. Hoy

I would not like the hon. Gentleman to go wrong about 1947, which was the year to which he wants to refer, but it was a very bad winter, which he thought should be excised from the record. If that was the case with the overall figure, he should not choose it for the second.

Mr. Stodart

I said that I had omitted 1946 from the first figure. The average percentage rate throughout was 3.1 in each case, whereas the Great Britain average under the first regime was 1.7 and, under the present regime, up to date 1.6. Therefore, these figures are remarkably similar, and all I can say to the hon. Member is that if I have calculated them wrongly, I have at least done so in good faith.

Mr. Willis

Would the hon. Gentleman now tell us the relevance of these figures, and how they are more relevant than if he went back to the figures before the war?

Mr. Stodart

I am merely trying to point out—and I am sorry that the hon. Member for Edinburgh, East (Mr. Willis) does not realise its significance—that this is a problem which has baffled both Governments, which I believe each Government have done their best to try to solve, though the one has not been much more successful than the other.

One thing I do believe is that as we passed from the 'fifties to the 'sixties, we found that the trumpets had sounded. During the Christmas Recess, my impression was that the news of the development at Bathgate made a profound impact upon everybody in Scotland. If I may be pardoned for using a simile, I would say that on the farms of East Lothian there is a saying that if in the early morning there is a redness which comes into the sky and then climbs up instead of dying away, we will have a good harvesting day, but woe betide us if the redness goes back. We must be determined that in this case the redness that has gleamed in the sky must not be allowed to go back again. That is why I say that the reaction to what is going on is so very important.

When I look at the various headlines I have seen in the daily newspapers, I think that they are significant. I have some of them here. One, from the Scotsman, reads: 300 industrialists flock to B.M.C. Supply Meeting. £35 million shopping list issue. Another one reads like this: Break through by Scottish steel. Native industry on the verge of new era of prosperity. Just to be fair in the matter, I will refer to the Daily Express, which is not a newspaper which particularly favours one side or the other. [HON. MEMBERS: "Oh."] I should have said that it is at least as unpopular with one side as with the other. Its injunction is to "go out and sell Scotland", and to "rise to meet the challenge". That spirit is of more value—and I do not think anybody would disagree with this description—than the doubts and misgivings which have been expressed on many occasions by hon. Members opposite. It is, of course, the duty of the Opposition to oppose, but surely not to carry this opposition to the extent of frightening away every suitor for the hand of Scotland.

Mr. Manuel

That is ridiculous.

Mr. Stodart

It is lamentably easy to win the sort of reputation which drives a potential customer away. I read the other day, as I have no doubt other people read, the article by Mr. Francis Williams in the Scotsman. He is the ex-editor of the Socialist paper Forward and he complained about a self-pity which Scotsmen were tending to exude all the time and said it was dreadful to get into a state of permanent mental depression.

I have a close friend who keeps an hotel in Scotland, and he has often said to me that one bad meal served in that hotel requires 50 good ones to repair the damage that has been done. I do not want to make too much of the fact, but I believe that this operates within the minds of industrialists in the South. There is an expression known as "Red Clydeside", and that is why, whether we like it or not, one demarcation dispute on the Clyde probably does more psychological damage than three or four demarcation disputes elsewhere.

I listened with great interest, as I always do, to the right hon. Member for Clackmannan and East Stirlingshire (Mr. Woodburn) when he was talking about the importance of management. I cannot help thinking—and I am never slow to put in a word in favour of the greatest industry in the country, namely, agriculture—what lessons there are to be learned by industry from the fact that since the beginning of the war there has been a 60 per cent. increase in production in farming in Scotland, with a labour force of 20,000 less than there was in 1939. There has never been any sort of labour dispute, far less a strike, ever since I started farming thirty years ago.

Mr. Willis

They might lose their homes.

Mr. Stodart

It seems to me, therefore, that we have something in farming that we should be able to offer to industry generally. How right, indeed, it is to say that peace in industry does not depend upon one side but upon amicable relations between both sides.

I want to turn now to the question of transport in Scotland generally. I think that it was the right hon. Gentleman the Leader of the Opposition who referred to road conditions, a subject that has been touched upon by other hon. Members. Much has been said about the bad roads in Scotland, yet one thing I would say—and we should not lose altogether our sense of proportion—is that we should admit that, by and large, the surfaces of the roads in Scotland are first class.

Mr. Manuel

They are getting very bad.

Mr. Stodart

At any rate, much has been said about bad roads in the Highlands. The surfaces of our Highland roads. in my view and from what experience I have had of them, are far superior to the mountain roads in Switzerland What concerns me to a greater extent than the condition of the roads in the Highlands where, I agree, there is need for wider roads—though, I hope, not for the creation of motorways—is that I detect a slight lack of determination on the part of the Government regarding the building of the Edinburgh by-pass. I wish to ask my hon. Friend the Joint Under-Secretary of State to picture himself in the cabin of a lorry at Pertlh, the driver having possibly travelled from Aberdeen. If I understand the matter aright, three years hence, on arrival at Perth, a lorry driver will be confronted with the alternatives of making far Stirling—Carlisle—Penrith and the South, or going over the Forth road bridge and taking the East Coast road.

It is all very well to say that a double carriageway from Carlisle to Stirling is the answer. It may help. But I think that it overlooks one factor, that no matter whether there be a single carriageway or a double one, a journey over Beattock, followed by Shap or the Pennines in the middle of winter, is not something which any lorry driver would readily wish to undertake. That is why I am certain that, given a by-pass round Edinburgh, the East Coast road will generally be followed.

It is true that within recent weeks a survey has been made on the outskirts of Edinburgh. financed in part by my right hon. Friend's Department, and that inquiries have been made about the intentions of motorists. I think, with respect, that the questions asked have been quite the wrong ones. When I was stopped the other day I was asked whether I was going into Edinburgh. I said that I was, and I was then asked which part and I told the inquirer. I was not asked the important question whether, if there were a by-pass, I would still go into Edinburgh Until that knowledge is revealed none of these statistics will be of real value either to the Scottish Office, or the people now queuing up to get through the centre of Edinburgh, and who, given the opportunity to do so, would use a by-pass.

From roads to railways. I notice in the Report that while freight receipts on the Scottish railway system are down passenger receipts are up, even though the number of passenger journeys is down. On many routes passenger traffic has risen sensationally, particularly, I am glad to say, on cross-country routes where dieselisation has taken place. Here I believe that the tide is on the turn. During the Whitsun Recess, thanks to the kindness of British Railways in Scotland, I was enabled to make a trip to see the recent effect of modernisation and I discovered three things which impressed me more than anything else.

The first was the absolute and complete punctuality on the railway. The second was the cleanliness and the third was the splendid spirit among the men at all levels. I was particularly impressed with the young firemen, who are obviously longing to become drivers of these magnificent new locomotives. One young man said that he had come to Scotland six years ago from Yorkshire, where he had worked driving a Ferguson tractor on a farm. I wished that I could get men of his type coming from the railways on to the farms.

We have now running between Glasgow and London what is known as the Condor express freight service, which is reputed to be the fastest in the world. I think that the Scottish Region of British Railways is being well run. There can be no region in which morale at all levels is better and in which the spirit of keenness burns more brightly. The only thing that I should like to see is the rolling stock labelled "Scottish Railways" instead of "British Railways". Future emphasis must be on punctuality. That matters to the general public far more than many other things. It is essential that the railways win back the confidence of the public that both passengers and goods will arrive on time.

The only thing which concerns me about British Railways is the tendency to solve its financial difficulties merely by putting up the fares. The civil airlines reveal a tendency to reduce fares in the hope—which is so often realised—of carrying more passengers. I am sure that we are all agreed that if the influence of Scotland is to blossom and expand there is no room for any restrictive attitude whatever. We are living in a highly competitive world. There is no room for the blunting of individual responsibilities. There is no time for any sort of benevolence which puts the brake on effort and which seeks to say, for example, that oil must be prevented from competing with coal or, for that matter, road haulage with rail.

I detected the key to this spirit in the speech of the hon. Member for West Stirlingshire. If that spirit exists on both sides of the House from now on, I believe that there is a tremendous future for employment in Scotland.

8.9 p.m.

Mr. Hector Hughes (Aberdeen, North)

I wish to make two points which have not been made in this debate so far, but, first, I wish to refer to the speech of the President of the Board of Trade. It was a speech remarkable for its omissions. The right hon. Gentleman claimed that industry had been brought to Scotland by the present Government, and he put the claim forward under three heads. One, industries promised; two, industries guaranteed, and, three, industries that were not guaranteed.

Many hon. Members on this side of the House immediately asked where the industries were and the right hon. Gentleman was unable to answer. Hon. Members called out that the industries were not in their constituencies and I then intervened to ask the President of the Board of Trade to become more specific and to indicate the names and the locations of the industries promised, guaranteed or not guaranteed. The right hon. Gentleman was unable or unwilling to give particulars of the locations or the names. I know not why, He is at the centre of industry. He is the person responsible for implementing any plan with regard to industry. But the right hon. Gentleman was vague. His story, his short trip to Scotland today, was one of fantasy and illusion.

His speech was in bold contrast to the speech which had preceded it, that made by my right hon. Friend the Leader of the Opposition. He gave facts and figures and was clear and definite in regard to the fortunes of Scotland today and the failures of the present Government. It must be evident to any student of public affairs in Scotland and her industry that the outstanding need of Scotland today is an integrated plan for the country as a whole and, secondly, for the implementation of that plan in a way which would do justice not only to the South which is congested, full of industry and of congestion of various kinds, but also to the North and the East.

Aberdeen has been clamouring for new industries and location of industries for a long time. It has been given promises of industries, but those promises have not been fulfilled. Why? It is because a clear, comprehensive and integrated plan for the whole of Scotland has not been implemented by the present Government. I want to refer to only two points on that and I shall present them as shortly, tersely and succinctly as I can.

The Joint Under-Secretary of State for Scotland (Mr. Niall Macpherson)

The hon. and learned Member has said that Aberdeen has been given promises of industry. Can he say what those promises were and by whom they were given?

Mr. Hughes

I shall come to that. I shall be very concrete and definite in regard to my two points. The party which supports this Government has been in office for eight years. It has failed to distribute industry fairly throughout Scotland. It has failed to repopulate the North of Scotland. It has failed to relieve congestion in the South of Scotland and, worse, today this Government are accentuating the relevant problems by driving many of our workers from the North-East and North to the South. Worse still, they are stealing our technicians and scientists by transferring them to the South, taking away our research establishments from the North of Scotland and taking away our scientists who matter.

That brings me to the first of my two examples. It is the example of the Ministry of Agriculture, Fisheries and Food—that Ministry with so odd a name, as if fish were not food and as if agriculture were not food. However, we must take it as we find it. That Ministry had at Aberdeen a research establishment in Greyhope Road. That establishment, after many years of unique service and while still doing good work, is to be closed and its scientific and other staff are no longer to be employed and will have to find other work.

Aberdeen feels very keenly about that, naturally. I wrote the Minister a letter of protest and got from him an astonishing, illogical and unpatriotic reply, admitting the success of the research station and using that very success as a bogus reason for depriving the public prosperity of its beneficent functions. I quote from that astonishing letter. The right hon. Gentleman said: The establishment has, as you say, gained wide prestige both in this country and abroad, and indeed, so far as I know, is unique throughout the world. But, as I indicated in my letter to you of 1st March, its very success and the progress which has been achieved are the main reasons for my conclusion that the developmental work on dehydration will by the end of this year have reached the stage where private enterprise should take over. I do not believe that we should be justified in spending further public money on the work once it has crossed the threshold from research to commercial exploitation. Worse still, the establishment has actually on hand very valuable research work and, for the record, I shall stress the importance of the scientific work which it is actually doing and which it has in prospect to do. I quote from a statement sent to me by the Minister on 27th May this year: The establishment has also undertaken with the approval of the U.S. Department of Agriculture three research projects which are financed from Counterpart Funds under Congress Public Law 480. These cover:

1. (i) biochemical and physical changes in meat fibres when dehydrated by A.F.D
2. (ii) isolation of flavoroids, xanthones and other polyphenolic compounds from selected plants in order to evaluate their properties as anti-oxidents and to prepare derivatives of maximum antioxident efficiency.
3. (iii) chemical changes in carotenoid pigments resulting from processing of vegetables by canning or dehydration, with the object of preventing deleterious effects by changes in processing techniques, by chemical inhibition or by choice of plant variety."

I apologise to the House for imposing those technical terms upon it, but I do so advisedly because I want to make clear the very valuable technical work which that research station is doing and of which it is to be deprived of the opportunity of doing in future. Notwithstanding that, I quote the Minister about the high prestige of this beneficial national and international work. The whole scientific plant is to be wantonly dismantled. On the authority of the Minister himself, I can tell the House of this almost incredible outrage on the public. I quote the Answer of the Minister to me, made in the House on 12th May this year. He said: The scientific and other plant at the Research Establishment is composed of preprocessing equipment for meat, fish, vegetables and fruit on an industrial scale, dehydration cabinets now of an obsolescent pattern and laboratory and scientific apparatus. In addition, there is one prototype dehydration cabinet, the property of an American firm and on loan to the Ministry for experimental purposes. I had asked the Minister about the cost of the plant, and he said: The cost of the plant, equipment and apparatus (excluding the plant on loan) at the time of acquisition was £131,000. On closure of the Establishment in March next the industrial plant will be sold."—[OFFICIAL REPORT, 12th May, 1960; Vol. 623, c. 592–3.] It is disgraceful that this scientific research establishment which, to quote the Minister, is "unique throughout the world and is characterised by "success and progress", is to be savagely sacrificed to "commercial exploitation". Whatever the principle may be on which he is acting, I say advisedly that it is a poisonous principle, and I ask the House to disapprove of it, because it is contrary to the country's interest, both financial and scientific.

I pass from that. The only other example with which I shall trouble the House is the damage which the proposed European Free Trade Association will have on the fishing and papermaking industries. On 30th June I asked the President of the Board of Trade about this and, in an offhand way, he admitted my indictment of this aspect of the Government's policy. He said: The hon. and learned Gentleman has mentioned one or two industries —one or two industries; he might almost have said, "What do they matter?"— which may suffer greater competition as a result of the European Free Trade Association."—[OFFICIAL REPORT, 30th June, 1960; Vol. 625, c. 1527.] He went on to say that he felt—not that he reasoned; not that he was basing his decision upon reason, but that he was basing it upon emotion—that other industries may benefit.

In other words, the fishermen and papermakers may be dis-employed and left short of work. This is wanton, callous and bad statesmanship. The fishermen and the fishing industry are entitled to just as much consideration, and the papermaking industry is entitled to just as much consideration, as are other industries, and it is wrong that these men should be turned off and dis-employed in this casual way without any compensation; and I will come to that in a moment. There is an old country saying, Live, horse, and you'll get grass some time, somewhere. That is apparently the Minister's attitude to the fishermen and the paper workers.

It goes further than that. The mere threat of the European Free Trade Association has had another adverse effect in the county of Aberdeen and, I suppose, elsewhere. A great paper-making company planned an extension of its premises costing £750,000. Obviously this would have given work to many kinds of constructional workers and later to workers in the paper-making industry. But on the mere threat of this European Free Trade Association, the company abandoned its plan to extend its premises, with great loss to the nation.

Mr. Hendry

The hon. and learned Member is probably referring to a paper company in my constituency. Where did he obtain his information? My information is that the work has already been carried out.

Mr. Hughes

I agree that it is in the hon. and learned Member's constituency, but a number of constructional workers from my constituency, and planners, architects and others, are involved. The company announced in a letter to me that in view of the European Free Trade Association it was abandoning its plans. My submission is that the abandonment of those plans is damaging to the constructional workers, to the paper makers, to the transport workers and, indeed, to all the ancillary workers who might have expected to obtain work in connection with that scheme. Yet Aberdeen is a scheduled area.

I submit that this is another instance of the Government's inconsistency in promising factories and then taking steps aliunde to prevent the promises from being carried out. Notwithstanding these adverse effects, the European Free Trade Association, the Outer Seven Convention, has been pushed through, and it came into operation this very month, on 1st July. The effect of that is damaging. About 10,000 British fishermen are adversely affected by increased competition from European fishermen, and they are deprived of their tariff protection.

Scandinavia can now extend her fishing grounds and sell Britain—and these figures are not mine, but I will give my authority for them in a moment—£75 million worth of frozen fish per annum, employ 10,000 more workers in freezing fish in Scotland and deprive British fish workers of their work. This will damage all the ancillary trades, such as shipbuilders, trawler builders, engineers, net makers, ships' chandlers, fish market porters, transport workers and all those who are involved in the great fishing industry, one of the great industries of this country.

As recently as 6th July the British Trawlers Federation sent me a statement in which it said: The Norwegian fishing industry estimates that if Britain will accept frozen fish as an industrial product. Norway can sell her about £75 million worth a year. This would enable the Norwegian fishing industry to work all the year round and employ about 10,000 more workers in the freezing plants. That is the precarious position in which the Government are putting the fishing industry in the whole of this island.

Only yesterday I asked the Minister of Agriculture, Fisheries and Food about it and about his attempts to resolve the fishery dispute with Iceland. Again he had to record failure. The fact is that the Government are a niggling Government, without plan and without vision for the whole of Scotland. I could quote other examples but those which I have given are sufficient to show that the Government have neglected the North of Scotland, have driven Scottish workers South, have closed a Scottish research station in Aberdeen, have sacrificed public research and valuable instruments to commercial exploitation, have thrown Scottish scientists out of work and have damaged the paper making and the fishing industries.

I have some questions to put to the Secretary of State, or perhaps to the President of the Board of Trade if he were here. The latter has had his short trip to Scotland today and has disappeared. I am glad that at least the Secretary of State is here. I will ask him a set of questions which I hope he will answer when he replies tonight.

Why do the Government deprive the public of the unique Greyhope Road research station? Who is the purchaser? What is the price? Are they giving it as a bargain to somebody at public expense? Why are they penalising Aberdeen in this disgraceful way? Why have they failed to bring other industries to Aberdeen? Why are they driving our scientists and other workers from Aberdeen to the South? What compensation are they offering the workers, or indeed the industrialists, in the paper-making industry and in the fishing industry? Why, by this Continental agreement, are they encouraging the fishing trade on the Continent at the expense of the fishing trade in Aberdeen?

This is only part of the indictment of the Government. Those are only two points in the indictment—there are many more—but those two points are sufficient to drive this Government out of office.

8.30 p.m.

Mr. Forbes Hendry (Aberdeenshire, West)

The House has just listened to one of the most wicked and irresponsible speeches I have ever heard made in it. It is very easy for a bantam cock to make a loud noise with nothing behind it. That is exactly what we have just had. We have heard a great many alleged constituency points. I say nothing about the research station, except that it is quite irrelevant to the debate, but we have heard a great deal about two other points which have nothing at all to do with the constituency of the hon. and learned Member for Aberdeen, North (Mr. Hector Hughes).

The first point concerned the paper mill. I do not know how the hon. and learned Gentleman got his information, but despite the conversations he had and the letter he received—I have seen a copy of the letter and I have had conversations with the owners of the same paper mill—he is probably not aware that a very large building, part of this £750,000 development, has already gone up. He is probably not aware that the paper mill in question is flourishing and is at present in communication with the Board of Trade with a view to assistance under B.O.T.A.C. I know from my own negotiations with the company and with the Board of Trade that that private company is receiving every possible assistance. That is a jolly good instance of the type of private enterprise which is being shown by private businessmen in the North of Scotland, and, I believe, throughout Scotland.

The second point I want to deal with arising from the hon. and learned Gentleman's speech is the question of fishing. This seems to me to be characteristic of a great deal that has been said by hon. Gentlemen opposite, until today, happily, and that is the moaning and groaning about what is happening to us in Scotland. I should like the hon. and learned Gentleman to think about it and tell us on another occasion what Norwegian fishermen have which our Scottish fishermen have not. There is an answer to it, but I do not think that the hon. and learned Gentleman knows it. [HON. MEMBERS: "Tell us.''] The hon. Member for Edinburgh, Leith (Mr. Hoy) knows full well that the Scandinavian inshore fishermen have advantages which the Scottish inshore fishermen do not have, but the hon. and learned Gentleman did not tell us that. I do not think that he knew. All we got from him was the complaint that we were being badly done by because of the Outer Seven, the Free Trade Association. Instead of this, I hope that we in this House will get down to it and see that we can make our fishing industry more prosperous and efficient and meet the Norwegians on our own ground.

It would have been far better if the hon. and learned Gentleman had been in the House when we listened to a most remarkable speech from my own Member of Parliament, the hon. Member for West Stirlingshire (Mr. W. Baxter). I am a constituent of his, and if he makes many more Tory speeches of the type he made this afternoon he will maybe get another vote, namely, mine, although I did not help to return him to the House on the last occasion.

Mr. Hector Hughes

It is not a question of meeting the Norwegian fishermen on their own ground. This Government are so unpatriotic that they are encouraging the Norwegian fishermen to sell their fish in this country.

Mr. Hendry

That is not what I asked the hon. and learned Gentleman. [An HON. MEMBER: "That is what he has said in answer."] Yes, that is what he has told me, but it is not what I asked him. I will now ask him another question, and possibly I shall receive an answer to it. He accused this Government of having promised industries for the City of Aberdeen and the County of Aberdeen. He said that the Government did not provide those industries. Perhaps he will tell me at some other time when he has had time to think about it what industries Aberden was promised which it did not get. I have never heard of them. I have quite as much contact with chambers of commerce and other bodies in the City and County of Aberdeen as the hon. and learned Gentleman has.

Mr. Ross

Will the hon. Member tell us what the industries were which we were promised today, but not guaranteed, by the President of the Board of Trade? The right hon. Gentleman would not tell us.

Mr. Hendry

The hon. Member for Kilmarnock (Mr. Ross) had better address that question to the President of the Board of Trade.

Mr. Ross

I thought that the hon. Member was more knowledgeable. The right hon. Gentleman could not tell us.

Mr. Hendry

At any rate, I ask the hon. and learned Member for Aberdeen, North to give me the answer to a question which I asked not ten minutes ago but to which I do not think that he knew the answer.

To return to what I was saying, we had a most remarkable speech this afternoon from the hon. Member for West Stirlingshire. I am sorry to see that he is not now present, as I should have liked him to have heard my tribute. He said that if we could all get together—not go as beggars do asking people to do something for us, but get together to do something ourselves for Scotland—we should be better off. I pay this tribute to him, that he himself is one of the Scottish business men who has got down to it, who has used his own capital for his own business and has thereby added to the prosperity of Scotland. If a great many more of us did that, we would be a good deal better off.

There has been a great deal of castigation of Scottish business men in this debate. The hon. Member for Central Ayrshire (Mr. Manuel) appealed to hon. Members on this side to go to their local associations and ask the business men to get down to finding the money to produce industry in Scotland. Various other hon. Members opposite have made the same sort of suggestion, but I would remind them that there are more than business men running industries in our country, and I should like to turn for a minute, not in a hostile way but with a view to constructive criticism, to certain nationalised industries which, I think, also have their part to play.

I would remind hon. Members opposite that there is on the Order Paper at the moment a Motion calling on the Government to produce nationalised industries in Scotland. Let us see how the nationalised industries have been shaping, because I think that they, as well as have the business men in Scotland, have quite a lot to learn.

I want to refer to a speech made by the hon. Member for Dunbartonshire, East (Mr. Bence) in the corresponding debate last year. He is not in the Chamber now, but he was just a few moments ago. Referring to the railway workshops in Scotland, he said: Many of these workshops are in the same condition as they were a hundred years ago. In other railway workshops and establishments in the south of England modernisation is going on, but apparently in Scotland these workshops will be maintained as they are now laid out." —[OFFICIAL REPORT, 2nd July, 1959: Vol. 608. c. 646.] The hon. Member went on to talk about the tendency of British Railways to centralise their workshops in the south of England. That, I am sorry to say, is still going on. It is right that British Railways should modernise their lines, but I wish that they would turn to their workshops to see how they can help Scotland there. Scotland is not getting her fair share of British Railway work at the moment.

The railway workshops in Inverurie, in my constituency, are not a small establishment like those at Inverness—now, unfortunately dead and gone. They are large, they have been producing locomotives for many years and, until recently, employed no fewer than 900 men.

The coming of the diesel has set these workshops back for many years, and for a very considerable period there has been a gradual drift from Inverurie to Swindon. My latest information is that no fewer than 50—and probably nearer 60 families—have left Inverurie for Swindon in the last year; families not persons. For a small town like Inverurie that is a very serious matter.

We in this House have no direct control over the internal workings of British Railways, but we have an influence over them, and it is worth while saying that. Perhaps my right hon. Friend the Secretary of State will tell British Railways that we believe that in Scotland we have not been getting a fair deal in locomotive and carriage building.

The North British Locomotive Works in Glasgow has been through a very thin time and has not had a fair share of British Railways work. In Motherwell, British Railways have failed to maintain Motherwell's large wagon industry and one of the two firms there has closed down. It is not unfair—

Mr. George Lawson (Motherwell)

The hon. Gentleman has accused my hon. and learned Friend of being inaccurate. I would ask him to take more care in accuracy for himself. The firm he mentions was bought out by an English firm and closed down. There was a take-over bid, and then it was closed down by an English firm.

Mr. Hendry

I stand corrected and I am very grateful to the hon. Member for the information he has given. I suggest that it is a fair inference that if the firm which was bought out and subsequently closed had had a fair share of British Railways work it would not have been closed down.

At any rate, I think I have said enough about that. I do not want to pursue the matter indefinitely, and I do not wish to criticise the nationalised industries as such, because I believe that they have a very great part to play. Nevertheless, they must take their share. As the hon. Member for West Stirlingshire said, both private business and nationalised business must play their part in the advancement and prosperity in Scotland. I hope that my right hon. Friend will pass on these observations to British Railways so that they may see to it that they play the part that they should.

I come now to another nationalised industry, again without wishing to criticise, particularly because it is suffering very great disabilities at the moment. I mean the National Coal Board. Hitherto, the Coal Board has had the advantage of being in a seller's market. It is now finding things extremely difficult because it has an enormous organisation which has not been geared to the situation confronting it now.

Miss Herbison

The hon. Member says that the Coal Board was for a time in a seller's market. That means that it could charge almost whatever prices it cared to charge. Is he not aware that the Government controlled the prices that it could charge for coal, even for the coal it had to import?

Mr. Hendry

If the hon. Lady had waited a moment and allowed me to finish my argument, she would have understood that that is not what I mean. The Coal Board could sell its coal without actually going out to sell it. Now it is finding great difficulty in selling the coal. I am referring not to the price but to the actual act of selling.

The Coal Board has built up stocks and, as a result of building up these stocks, it has taken certain action which I regard as grossly unfair, action which has led to a great deal of hardship in Central Scotland and, indeed, in the United Kingdom. I need not remind the right hon. Member for Clackmannan and East Stirlingshire (Mr. Woodburn) about this. In his constituency there are many small licensed mines. These small licensed mines have been working small pockets of coal. The miners are mostly working men working on very small capital, their own savings, and hitherto they have done very well. Their mines are not so highly mechanised as those of the Coal Board, but they have been pro- ducing a very large quantity of coal throughout the country, mostly round coal which is the type of coal which is very much in demand now. There is not enough of it.

The National Coal Board has written to all licensed mines and said, "We are having a difficult time. We have far too many stocks. There is too much coal in the country. You must play your part and reduce your production". The Coal Board says that it has come to agreements with the Federation of Small Mine Owners, but what it has really done has been to issue a command to the owners of the small mines saying, "You will reduce your output, or else". That is what it boils down to. It is a very serious matter, and it has had serious repercussions on a tremendous number of workmen who have had enterprise and sunk their capital in the mines.

The figures are very interesting. About 2½ million tons of this sort of coal were produced in the United Kingdom last year. The level has been cut to a very great extent. I have not the actual figure here, but the reduction has been considerable, down to something over 1 million tons or so for this year. In some cases, even greater unfairness has been caused by taking the level in 1959 as the basis. In the case of a friend of mine who is in that industry, the figures are these. In the three years up to 1958, he was producing an average of 6,000 tons a year. In 1959, because he experienced certain difficulties, he produced only about 2,000 tons. The Coal Board in this case has allotted him a basic tonnage for the coming year of only 1,434 tons.

This is a very serious matter for working men who have sunk their capital in an enterprise of their own and it is very serious for the country also because the type of coal these mines are producing is the type which is very much in demand. I ask my right hon. Friend to make representations to the National Coal Board to help these small industries to survive and make sure that they play their part in adding to the prosperity of Scotland.

I do not want to speak at great length, but mention has already been made of British European Airways cutting its charges to fill its aeroplanes. It has done that to a certain extent, but I think that it could be done to a much greater extent, especially in the case of the Western Isles, where aeroplanes are at the moment flying at a loss and in many cases half empty. British European Airways must realise that it is working for a rural community and adjust its charges accordingly. There is still a disproportionate amount of traffic between the Western Isles and the mainland of Scotland going on the ships of MacBrayne. Last year, I understand the passengers carried by MacBrayne's numbered about 30,000 as against 5,000 by B.E.A. between the Island of Islay and the mainland. I shall be glad if my right hon. Friend will pass that on as well.

Mr. Rankin

Would the hon. Member consider, when he is talking about reduction in fares to the Western Isles, that at present B.E.A. lose about £800,000 on those social services, as they are called, and, despite the recommendation of the Select Committee that that should be a charge borne by the Government and not by B.E.A., the Government resolutely refuse to accept the charge and therefore prevent the reduction in fares that the hon. Member wants.

Mr. Hendry

I agree with the hon. Gentleman. But he is missing my point. My point is that these aeroplanes are flying anyway, are subsidised, and are flying half-empty in many cases.

Mr. Rankin

Subsidised by whom?

Mr. Hendry

Subsidised by British European Airways, I agree. They are losing money and they might as well fly the aeroplanes full. I believe that with a comparatively small reduction in fares they might very well fill the aeroplanes and even reduce the loss. I would remind the hon. Gentleman, who, I think, has gone into this matter most particularly, that the Consultative Committee on Civil Aviation in Scotland, meeting recently under the chairmanship of Sir Patrick Dolan, made such a recommendation to B.E.A., who has persistently disregarded it. This is a point which ought to be considered, and I hope that my right hon. Friend in his communication with B.E.A. will raise it and see what can be done along those lines.

Mr. Rankin

Would the hon. Member be prepared to suggest that if B.E.A. is failing in this job private enterprise might undertake it?

Mr. Hendry

I certainly should. I see no reason why it should not—

Mr. Manuel

It has refused.

Mr. Hendry

—providing a fair deal was given to B.E.A. As the hon. Gentleman fully recognises, this was done by private enterprise previously, and done extremely well.

I have one other hobby horse I want to mention, and that is the North of Scotland Hydro-Electric Board. No doubt the Board has done a tremendously good job since its inception, but there is one very serious defect in the statute that set it up and that is, that taking one year with another it has got to pay. This is extremely difficult to do, because one year it may be very profitable and then, after a series of dry years, it does not pay. I want my right hon. Friend to give very serious thought to the position of the Board and its possibilities in helping rural industry. I know that my right hon. Friend has been in negotiation with the Board on this point, and I hope that those negotiations will came to fruition at a very early date, because in my constituency and in other parts of the North-East, as well as in a great many other parts of Scotland, we are suffering from depopulation. That depopulation could in many instances be halted if only the power were there to enable local indigenous industries to spring up. In one village in my constituency a local joiner who had a one-man business, had a good idea about ten years ago and is now employing about 20 people, which is a very small number compared with the whole of Scotland, but it is a step in the right direction, and Mony a mickle maks a muckle ", as everybody knows.

In a village called Sauchen, Willie Nicol, the local parish blacksmith, had a good idea for a new type of snow plough. Last year he was inundated with orders for it. He tells me that if he could get electricity he could increase his labour force to about 20 men making snow ploughs and agricultural implements. He cannot do that because of the ridiculous position by which the North of Scotland Hydro-Electric Board is not able to run a line through, even though he is prepared to make a contribution towards the cost, because it has not the money in the "kitty" as a result of the succession of dry years. I ask my right hon. Friend to consider this point.

In conclusion, I should like to come back to the remarkable speech of the hon. Member for West Stirlingshire. Do not let us keep saying to the Government, "Where are the jobs that you have promised us?" Let us get down to the job together, and let nationalised industries and business men co-operate. Let us put our heads together. Let us use the enterprise and initiative which are characteristic of Scotland. I am certain that, with the assistance which we have been given by the Government, Scotland is assured of prosperity in the future.

8.52 p.m.

Dr. J. Dickson Mabon (Greenock)

In case I should alarm the House, let me say that I have no intention of following the hon. Member for Aberdeenshire, West (Mr. Hendry) in the sense of numbering off my constituents by name, not even the 3,120 referred to in the Report as being unemployed. However, I want to talk in one sense about figures. The debate has been full of figures. I have no doubt that in St. James's Park at least one goose has been impressed by a series of false figures. But we must not talk too harshly to the hon. Gentleman the Member for Edinburgh,West, because he is in the company of the Lord Chancellor and the Chancellor of the Exchequer, who used similar figures over a year ago.

Several of us had to go right through the unemployment figures from the beginning of August, 1945, and make a comparison of them to find out whether the claims made by these two eminent men were true. They were not. We challenged them, and I am glad to say that they had the courtesy not to use them again. We have gone into this matter thoroughly and hon. Members would be surprised to know the great disparity in the records of both parties.

I admit that the chronicity of unemployment is a very difficult problem which will face any party governing Scotland. but I do not think that hon. Members opposite can skate out of the responsibility by saying that if we on this side did this until 1951, using the hon. Member for Edinburgh, West's argument, they cannot be blamed for doing no better. There is a fundamental difference between conditions at the end of the war and those six years after the war. It seems to be suggested by innuendo that the years from 1951 to 1959 would have been the same if a Labour Government had been in power—a not so very fine point denied by the hon. Member's own political propaganda.

The other point which I found distressing in this debate was the resort, not to the argument of the pipeline, as in the past, but, indeed, to the very oil well itself. We are not discussing 24,000 jobs in the pipeline, but 15,000 jobs which, somehow or other, will be drilled out of the terrain. This is a new argument, and, while it is interesting to get new arguments, nevertheless, it is a distressing one. It is even more abstract than the argument of the pipeline.

Let us cast our minds back to the promises which have been made by the Government. I interrupted the right hon. Gentleman the President of the Board of Trade on this score. My point was a constituency point, but it illustrates the general argument. In the debate in November, 1959, the Secretary of State for Scotland said that there were 3,000 jobs at least, on paper. Actually, he had the audacity to say that there were 3,000 jobs. Later, when I interrupted to say, "On paper", the right hon. Gentleman agreed, with one of his charming smiles. I grant him that.

Later, I wrote to the President of the Board of Trade and asked what were the 3,000 jobs on paper which his right hon. Friend the Secretary of State had mentioned in the debate. The President of the Board of Trade kindly wrote to me listing the five firms concerned. One was the graving dock, which would provide 1,000 jobs. The other 1,900 jobs were to come from the remaining four firms. The President of the Board of Trade could not break down the figures because, he said, the matter was private and confidential and he could not give the details.

I have certain sources of information in my constituency, some of them official and some unofficial. At least, I can say that they are reliable. I find that in each of the five cases, including the graving dock, not one of those claims has come true. The 1,000 jobs at the graving dock, for example, are denied by General Sir Gordon MacMillan, who has stated that only 300 jobs will eventuate at the beginning of the dock and that, although during construction the number might rise to 500 or 600, eventually it will settle down to about 300. Nobody who knows the real facts has ever suggested that the graving dock would provide 1,000 jobs.

In the case of International Business Machines, we were told that employment would rise, but that later proved not to be true. I know from official sources within I.B.M., which the Secretary of State and I visited not long ago, that the working force has actually gone down and now stands at 1,000. This, however, was supposed to be one of the positive increases that would be made. Only one of the firms in question has come anywhere near the estimate. It is unfair that I or any other hon. Member should be fobbed off with a story of so many jobs to come when, later, we find that it is not true.

When I first came to the House of Commons, the Minister of Labour, for whom I have a great admiration as a political Minister—at least, I did have until then—told me of the issue of industrial development certificates to a value of 700 jobs. I regarded that as quite remarkable. When I was at home, the following weekend, I went to the employment exchange and made inquiries. Within about ten days, I discovered that the 700 jobs were all on paper. A year later not one of the jobs had emerged, because they were merely the estimates given by firms to get approvals for extensions which were no more than reshuffles of plant in their own factories. They hired not a single additional man or woman.

If the Minister turns to page 38 of the Report, he will see the relevance of my argument. Referring to jobs, paragraph 153 states that In the single year 1959, the area completed in Scotland was 4.0 million square feet with over 7,600 jobs expected to result, compared with 4.3 million square feet completed in 1958 with over 8,800 jobs expected to result. It is always "expected to result". It is never reality. According to paragraph 153 of the Report, 8,800 jobs were expected to result in 1958. We are now in 1960. Why cannot the Report say that we have, in fact, had 8,800 jobs? Would that be untrue?

Hon. Members opposite must not he deceived by their own propaganda, or by their own administrative inefficiencies or claims. They must not believe the claims that they make for industrial development certificates if they do not become realities. They must not believe their own Government's statements in the Report unless they can tell us how many jobs emerge. There is no doubt that to a large extent these claims about jobs befog hon. Members. While hon. Members opposite accuse us of girning, we are entitled to accuse them of downright complacency. It is terrible even to see hon. Members opposite deceiving themselves with their Conservative Central Office briefs and gradually believing all that they say.

Mr. Manuel

It is dishonest.

Dr. Mabon

It may be dishonest in the case of some hon. Members opposite and, in a way, I can forgive them. It is the stupid ones I cannot excuse, the ones who will not look behind the so-called facts presented by the propaganda departments and view the real truth so that, at least in private, they can exert pressure on their own Ministers.

Even if we were to get all the jobs which the President of the Board of Trade says are in the pipeline and are now being drawn out of the ground, the fact is that he cannot give an estimate—he dare not—of the number of jobs which may be lost during that time due to the natural process of industrial development. The right hon. Gentleman talked, for example, about modernisation. Everyone who knows shipbuilding towns knows that modernisation is splendid. The modernisation in Greenock is a success. But the right hon. Gentleman did not mention the other side of the coin of modernisation.

First, modernisation has come a little too late. Shipbuilders should have modernised long ago—at least five years ago, according to the guides to good business given in the Financial Times and the Investors' Chronicle. They say that for years shipbuilders have been sitting on their soft backsides saying, "This is a wonderful world. We have full order books for five years", and now they are modernising at a time when unemployment in shipbuilding is rising and modernisation means redundancy. Redundancy is the natural consequence of modernisation, and while the workers of Greenock and other places are not Luddites they can hardly be content to see rising unemployment while modernisation in their towns forces them into joining the queues of unemployed.

I know that the argument about advance factories is an old one. I hope that my hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey) gets his tenant as quickly as my hon. Friend the Member for Anglesey (Mr. C. Hughes) has got his. It took us a long time, in the last Parliament, to push the Government into building these three factories. They were absolutely and resolutely opposed to the theory of advance factories. They refused to accept it but, as the election drew near, towards the end of the last Parliament they decided to build them. Now if they get a tenant in Coatbridge and Airdrie they may concede that in Scotland the idea of building advance factories is a sound one.

When Ministers have come to my constituency we in Greenock have advocated the case not only of advance factories, but of pilot advance factories. We have argued from our post-war experience with three very large firms that if premises can be produced there and then—even small premises—to enable a firm to get started, industry can be attracted to a town. We want small pilot advance factories erected to induce firms to come in. Then if they are satisfied with the local conditions they can have a modern tailor-made factory provided for them. It took a long time to convert the Secretary of State to this view.

My town council and I were very pleased that after we met in February this year he wrote a letter on 23rd March in which he said that in principle he agreed to the idea. The council wrote back to say that it was glad that that was the case, but that the Secretary of State had misunderstood the local authority. It said, "We did not want to build the factory. We thought that you agreed to built it." The Secretary of State wrote back, "That is entirely different." It all boils down, therefore, to a question of money. The right hon. Gentleman is in favour of pilot advance factories built by a town council, but he is not in favour of the Board of Trade building chem.

Is this right in a constituency like mine—and there are so many in Scotland—where unemployment has raged for so long? And "raged" is not an exaggerated word. It has raged at roughly 7 per cent. for the last five years, and it has never been lower than 3 per cent. to 4 per cent. even in the best years of the Labour and Tory Governments. Is it not unreasonable that the Government should stint this town and other towns like it by not being willing to give money for the construction of these advance factories? We know that if we have an advance factory we shall find a tenant for it. We have not failed yet. There is no factory lying derelict in Greenock.

If we had a factory built by the Government with the additional advantage of a trading estate rent, we could fill it. It is no use hiding behind the argument that a graving dock represents a great deal of money, because that is not a matter for Greenock only but one for the whole of Clydeside. It is no use hiding behind the argument that firms have promised more jobs from proposed extensions and, a few months later, have had to withdraw the promise. There is no sense in that. I appeal to the right hon. Gentleman to realise that the Government should extend the advance factory programme, and I hope that Greenock will be considered as a good candidate for the very first one.

9.5 p.m.

Mr. James H. Hoy (Edinburgh, Leith)

We come to the end of the first day of the debate on employment and industry in Scotland. As the party which initiated the two days' debate on this important topic, we have departed from the usual routine once more. We invited our right hon. Friend the Leader of the Opposition to open the case for Scotland from this side of the House. I know that he knows that Scots appreciate that they are not very generous in their tributes, sometimes even to their friends, and so when I tell him tonight on behalf of all of us how grateful we are for the magnificent way in which he opened the debate, I am sure he will know that we mean that most sincerely.

I had hoped to offer a word of praise to the noble Lord the Member for Edinburgh, North (Earl of Dalkeith), but he has apparently disappeared to another place. I hope he has not prematurely anticipated that transition. As the senior Member of Parliament representing the City of Edinburgh, I thought it might be rather nice if I said a word to the junior Member who today delivered his maiden speech. In his absence I would say that we appreciated his speech and look forward to hearing his second speech, which we shall be allowed to interrupt.

I turn now to the speech delivered by the hon. Member for Edinburgh, West (Mr. Stodart). I am sorry that he is not present at the moment either.

Mr. Ross

The hon. Member may be away looking for his noble Friend.

Mr. Hoy

It was rather unfortunate that the hon. Member chose 1947 for an unemployment comparison. It was obvious that he was mixed up about the years. I am certain that he was quoting from a brief supplied by the Central Office, and apparently it was not correct. The hon. Gentleman himself did not know better, and so he took 1947, which most people will realise had a most disastrous winter, for which no Government could be held responsible.

I would tell the hon. Member and the House that it does not add anything to our debates to compare the immediate post-war years with the present day in respect of unemployment.

Mr. Bence

It is dishonest.

Mr. Hoy

The Secretary of State and his hon. Friends should never forget that the Prime Minister of the day said that when the war finished this country was in a bankrupt state. That is what the Labour Government of 1945 inherited, and it was on that that they had to build. Therefore, to make that comparison is completely dishonest. When hon. Gentlemen opposite accuse us of using it for political purposes, let them think of some of the speeches which they themselves have delivered.

However, I should not expect too much from the hon. Member for Edinbugh, West—perhaps he will begin to realise what this House is for—because he has since 1945 become a viable politician, or a peripatetic politician. He started off in 1945 as a Liberal, became a Liberal Unionist candidate in 1950 and succeeded in winning a seat as a Tory in 1959. He has obviously moved through the political stages. Perhaps that is why he thinks that he is qualified to speak in this debate.

I want to say a word in defence of my hon. and learned Friend the Member for Aberdeen, North (Mr. Hector Hughes), although I do not really need to defend him. I am a little surprised to find that the hon. Member for Aberdeenshire, West (Mr. Hendry) should seek to chastise my hon. and learned Friend for raising the question of the abolition of the research station at Aberdeen. The hon. Member seemed to think that it was irrelevant to the debate, and said so. Surely if Scottish hon. Members on both sides of the House have one complaint it is that research students in Scotland, after having passed their university courses, cannot find employment in Scotland. Every time a research station is closed down it means less employment for our research students. It was absolutely relevant for my hon. and learned Friend to raise this position.

I did not regard it as very bright of the hon. Member for Aberdeenshire, West again to seek to attack the nationalised railways for not providing employment. We on this side of the House have sought for many years to get the nationalised concerns—both industrial and others like the Navy, the Army and the Air Force—together with private industry, to direct some of their work into Scotland. We have been very consistent in this, but Members opposite who single out the railways or any other nationalised industry and say that it ought to have directed workers to Scotland are being quite unfair. We accept that the nationalised industries, with others, should give Scotland its share of work. I only hope that when we are making these demands in future we shall have the support of Members opposite.

The hon. Member for Caithness and Sutherland (Sir D. Robertson) also paid tribute to the speech of my right hon. Friend the Leader of the Opposition, and it was well deserved. But he also wanted to join with that a tribute to the speech of the President of the Board of Trade. I say quite sincerely, however—and I know that he will understand—that I regret that I cannot join in that tribute to the right hon. Gentleman. I have met the President of the Board of Trade on many occasions, dealing with many industries and many problems, but I thought that his speech today was about the worst I have ever heard him make. I believe that he delivered it without conviction. He tried to be smart with some of his rejoinders, but I think that, on reflection, he will feel that he did himself no credit by that speech.

First, he seemed to argue that a depression in the light industries would immediately create more employment in the heavy industries and that, as a result, Scotland would be better off. I cannot see the logic of that argument. He went on to quote what light industries he meant. He said he was thinking of the production of refrigerators and that type of goods. But if we create a depression even in metal work, how does that create greater industry in shipbuilding, heavy engineering, and mining—the three industries which he himself instanced as being in decline? There is no logic in that argument. It is not good enough for him to make such an argument.

Then, when the right hon. Gentleman spoke about shipbuilding, which is one of the key industries in Scotland, he was not saying anything new when he said that we in Scotland had been too long dependent on heavy industry. In every debate over the years this is a point which has been hammered home from this side of the House—that Scotland, if it is to play its part in the development of Britain, must become less dependent on heavy industry and must have a diversification of industry. Only in that way can we seek to tackle successfully our unemployment problem.

We have argued that because we believe it to be true. We were arguing it when the right hon. Gentleman's predecessor—the present Minister of Education—was President of the Board of Trade. At that time the Government had one of their economic panics, and as a result put the Bank Rate up to 7 per cent., imposed a restriction of credit, and said, "Poor Scotland will have to take its share of the business." They thought that, on the whole, Scotland's employment position would improve as a result of this action, but instead of that it got steadily worse. Therefore, there is no logic in the argument put forward by the President of the Board of Trade this afternoon.

I want to be a little more forthcoming than he was. I shall deal with the employment figures that he used. First, I disagree with his argument that an increase in the Bank Rate will have no effect on industry in Scotland or elsewhere. I cannot understand it. If that is so, I cannot understand why they took this action. Surely there must be some reason for it. This fact was well recognised by the Secretary of State. He and his hon. Friends are always telling us that on this question of employment and unemployment we should not introduce party politics. But the right hon. Gentleman does not mind doing a little of that when it suits his purpose.

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

I do not ever remember saying that we should not introduce party politics in this matter. It would be a counsel of such perfection that I would not expect to achieve.

Mr. Hoy

The right hon. Gentleman's ambitions are not very high, to begin with. Every time we have a debate of this kind he and his hon. Friends accuse hon. Members on this side of introducing party politics and painting a picture of gloom. But when the Secretary of State was addressing the Scottish Grand Committee, and making a pretty slick speech in reply to proposals put forward by my hon. Friends, he said, in effect, "I want to give the Committee a complete picture of what Scottish unemployment figures are today." He was able to produce figures that had been issued at noon that day, just before he spoke. He said, "I am giving them for the first time because I know that the Committee is not informed on these matters. The figures have only just been released, and I have got them because I am a Cabinet Minister." That is the effect of what he was saying, and he was using those figures to argue against the case put by my hon. Friends.

But he took good care not to disclose that an hour earlier his right hon. Friend the Chancellor of the Exchequer had imposed a further credit squeeze and had increased the Bank Rate from 5 per cent. to 6 per cent.

Dr. Dickson Mabon

Perhaps he was not told.

Mr. Hoy

I can hardly believe that the Cabinet treat the Secretary of State for Scotland so cheaply that he did not know that the Bank Rate increase had taken place. Nevertheless, he took good care not to disclose it to the Scottish Grand Committee when he was announcing the new unemployment figures.

Mr. Maclay

The hon. Member should not make that charge unless he understands the machinery of Government in these matters. If he will consult his right hon. Friends he will realise how the machinery of Government works in relation to the matters that he is now mentioning.

Mr. Hoy

Even if I ignore the situation with regard to the Bank Rate, if the right hon. Gentleman was not consulted about the Government's decision to impose a new credit squeeze it does not say much for him, because such things react much more against Scotland than against any other part of Britain. If he had been fair he would have told us that this action was being taken, but because it did not suit his argument he did not mention it.

Now I turn to the figures of unemployment. One of the things that surprises me in all these debates is that the President of the Board of Trade and the Secretary of State for Scotland claim credit for having reduced the unemployment figure to 69,500. Not so long ago they told us that it was over 100,000, but who put it up to 100,000? It was the right hon. Gentleman and his Government who increased it, and we are getting just a little tired of their claiming the credit when, having put the Bank Rate up to 6 per cent., and sometimes 7 per cent., it comes down. They talk as if it were a smart achievement. Really, this is nonsense. Although the figure is 70,000 and it has come down, it has only come down from the very high figure to which the Government increased it. With all the arguments as to whether it is 70,000 or 60,000, I say to the right hon. Gentleman that the figure still remains the highest for any part of Great Britain. That is what we are facing tonight, and that is what we have to tackle.

As to the jobs which we have suggested, one thing that has to be admitted in the House and elsewhere is that my hon. and right hon. Friends have on many occasions been making suggestions how this problem ought to be treated. Indeed, the programme of the Scottish Council for Development and Industry, which has received so much praise tonight, was the programme suggested to the Government by my hon. Friends a year or two ago. Let there be no mistake about it. That is the substantial contribution that we have made, and we are willing that it should be discussed. We may be wrong, but at least we have put forward proposals, and it is for the Government to say where they are wrong, and whether they can better them.

I go on to deal with the Government's proposal. I was a little surprised that the President of the Board of Trade was trotting out once more the figure of jobs in the pipeline.

Mr. Willis

It is a leaky pipeline.

Mr. Hoy

As my hon. Friend the Member for Edinburgh, East (Mr. Willis) says, it is a very leaky pipeline. On many occasions, we get this figure, and the right hon. Gentleman keeps on reiterating the same figure. It is like the roads programme. Every year, the Secretary of State brings out a new one which includes hundreds of miles which he told us about the previous year. If we had all the roads which the Secretary of State has suggested that we should have, we could give them away to England and Northern Ireland to get rid of them, because they would have become an encumbrance to us. That is what they are doing about jobs.

The President of the Board of Trade said that we have got 7,500 jobs in schemes which have been approved and some 16,000 in the pipeline. I wish to say to the hon. Member for Caithness and Sutherland that I misled him a little. The President of the Board of Trade had, in fact, talked about 39,000 jobs, but he said that 14,000 of them had no firm promise. [Interruption.] I am sorry, it is 15,000, which is better for my argument, and I want to be generous to the right hon. Gentleman. For these 15,000 jobs, he said that we have no firm promise—I think I have quoted him correctly—so that, in fact, what we are faced with are the 24,000 jobs in the pipeline, which includes, of course, the B.M.C. at Bathgate, I take it, and the new factory of Messrs. Rootes. Is that included or not?

Mr. Maudling

I specifically said—the figures are quite simple—in projects under construction 7,000, projects approved but not yet under construction 16,000, and projects of which we know, which include the Rootes one, but not definitely settled, another possible 15,000.

Mr. Hoy

If we accept the numbers involved in projects not yet approved, it will be over a considerable number of years. I think it would be fair to say that. That is the position with which we are faced, if we take the figures which the President of the Board of Trade has given. May I remind the right hon. Gentleman that it is admitted on all sides of the House, and certainly by the Scottish Council for Development and Industry and the trade unions, that even to keep step at the present time. we in Scotland require 12,500 new jobs each year. That is the figure. I do not think it has ever been disputed. So with the best will in the world, and with all this we are not keeping in step.

Let me remind the House that the President of the Board of Trade, when giving these figures, made no allowance for wastage. In one industry alone last year, the mining industry, we lost 6,700 jobs. The President said this afternoon that the outlook in that industry this year could reveal only a further number of losses. All these losses have to be offset against the jobs which the President mentioned. That is the measure of the problem confronting Scotland, and we on this side of the House have sought to direct the attention of the House to it.

There is the other problem of the young people and it is one which particularly affects Scotland. We must remember that in this year, 1960, we shall have about 61,000 school leavers. Next year the number will be 75,000 and in 1962 the figure will have risen to 82,000. When one looks at the figures for Scotland today, one is not filled with hope about the opportunities for these young people to find jobs in the years ahead. As the President said this afternoon, there are today many young people in Scotland who are accepting dead end jobs to tide them over for a year or two, and then they go on to the scrap heap. In my constituency I have well educated young people who have passed all their examinations, but they cannot secure an apprenticeship within the constituency, and that is tragic. The problem will worsen in the years to come and it must be tackled.

In addition to the figures given today by my right hon. Friend, at the end of last year the proportion of the total unemployed persons under 20 years of age in Scotland was 37 per cent. of the total for Great Britain compared with 1.6 per cent. in the Midlands. We do not wish to exaggerate the problem, but we think it right that the attention of the House and the Government should be directed to it. Another thing which must not be forgotten is that the number of insured workers in Scotland compared with those in other parts of the kingdom reveals that Scotland is in a far worse position. Between 1950 and 1959 the increase in the number of insured workers in the eastern and southern region was 15.5 per cent. In the south-western area it was 9 per cent. In London and the South-East it was 8.3 per cent. but in Scotland the increase was only 1.3 per cent. So we say that there is some stagnation and it is no use hon. Members in any part of the House denying it.

If the Government are in earnest they must get rid of some of their political bias and accept some of the schemes suggested by my hon. and right hon. Friends. We are quite prepared to face up to State undertakings and Government investment. There is not an hon. Member on either side of the House who wants to refuse State aid. Every large undertaking in Scotland today is receiving it. When the Government wanted to get rid of depression in Scotland, as elsewhere in Britain, they wanted to prime the pump by getting the nationalised industries on the way. Afforestation, hydro-electricity and coal have made a tremendous contribution to our economy and those things have brought some hope to great parts of Scotland which otherwise would have to go without.

I wish to make another suggestion. The shipping industry in Scotland, as in other parts of the country, is in a bad way. The President of the Board of Trade made it quite clear this afternoon that he did not think there was very much hope for it in view of the worsened position. In Scotland we feel it more keenly because we are so dependent on this industry. The recession in the shipbuilding industry can bring untold misery to many parts of Scotland because of its reactions over a wide area.

My hon. Friend the Member for Glasgow, Scotstoun (Mr. Small) had a letter yesterday from the shop steward of the Blythswood Shipbuilding Company pointing out that that company had the last order on the stocks. After the ship had been launched in October this year it could see no further orders and 900 men would be out of work. That is a serious position. In my constituency, which has a fairly important shipyard, there is a continual pay-off of shipbuilding workers. Only a week ago when thirty-five men went to collect their holiday pay they also collected their unemployment books. That was not a very nice present for going away on a holiday. This is a problem which must be attended to.

A small contribution for the small yards can be made by the fishing industry of Scotland. The fishing industry of Scotland has spent money in bringing itself up to date. It has provided work for shipyards in Aberdeen and elsewhere, but a considerable amount more requires to be done. One of the awful problems which confronts it is the interest charges which I mentioned earlier. In the last eighteen months or less there have been seven changes in the interest rates and even in the last seventeen days the White Fish Authority has increased the interest rate on two occasions. This has a really depressing effect on people in the industry. It does not allow them to budget for carrying on their businesses nor to build new vessels. The industry can make a contribution to smaller yards, but the Government, whether they like it or not, have to come more and more to the assistance of Scotland.

Let us have no more humbug about State interference. Whether it is the North British Locomotive, Colvilles steel strip mills, farmers or shipbuilding, they are all willing to accept money to carry on their businesses. As was said by my right hon. Friend the Member for Clackmannan and East Stirlingshire (Mr. A. Woodburn), one of the first things the Secretary of State did after the Government were returned was to establish a nationalised shipping ser- vice to cope with the needs of people in the North of Scotland. We have made these suggestions throughout these debates on many occasions. We hope that eventually the Government will accept them. Let them understand quite clearly that in Scotland there will be no real hope for economic recovery without State assistance and State planning.

9.35 p.m.

The Joint Under-Secretary of State for Scotland (Mr. Niall Macpherson)

In going into bat on the first day of this very important two-day match, my first task is the very agreeable task of congratulating my noble Friend the Member for Edinburgh, North (Earl of Dalkeith) on his first innings. At one time I counted him among my constituents, and I felt a special interest in his performance today, if I may say so. I thought that not only did he keep a straight bat but that he showed a remarkable variety of strokes all round the wicket.

He expressed the view that Scots were not natural salesmen, but as a Scot himself he belied that. Scotland has in him a very high-powered salesman, and we wish him a long and successful period of service in that rôle. He has shown that he means to uphold the great tradition of his family in Parliament, and that he is well equipped to do so. I join with others in welcoming him to our debates and in offering him our warm congratulations on his maiden speech. In choosing to make his first speech in the House on this subject, he chose well, for it is a subject of fundamental importance to Scotland.

Formally, the House is invited "to take note of" Command Paper No. 1045, which deals with industry, employment and roads. In effect, the Motion covers a very wide field, and it is natural that the debate should have ranged widely. My right hon. Friend the Minister of Labour is to speak tomorrow afternoon in the debate, and the House may think it appropriate if I leave him to deal with matters raised today which are within his Ministerial sphere. I might perhaps refer to the remarks made on the subject of youth employment by the hon. Member for Edinburgh, Leith (Mr. Hoy), who always entertains us so agreeably with his speeches and the hon. Member for Central Ayrshire (Mr. Manuel).

My right hon. Friend will deal with this subject more particularly tomorrow from the employment angle. It is true that we shall have a considerable increase in the number of school-leavers in the next two years, but one important factor is the much larger number of boys and girls who are staying on at school, as we wish them to do and as it is in the interests of the nation for them to do. In 1959, 51,000 boys and girls left school on reaching school-leaving age, but fortunately there is a definite trend to stay on, and in 1959, 34 per cent. of those leaving school from five-year secondary courses had finished the course.

In the last four years there has been an increase of 1,200 in the number of pupils aged 17 in our schools, and the percentage of this age group at school continues to rise. It is now as high as 10.7 per cent. Perhaps the best way for me to put it is to say that the rate of increase in practice in staying on at school between 1959 and 1960 is 17 per cent. compared with an average of about 7 per cent. over previous years.

That is a remarkable increase, and it will certainly make a contribution towards the solution of the problem of youth employment. It will enable those boys and girls, when they are employed later, to be more highly qualified for jobs. As I have said, I will leave my right hon. Friend the Minister of Labour to deal more particularly with the employment aspect which is in his sphere.

Mr. James Dempsey (Coatbridge and Airdrie)

Does the hon. Member realise that, in reply to a Question tabled by me last week, the Minister of Labour stated that nearly 82,000 young persons will leave school in 1962, which is 19,000 more than the number who left last year, and that we still have 152 children who left last year who are without a job?

Mr. Macpherson

The figures are encouraging. In the past month, unemployment among young persons was 2,849, which was 761 less than two years ago, although still 1,000 more than in June, 1957. That is a very considerable improvement. Of 12,259 Easter school leavers, 184 remained unemployed at 30th June.

My right hon. Friend the Secretary of State will deal with the housing point which has been raised. I am sorry that I missed the speech of my hon. Friend the Member for Aberdeenshire, West (Mr. Hendry), but my right hon. Friend will deal with the point which he raised, and also with the points raised by the hon. Member for Central Ayrshire on the railways. My right hon. Friend will also deal, as I think is appropriate, with the speech of his neighbour, the hon. Member for. Greenock (Dr. Dickson Mabon).

As regards the form of the Report, for the first time there has been included in it a section on outlook. The Report, instead of being confined to the calendar year, has been brought as closely up to date as possible. All the same, the Report has avoided the rôle of prophet which the right hon. Member for Leeds, South (Mr. Gaitskell) seemed to think we ought to adopt.

Mr. T. Fraser

Used to adopt.

Mr. Macpherson

I should like to say how very warmly we welcome the intervention of the Leader of the Opposition in these debates. He spoke of himself as an outsider, but, to use an American phrase, one might call him a very ranking outsider.

If the Report is to be available in time for the Estimates debates, it is clearly not possible to include in it the actual expenditure on roads in the previous financial year, but arrangements are being made to print a supplement, which will be issued in the autumn.

The right hon. Member for Clackmannan and East Stirlingshire (Mr. Woodburn) challenged my right hon. Friend to say whether the expenditure on roads this year will be less than it was last year. The answer is that the expenditure will be about £650,000 more, apart from the £1,400,000 loan which is being made in respect of the Forth Road Bridge in the current Estimates.

Listening to the Opposition today, one would think that the Scottish economy was in a state of collapse. Indeed, the Leader of the Opposition referred to "the Scottish economic decline". Unemployment in June at 3.2 per cent. is lower than it has been for two and a half years. It is true, as my right hon.

Friend the President of the Board of Trade said, that recovery started later than in some other parts of the country and has not yet caught up, but recovery has been uneven in other parts of Great Britain.

What cannot be disputed is that there has been a substantial recovery in Scotland. Scottish output in the fourth quarter of last year was over 4½ per cent. higher than in the fourth quarter of 1958, and in the next quarter was 6½ per cent. higher than in January to March, 1959.

Miss Herbison

For the purpose of this debate, the comparison ought not to be with 1958. The correct comparison should be with this time in 1957 before the Government took the panic measure of raising the Bank Rate to 7 per cent., which led to over 100,000 unemployed.

Mr. Macpherson

What we are dealing with in this debate is the question of trends. The trend is definitely upwards now. That is the important thing. Nor can it be disputed that the measures taken in 1957 were absolutely necessary to restore the economy of the country and keep it on an even keel. The measures taken by the Government have certainly contributed to this recovery. [HON. MEMBERS: "Which recovery?"] I am speaking of the recovery which has taken place.

The Board of Trade has 376 tenants in Government-owned factories in Scotland. In the period between the coming into force of the Distribution of Industry Act, 1958, and the Local Employment Act, 1960, firms in Scotland received 22 per cent. of the total amount of assistance recommended by D.A.T.A.C. and nearly 20 per cent. of the total number of jobs related to the recommendations. As my right hon. Friend said, 50 per cent. of the work on building Government factories is now taking place in Scotland.

As to the assistance available under the 1960 Act, all D.A.T.A.C. applications that were outstanding on 1st April and which would equally have been eligible under the 1960 Act were automatically carried over for consideration by B.O.T.A.C. Of the 100 applications received by B.O.T.A.C., either from D.A.T.A.C. or direct, ten have so far been approved under Section 4, which is concerned with loans or grants, and 60 are still under consideration. Five applications for building grants under Section 3 are also under consideration.

My hon. Friend the Member for Aberdeenshire, East (Mr. Wolrige-Gordon) raised the question about availability of information. I ought to tell him that he need not be so despondent about this. Information about particular labour availabilities is always to be had from the Ministry of Labour district officers, and information about firms and premises is to be had from the Board of Trade in Glasgow. All B.O.T.A.C. applications are seen by the Board of Trade at the headquarters in Glasgow.

As to the local service in Aberdeen, my hon. Friend is probably aware that a visit is made two or three times a month from Inverness, and as regards the North-East Development Committee, there have already been considerable discussions in London with the Committee's Aberdeen representatives. One meeting was held very recently indeed. I can assure my hon. Friend that the Board of Trade is prepared to give every possible assistance and advice to the Committee once it gets going.

Perhaps, at this stage, I might also refer to the observations made by the hon. Member for West Stirlingshire (Mr. W. Baxter) who, in the course of a very interesting speech, referred to the need for an encyclopaedia of world trade requirements. If firms used the export services that are available in the Export Service Branch of the Board of Trade, they would find that there really is a complete encyclopaedia available to all. The Special Register of Information gives firms who join the most up-to-date information about all parts of the world, and the more the hon. Gentleman can do to make that known to firms in his constituency the better they will fare.

Mr. W. Baxter

Is this register kept in Edinburgh or in London?

Mr. Macpherson

The Special Register of Information is kept at the Board of Trade headquarters in London, but information can easily be made available in Glasgow or anywhere else.

Mr. Baxter

We are talking about Scotland.

Mr. Macpherson

It has been suggested that the measures taken by my right hon. Friend the Chancellor of the Exchequer to fend off inflation would lead to a reduction in this kind of assistance. My right hon. Friend stated yesterday that he intends to keep investment in the public sector in the next financial year at its current level, but made it plain that particular Votes will not necessarily remain at their present level. Some will be up and some down, but it would be quite wrong to assume that investment under the Local Employment Act is bound to suffer.

It is not only in development districts that industrial development certificates have been given. My right hon. Friend the President of the Board of Trade has said that in the past six months the factory area covered by these certificates—at 4.6 million sq. ft.—is greater than that in any complete years except 1946, 1954, 1955,—or, indeed, last year—and that the jobs to be provided exceed those provided in any whole year except 1946.

The hon. Member for Leith (Mr. Hoy) thought that this was not enough. He thought that it ought to have many more than that, because we need 12,000 a year, but my right hon. Friend referred to jobs to the number of nearly 24,000 that are in sight, including 7,500 in factories under construotion—[Interruption.] One is really like a man advancing over a countryside—

Mr. McInnes

And then coming back again.

Mr. Macpherson

One can see to the horizon. From this point, one can see a certain number of jobs such as those at B.M.C. Such peaks stand out, and the high points to be planned are still further in advance. They stand up, and as one moves forward, the prospect of still further jobs will become apparent. This is not the complete story for any particular period of time. This is what actually can be seen on this side of the horizon now. It is really not so very unsatisfactory.

Mr. Hoy

I do not want there to be any misunderstanding. We have expressed our thanks for the jobs which are coming. We are grateful for them. All we say is that these jobs will still not satisfy Scotland's need, because we still require 12,500 a year to keep us in step. In view of the wastage which has still to be taken into account, plus the school leavers, the Minister ought to be able to calculate how many we will require, and not disparage what we say.

Mr. Macpherson

There is no question of disparagement. There is here a certain number of jobs for an indeterminate period. More jobs are to come along. We know the number we should like. This is what is in sight, and 24,000 jobs, fairly secure, are not, as the hon. Lady the Member for Lanarkshire, North (Miss Herbison) said, not to be sneezed at, especially if one has the possibility of another 15,000 coming along.

Mr. T. Fraser

At some time, will some Minister take into account the number of jobs which it is known are to disappear in existing industries and tell, us what the Scottish Office believes will be the net increase over any period it likes to choose?

Mr. Macpherson

The real point is that this is a running figure all the time. It is very difficult to specify at any particular time the number of jobs for a definite period. Factories close down. That makes headlines and, of course, it makes a great impact; it is taken as a portent. The real fact, on the other hand, is that there has been a very great deal of progress and improvements made.

Mr. Fraser

The B.M.C. factory has made the headlines and has been the subject of a lot of speeches. It is to provide, so we understand, about 5,600 jobs. But there were 6,700 jobs lost in the mining industry last year, with no headlines about that at all. Will the hon. Gentleman try to give us the complete picture at some time, with the net increase in the number of jobs?

Mr. Macpherson

What we are trying to do is to look at the tendency at present. We know the difficulties, in shipbuilding and in coal mining for instance, but it is right that we should look at the general and the improving position. For example, there is the steel strip mill which has already resulted in enhanced activity. This is referred to in the Report. Orders for machinery at Ravenscraig are being executed in Glasgow by the Davy and United Engineering Co.

It would be foolish to expect that all the needs of Colvilles and B.M.C. will be met in Scotland. After all, firms in Scotland are supplying boilers to Ford Motor Company at Dagenham, and axles also. There is, however, good reason to suppose that Scottish firms will supply a great deal of what they need. Last Friday, in Glasgow the Scottish Board of Industry, on its initiative, arranged a meeting of firms which might be intertsted in supplying the needs of British Motor Corporation.

It is important that the House should realise what is happening and the developments which are taking place. The hon. Member for Hamilton (Mr. T. Fraser) referred to firms which are closing down, but what of the new enterprises like the Caterpillar Tractor Company at Tannochside, Burroughs Adding Machines at Cumbernauld, to which work has been transferred from Nottingham, the American firm which is manufacturing transistors at Glenrothes, and the Glacier Metal Company at Kilmarnock? Also there are extensions to existing enterprises at Peterhead, Glasgow, Greenock, Hillington, Dundee, Edinburgh and Larkhall, not to mention the extensions of Colvilles at Ravenscraig and Gartcosh. It is widespread. One could give many examples.

The Opposition like to give the impression that the only buildings going up—I do not mean in flames—are whisky stores. Even in food and drink, that is far from the truth. There are bakeries, canning factories, quick-freezing plants. fish processing works, and so forth.

One thing which the Report brings out is the willingness of some firms. when demand for their main products goes down. to embark on fresh activities, for example, manufacturers of mining machinery—reference has been made to that during the debate—and manufacturers of jute products.

I have not tried to disguise the fact that recovery came later in Scotland and is still lagging behind. We all know the particular problems, that too many of our highly skilled people are leaving Scotland and that there is too large a proportion of areas of high unemployment. To deal with those problems in Scotland as elsewhere, we are using not only the methods of the Distribution of Industry Acts to encourage firms to go to areas of high unemployment, but we have improved on them by the Local Employment Act this year, in particular, by enabling firms to obtain grants towards the cost of building factories themselves, by concentrating assistance on the districts most needing it, and by making it possible to take account not only of a persistent and high rate of unemployment but also of the expectation of a high rate of unemployment. This is a flexible system and not a rigid one.

May I say to the hon. Member for West Stirlingshire (Mr. W. Baxter) that there are no firm permanent lines of demarcation. The expectation is that as progress is made on an area it will obviously cease to be a development district.

The basic condition of giving assistance to a particular firm is that there must be good prospects of it being able to carry on its business successfully without further aid. In other words, it must ultimately be able to compete on level terms. This is a combination of State and private enterprise.

Reference has been made to State factories. Let me put this to the Opposition. Would State factories pay their way? This is the dilemma. If they could pay their way why should not, industrialists undertake the task? There is no certainty of it. If they would not, do the Opposition really accept that noncompetitive State enterprises should be permanently subsidised in competition with other manufacturing industries? That is the dilemma that the Opposition has to face.

Mr. Hoy

The hon. Gentleman is talking about State industry. Did not S. G. Brown pay its way as a Government concern? Why did the Government take it over?

Mr. Macpherson

We are talking about the steering of industry and the setting up of industry and this is the dilemma that has to be faced.

The challenge of factories paying their way is a challenge which we do not shirk in Scotland. It is right that they should stand on their own feet, We on this side of the House are anxious to see firms encouraged and assisted to come to Scotland. But there can be no question of giving any permanent subsidy for the privilege of working and living in Scotland. Firms and communities can prosper only by producing the right quality at the right price. It is up to us to see that they do so. Many firms have shown what they are doing and can do, as the Report shows. We on this side of the House accept the challenge and we believe that if it is properly put to them the great majority of Scots will do this.

Debate adjourned.—[Mr. Noble.]

Debate to be resumed Tomorrow.