SCOTLAND (TRADE AND INDUSTRY)

HC Deb 24 July 1961 vol 645 cc54-186

4.0 p.m.

Mr. Thomas Fraser (Hamilton)

We have come again to the time of the year when we normally debate industry and employment in Scotland. I should not be surprised if the Secretary of State for Scotland and the President of the Board of Trade detected a somewhat familiar ring in my speech.

It occurs to me that the two right hon. Gentlemen will find it a little difficult to make the kind of speeches which they have been making in these debates in recent years. They have been saying that the picture painted by my hon. Friends has always been too gloomy and, although they have sometimes admitted that there are a few clouds in the sky, they have said that tomorrow all the clouds will disappear. In view of the statement by the Chancellor of the Exchequer which we have been promised—"threatened" is a better word—for tomorrow, they will find it exceedingly difficult to make the same kind of speech today.

The Secretary of State must have had a most agreeable Press conference to launch the Report on Industry and Employment in Scotland. The Scottish Press gave it fulsome praise. It is a pity that the leader writers and the industrial correspondents did not take the trouble to study it, just a little, before writing their articles. However, it is not for us to spend our time discussing what the Press did with the Report. I was interested to see that on the following day the Scottish newspapers carried reports on their front pages of another 1250 workers in Lanarkshire being out of jobs. What wonderful timing! Most of those workers collected their books on the day on which they had expected to be going on their annual holidays.

The White Paper says that total production in 1960 was at a record high level, 9 per cent. over 1954. The United Kingdom increase over 1954 was no less than 20 per cent., and the United Kingdom had the distinction of having the smallest increase in production of any industrial nation. If England is at the bottom of the league in these matters, Scotland seems to have scratched from the tournament with no matches played.

The production of manufacturing industry was 7 per cent. up on 1959, but only 5 per cent. up on 1957. Shipbuilding and marine engineering were 12 per cent. down on 1959. Metal manufacture, including steel but not exclusively steel, was 28 per cent. up on 1959 and almost back to the 1956 level, but not quite. Coal output, not surprisingly, was down 5 per cent. on 1959.

We have been told in the past that production of crude steel is the key to our economic wellbeing. Crude steel production in 1960 was about 38 per cent. up on 1959. To get the picture clearer, I turn from the White Paper to the iron and steel monthly statistics which are published jointly by the Iron and Steel Board and the British Iron and Steel Federation. Over the last twenty years, steel production in Scotland has increased far less than in any other steel district in Britain. For example, over all ten districts in the United Kingdom, the weekly average of steel production rose from 200,000 tons in 1938 to 467,000 tons in 1960, whereas in Scotland it rose from 30,000 to 51,900 tons. Therefore, production in Scotland increased by two-thirds whereas for the United Kingdom as a whole it increased by two and a half times.

Between 1958 and 1959, British production of steel went up from 369,000 tons to 388,000 tons a week, while Scottish production declined from 39,900 to 37,800 a week, so we were going in the wrong direction. The White Paper confidently forecast that the upward trend would continue, but the figures show that in the first five months of 1960 the average weekly output of crude steel was 52,800 tons, while in the first five months of 1961 it was exactly the same.

Since the White Paper was published, on 5th July, output of crude steel in Scotland has fallen by one-third. That is not just a wicked rumour and it has nothing to do with the annual holiday. Crude steel production in Scotland is now planned at about 17,000 tons a week less than we were getting in the first five months of this year, and already we are getting back to what we had in 1958 and 1959.

This is before the Chancellor of the Exchequer makes his speech tomorrow. This is at a time when, we are told, too much of our resources is going into capital investment. This is heavy steel which is mainly used for capital projects. We are already moving in the wrong direction. Great hardship is being caused in some parts of Scotland, and many workers are already on the dole and many more are working four days a week. "You have never had it so good!"

The Secretary of State assures us that the future is bright. He has told us that there are about 33,000 jobs in the pipeline. The figures are set out in the table on page 57 of the Report. The potential employment on 31st March, 1960, from all those factories completed in the first three months of the year, or under construction, or approved but not started was 33,342. I put it to the right hon. Gentleman that employers in areas of unemployment always over-estimate the number of jobs which will be provided in their industrial establishments which are to be built, while employers in congested areas always under-estimate that number.

The President of the Board of Trade must know that very well and must have experienced it over the years. In that case, why does he continue to say that all these jobs will mature as a result of the projects in Scotland, when he says that a project costing £10 million and providing 1 million square feet of factory space for Fords in Essex, will not provide one extra job?

The pity is that the White Paper gives this kind of support to forecasts which Ministers make from time to time of the number of jobs in the pipeline, but very little is said about the number of jobs which are lost week by week and month by month. When the Secretary of State resigns, he will no doubt become a director of a large capitalist enterprise—probably its chairman. I put it to the right hon. Gentleman that if, when he becomes chairman of some large capitalist enterprise, the sales manager submits a report detailing the new orders which he has received over the period, and fails to mention the orders that he has lost, he should either order him to complete the report, or sack him on the spot.

The Secretary of State for Scotland has not given us the full story. He has proclaimed the gains, but largely ignored the losses. He has made no comparison with our neighbours to show our share of an expanding market. That figure is not stated. In the circumstances, perhaps it would not be a bad thing if the right hon. Gentleman were to take the sack.

The only test of Scotland's well-being which the right hon. Gentleman offers us in the Report is the programme of factory building—the jobs in the pipeline. This is the measure of the prosperity which is coming our way. Going back over the years, the then President of the Board of Trade, now the Minister of Aviation, said, in 1953: Scotland has 10.4 per cent. of the population, but she has 12.3 per cent. of all the new factory building which has gone on since the war."—[OFFICIAL REPORT, 15th July, 1953; Vol. 517, c. 2091.] It seems to me that there must have been a Government in power some time after the war who managed to give Scotland a fair share of the factory building. Incidentally, three years later, the same Minister, speaking in the same kind of debate, spoke about a marked improvement in Scotland's affairs and referred to her vigorous, growing and expanding economy."—[OFFICIAL REPORT, 26th July, 1956; Vol. 557. c. 676–81.] What are the facts? The latest issue of the Digest of Statistics, issued by the President of the Board of Trade, gives the following figures for factory building at 31st March, 1961: Great Britain 841,185,000 sq. ft.; Scotland, 61,858,000 sq. ft. That is all the industrial building which has been approved between 1st January, 1945, and 31st March, 1961. Scotland now has 8.3 per cent. of the total. This means that in the years when right hon. Gentlemen opposite have been responsible for the government of our country we have fallen from 12.3 per cent. to 8.3 per cent.

If we look at the amount of factory building under construction at the latest available date, which is 30th September last, what do we find? In Great Britain the figure was 98,615,000 sq. ft. Scotland's share was 6,725,000 sq. ft. That represents 6.8 per cent. of the total. That is the position we have reached under the Ministers who are in charge of the nation's affairs at the moment. During the last eight years we have gone back from 12.3 per cent. to 6.8 per cent., and this is the figure about which the Secretary of State for Scotland boasts. This is the pipeline which will provide all these jobs in the next few years.

We have only 6.8 per cent. of the total being built because factories are being built in those parts of the country where there is less than 1 per cent. unemployment. In London and the South-East area 14,446,000 sq. ft. of factory space are under construction. The President of the Board of Trade will no doubt say that nobody will be employed in this accommodation. In the Eastern and Southern areas, 13,184,000 sq. ft. are under construction. In the Midlands, the figure is 10,694,000. Those are the areas where the factories are going up; areas where there is a shortage of labour. Factories are not being built in those parts of the country where there is still substantial unemployment.

The Minister of Labour published a Press statement the other day giving the latest unemployment figures. In Great Britain, 258,500 people are unemployed. What is Scotland's share of that figure? It is 59,740, which means that the unemployment figure in Scotland is 23.4 per cent. of the total unemployed. That unemployment figure, and the figure of 6.8 per cent. for factory building, represents the position today, and yet the Secretary of State for Scotland boasts about the extent of the building which is being carried on. He says precious little about the extent of the problem in Scotland.

What is the rate of unemployment in London and the South-East, the Eastern and Southern areas, and the Midlands, where factory building is going on? We find the following figures: London and the South-East, 39,576; Eastern and Southern areas, 17,997; Midlands, 19,261. In each case it amounts to 0.8 per cent. unemployed—no unemployment at all, yet these are the areas where the factories are going up. Unemployment in the areas where factories are not going up amounts to 3, 4 or 5 per cent.

Those figures do not seem to paint a bright and prosperous future for Scotland. I hope that the Secretary of State for Scotland will say how he proposes to correct the disparity to which I have called attention. We were in no way comforted by the speech of the President of the Board of Trade last week. It will be recalled that although he exempted Northern Ireland and Scotland from what he was saying, at one point of his speech he went on to say: … in England and Wales generally we have made a great deal of progress in tackling the situation where there is pressure of labour in one area and idle hands in another. This we are doing in geographical terms. It will have to be done more and more in terms of industry, the movement of people out of industries where the order books are short into the industries where the order books are long."—[OFFICIAL REPORT, 18th July, 1961; Vol. 644. c. 1094.] What was that intended to convey? Presumably, it meant something? Did it mean that we were to have a payroll tax as from tomorrow? Was it a warning about what was to come in the Chancellor of the Exchequer's statement tomorrow? Did it mean that the right hon. Gentleman would take workers even more rapidly away from Scottish industry and send them to the busier industries of the Midlands or the South? Or did it mean that he would get some of the busy industries into Scotland? He said that he had been dealing with it on a geographical basis, but that he was going to change it.

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

I did not say that we were going to change. We must deal with it on an industrial as well as a geographical basis.

Mr. Fraser

The right hon. Gentleman said: It will have to be done more and more in terms of industry … The right hon. Gentleman was not going to make a change, but would do it differently. I would have thought that if he intended to do it more and more in terms of industry he was making a change. If he was not making a change, what he said did not mean anything. The right hon. Gentleman says that what he said meant something, but he also says that it does not mean anything. It seemed to me to be too simple. I do not think that it meant that he would deliberately take more and more workers out of Scottish factories, where they have short order books, and send them to English factories, which had long order books, but that the Chancellor of the Exchequer would be obliged to institute a payroll tax.

The whole point of this, so we were told, was to squeeze workers out of indus- tries where they were not needed, into industries where they were, but it is much easier for an employer in Scotland to get rid of all the workers who are not immediately required than it is for an employer in London or the Midlands to do so. The President of the Board of Trade has told us in debates in the House that there is a good deal of concealed unemployment in the congested areas because employers hold on to labour believing that they might need it in a few weeks.

We do not get that kind of concealed employment in areas of unemployment. The employers there can afford to let the workers go. They know that the workers will be waiting for them when they send out the call again. If the Minister has any idea of using the payroll tax to get the workers from an industry where they are less needed into another where they are more needed, he will get a little more unemployment in Scotland without there being any guarantee that he will get workers into the right industries in the South.

I have said that there has been much greater activity in factory building in the South than in Scotland. I now turn to the Ministry of Labour Report for 1960—Cmnd. 1364—to see what happened in the year under review, and I find that the number of employees in Great Britain increased by 350,000. Employees include the unemployed; they are the people who are either in employment or are registered as unemployed but liable to be taken into employment. The employable population increased by 350,000 last year.

What was Scotland's share? A miserable 9,000. With slightly more than 10 per cent. of the population, Scotland's share of the increased working population was 2.5 per cent—a further indication that the jobs are being created in the South, and that industrialists always underestimate the number of jobs which can be provided in the factories in the South whereas in Scotland, and in any of the new development districts, they always overestimate the number of jobs.

The Report on Industry and Employment in Scotland, on pages 58, 59, 60 and later pages, deals with developments affecting the future. Paragraph 8, on page 60, reads as follows: North Lanarkshire had a successful year in attracting industrial developments which were spread fairly well throughout the district. Completions included the large extension of the steel tubes works of Stewarts & Lloyds Ltd. at Bellshill.. Is the Secretary of State aware that on Friday, 14th July—Glasgow Fair Friday—800 men collected their employment books because there were no job for them? In this firm, which is said to have the most modern steel mill of its kind in Europe, 800 men lost their jobs. It is not likely that these are the circumstances which the Chancellor is likely to describe tomorrow, when he imposes his new credit squeeze, or his capital restrictions, or his increasd Purchase Tax, or whatever steps he is to take. He is not likely to use as the background of his speech the picture which emerges from any analysis of the economic position in Scotland. In those circumstances, I very much hope that the Secretary of State will have made clear to the Chancellor of the Exchequer that we are in no mood to be put off with a further restriction of development in Scotland.

Incidentally, in paragraph 176, on page 45, the Report states: This year there will be 13,000 extra boys and girls seeking work as compared with 1960. … Next year it will not be an extra 13,000; it will be an extra 20,000. That is not the total; it is merely the increase. We see how inadequate the Government's programme is in relation to new work to provide openings for those youngsters. The table setting out new factory building shows that the potential employment in the factories completed in Scotland in the first three months amounted to 696 jobs.

We are told that 13,000 more youngsters will be leaving school and looking for employment this year, and that in the first three months 696 extra jobs were provided. Where will the youngsters find jobs? Does any hon. Member opposite think that they will find them in Scotland? Hon. Members opposite know that they will not? What will they do? Will they take the high road to England—or, as is becoming a little more fashionable, to Germany? These youngsters are not growing up in an affluent society; they want no more than the right to work and, in particular, to get into a job which provides some training for skill.

Let us consider the position of youths under 18 years of age. In 1951, we had 85,400 in employment in Scotland, and another 716 unemployed. In 1960, we had 81,500 in employment. In the debate a year ago the Under-Secretary said that we had to remember that youngsters were staying longer at school. Unfortunately, looking at the relevant figure for youths under 18 who are unemployed we find that in 1960 it was 2,023. Whereas the number in employment has fallen by 4,000, the number unemployed has risen from 700 to 2,000. That is a threefold increase. Notwithstanding the fact that many youths are staying longer at school, more are unemployed now than a: any time during the last ten years.

I do not object to these young people showing a little enterprise and looking for pastures new. I do not mind some of them going to England, and many more going to Commonwealth countries or other overseas countries in search of employment. But our loss of employable labour by migration is a standing disgrace. Over the past ten years we have lost 250,000 of our population. I have no doubt that if we had real prosperity in Scotland, with full employment, many people would still be leaving. I do not complain about that. But we would not have had this loss. People are not coming in to match the numbers going out, because of the lack of opportunity in Scotland.

I do not want to harp on the number of unemployed and the hopeless inadequacy of the number of factory jobs being provided, but when we are told, as we were only last week, by the President of the Board of Trade, at that Dispatch Box, about the increase in our imports of manufactured goods and capital goods, due to the fact that we could not produce them in Britain, we can only point out that the only reason for our being unable to do so is that we are trying to produce them all in the same place. Why cannot we use some of our Scottish workers, with their native engineering skill, to produce some of these manufactured goods and machine tools? We have a good machine tool industry in Scotland, but it is too small.

If private enterprise will not give Scottish workpeople the opportunity to do this job, public enterprise must go in. I do not have much confidence that right hon. Members opposite will set up a new instrument of public enterprise to do the job, but they must know in their hearts that if private enterprise will not do it, and if public enterprise does not, in a few years' time Scotland will be a desert.

The record of the last ten years in Scotland is far and away the worst of all the small countries of Europe, some with a smaller population than Scotland and none with Scotland's proud record in industry. We were in the forefront of the Industrial Revolution, 200 years ago. Now we are lagging behind countries to which the industrial revolution came only in this, the twentieth century. I do not know why the Secretary of State is not wholly ashamed of this performance.

The Report also deals with Scottish roads. I listened with some interest to the answer given by the Minister of Transport last week. When asked about motorways he said: Since 30th April this year, contracts have been placed for 50 miles of new motorway. I hope that contracts for major bridge and tunnel works on the routes of a further 30 miles will be placed by the end of this year. About 170 miles are now under construction. I am going ahead, as fast as statutory procedures and availability of funds permit, with the detailed preparation on all projects for which lines have been fixed. Preliminary work is meanwhile in hand on some 420 miles of proposed motorway for which lines have not yet been established."—[OFFICIAL REPORT, 19th July, 1961; Vol. 644, c. 1236.] How many miles of motorway has he built in Scotland? None. There is not a yard of motorway in Scotland. The work on our trunk roads is hopelessly inadequate to our needs, and I defy any hon. Member opposite to say that he or she is not painfully aware of the slow progress that is made on any of these Scottish projects compared with the progress made on projects in the South.

I said that we have no motorways. The busiest road in Scotland is the A.74, the trunk road from Glasgow to the South. Incidentally, the A.74 carries 90 per cent. of all the long-distance road haulage that runs on the roads of Scotland. That is a surprising proportion. The Secretary of State is working on it. He has a lot of schemes going on in connection with the A.74. In another two or three years, the motorist will have a dual carriage road from Carlisle to Larkhill, in my constituency—and then he will enter the bottleneck, the most difficult and costly bit of the A.74, which must be left to the last. The real bottleneck of the A.74 is where it passes through my constituency, in the town of Hamilton; but that is the last part of the A.74 to be constructed.

The Secretary of State is providing a dual carriageway all the way from the Border, so that the long-distance road haulage vehicles will come thundering more quickly than ever before into this bottleneck. After he has managed to get this bottleneck more congested than ever, this part of the A.74 will have to be used to service the construction of the Hamilton by-pass, which the right hon. Gentleman is pleased to call his first motorway in Scotland. If the Secretary of State has ever had a crazier plan than this one, I hope that he will tell us about it. I would have thought that he and other hon. Members opposite would take the view that better roads would help to attract more industrial expansion. The Secretary of State does not seem to see any connection whatsoever between the two.

The Secretary of State is more disposed to think that the way to solve our unemployment problems is for the councils to charge higher rents for houses. At least, that is what he said in the Scottish Grand Committee, on 4th July: Experience shows that the low rent tradition—I make this remark deliberately—stamps an area as industrially and socially old-fashioned, so that new industry tends to hesitate before seeking new investment and providing new employment in such areas."—[OFFICIAL REPORT, Scottish Grand Committee, 4th July, 1961, c 16.] I would ask the Secretary of State to look at the information he so readily publishes. If he looks at the Census Report he will find that the depopulation of the Border counties, except Dumfries, is quite frightening. If he looks at another publication which he puts out he will see that the Border counties have higher than average council rents. People are not leaving those areas because there are too many jobs, or because the rents are too high, but because they do not have employment in the areas.

The right hon. Gentleman is very concerned about unemployment in Greenock and Port Glasgow. I find that Greenock is among the most highly rented large burghs in Scotland—20 per cent. above the average. It has by far the highest unemployment figure of the large burghs. The industrialists cannot know about the high rents paid in Greenock, or they would be rushing there. Why did not he tell the industrialists? Or is he now telling the President of the Board of Trade that they have high rents in Greenock? If he just lets them know, the industrialists will be running to Greenock to provide jobs.

The B.M.C. must not have known that West Lothian was one of the lowest-rented counties in Scotland, because that is where it took its factory. It is a good thing that the Secretary of State did not meet the chairman because he could have told him that there were low rents there and, therefore, that the area was unattractive to industrialists. The truth is that the Secretary of State talks the most arrant nonsense on these matters. I sometimes wonder whether he is being undermined by his scriptwriter.

I turn to the section of the Report which deals with building. It appears that the Secretary of State made a tremendous discovery. He found that most building materials were in good supply. Of course, building materials are in good supply—that is why brick works are closing. That brick works are closing now and building materials are in good supply when we need more factories, houses, hospitals and schools is not something to boast about, but to apologise for. There is such a backlog of building work today that it is a disgrace that already this year several brick works have been closed in Lanarkshire—and this is before the announcement to be made by the Chancellor of the Exchequer tomorrow.

The truth is that the White Paper reeks of complacency. In his statement tomorrow, I hope that the Chancellor will be planning expansion and not contraction in Scotland. In Scotland, we have never "lived it up." By the test of television sets, washing machines, refrigerators and motor cars, Scotland is a relatively poor country. That is, unhappily, the truth. The test of motor cars is often applied to compare our well-being with the well-being of European countries. There are about seven cars per 100 of the population in Scotland as compared with ten in England. This puts us well behind many of those European countries with which the comparison is so frequently made.

I hope that the Secretary of State will have made clear to the Chancellor that in Scotland we have not sat in at a banquet and that we must molt be made to share the hang-over. We do not want more credit squeeze or capital restriction in Scotland. The Leader of the House has been calling for service and sacrifice. The Tories have sacrificed Scotland for ten years and all that the Scottish people ask is the right and the opportunity to serve.

4.41 p.m.

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

The Report on Industry and Employment in Scotland shows a substantial improvement in the position of employment, investment and production in Scotland. No one who reads it with any objectivity at all can deny that—[HON. MEMBERS: "Oh."] Of course, that is not the purpose of some hon. Members opposite.

The hon. Member for Hamilton (Mr. T. Fraser) dredged out every possible piece of gloomy information that he could find. He started by blaming the Press for not reading the Report, but I suspect that he may possibly bear blame for not reading some parts of it himself. Some parts he studied, the very gloomy bits, but the other bits, I think, he tended to ignore.

If hon. Members have not noticed from this Report that industry after industry is showing increased production and that the employment figures are looking better and industrial investment is looking better, and if they want to write down the prospects of Scotland, well, let them. But all I can say is that they are doing no good to Scotland.

Mr. James McInnes (Glasgow, Central)

The Government have been saying that for ten years.

Mr. Maudling

Despite the protests of hon. Members opposite, the Government have persisted in this "rather foolish course" and have gone ahead with a programme which has brought more jobs and employment to Scotland.

The hon. Member for Hamilton cast some doubt on the figures of jobs in the pipeline. Of course I agree that these figures are tentative. We cannot guarantee that they will be exact. We take the figures which are given by employers in respect of industrial development certificates which are granted or Government assistance which is provided. But by and large I should think that they are fairly accurate. The hon. Member was accurate when he talked about a factory extension in the South of England which was yielding no additional employment. This is part of an agreement which we reached with the motor industry which, I think, was a very satisfactory agreement.

I have always taken the view that the purpose of the Local Employment Act was to provide employment and jobs. Therefore, I am concerned to see that the new jobs created in our economy are, so far as possible in the development districts. If an employer can use the same labour force more efficiently by having more space in Birmingham or London, I am quite prepared to see him have it. That seems to me pure common sense. But I thought that the hon. Member for Hamilton was implying that if any employer in the South of England had more factory space he would employ more labour. That is not so.

It is a perfectly clear understanding which I have reached with this firm and with other firms, as part of the general policy. These firms put up their new employing capacity in a development district. At the same time, we permit them to expand their factory space in a congested district where they can more efficiently use the existing level of manpower. That seems to me to be in the interests of efficiency, of our economy and of our export trade and in the interests also of the development districts.

Mr. T. Fraser

Does the right hon. Gentleman believe that that happens?

Mr. Maudling

If I did not I should not do it, and if the hon. Member has any evidence that it does not work I shall be glad if the hon. Gentleman will provide me with it.

Mr. Fraser

The evidence is contained in Appendix 5 of the Report of the Ministry of Labour, where it states that of the 350,000 new employments last year only 9,000 or 2½ per cent., were in Scotland.

Mr. Maudling

With respect, that is no evidence whatever. The hon. Gentleman knows very well what I am saying. Certain firms have undertaken, in exchange for the opportunity to expand their premises in the South of England, that they will not increase their labour ceiling and their new development will go to Merseyside, Scotland, or South Wales. I have seen no evidence that that is not being done and the hon. Gentleman should not suggest that industry is not carrying that out, unless he has evidence to that effect

Mr. Fraser

It is in the Report.

Mr. Maudling

The Report deals with the period before this happened.

Mr. Fraser

During the last ten years the number of people in jobs in Britain has increased by 1½ million. Is that true or untrue? In the last ten years the number of people employed in Scotland has remained virtually static. Is that true or untrue?

Mr. Maudling

Whether it is true or not, it is irrelevant to the point which I am making. It is entirely irrelevant, and if the hon. Member reflects on what has been said this afternoon, he will realise that.

We cannot determine the location of industry in the United Kingdom entirely on the percentages of unemployment in different districts. That just makes no sense whatever. Quite apart from the importance of ensuring that there is not too much congestion in one area and not too much unemployment in another, there is the question of industrial efficiency, and the rise in costs which often happens if an industry is forced to develop in a location which is commercially disadvantageous.

We must be sensible when discussing those matters. It is absurd to look only at one side of the picture. I should have thought that that it would be agreed that in the last year or so the Government have done an immense amount and taken a strong line on industrial location. On many occasions we have refused to approve industrial expansion in the South and in the Midlands, which, on the face of it, looked commercially attractive, and insisted that this development should take place in areas of substantial unemployment. Sometimes we have done that at considerable risk to the exporting and productive capacity of the country as a whole.

We are trying to hold the balance between these things. Sometimes I am criticised by hon. Members on both sides or refusing an industrial certificate in Nuneaton, Birmingham, Landon or Portsmouth. Today, I am criticised for allowing certain industrial expansion in these industrial areas. I suggest to the Committee that the sensible line for any Government to take in these matters is to try to get industrial development and employing capacity in the development districts wherever possible, but not to take action at the expense of the general efficiency of the economy and the export prospects of some of our rapidly expanding firms.

Mr. A. C. Manuel (Central Ayrshire)

This is very intriguing. The right hon. Gentleman is citing an area where there is unemployment. It is not, in his opinion, a commercial area because of some capitalist standard, about which he knows but about which I do not know very much. It is, therefore, better that industry should not go to that area.

The right hon. Gentleman says that he has to balance the thing up. Does he agree that industry generally should serve the needs of the people? Or should the people move, irrespective of ties of family and responsibility for educating their children and everything else, and go, at the behest of industry, to whatever area industry is located?

Mr. Maudling

The point I am making is that we must strike a balance between these two things. Very often, if we were to force certain industrial expansions, say for the export trade, to development districts, such development would not be economic because of extra costs—the carriage of components and high management costs, and so on. It would be of no benefit to Scotland or to any other part of the United Kingdom to force an industry to do anything which made it uncompetitive.—[HON. MEMBERS: "That is old-fashioned."] It may be that what I am saying is old-fashioned, but it is true, and it may well be that it is better to be old-fashioned and better to stick to truth and the facts.

While we are talking about accuracy in these matters, may I say that I have been inquiring into the steel production figures given by the hon. Member for Hamilton. It is true that in the second and third weeks of July there was a large fall in steel output. I am told that this was due to the special situation resulting from the Glasgow Fair holiday.

Mr. T. Fraser

I did not throw those figures out irresponsibly. I have been in touch with the steel unions. In fact, the trade unions have been in touch with me and have given me details of every blast furnace which has gone out and which is running at lower pressure. All these figures are agreed with the steel employers in Scotland. We are planning now on producing rather more than 17,000 tons a week less.

Mr. Maudling

I was not quarrelling with the hon. Gentleman's figures. I was giving him the information which I have as to the reason for them; and I think that he will find that my information is accurate.

The hon. Member for Hamilton referred to what I said the other day about labour movement from industries with short order books to those with long order books. I certainly did not mean one movement to be alternative to the other. I was saying that already we have done a great deal to encourage industry to expand in areas where there is an excess of labour. That process must continue and is continuing. In addition, we want throughout the country a movement and, if possible, a more rapid movement, of labour out of industrial areas where order books are short and into areas where order books are long.

I agree that in Scotland special considerations—to which the hon. Member referred quite clearly—may make the position different from that in the United Kingdom as a whole, but the proposition is perfectly fair: that it is essential to make the maximum use of our labour force. We cannot expect people to move all the time to where there are jobs. Therefore, we have to have a policy to ensure that, where economically possible, development takes place in areas where people are looking for jobs. At the same time, we as a country must reconcile ourselves to the changing economic circumstances and changing economic resources of expanding industries.

Mr. Hector Hughes (Aberdeen, North)

The right hon. Gentleman is making the point that industry and employment have been fairly distributed throughout the country as a whole. Does he know that the figures show that unemployment in Scotland is twice that in the rest of Britain and has remained in that disparity for the last ten years? The Government have done nothing—successfully, at any rate—to equalise unemployment in England and Scotland.

Mr. Maudling

If the hon. and and learned Member will possess himself in patience he will find that as I go along I shall deal with the point that he has made.

The hon. Member for Hamilton, in his closing remarks said that in a few years Scotland will be a desert. That is the sort of nonsense which does no good to Scotland or to anyone. If we look at the facts in the Report we find that, as I have said, employment, production and investment in Scotland are all showing a definite improvement. It is perfectly fair for hon. Members opposite to say that the improvement is inadequate and should be greater, but it is neither fair nor sensible to ignore the facts which are so clearly set out in the Report.

The rise in production last year was about 6 per cent. above 1959. It is true that it is still slower than in England. That is because of the higher predominence in the Scottish industrial scene of the traditional industries of mining and shipbuilding, both of which are showing a decline whereas general engineering industry, the chemical industry and manufacturing industry are expanding. The basis of different trends in Scotland and the rest of Great Britain is the Scottish dependence on traditional industries which, for economic and cyclical reasons, show a tendency to decline.

The hon. Member underestimated what has been achieved in employment. In 1960, unemployment, on an average, was down to 3.7 per cent. compared with 4.4 per cent. in 1959 and since then it has been consistently better. For the first time for some years unemployment fell in the early parts of this year and has continued falling. In June, it was 2.8 per cent., which was a very great improvement on the position a year ago. The improvement has also been seen in the Scottish development districts. From April, 1960, to April, 1961, the percentage fell from 5 per cent. to 4.1 per cent. and on the latest figures it was down to 3.5 per cent.

I should have thought that a considerable improvement. The largest decreases were in Glasgow, North Lanarkshire and Shotts, Peterhead and Buckie, and Bathgate, but I agree that there are places in which the situation has got worse. [HON. MEMBERS: "Oh."] How can we expect Scotland to pick up in this atmosphere? In Dundee and Broughty Ferry the position got worse and in Greenock and Port Glasgow it is slightly deteriorating.

Mr. George Lawson (Motherwell)

I accept these figures, but I am sure the right hon. Gentleman will agree that one cannot reasonably compare one area with another. To know what is happening one must go back a number of years. Will he tell the Committee how these figures compare with 1957?

Mr. Maudling

I am sorry that I have not those figures available. What I am talking about is the period covered by this Report. It is a period which has shown a considerable improvement on the situation which we saw a little time ago.

About 7,600 redundancies have been notified this year. There have also been one or two disappointing examples recently, to which hon. Members have called my attention. As we see a large number of new enterprises entering Scotland and expanding there will also be other industries which decline. The figure on which one must fasten attention is the net gain, which is considerable, in the employment situation.

There is one particular situation in Scotland to which a number of hon. Members have called my attention when they have come to see me about particular districts. That is the question of employment of young people. We have been very well aware of the great concern in Scotland about that. I am also aware of the large increase in the number of school leavers that there will be in the near future.

This is still a serious problem, but I think, once again, that there has been an improvement which should not be ignored. Unemployment among young workers in June was less than it has been for four years. It was just over 2,000. There were 8,000 unfilled vacancies. The apprentice intake of boys in 1960 showed a 6 per cent. increase over the previous year. There have been encouraging signs of interest shown by firms in apprentice training. The jute industry and Colvilles have new schemes. I am glad to see that a Scottish committee has been set up as a result of a meeting of the Industrial Training Council.

I am quite certain that my right hon. Friend the Secretary of State will agree with me, for I know his mind on these matters, that in view of the bulge in the birthrate we shall have this problem with us for some time. While I agree that it is a problem which we must continue to watch very carefully, I say, once again, that we should not underestimate the progress made during the last year.

The next point I refer to in recent developments is the rate of investment in Scotland. Looking again at the Report, we find that over the last three years public investment in Scotland has been about £170 million a year. That is a steady average and is about 13 per cent. of the total for Great Britain. It compares favourably with the population statistics. Investment in private manufacturing industry has lagged behind a little, but there has been a considerable improvement between 1958 and 1960. In 1960, investment in private manufacturing industry in Scotland went up by 30 per cent. compared with only 18 per cent. in the United Kingdom as a whole. That is one example in which I am glad to see Scotland getting ahead of the average for the whole United Kingdom. I am sure that the hon. Member for Hamilton would welcome that.

Turning to the prospects as revealed by the Report, which are covered very clearly in paragraph 177 onwards, I think that there is—[An HON. MEMBER: "What about the figures?"]. We may bath juggle with the figures, but the only difference between the hon. Member and myself is that I catch the ball when it comes down whereas he sometimes drops it. The improvement we can look to here is very solid. Shipbuilding is obviously up against a very difficult time still, but one or two recent orders have been encouraging. There was the order which Lithgow's had for a tanker for Norway, which shows that the best Scottish yards can compete with European competitors. I am certain that credit facilities available to our builders are equally as good as those available to our competitors.

Dr. J. Dickson Mabon (Greenock)

Is it not the fact that the reason for that order lies in the large funds behind the company, so that it is able to give credit facilities which other companies cannot offer? Does not that underline the need for the Government to take much more vigorous steps than they have done in the past to provide far better credit facilities for all shipbuilders in Scotland?

Mr. Maudling

The Government do not provide credit facilities; they provide credit insurance facilities. If the hon. Gentleman looks at this case, he will find that it was contracted after the improvements made by the Government in that direction a few months ago, which is rather good evidence that what we did was helpful to the Scottish industry. I think that other orders will follow.

Shipbuilding is facing difficulties, and we all know that coal mining, with its geographical problems, high costs and relative unprofitability is also in difficulty. The textile position is rather mixed. Jute has been running into a rather difficult patch, because of the present price structure of the raw material, but we hope that it will improve. On the other hand, knitwear and some other textiles are showing considerable improvement, and clothing is certainly on the upgrade.

I suppose that the engineering industry is the most important of all, and here it is encouraging to see the heavy side of the industry getting more orders in recent months. That is only to be expected in view of the growing rate of investment but, in the past, one has been concerned to see that side of the industry lagging, and the recent pick-up has been encouraging.

Paper and printing progress, chemicals are doing very well, and the food and drink industries maintain their progress. Improvements in the aircraft position, referred to in the Report, may counterbalance the decreases in locomotive construction, which are considerable. The construction industry, of course, has a very heavy order book.

I am sure that new developments either already introduced or now taking place in Scotland will add to production and employment prospects. The developments at Colvilles are very important, bath in themselves and for what they will provide as a general industrial base. There have been developments in the motor industry, and the component manufacturers are showing signs of following those firms, as was predicted before the movement took place. There is Hughes Aircraft, National Cash Register and, in clothing Simpsons and Playtex. There is the firm of Thames Board Mills in the paper and printing field, and British Hydrocarbon provides another source of employment.

Throughout the Scottish scene one can see a number of new developments that will add to the general hopes one has of an expansion of Scottish production and employment, but it is perfectly right to say that one must balance these increases in the expanding industries against the continuing serious problems facing coal mining and shipbuilding, and the fact that in Scotland the industrial percentage represented by coal mining and shipbuilding is so much higher than it is in the United Kingdom.

A word now about the Government's contribution to the present position. We have given considerable assistance to the steel industry—with, sometimes, a certain amount of controversy over the manner in which it has been given. We have helped the shipbuilding industry for several years now by the very favourable tax concessions given to British shipowners and, with the Greenock dry dock the Government are making a useful contribution to a traditional industry. When thinking of new industries and occupations it is always important not to forget the jobs created in the old traditional industries, which can be just as important—

Mr. John Rankin (Glasgow, Govan)

But, surely, the right hon. Gentleman would agree that the 40 per cent. tax rebate to the shipowners in no way compares with the assistance at present being given to Canadian shipowners by the Canadian Government—and that is just one example.

Mr. Maudling

It is very hard to compare a tax rebate of this kind with the type of regulations that the Canadians propose for the carriage in certain areas of their own cargoes in their own ships. I do not think that one can strike a balance. Nevertheless, the 40 per cent. rebate is a very big and special assistance to the industry, and is one that I think that hon. Members have always recognised as being right to give. It has meant that the taxation problem of the shipbuilding industry is now much smaller, but I agree that flag discrimination, which is much less within our control, is still very formidable.

Since the war 50 million sq. ft. of new factory space has been built in Scotland, creating employment for 115,000 people. Of this total, about 20 per cent. of the factory space, providing over 50,000 jobs, has been built by the Board of Trade. Since the Local Employment Act came into force, Board of Trade factories have been approved in principle to provide over 2½ million sq. ft. of factory space, which will provide over 11,000 jobs, and the buildings providing most of this space are now under construction. That is a fairly formidable total of Government assistance given to Scotland for factory building.

Generally speaking, we find it much better to build factories to the requirements of the industrialists. First, one catches one's bird and then one provides—I will not say the cage, but the factory for him. There are cases, however, where good arguments for an advance factory are put forward, and we have agreed to build a few. I am glad to say that we have found a tenant for the first factory at Coatbridge, and hope soon to announce the details. This should provide useful new jobs there. We hope to find tenants, also, for the other advance factory.

The units at Carfin have been taken over, and I pay tribute here to hon. Members opposite for pressing me on that point. I am always willing, I hope, when I am wrong, to agree that I have been wrong. Owing, as I say, to the persistence of hon. Members opposite, we have taken over some of the premises at Carfin, and this is making a contribution I acknowledge that this was good enterprise on the part of hon. Members opposite—

Dr. Dickson Mabon

Before the right hon. Gentleman leaves the subject of advance factories, may I ask whether it is his intention soon to designate a new advance factory? And, if so, would he consider the Port Glasgow Industrial Estate as a site for it?

Mr. Maudling

If it were my intention to do so in the future I would not be able to say so now, but I am quite certain that if and when this comes to be dealt with the claims of the Port of Glasgow will be forcefully put to us, not least by the hon. Member.

Since the Local Employment Act came into force, a great deal of assistance has been given to Scotland. The latest figures, those from 1st April, 1960, to 14th July of this year show that total financial assistance of about £24 million was offered, estimated to provide over 20,000 new jobs. That is a very large amount, indeed; it represents nearly half of the total amount of assistance given or offered to the whole of Great Britain.

If the hon. Member who talked about unemployment percentages would look at the figures, and relate unemployment in Scotland and Great Britain as a whole to the assistance given to Scotland and Great Britain as a whole, he would find that Scotland has had very generous assistance. It has had 47 per cent. of the assistance offered under the Local Employment Act, which relates very well to the total unemployment in Scotland at the time of the passing of the Act—

Mr. McInnes

Last year, the right hon. Gentleman categorically stated that there were 39,000 new jobs in the pipeline. We have not seen where those 39,000 new jobs are, but today he adds another 20,000 to them. Will the right hon. Gentleman say where those jobs are?

Mr. Maudling

They are in the pipeline. [An HON. MEMBER: "Oh."] The hon. Member is making a mystery—[An HON MEMBER: "There's a hole in the pipeline."]—about the number of jobs coming forward from projects we have approved or financed. Quite a number of the jobs that were only in prospect a year ago are now actual jobs. That is why the unemployment figures are so much better, particularly in the development districts. I therefore hope that the hon. Gentleman will take heart from the fact that a number of new jobs has come into existence, because I am sure that that is what he and his constituents wish to see—

Mr. Thomas Steele (Dunbartonshire, West)

The right hon. Gentleman has stated that £24 million has been offered, but he did not say whether it had been taken up. Does this sum include certain offers to the Albion Motor Company, and others? Further, has the £24 million not only been offered but accepted by firms that are going ahead with projects?

Mr. Maudling

I could not give the exact proportions. The great majority of it would have been accepted. I cannot say what, in particular, has been accepted, but the figure represents the total amount that the Government have offered by way of assistance to Scotland since the passing of the Local Employment Act, It represents 47 per cent. of the total value of offers made to the United Kingdom as a whole.

The range of products to which help has been approved in principle in Scotland ranges from motor cars, electric condensors, sheet metal works, accessories for motor cars, machine tools, electric engines, gas and electric appliances to, I am glad to report, a firm making golf clubs. It shows that we do not exclude the small industries as well as pay attention to the large ones.

One of the great problems is that of the Highlands, and I think it would be unreasonable to expect the same pattern to present itself there as in the industrial belt of Scotland. About £½ million has been offered to projects in the Highlands and we shall certainly continue all the time to look as sympathetically as we can at projects of expansion in that area. However, I think that, largely, they will have to be based upon the local agricultural and forestry industries and the uses and developments of the products of those industries.

Of course, there is the extremely important tourist industry which, I am glad to say, showed last year, despite the bad weather, an improvement. [HON. MEMBERS: "Not the bad weather."] I see; it is never bad weather in Scotland.

I am told that 90 per cent. of the £24 million has been accepted. I think that all concerned with promoting the tourist industry in Scotland are entitled to congratulation on the efforts that they have made, and certainly the contribution which they make to the general well-being of Scotland and the balance of payments of the country as a whole are very much to be welcomed by all concerned.

I have been trying to deal with the points raised by the hon. Member for Hamilton and with the general industrial and employment picture in Scotland, and making the point that there has been an improvement in the period since our last debate in employment and production. Investment is at a high level, but though a number of projects have come into Scotland and a very large amount of Government assistance has been rightly concentrated on Scotland, because her claims are very strong, the problem will remain one of diversification, of finding new industries, not only to provide additional employment but also to make good the decline which we must expect in some of the traditional Scottish industries.

The position under the Local Employment Act, of steering industry to Scotland has changed to some extent, As one would naturally expect, the development districts near to Birmingham, Coventry and London—places like Merseyside and South Wales—are bound to attract industry more than are places like Scotland, Ulster and the North-East Coast. As we have been able to provide industry in these nearer areas so we have removed places from the list of development districts, or we have notified them that we will not accept further applications for assistance. There is more and more a concentration of Government help in Scotland and Northern Ireland.

At the same time, one must recognise that it is more difficult to expect a business in the Midlands or the South to locate expansion of plant in Scotland than in the South-West or Merseyside. In same ways, the best prospects for the development in Scotland are those offered by American and other foreign firms who are coming to this country. It is no more a disadvantage to them to set up in Scotland than to set up in the South. In fact, there is often skilled labour available there. If people have a main base in London and are setting up a branch factory elsewhere at a distance from their markets it creates great difficulties in the carriage of components and other necessary materials.

The development districts in England and Wales have attracted a good deal of industry and, therefore, the concentration of our help is now much mare in Scotland and Northern Ireland. The difficulties of getting industrial expansion to take place in those areas are growing all the time.

The figure of about 29,000 jobs in prospect, of which 25,000 are in the development districts, is very encouraging. We shall continue to try to get further industry into Scotland, and it will greatly assist if hon. Members will do their best to make Scottish industry as competitive as possible, to reduce the costs of production there as much as possible, to get away from the idea that everything in Scotland is gloomy and disastrous, and to paint the picture, not of the wicked Government trying to grind down the Scottish people, but of the expansion that can take place given the help that the Government are providing and, given a proper determination on behalf of the Scottish people, employers and workers alike, to ensure that industrialists are not forced to go to Scotland but want to go there.

5.16 p.m.

Mr. John Strachey (Dundee, West)

I do not think that the speech of the President of the Board of Trade will have done anything to mitigate the sense of complacency which we got from the White Paper. The right hon. Gentleman seems to have said little more than that it was very wrong of us to attempt to puncture that complacency. Surely, if, in our opinion, the situation is unsatisfactory, it is our duty to point it out so that it may be remedied. We certainly resent this impression that we are doing some disservice either to our own constituencies or to Scotland as a whole when we do that.

It is perfectly true that there has been a decrease in unemployment in Scotland. After all, in a period when in the United Kingdom as a whole unemployment has gone down to a very low level indeed, it would be disastrous if there had not been some improvement in Scotland also. If the Government are relying on the overall position of employment in the United Kingdom as a whole, then I must remind the President of the Board of Trade of what is going to take place tomorrow when his right hon. Friend the Chancellor deals with the matter of unemployment in the United Kingdom because it cannot be denied that the effect, and, indeed, the object, of the announcements which we are told the Chancellor is to make to us tomorrow are to reduce the level of employment in the United Kingdom as a whole.

We do not think that that is necessary, but no one can deny, whether it is necessary or not, that its effect will be disastrous in areas like Scotland where there is still a substantial level of unemployment. Therefore, it seems to me that my hon. Friend the Member for Hamilton (Mr. T. Fraser) was fully justified in making the real comparison which he did of the relative position between Scotland and the United Kingdom as a whole. Surely that is the relevant thing, because we in Scotland cannot possibly depend upon a general, undiscriminating policy which would produce overfull employment and an excessive demand on labour in the Midlands and London long before it soaked up the pool of unemployment in Scotland.

What depressed us most, I think, in the right hon. Gentleman's speech was the attack—I can call it nothing less—on the whole principle of the distribution of industry which he made in several passages of his speech. It really seems to us most retrograde for the right hon. Gentleman to take the occasion, which he did today, to stress all the arguments against measures for the redistribution of industry, under the old Act or under the Local Employment Act.

After all, what is the argument which he stressed so heavily about costs being so much higher in the areas of high unemployment like Scotland? It is true that we cannot move a shipbuilding firm inland, neither can we move coalfields to areas where there is no coal. But if we apply that argument to industries such as engineering, clothing, and all the lighter industries, how much substance is there in the suggestion that costs are higher in Scotland? I should have thought that there is very little in the argument.

If the economic principles by which the present Government set such store have anything in them, the whole ten- dency in areas where the supply of labour is in excess of demand is that costs are lower, and not higher. I do not think that anyone could deny that. In areas like the Midlands and London, which the Government, at any rate, think are overfull of employment, the tendency is to push up wage rates and to force firms to work overtime. That is less true in areas where there is still susbtantial unemployment. It is, therefore, impossible for us to believe that industries cannot be induced or forced to go to areas of unemployment because the costs would be so much higher and because they would be uncompetitive in the export markets. That is demonstrably false.

It is profoundly disturbing to every hon. Member on this side of the Committee that those arguments should be trotted out to us. We feel that the sustained effort to discriminate in favour of Scotland and other areas of high unemployment, which we regard as indispensable, is not going to be maintained. The relative figures which my hon. Friend the Member for Hamilton produced are extremely strong and they show that Scotland, in terms of development, is not even holding its own.

As my hon. Friend said, Scotland has 10 per cent. of the population of the British Isles, and yet it is getting just over 6 per cent. of the factory building and, therefore, is tending to lag still further behind. Whatever is the absolute level of unemployment at a particular time—and it will go up and down with the United Kingdom average to some extent—unless far more determined efforts are made than the Government are even considering at the moment, we cannot be satisfied.

Consider the figures of emigration from Scotland which my hon. Friend mentioned. He said that in many respects Scotland had a far worse record in economic development under the present Government than have many of the smaller countries in Europe. That is undeniable. My hon. Friend referred to one smaller country in Europe which bears a similarity to Scotland. The other small country where there is a flood of emigration is East Germany. I am not saying that the emigration from Scotland is on the same level—

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

Nor for the same reason.

Mr. Strachey

Nor for the same reason, certainly not. The reason in Scotland is persistent unemployment, and it is a very discreditable reason to this Government. So long as that goes on, no Scottish Member can possibly be satisfied.

I wish to say a word about the position of Dundee. On earlier occasions when we have debated the situation in Scotland, Dundee has been relatively well blessed, but today it is very badly blessed compared to the rest of Scotland. Our anxieties about employment in Dundee have grown markedly in recent months. There has been a deterioration in the situation, which has varied from month to month. A month ago unemployment was at a substantial level of 4.8 per cent. which, for a large industrial city like Dundee, is grave, and it varies between 3 and 4 per cent. at different times which is not only far above the United Kingdom average but well above the Scottish average.

Nothing that the President of the Board of Trade has said today will be of much comfort to Dundee. Our main industry is still jute. I was careful to note the right hon. Gentleman's words. He said that the jute industry had been going through a difficult patch and it was to be hoped that it would improve. No one can contradict that hope, but it certainly does not suggest that the Government have anything in mind to help the position there.

If there is to be any question of entry into the European Common Market, the jute interests which are so highly concentrated in the area of Dundee require careful consideration. I am not saying that it is necessarily impossible to reconcile them with membership of the Common Market—it may be possible to do so—but it will require great care and attention. It is not a question of European competition in finished jute goods. It is rather a question—and a complicated one—of reconciling the present arrangements for the import of Indian finished jute goods with membership of the Common Market and without detriment to our Commonwealth relations. It will not be easy, but it may be possible, and we shall certainly press very hard on the Government to make that one of the conditions of entry into the Common Market.

I want to say a word about the efforts which are being made in the City of Dundee to help itself. I think that the Secretary of State, who has been there recently, will agree that real efforts are being made to this end. The problem is quite serious. To reduce the level of unemployment in Dundee to 2 per cent., which is quite a modest goal—it would still be well above the present United Kingdom level—probably between 2,000 and 3,000 more jobs are needed, and there seems little or no prospect of getting them.

That conclusion has been reached quite impartially by a committee set up under Lord Provost McManus, who is doing very fine work indeed in this respect in conjunction with the wide interests in the city—leading employers, the trades council, the chamber of commerce and men and women in the universities who are experts in economics.

They have arrived at certain conclusions as a result of a questionnaire issued by the department of economics at the university, under Professor Campbell, who deserves the thanks of the city for the work he has done. The decidedly disturbing conclusion is reached, that, when all the measures—and there are some—which are going on to help Dundee are taken into account, with new projects like the Tay road bridge, the new hospital, the clearance of the centre of the city and industrial developments—there are not many—which are taking place there, there is a grave deficiency still in employment prospects.

I trust that the Secretary of State will give us some reassurance. In the first place, we want to be assured that there can be no question of stretching out the time or postponing present projects such as the Tay road bridge, the building of the hospital, and so on. The Tay road bridge is of great importance. We realise that the actual number of jobs given locally in the building of the bridge is not in itself likely to be very great, but any postponement of the start of construction under the economy measures which are threatened would have a disastrous psychological effect in Dundee generally and on employment prospects in particular. Experience shows that big road bridges connecting somewhat distant areas with the rest of the country have a very great stimulating effect on the prospect of bringing in new industries, and this is certainly true of Dundee.

We ask for more assurance than that. We ask that the deficit, for such it is, in the prospect of jobs which local inquiries in Dundee have revealed should be acknowledged by the Government and that proposals should be put forward to meet it. A real local problem has been identified. The magnitude of it has been identified. Local initiative by itself cannot solve it. Local initiative can do no more than identify it and show its magnitude. It can be solved only with the co-operation of the central Government. We very strongly press the Government to tell us what further measures they have for attracting new industries to Dundee and for giving employment in one way and another during the next five years.

The President of the Board of Trade spoke about advance factories. We have for a long time pressed that at least one more advance factory should be built in Dundee. The right hon. Gentleman spoke as if, because one advance factory was built in one place, it could not be built in another. We do not accept that for a moment. Why should not several new advance factories be built in Scotland? The right hon. Gentleman admits that they have been a success where they have been built. Now that the shortage of jobs in prospect has been clearly shown after careful local investigation, surely the case for one or more advance factories becomes very strong indeed.

I make no apology for calling attention to the renewed seriousness of the employment position in Dundee. I think that it is a service, not a disservice, to the city to do so and to show that our problem, like the wider problem of Scotland, needs most urgent attention from the Government.

5.34 p.m.

Sir James Henderson-Stewart (Fife. East)

I have a warm place in my heart for Dundee, but I do not think that the right hon. Member for Dundee, West (Mr. Strachey) will expect me to comment on what he has said about the details of the policies which have been followed by the Lord Provost and the Council there. I observe what is happening with great interest and sympathy from the other side of the Tay, but I have quite enough to do on the other side of the Tay to keep me fully occupied and interested.

If I may say so, I thought that the right hon. Gentleman's remarks about jute and the Common Market were very wise. The jute industry is in a peculiarly difficult position. I agree with the right hon. Gentleman when he says that, if we are to enter into discussions about the Common Market, we shall have to consider the problem of the jute industry with the utmost sympathy and care. It is not necessarily a case of being against entry into the Common Market, but we must be very careful about what we do before we commit the industry of that great city to a place which might be difficult for it.

Generally speaking, I should never claim that the Opposition have any reason for not opposing, probing and criticising on occasions such as this. It is their proper duty to probe into what is happening now, into what will happen tomorrow and into what has happened in the past year. It is quite right that such probing should take place. I agree with my right hon. Friend the President of the Board of Trade in doubting a little that the method of doing it is always satisfactory. The Opposition are inclined to paint too dark a picture. I have said that many times, and I repeat it now. Nevertheless, for all that, we are here examining conditions and problems in Scotland, and we must do it with as much candour and frankness as we can. I turn now to the matters I mentioned—what is happening now and what has happened in the past year.

The Report for the past year reveals that in our country we have not entirely a bed of roses. There are thorns and thistles in plenty to be found in the Scottish industrial scene. Nevertheless, on reading the Report as a whole, I feel that no unbiased person would deny that it reflects a marked and, I suggest, welcome improvement in the general economy of the country. The best way to check that assertion is to look back upon similar debates of two or three years ago.

Two years ago, if I remember aright, there was a strong and persistent demand from these benches, and, I think, occasionally from the benches opposite, for what was called a "break-through" in the traditional order or pattern of the Scottish industrial set-up. It was urged that some really big, new enterprises should be created which would give a fresh spurt to the Scottish national spirit and import, as we thought, an effective balancing influence into our development. I very well remember the speeches made by my hon. Friend the Member for Glasgow, Pollok (Mr. George) on this very topic, on the need for a breakthrough.

Mr. James H. Hoy (Edinburgh, Leith)

The strip mill.

Sir J. Henderson-Stewart

Others talked about it, too. The Committee may recall that I had something to say about the need for a wide-ranging inquiry into Scottish industrial conditions so that we could, as I put it, blue-print the future development of our country.

In reading the Plowden Report over the weekend, I was interested to see exactly the same suggestion for a five-year plan. That is what we wanted and that is what is foreshadowed and demanded in this Report. There is a need to look ahead, plan ahead and to organise ahead for five years. I was glad to see that the suggestion which I then made was put into effect later the same year. I am sure that we all look forward with great interest and eagerness to receiving the Report of the Scottish Council. I suppose that we shall have it some time in the autumn.

Mr. T. Fraser

I should have thought that the Toothill Committee is nothing to do with what the hon. Gentleman has suggested.

Sir J. Henderson-Stewart

That remains to be seen. We do not know what the report is yet.

Mr. Fraser

We do not know what the report is, but we know that the Toothill Committee is not doing the job which would be done by a wide-ranging new authority.

Sir J. Henderson-Stewart

Let us wait to see what the report says. I hope very much that it will be possible for the Scottish Council to look forward five years. If it does not do so I shall be disappointed.

But much more than just the prospect of this report has happened in the last year. The break-through to which I have referred has taken place. Not one but four major new enterprises have been established or planned within the past two years, the size and character of which might not have been thought of before that time. The strip mill at Ravenscraig, the new B.M.C. factory at Bathgate and, more recently, the agreements about the Rootes factory at Linwood and the large extension of the Pressed Steel Company at Bathgate are far-reaching developments which not only offer substantial employment to Scottish people but make a major contribution to the diversification of Scottish industry. That is what all of us have been requesting for quite a long time—the importation of new big enterprises.

As the Report rightly claims, the value of these four new enterprises is much greater than we might have contemplated. The strip mill will make available an extended range of finished steel—that is obvious—while the vehicle factories will create a considerable demand for materials and components throughout Scotland. Together, they will provide an incentive to expand and an opportunity to develop factories which are already established.

The concluding words of the Report are significant and worth noting: As the evolution process is necessarily slow, the full effect, both direct and indirect, of these and other projects will only gradually build up over the next few years"— and this is the point— history may well refer to the recent past as having provided some of the most important foundations needed to establish the broader-based and progressive economy which we want. I think that that is true. I share that view, and I compliment my right hon. Friend the Secretary of State, the Board of Trade, the Scottish Council and the firms interested on their achievements, which are quite startling. There is a need for a great deal more to be done, but a break-through has taken place and we hope that it will develop.

As I have said, however, there are thorns and thistles as well as roses, and I am afraid that there are some matters which cry out for action. The state of our shipbuilding industry, for example, is little short of alarming. Here, I know that I have the support of hon. Members on both sides of the Committee. I welcome Lithgow's recent order. I know that the Government have recently introduced taxation reliefs.

Mr. Rankin

Recently?

Sir J. Henderson-Stewart

Well, whenever it was—two years ago, was it? They have been welcome, but a great deal more needs to be done. No doubt we shall hear something about that tomorrow. [HON. MEMBERS: "Oh."] I shall be very disappointed if we do not. The position of the Scottish shipbuilding industry has a corroding influence on the economy of the whole country.

Mr. Rankin

Corroding?

Sir J. Henderson-Stewart

Yes, a corroding influence. We had a debate on this matter ten days or a fortnight ago, when my hon. Friend the Member for Perth and East Perthshire (Mr. MacArthur) made a very interesting and useful speech. I do not wish to develop the matter at length, but I think that the outstanding facts need to be repeated today.

The facts are very simple and pretty grim. In the United Kingdom as a whole, since 1957 orders for ships have fallen from 896 to 430, representing a decline of 7 million tons. That is pretty shattering. In the same period on the Clyde orders for ships have declined from 241 to 97, a loss of about 1 million tons and a labour force loss of nearly 5,000. These are very startling facts and members of the public must have them drummed into them so that they realise the seriousness of the situation.

According to the Report of the Scottish Office further reduction in activity seems inevitable this year in the shipbuilding and marine engineering industry. Apparently the depression is continuing. There is an addendum to the Report which rings bitterly in the minds of those of us who have Scottish interests. It states: Two Scottish shipyards (we are told) are among those which have been invited to submit tenders for the building of the new 'Queen' passenger liner. The only comfort which I can draw from that statement is that it is to our credit that no Scottish Member on either side of the Committee voted against the recent North Atlantic Shipping Bill. I devoutly hope that the order for the new "Queen" liner will come to the Clyde. I believe that it is right and proper that it should, but, whether it does or does not, there is a separate problem affecting shipbuilding in Scotland which, in my view, demands swift remedial action on the part of the Government. It is to this that I ask my right hon. Friend to give his close attention.

I refer to the burden of local rates following upon the recent valuations. I know that my right hon. Friend the Minister of State, Scottish Office, recently met Clyde shipbuilders and offered to assist them in securing an early decision on a test case presented to the local valuation committee or, if necessary, to the Land Valuation Appeal Court. That is very good as far as it goes, but is this all that the Scottish Office can do for the shipbuilding industry at this time? How long will it take to have the case presented and decided? Even if the court finds for the appellant, how long will it be before the benefit of the revised assessment reaches the actual shipbuilders?

My right hon. Friend the Secretary of State has been most helpful in providing me with information about these and similar matters, but, if I understand him aright, there is likely to be a long period—perhaps a year or more—before any effective relief can be given. If that is so, we are really in difficulties, because meanwhile the greatly increased burden of rates will seriously affect the ability of the Clyde firms to compete for new orders and will, therefore, result in widespread unemployment in the industry.

To a greater extent than almost any other industry, shipbuilding has to make use of heavy fixed equipment, which inevitably inflates the valuation placed upon the yards. I am authoritatively advised that, making no allowance whatever for any possibility of increased spending by the local authorities, the rates to be paid by the Clyde yards under the present dispensation will rise from £173,000 to £507,000 this year and to over £1 million two years hence. To put it another way, in the shipyards working to full capacity the higher rate burdens will add from £20,000 to £70,000 to the cost of ships commonly built on the Clyde. Where the yards are not fully employed, the increased cost per ship will be greater.

We must bear in mind, all the time, too, that firms are tendering today for orders two years hence. Therefore, they must know today what their costs will be two years hence. That is the urgency of the matter. That is why we have to settle this problem of rates and valuation without further delay. The conclusion is inevitable, that if we are to allow for the huge rate burden brought about by the recent valuations and the withdrawal of derating a short time ahead, we must be prepared to see lost orders, empty berths and fewer jobs in the Clyde.

I do not say that without serious thought. I have thought this out and I assure the Committee that this is not talking through my hat. Hon. Members know that I am speaking of the actual grim facts.

Mr. Rankin

Will the hon. Member assure us also that he is not being gloomy?

Sir J. Henderson-Stewart

I will carry on. I started by saying that the general result of the Report was good, but that there were thorns and thistles. These are some of them. It is no use standing up and saying that all is well when we know that we have our weak places.

Mr. Manuel

Would not the hon. Member agree that the result of any appeal to the Valuation Court is a foregone conclusion against the appellant, as such an application will be treated as all other matters are treated? If there is to be any relief from the added valuation upon shipyards, it will need to come direct from the Government in some other way than by a rating appeal.

Sir J. Henderson-Stewart

It may be that the hon. Member is right—I do not know. We know that machinery exists through the various courts, and my right hon. Friend is right in advising shipping firms to go through the process. I am asking that, when that is done, my right hon. Friend should take action.

I want to go further, however, because the conditions for shipbuilding on the Clyde are to be found in nearly all the shipyards around the Scottish coasts. In Fife, for example, the modest shipyard at St. Monance has had its valuations raised 400 per cent. I understand that on the North-East, round about Buckie, the position is even worse, so I am informed by the chairman of the Shipbuilders' Association. That is a serious matter.

If we are to maintain those small ports as viable units, the Scottish economy must be so managed as to prevent the imposition of these new sudden burdens upon these local yards. These burdens which have come upon St Monance, Anstruther and other fishing areas have been sudden and crushing. I know that my right hon. Friend is concerned about this matter, but I must warn him, although I am sure it is hardly necessary, that unless action is taken speedily to relieve these places to which I have referred, opposition and criticism will continue and spread throughout the country.

It is not only in shipbuilding that industries will be affected by this change of valuation. Industries in all parts of Scotland where this has had its effect are themselves affected. Some parts of the country are much more seriously upset than others. It happens that Fife and, I think, Buckie, Banff, part of Moray, Orkney, and Ross and Cromarty are the most heavily hit with regard to the new valuations. In Fife, some of the burghs have had imposed upon them the additional burden of losing, not only part, but all of their equalisation grant. The increased valuation has brought about a complete cut in the equalisation grant, with the result that these authorities whom I shall name will require to impose the most heavy local rates upon their industries. It needs no imagination to see what might happen. In the case of one burgh in my division the new valuation has resulted in one factory, one enterprise alone, paying 40 per cent. of the total valuation of the town. That is a very remarkable situation.

I would not mind very much, none of us would mind very much, if the new valuations appeared fair and equitable throughout the country, but that is precisely what they do not. The percentage increase in the rateable valuation from 1960–61 to 1961–62 over the whole country of Scotland is 53. In Cupar it is 107, Falkland 100, Anstruther 118, Newburgh 126, St. Monance 112. In Anstruther the equalisation grant has fallen from £13.000 to nil and in Newburgh from £9,000 to nil. I do not know how local authorities like these are going to meet their commitments in the next year without imposing overwhelming new local rates upon the local industries.

This is an industrial Report that we are considering. It is industry which is affected. I want to plead its case against these effects. Let me give one example. It really is farcical—is it not?—to declare the Anstruther area a development district under the new Act with the idea of encouraging industry to come there, when at the same time we are going so to exaggerate the rate burdens of that area as to frighten every industrialist out of it altogether. It does not make sense.

In this whole matter of public finance, public expenditure local and national, it is the chopping and changing at short notice which so upsets public opinion. That is the truth. In the examples which I have quoted the shock of the sudden reversal of established practice has outraged the sense of justice among our people, and it was precisely against this practice that the Plowden Group reported the other day. This is What it said: To introduce more stability into the decision-making process at this point could be a material factor in improving the control of public expenditure. That is true, but that is an understatement.

As I have said, I know that my right hon. Friend is perplexed about this matter. I know that. But, unless the Government are prepared to bring substantial relief to these areas and industries so hard hit now, and to which I have referred, then we shall be faced in these areas with a depression so acute that none of us may be able to withstand it.

6.4 p.m.

Mr. James McInnes (Glasgow, Central)

I listened with great interest to the hon. Baronet the Member for Fife, East (Sir J. Henderson-Stewart), and I would strongly advise him to consider the implications of some of the statements he made about rating and valuation. He should go further into the detail of the matter with the Fife- shire local authorities who, if they have not already briefed him, can at least convey to him the facts and figures relating to their valuation before revaluation took place.

Mr. T. Fraser

A low valuation?

Mr. McInnes

Yes, very low indeed.

As to the rate burden on the shipbuilding industry, I would not accept for one moment that, apart from the procedural question of appeal, it would be the function of the local authority to reduce the rate burden of the shipbuilding industry, because what in effect would happen would be that the shipbuilding centres like Glasgow, Greenock, Port Glasgow and elsewhere throughout Scotland would be subsidising the shipbuilding industry, While Edinburgh, Perth, Dumfries, other towns in Scotland without any Shipbuilding industry would be freed from that, and if the shipbuilding industry finds it is highly competitive with its competitors in foreign countries whose Governments subsidise their shipbuilding industries, then it ought to be the responsibility of this Government to give the shipbuilding industry similar subsidies.

However, I do not want to dwell on the question of rating and valuation. I want to come back to the question which is before us, namely, that of industry and employment.

Mr. T. Fraser

And the Statute.

Mr. McInnes

I could easily say that the party opposite made the Statute and put it on the Statute Book, supported in that by the hon. Baronet, but, as I say, I want to deal with the question of employment and industry. The hon. Baronet said he wanted to break through a barrier. Well, so do I, but my barrier is entirely different from his. I want to break through the barrier of Governmental complacency and Governmental ineptitude over the question of industry and employment in Scotland.

Government complacency has never been better exemplified than in the speech we heard this afternoon by the President of the Board of Trade, a speech which, despite the situation in Scotland, was smug and complacent in every respect, a speech which savoured, if I may say so, of tedious repetition. I think hon. Members will be surprised when I direct their attention to these facts. The President of the Board of Trade today mentioned the question of the great development at Grangemouth, and he again referred to the National Cash Register Company at Dundee, the extensions and developments at Peterhead, and to the enterprises in North Lanark such as that of the Caterpillar Company. I remind hon. Members that when we debated this subject of industry in Scotland in 1958 the President of the Board of Trade referred to the extension of the British Petroleum Company at Grangemouth, and he did so again in 1959, and again in 1960, and again this afternoon. In 1958 the President of the Board of Trade said: I should like to draw particular attention to the new factory for the Astral Equipment Company …"—[OFFICIAL REPORT, 10th July, 1958; Vol. 591, c. 610.] at Dundee. In 1959 the Minister of State, Board of Trade, said we should not forget the Astral Equipment Company at Dundee. In 1960 the Parliamentary Secretary to the Board of Trade said that there are, of course, the extensions at Dundee of the Astral Equipment Company. And, of course, the President of the Board of Trade again mentioned that today. Then in 1958 when we debated this subject the President of the Board of Trade said that we should have regard to the fact that the Cleveland Twist Drill Company … in Peterhead …, is beating its competitors in North American markets."—[OFFICIAL REPORT, 10th July, 1958: Vol. 591, c. 608.] That was in 1958. In 1959, the Secretary of State for Scotland, not to be outdone, said: At Peterhead, the Cleveland Twist Drill Company … is exporting … to all parts of the world … "—[OFFICIAL REPORT, 2nd July, 1959; Vol. 608, c. 731.] In 1960 the Under-Secretary said that it was very important to realise the existing enterprise at Peterhead.

I could go on. We have had this tedious repetition year after year since 1958. Even today the President of the Board of Trade mentioned the Ravenscraig development. He omitted to talk about Ole Clyde tunnel and the Forth road bridge, which have been referred to in every debate since these projects were first mooted. The star part in this act of tedious repetition has undoubtedly been played by the Parliamentary Secretary to the Board of Trade. In 1958 he talked of the development of Euclid in North Lanarkshire, not realising that Euclid set up in North Lanarkshire six years before that.

When we debated this very subject on 12th July, 1960, the President of the Board of Trade said this: … 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. … 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. Where are these 39,000 jobs? When I asked earlier today I was told that they were in the pipeline—Maudling's pipeline. I want to know the exact location in Scotland of this pipeline with 39,000 jobs in it. When the President of the Board of Trade made that statement in last year's debate, it was little wonder that my hon. Friend the Member for Greenock (Dr. Dickson Mabon) intervened with the following observation: 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."—[OFFICIAL REPORT, 12th July, 1960; Vol. 626, c. 1220–1.] That is the position today. What confidence or trust can we put in the right hon. Gentleman when he throws figures at us of 39,000 jobs without giving us concrete evidence as to where in Scotland the jobs are located.

The facts are that, despite all the efforts of the Government to attract new industry—I acknowledge that they have attracted new industry to Scotland—and despite all their efforts to find new jobs in Scotland, Scottish unemployment in the last ten years has consistently remained at twice the national average, as my hon. Friend the Member for Hamilton (Mr. T. Fraser) said in his very powerful speech in opening the debate. But Scotland's unemployment problem is not to be measured merely in terms of a rate which runs constantly at more than twice the national average. Those of us who have the country's welfare at heart are disturbed that the Scottish figure includes a persistent core of about 30,000 workers who have been out of work for over eight weeks. The picture is that for every 1,000 new jobs we create we are simply filling the gap of 1,000 old jobs which have disappeared as a result of existing industries closing down. That is at least one of the reasons why the Scottish percentage remains twice that of the national average.

One has only to consider the tens of thousands of jobs which have disappeared in Scotland as a result of the closing down of naval establishments, Royal Ordnance factories, railway workshops, and coal mines throughout Scotland. One has only to consider the decline which has taken place, as my hon. Friend the Member for Dundee, West (Mr. J. Strachey) has said, in the jute industry, the shale oil industry, and, as even the President of the Board of Trade confessed, in the shipbuilding and marine engineering industry. There has also been the decline in the textile industry, particularly in the Dumbarton area. All these in the aggregate have lost tens and tens of thousands of jobs over the years. All that we are doing today is simply replacing jobs which have disappeared.

In a state of affairs like that, how can the President of the Board of Trade say, as he did last year: During 1959, we saw a considerable expansion in trade and industry in Scotland."—[OFFICIAL REPORT. 12th July. 1960; Vol. 626, c. 1211.] In fact, in 1959 Scotland had reached the highest figure of unemployment it had ever achieved since 1946, yet the President talked about the considerable expansion in trade and industry. I become irritated, to say the least, by such statements make by official and semi-official people. These statements are nothing but meaningless platitudes. For instance, Lord Polwarth, Chairman of the Executive of the Scottish Council (Development and Industry), writing in the Financial Times on 31st May, commented: The beginning of the sixties has marked a period of growth in Scotland which is at least as great, and probably greater, than at any time in the last forty years. What an over-statement. It may be that, for some of this period, the industrial statistics were favourable, but the impression given by such a statement simply does not square with the facts.

The Registrar-General, in his preliminary population statistics for 1960, said that Scotland lost 32,000 people by emigration-50 per cent. more than in 1959. It is estimated that 23,500 of these emigrants went to England, which is perhaps the heaviest movement over the border in history. The increase in emigration in 1960 raised Scotland's net loss, as has been pointed out, to 254,000 people in the last ten years.

These are incredible figures. They amount to the equivalent of almost half the population of the City of Edinburgh. The sad thing about this is that it involves our young, skilled people. No medieval plague, no wars or anything of that kind could have exacted a greater toll from Scotland than this exodus to the South. The barriers we want to break through are those of Governmental complacency and ineptitude. Above all, we must have a clearer vision of what must be provided for our people, in order to give them the jobs which they so desperately need.

6.22 p.m.

Lady Tweedsmuir (Aberdeen, South)

It is unfortunate that right hon. and hon. Gentlemen opposite, when they had the chance to choose the subject for today's debate, did not manage to persuade their colleagues to have it tomorrow and instead to hold the debate on East and Central Africa today. Had we held this debate tomorrow, after the statement of the Chancellor of the Exchequer, Scottish Members would have been the first in the House to have the opportunity to consider the statement in relation to Scotland's industry and employment. Having the debate today means that, in a way, there is a slight unreality about it, if I may put it so, because we have somehow to try to get the measure and a balance of the problem—to try on the one hand, not to have panic or despondency or on the other, complacency, as the hon. Member for Glasgow, Central (Mr. McInnes) said just now.

We must realise, after looking at the White Paper, that it is true, as my right hon. Friend the President of the Board of Trade said, that the level of personal savings, of investment, employment and production in Scotland is steadily increasing, although, of course, there are black spots to which we all wish to refer, and it is right that we should be anxious about these matters. Yet, despite the fact that the overall picture is one of encouragement, we, together with the rest of the country, are involved in what is really a foreign exchange situation of great seriousness.

I hope that the measures to be announced tomorrow will take account of Scotland's particular problems. For instance, I hope that the payroll tax will not apply to development districts, if it is to be introduced at all. I hope that if investment is to be planned in the future Scotland will be allowed to continue to have her fair share, because, however necessary it may be to have these anti-inflationary measures south of the Border, we have our own peculiar problems in the North.

Miss Margaret Herbison (Lanarkshire, North)

Is not the noble Lady making the case for our having the debate on Scotland today rather than after the Chancellor of the Exchequer makes his statemant? Does not she believe that perhaps what is said in this debate might influence him and make him realise that every Tory Chancellor we have had, when taking economic measures, has hit Scotland much worse than any other part of the United Kingdom?

Lady Tweedsmuir

We had many opportunities of debating particular measures—for example, the payroll tax—during the passage of the Finance Act.

Mr. William Ross (Kilmarnock)

The noble Lady voted for the tax.

Lady Tweedsmuir

I did not, I abstained. In the sense that we have had these opportunities to discuss such measures before now, it would have been much more interesting had we been able to have this debate after tomorrow's statement.

Dr. Dickson Mabon

The noble Lady has just said that she hopes that the payroll tax, if it comes at all, will not apply to development districts. I agree with her. Indeed, I hope that it will not apply to Scotland at all. But how can she possibly see any way by which the Chancellor of the Exchequer, with his present powers, can discriminate between one area and another? I do not see how he can.

Lady Tweedsmuir

I have great hopes that my right hon. and learned Friend will not apply a payroll tax at all. I said that during the debates on the Finance Act.

Mr. Ross

But the noble Lady will not vote against the tax if he introduces it.

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

The noble Lady did not vote against it during the Finance Act.

Lady Tweedsmuir

I abstained. One did get the impression during those debates that my right hon. and learned Friend would not use the payroll tax except on one condition—and that was if, in his judgment, the inflationary situation was so serious that it involved Scotland as much as the whole of the United Kingdom.

Dr. Mabon

I hope that the payroll tax will not be used at all, but I ask how the Chancellor, under the Finance Act, can select districts or industries in which to apply or not to apply it. Perhaps the noble Lady can point out the provision in the Finance Act which allows him to select in this way.

Lady Tweedsmuir

Perhaps I did not make myself clear I said that I hoped my right hon. and learned Friend would not impose it at all. I suggested during the passage of the Finance Act that the payroll tax should not be applied in development districts, and my right hon. and learned Friend said that he would like to have the coming year in which to consider whether regional considerations of this nature could or could not be given. However, I want to continue my speech, because many other hon. Members wish to speak.

I am not an economist, but it seems to me that no economist since the end of the war has discovered the answer to the problem of how to have economic growth and a high level of employment without cost inflation. We are told that our basic trouble is that we are unable to export sufficiently in competition now that the post-war market is to a very large extent satisfied. Judging by what has been said so far on this side of the Committee today, and by this Report, it seems to me that Scotland has made a very real effort during this last year. It is summed up on page 1 of the Report, where it says that 1960 was a "good year" for Scotland.

While it is true that relatively our unemployment is still worse than England's, nevertheless we are going through some fundamental changes in our basic industries and it is an achievement that the latest unemployment figures show that Scotland's total has been brought down to 2.7 per cent.

Mr. Willis

We had that ten years ago.

Mr. T. Fraser

Will the noble Lady turn to the latest employment figures just published by the Ministry of Labour which show that while unemployment came down between mid-June and mid-July by 7,412 for the country as a whole, Scotland's figure was only 21?

Lady Tweedsmuir

That may be perfectly true, but I was talking about the latest unemployment percentage figure, which is 2.7, which I think the hon. Gentleman must admit is very much better than the figure at the same time last year.

Mr. Willis

But not better than 1951.

Mr. Fraser

Since this time last year we have lost 32,000 of our population who have come South. Will the hon. Lady show where we are giving more employment this year than last year?

Lady Tweedsmuir

If the hon. Gentleman will let me continue with my speech, I shall perhaps cover some of these points.

Other hon. Members talk about their constituencies, and I now want to talk about mine—Aberdeen. First, I want to say how happy I am that the unemployment figure there is at the moment below the Scottish average. It is considered that it is not by any means only a seasonal improvement, that there are certain definite improvements in engineering and in just the type of industry in which we want to see improvement, except one which has been referred to already, particularly by my hon. Friend the Member for Fife, East (Sir J. Henderson-Stewart), and that is shipbuilding.

I want to say one thing here to the Secretary of State for Scotland, and I wonder whether he could give consideration to this. We are, of course, lucky occasionally to get our share of contracts for ships in our shipbuilding yards, but I want to talk about an extension of the rebuilding programme of the Aberdeen fishing fleet. Were this undertaken, I believe that it would give our local yards an opportunity at any rate to tide over the next year or two until, possibly, the world shipbuilding position would gradually have improved.

Aberdeen has been lucky enough almost entirely to rebuild its fishing fleet into a modern fleet, but now, owing to the extension of the fishing limits, we are in a position where a great many of these very modern boats, which are from 100 to 130 ft. in length, are not able to go to the more distant northern waters to which they really ought to go if they are to find fresh territory.

In the economic measures which are to come before us tomorrow, the newspapers tell us, we may possibly be going to consider some curtailment of aid to young developing countries. If that is so, I would ask whether we could not give some form of this aid in kind instead of only in cash. Could not the Government agree to purchase some of these 100–130 ft. long boats—I understand that twenty or thirty firms in Aberdeen might be prepared to consider this—and give them to the developing countries as part of our overseas programme? We should then be able to let the Aberdeen owners get on with building larger boats which could fish the more difficult and deeper waters, which they will now be called upon to do. I refer particularly to the fact that there are some owners who feel that the future of this kind of distant water fishing lies in stern fishing vessels. If we could do this, it would help one of our basic industries in Aberdeen and also our shipbuilding yards over a difficult period.

The Report that we are studying today says on page 55 that the short-term prospects for productive industry as a whole are good, except for shipbuilding. It also says that the long-term prospects are bright. It also says that history may well refer to the recent past as having provided some of the most important foundations needed to establish a broader based and progressive economy. Surely that is one of the most encouraging things. We have always in our many debates ever since the war complained that Scotland has been very dependent on certain basic industries only. Now it is apparently shown that we are laying, and have laid in the recent past, the foundations for real prosperity for our industry in the future.

One of the most important attractions to, for example, American firms coming to Scotland is whether we are going to enter the Common Market. That is why, once again, I wish that we would definitely decide to go in to negotiate, at any rate to see what the prospects are. A great many technical considerations were gone into over many months when the matter was handled by the President of the Board of Trade. Now that the Ministers have come back from the Commonwealth it is surely right that we should ascertain whether it is possible to arrive at some kind of accommodation at least which will give basic protection to the Commonwealth. If we cannot do it, I do not think that we should go into the Common Market at any price.

Apart from the trading advantages, which I look upon as very great, American firms hesitate to come to Scotland when they think that they might establish themselves on the Continent. However, apart from those trading advantages, I have an instinct about this country, which has always survived as a small island off the north-west corner of Europe in the past because it has had freedom to make its political alliances where and how it would. Therefore, if we find that certain members of the Common Market may not wish to have us, I hope we shall then go all out to have a Commonwealth conference and consider whether we cannot start a new drive in trading with the Commonwealth. Naturally, that means revision of such agreements as G.A.T.T.

There is one provision in G.A.T.T. which I think the Government might well be studying at this time. I notice that in an economic debate in another place the other day Lord Polwarth, the Chairman of the Scottish Council, said that he had now come to the conclusion that we ought really very seriously to consider whether industries in Scotland going out into the export market ought not to have some form of direct tax incentive. I feel that I am in good company, having tried to make this plea on the Finance Bill earlier on.

At that time I asked the Economic Secretary to the Treasury how it was that Australia, which is also a member of G.A.T.T., is able this year to have two definite incentives far her companies going out to export. The first is that taxes are remitted on overseas market development, and recently this remittance has even doubled. Secondly, there is a rebate of the payroll tax to firms increasing their export sales.

I understand that the reason is that Australia, although she is a member of G.A.T.T., has not undertaken all the obligations that we have. The only general obligation that she has undertaken, which applies to countries which grant subsidies for exports, is that where the subsidies increase exports or, on the other hand, have the effect of reducing imports, these countries must notify the others which are members of G.A.T.T. If serious prejudice is caused to the other contracting parties, there is an obligation to discuss the limiting of these subsidies.

I did not know this at the time of the Finance Bill, but I have since discovered that there was a standstill agreement on this arrangement in G.A.T.T. and that the agreement lapsed at the end of 1960. I understand that for the whole of this year this agreement has lapsed, but that at the end of 1961 it is proposed to get the contracting parties together and to try to have a complete ban on export subsidies of any kind. This will apply only to those countries which agree, so to speak, to carry out the convention. If in an expanding country such as Australia, which is fast becoming one of the largest manufacturing countries in the world, it is thought advantageous to have these direct taxation reliefs or tax incentives for exporters, I should have thought that we might have considered them here.

Surely, what we want to try to do is to lift the home producer out of the easier home market into the export market, where, of course, he will be in direct competition with all the others, whether they have export subsidies or not. It might just give them the added incentive to start, and I think this applies particularly to the small firms in Scotland. We have a lot of small firms in Scotland, and if they felt that there was a definite tax incentive of this kind we might well encourage them to band together, to have their own sales arrangements and perhaps sales representatives, which are extremely costly to any individual firm.

At present, it seems to me that what we do is to restrict the home market by various devices, such as increasing the Purchase Tax. Very few firms only export; most have their home market as a testing ground. It is their base to which they can return should difficulties occur in the overseas markets over which they have no control, such as political difficulties. Therefore, I think we might seriously consider during this period of standstill whether in the modern age and at a time when the post-war demand has been satisfied we should not try in this competitive field to help our own industries to start in exports.

Probably, tomorrow, we shall hear that the Government have accepted the main recommendations of the Plowden Report—this is just a guess, and not a leak—that tell us that with a five-year plan, we should start off with a firm allocation of funds for the first year, that we should have a firm allocation for the second year, subject to major changes in the military and economic situation, that in the third year there should only be provision, and that in the fourth and fifth years it should be tentative. In many ways, that is what the Government have been trying to do, though whether each Department does it separately from the others and not on an overall basis, I am not in a position to judge.

On the Plowden Report, I would say that to have a five-year plan does not, of course, allow for human error. Hon. Members will remember that after the Suez crisis we were all told that there would be an extreme and urgent shortage of oil. All the best planners and economists told us that we must build tankers, which we did. But what happened? The price of oil fell, and there is, if anything, a surplus, so that even the best prophets may be proved wrong.

On the subject of the statement which the Chancellor is to make tomorrow and its relation to the Scottish industrial problem, I think that the public as a whole would carry out long-term measures if it felt that it would mean an end to the sort of "restrictions one moment and expansion the next" policy. On the other hand, I do not think that any of us can expect that an island such as ours, supporting 50 million people, without any raw materials except coal can retain an even economy. It was the late Mr. Aneurin Bevan who once said that this island was founded on coal and surrounded by fish. I do mot think that we can expect that an island like ours, with a very artificial economy, could ever achieve complete stability, because we must occasionally have to apply the brakes, or occasionally offer encouragement.

I hope that the Government, in making their statement tomorrow, will give those of us who are by no means economists a fair picture, so that we clan realise that, while the position generally both in Scotland and in the United Kingdom as a whole, is encouraging, nevertheless, if we all did just that much extra—and we are all human and no doubt all of us have many failings—we could get the extra margin of production which would take us out of the wood.

6.45 p.m.

Mr. James H. Hoy (Edinburgh, Leith)

We have just listened to an extraordinary speech by the hon. Lady the Member for Aberdeen, South (Lady Tweedsmuir), but it did not surprise me very much. This afternoon, we have had a lot of speeches that would not have been made by hon. Members opposite a year or two ago. If one thing has been consistent in the speeches from the Government benches during this debate, it has been the call for planning, for a master plan. In fact, it is said that if we had one, we could get out of the difficulties in which we now find ourselves.

I go back a few years to the days of the Labour Government, when the late Sir Stafford Cripps was building up the economy of this country following the war. No section of the community derided Sir Stafford Cripps and the Labour Government more than those who now occupy the benches opposite. Indeed, when I heard the President of the Board of Trade this afternoon pay a tribute to what had happened in Dundee in regard to National Cash Registers, I thought that the right hon. Gentleman should remember that National Cash Registers would not have gone to Dundee if it had not been for the planning of Sir Stafford Cripps in the Labour Government. That is how the firm happened to be there.

Indeed, the great development of an industrial estate in Lanarkshire took place because of the planning of that Government, which said that a certain part of our national product should be used to develop employment in those parts of Scotland where unemployment had been a blight for a very long time.

It is astonishing now to find that, as a result of what has happened, even the hon. Lady the Member for Aberdeen, South said that in Scotland we have now got our unemployment ratio down to 2.7 per cent. In fact, after eleven years, a Conservative Government have been able to achieve what we achieved in the last year of the Labour Government.

Lady Tweedsmuir

I should not have interrupted if the hon. Gentleman had not called my argument into question. While the Labour Government had many difficulties after the war, they did have their markets.

Mr. Hoy

Oh, yes; I am not saying that we did not have our markets, but the hon. Lady will also remember that her right hon. Friend the Member for Woodford (Sir W. Churchill) said at the end of the war that what we had left was a country that was bankrupt. We had to build up from that stage, and we had tremendous difficulties economically, which the present Government have not had to experience.

The hon. Lady went further, and seemed to me to be unable to make up her mind which way to go—right, left or centre. She talked a great deal of what was happening about the Common Market. If there is one section of the community that is culpable, it is the party opposite. I remember that, as the result of the talk of the hon. Lady and her friends, when she and I went to Strasbourg to the Council of Europe, how the Europeans were led up the garden by the Prime Minister and the present Minister of Education, who submitted the Macmillan-Eccles proposals to Europe, and deserted them on the very day on which the debate was to take place. If we are not held to be persona grata in Europe, the hon. Lady and her colleagues have some responsibility for it.

Lady Tweedsmuir

The hon. Gentleman will also remember that when the Labour Government were in power after the war and the late Mr. Ernest Bevin was Foreign Secretary, Britain was invited to join in what was called the Schuman Plan and Mr. Bevin declined.

Mr. Hoy

The hon. Lady will also remember that Mr. Bevin said that those proposals had to be accepted without our being able to modify them. We were not able to make an amendment. We had to accept them willy-nilly, and that we were not prepared to do.

The hon. Lady also asked why we should have this debate today instead of tomorrow, and went on to say that she hoped that, as a result of this debate, the Chancellor will take recognition of what we said and would not impose the payroll tax in Scotland. This is the very reason for this debate taking place, because we want to anticipate the Chancellor and let him know that what might be good for the southern part of England or the Midlands is not applicable to Scotland.

In other words, we have to have planning. I know that that is a word which the hon. Lady and her friends did not like, but because Plowden said yesterday what we were saying five years ago, it has become respectable. I have been interested to hear what hon. Members opposite have had to say about planning. The hon. Member for Fife, East (Sir J. Henderson-Stewart) used to deride us for planning, and in these debates used to say that we made dismal speeches and painted a black picture of what was happening in Scotland. But no more dismal picture was ever painted than that by the hon. Baronet this afternoon.

His picture of the shipbuilding industry was the most dismal that I have encountered for a long time, and I can only hope that it is not as bad as he made it out to be. He derided us when we called for planning, but today he spoke about the need for a breakthrough. For years we have been asking for conscious planning of Scotland's economy. We said that for too long Scotland had been wholly dependent on heavy industry and that it needed diversification with industries like the strip mills, the motor car industry and so on.

This afternoon the hon. Baronet had the audacity to say that that had been demanded by his hon. Friends and by one or two hon. Members on this side of the Committee. He went on to say that he well remembered a speech in which his hon. Friend the Member for Glasgow, Pollok (Mr. George) had asked for these things. That is quite untrue. The one Member of the House of Commons who opposed the strip mill coming to Scotland was the hon. Member for Pollok. It was not only in the House of Commons but in a television debate that he showed that opposition. I was with him in that television debate when he had to confess that he had opposed it.

If there has been a demand for these things over the years it has been made by my right hon. and hon. Friends. Let us not forget the contribution made by the Scottish organised workers, as represented by the Scottish Trades Union Congress. Over the years they have made their demands. When opening a similar debate three years ago, I said that I did not care who got the credit so long as action was taken to give the people of Scotland an opportunity to work. I stand by that today. When I said that, I knew that some conscious planning was needed to achieve it and that the Government were the only authority who could formulate the required plans. I agree with my hon. Friend the Member for Hamilton (Mr. T. Fraser) that, if private enterprise fails to do it, the responsibility is that of the Government.

I must lake slight exception to what was said by my hon. Friend the Member for Glasgow, Central (Mr. McInnes) about the shipbuilding industry. When he was speaking of rating, he said that Edinburgh might have to contribute, as it had no shipbuilding industry. It is true that Leith always regards itself as distinct from Edinburgh, although it is part of the city, but there is a substantial shipbuilding industry in Leith, at Henry Robb's. As a result of reassessment, it will have to pay rates on a rateable value of something more than £l0,000 compared with £2,000.

The hon. Member for Fife, East said that he was grateful to the Secretary of State for providing information. We do not have to be grateful to the right hon. Gentleman. The assessors told us what we had to pay and we did not require to get the information from the Secretary of State. We must not be misled about what the Scottish Office can do. The Minister of State said that, if an appeal was made, he would do his best to speed it up and, after the result of the appeal, would see what action the Scottish Office needed to take. Nothing more than that has happened.

In the meantime, the whole industry knows that it is to have this tremendous burden. Shipbuilders like Henry Robb are entirely dependent on world trade. The Commonwealth has played an important part in providing orders for shipyards in my constituency. That is especially true of New Zealand, which has been a very faithful customer. Those Commonwealth countries have felt that they could not get a better job anywhere and they have continued to give us their orders. It is important that, whatever happens, nothing is done to injure that trade between Britain and Commonwealth countries on whom we have been so dependent for so long.

The hon. Lady suggested that if we were to get over these problems, we might make loans to other countries in kind rather than in cash. The fishing industry is going through a difficult time and in Scotland it is facing more difficulties than in other parts of the country. My hon. Friends and I felt so strongly about the matter that last Friday week we went into the Division Lobby against the Government's proposals. The hon. Lady will say that she abstained—she is a great abstentionist. There is no point in coming to the Committee saving that we must have the power to build more fishing vessels and then saying that those we have cannot earn a profit. That is not good economics. With this, as with all other industries, we have to plan what is needed to meet the needs of the people. Unless we are prepared to do that, we have no right to complain.

When we ask for more jobs in Scotland, we are not moaning, and I wish that the President of the Board of Trade would not say that we were. Every Minister seeks to make excuses for himself and his Department by accusing us of painting a black picture. What we say is that, despite what has been done, Scotland's unemployment ratio is still more than double that of the rest of the country. We are asking for action to be taken to improve the situation.

We are getting a little tired of hearing about jobs in the pipeline. Within forty-eight hours of the day when more jobs were being squeezed into the pipeline and Lord Polwarth, as Chairman of the Scottish Council (Development and Industry), was telling us about our bright prospects, firms in the Lanarkshire belt had announced that 3,000 people were to lose their jobs within the next fortnight. One firm has given 800 men their unemployment books on the day they received their holiday pay. We are not told about the number of jobs to be found to give those men employment.

We call attention to those things, because we feel that we must constantly argue the case for meeting Scotland's needs. The President of the Board of Trade made great play with the fact that about £24 million is to be invested in Scotland, apparently about 47 per cent. of the whole of the sum being devoted to development districts. I do not doubt his figures for a moment, but I want to know what proportion of the development districts Scotland represents. It may be that a comparison will show that Scotland is getting no more than its due proportion because we have such a large development district and so much unemployment.

That argument does not impress me, because, whatever the proportion might be, the one fact which stands out is that Scotland has a far greater amount of unemployment than any other part of Great Britain. As the figures show, Scotland has one quarter of the total unemployment in Great Britain. One person out of every four unemployed lives in Scotland. It is that fact with which we have to deal. I am consoled with the thought that, after all these years, even hon. Gentlemen opposite say that if this problem is to be tackled successfully it must be done by conscious planning.

I do not want to be too critical of the President of the Board of Trade, but he spoke about £500,000 being spent on the Highlands and Islands. That sum will make not the slightest contribution to the problem. We are grateful for the little things that we get, but we shall never find a solution to the problem in the Highlands and Islands as long as we keep tampering with the situation by setting up little panels, committees of inquiry, advisory committees, and so on. Lord knows, if all these committees had provided one job each, there would be no unemployment in the Highlands today. Until the Government appoint a real committee of development in the Highlands and Islands, and give it a budget to meet the situation, I do not believe that we will solve the problem.

Recently a distinguished visitor from Israel visited the Highlands and Islands. He said, "Why do you have unemployment here? With all this land and water, I think that you ought to be on a criminal charge for not using it" He saw the potentiality of the country, and could only view us with envy and think what he would be able to do if he had in his country only half what we have in ours.

The problem must be solved by conscious planning. It is true that some hon. Gentlemen opposite have said that this is the answer, but I am driven to the conclusion that it will not be done by right hon. and hon. Gentlemen opposite, because they do not believe in planning. Over the years, my right hon. and hon. Friends have argued that only planning could provide a solution to the problem in Scotland. We on these benches have been proved right by Plowden and others. In the last ten years Europe has gone ahead with leaps and bounds, but we have stood still. Plowden reports that what we have been saying for years will provide a solution to this problem, and I think that hon. Gentlemen opposite ought to give those who believe in planning a chance to make it a reality.

7.3 p.m.

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

Having listened to the whole debate, it seems that much of the difference between the two sides of the Committee lies in the interpretation of where pessimism ends and realism begins The hon. Member for Hamilton (Mr. T. Fraser) took my right hon. Friend the Secretary of State for Scotland to task for being far too optimistic. He took up his description of the Scottish scene as a vigorous, growing and expanding economy. Yet they do not seem very different from the words used by a former Secretary of State for Scotland, and one who, I think, is recognised by Scots of all political affiliations to have been a great one, and I mean Mr. Tom Johnston who, when he was opening the premises to be occupied by a new firm in April of this year, described that firm as being merely the harbinger of a flood of industrialists who would be moving into Scotland I regret that that firm, like so many others, had and still has its headquarters south of the Border. What makes me a little depressed is that during the last ten years more development has not been done by the Scottish firms themselves. It is no use barking the fact that it is imported industry, be it from America or south of the Border, all of which we are glad to see, which has provided many thousands of jobs during the 'fifties, while industry which existed in Scotland in 1950 now employs less than it did then.

I do not want to dilate on the effects on Scottish industry if we were to join the European Economic Community, but in the Glasgow Herald last week there was an extremely interesting article on the subject of Scottish industry. The article contained this sentence: Only if the calibre of Scottish management and, to a lesser extent, labour is lower than that in the rest of Britain would the Scottish economy as a whole stand to gain less than the rest of the country if Britain became a member of the Common Market. Management is just as important in domestic trading as in exports. Scottish firms, which are that much further away from the main consumer markets of this country, will always have to make just that much greater effort competitively, and thus management, using the word in its broadest sense, is of immense importance.

There was a fascinating series of articles in the Scotsman last March by that newspaper's industrial correspondent. As one who works occasionally for a rival newspaper, it gives me satisfaction to be able to pay tribute to the enterprise of the Scotsman in publishing those articles, without the slightest chance of its inviting me to write on its behalf.

Those articles examined and probed into the whole set-up of Scottish industry, with particular reference to the management of it. The conclusions to which they came, and the discoveries they made, were absorbing. They found, which I think would be of no surprise to anyone, that the management of the best Scottish firms was every bit as good as that of the best firms in England. But, on the average, they found that Scottish management was inclined to lag behind. They found that between 1950 and 1960 Scottish firms employing over 600 workers had increased their assets by 190 per cent, and their sales by 160 per cent., while the figures for the equivalent English firms with over 600 workers were 160 per cent. and 150 per cent.

Percentages can be immensely deceptive. Everything depends upon where one begins. It may be that there was a much greater scope for increase in Scotland than in England, and that the improved performances in Scotland could be accounted for in that way. No such doubts can be cast upon the figures relating to firms employing less than 600 workers, because in the same ten years assets rose by 120 per cent., as compared with 380 per cent. in English firms, and sales increased by 100 per cent., as compared with 270 per cent. Taking all firms of all sizes together, it was found that English firms ploughed back 45 per cent. more than did Scottish firms, the greatest differences again being among the smaller firms.

Three or four causes were given for this. I found the most revealing to be, first, that fewer than one in five of all Scottish firms have a person on their staff specialising in the management and welfare of personnel—every firm that does so employs over 1,000 workers—secondly, that when promotion takes place in Scotland up to the level of foreman it is nearly always based upon long service, ability being rated second in importance and, thirdly, that in the executive sphere promotion seems to be very rarely given to anyone outside the firm concerned.

I rate the management of personnel as of supreme importance in industrial circumstances today. It was interesting to see Sir Miles Thomas and a leading member of the Trades Union Congress on television recently, each agreeing that the major shortcoming in industry is the failure to tell people what is going on and why it is going on. Here I should like to put in a word for the industry in which I am interested. The reason why there has been no industrial unrest on the farms of Scotland for a generation is that the management of personnel, admittedly in tiny units, has been fairly carried out. I cannot think that the manager of a firm with 600 workers can adequately look after personnel interests and carry on the work of public relations and possibly something else as well. Nevertheless, that is what is done in the majority of cases.

Each industry must tackle the problem of better management, in that way doing what was emphasised by my right hon. Friend the President of the Board of Trade, namely, cutting down its costs. I do not want to make too much of this matter, since it has been touched upon by hon. Members on both sides of the Committee already, but the fear in the minds of many Scottish industrialists is that any greater efficiency, better management, or other effort will be cancelled out by the increased assessments imposed upon them.

We have heard of "astronomic" increases in the shipyards, and there is an engineering firm in Edinburgh whose assessment has risen ten times. If derating ends in 1963, as intended, the managing director of that firm has stated that in the case of an export inquiry running into five figures, 2 per cent. or 3 per cent. will have to be added to the price quoted to cover the possibility of these increased rates, and that that could tip the balance against them in the securing of export orders.

One other feature which could bring about a reduction in the costs of production generally in Scottish industry is better road communications. These could play a vital part in the next few years. I have perforce been away from the House for three weeks, and I have taken an even greater interest in the ongoings of my hon. Friends and hon. Members opposite in Scottish Committees upstairs. In order to take part in this debate I deliberately motored down the A.74 road on Saturday. Having read the description of that road in the OFFICIAL REPORT, I allowed myself an hour too long to make the journey, because I fully expected from the description to be stopped every few miles by diversions, traffic lines or other such obstructions. In the twelve months which have passed since I previously drove down that road vast improvements have been made, which make it almost unrecognisable at one or two points.

Having said that, it is only right to point out one disturbing feature. Of the contracts on that road only one has so far been completed on schedule. Other projects and developments which have been finished ran late. The same thing has been happening on the Fort William-Mallaig road. In a newspaper report last week I read that that road, which was scheduled to be finished in November this year, may not be ready in time for next summer's traffic. It is feared that the work at Turnhouse Airport which was under contract to be finished by 1st August may not be finished in August at all. All this compares unfavourably with what has happened on the Doncaster bypass, where all 16 miles were finished on time, in twenty-six months.

As I said at the beginning, it is a very narrow line at which realism ends and pessimism begins. I am not pessimistic about the future of Scotland or of Scotland's industrial life. I think that a tremendous opportunity exists for it, if it can do something on which I think so much of the industry of Great Britain falls short. If Scottish firms can fulfil their contracts on time, and if they can be really competitive in price, I think that the rosiest future awaits them.

7.18 p.m.

Mr. A. C. Manuel (Central Ayrshire)

I hope that the hon. Member for Edinburgh, West (Mr. Stodart) will forgive me if I do not follow the general line he has taken, as I want to deal more with constituency points as well as one or two other aspects of Scotland's position. I would say to the hon. Member that there was much good sense in his speech, and I agree with much of it.

I am pleased to see that the President of the Board of Trade has returned to the Front Bench, because he gravely disappointed me today, when he indicated in one part of his speech—I hope that he realises the significance of what he said—that because of Scotland's geographically remote situation in relation to other centres of commerce, or places where goods would be sold, we should need to put up with that aspect of it. I wonder if he realises that he is putting wards into the mouth of every industrialist who does not want to get out of the London area at a time when the Minister wants to get industrialists into the development districts in England, the North-East, Wales or Scotland. That excuse is far too easily arrived at today.

The right hon. Gentleman was indicating merely the difficulty of transport costs. Other problems, like houses for key workers, can be met. Scotland has something to offer in that connection to people formerly residing in England. I think that the difficulty to which he was referring was the freight charges for the commodities produced. But there are a host of commodities produced today of a light-weight nature, such as plastics, which are not greatly affected by freight charges. In the motor car industry in America, long distances are travelled to convey components to the factories producing the finished article. The right hon. Gentleman should change his argument a little, and say, "If the Americans can do it, so can we", in so far we can compare our little country geographically with that great country.

I turn to more constituency aspects. Things are happening in my constituency that we welcome, and I want to say so. A large part of my constituency is a development district. I was very annoyed to hear that the Government had made up their minds to close down the Royal Ordnance factory at Irvine, because I took the view, and I said so publicly as often as I could, that as long as the Government needed Royal Ordnance factories Scotland had as much right to a share of them as the rest of the country. I think that is a view that would be generally accepted. The Government should not have closed the Royal Ordnance factory at Irvine until they had alternative industry to employ the displaced labour which had to go straight to the employment exchange.

However, the Government did close the factory and a painful period then ensued in the Irvine area where unemployment figures rose very high. No great credit rests with the Government about this. I want to pay a very high tribute to the members of the Irvine Town Council and to its officials for the way in which they handled this industrial estate since taking it over. The council decided that it had to do something itself and, consequently, it bought from the Government the old Royal Ordnance factory site with the buildings upon it and has made an excellent job of its publicity to attract light industry to the site and really get things going. Much still remains to be done, but nevertheless the council deserve the greatest credit for what is happening in that area.

On the industrial estate itself, Hyster Limited have completed their metal plating shop which will bring the total floor area up to 250,000 sq. ft. On that small industrial estate there are many small firms. This is about the largest of them, and I am informed that the firm have applied for a further extension. Other projects which will bring employment to the district are the British Federal Welder Machine Company Limited and an extension to Wilsons Pipe Fittings Limited. The town council is also building a new factory to give employment to a further 300 people for the Wilson Sporting Goods Company of Chicago. That is going far afield, but it shows that with good publicity it is possible to go far afield. The town officials have gone to considerable trouble and have visited Sweden, America and elsewhere to impress upon industrialists the type of work which can be done in this area. We were desperately anxious to stop the rot of unemployment before we lost all the skilled people from our area. Even so, we lost a good many. When a situation arises—and I wish to impress this upon the President of the Board of Trade—in which there is heavy unemployment and the most skilful workers are lost—they are creamed off to England and other parts—it is then very difficult to get industry to go into the area. The Irvine Town Council managed to arrest the development of a hard core of unemployment in time, and things are now moving forward very well.

I am particularly pleased about these developments in the area, because there are indications that we shall need all the means of employment which we can get. There is the possibility of a run-down of the large staff employed by I.C.I. at Stevenston, which would affect many of my constituents who travel there by bus to work, and a good many of the constituents of the hon. Member for Bute and North Ayrshire (Sir F. Maclean). There are grave rumours of a large payoff there.

There is also the rundown of the contracting work at Hunterston, where the British Electricity Authority will not employ nearly the number of staff engaged during the site preparations for the actual running of the generating station. That will further increase the figure of unemployed in the area. In Irvine and district we have a hard core of unemployed of 1,373. There has been a slight improvement. There has been a drop of 1 per cent. in the figure since 1959, but it still stands at 5.3 per cent. Last year it was 6.3 per cent. So we cannot be complacent.

We must couple with the matters to which I have been referring the fact that 13,000 schoolchildren will be leaving school and looking for jobs in Scotland. Next year, remembering the figure given by my hon. Friend the Member for Hamilton (Mr. T. Fraser), this number will jump to 20,000. Every means available in the area will have to be used in order to take up the slack resulting from these young people coming on to the labour market. I cannot visualise a situation other than one in which thousands of these young people will go into dead-end jobs. There are not sufficient apprenticeships available, and there will be no future for many Scottish children unless we have many more apprenticeship openings for them. Those thousands who will go into dead-end jobs will, in a year or two, be back on the labour market without having been taught a skilled trade, and, therefore, they will find difficulty in all getting work in labouring jobs. I wish to pay tribute to those firms in Scotland which have started training schemes. Colvilles Limited is a good example, and I wish more firms Would start such schemes.

The preparation of a site is taking place just outside the burgh of Irvine on the Ayr County landward side near the village of Drybridge. The Skefko Ball-bearing Company Limited is starting a new and important factory in the area. We have nothing similar in the country, and it opens up great possibilities for the whole of Scotland as well as for Ayrshire. I know that the Ayr County Council will help in every way possible to make the people concerned happy and comfortable, and so will the burgh of Irvine. This development is just outside the burgh boundaries, and it is possible that many of the employees will be recruited from Irvine. Many will be Glasgow people who have come from Glasgow under the overspill scheme into the burgh of Irvine. That is one reason why Skefko came to that site.

There is also an extension to the Baelz Equipment Limited, which occupies a part of the industrial estate at Kilwinning, and I welcome that. This estate was built and equipped by the Government with the expenditure of a great deal of money, but there is still only one factory on the site. I wish again to make an earnest appeal to the President of the Board of Trade—I did so to the then President during the term of office of the Labour Government—for at least one more factory on the site. A great many people travel from Kilwinning to work, and if there is to be a rundown of the staff of I.C.I. it would save me a great deal of worry if we could have at least one more factory on that estate. We have spent over £100,000 on the project, and I think that now we should be trying to get back some of that money.

There is a strong rumour that people find it more convenient to go elsewhere than to Kilwinning because of the rentals on the industrial estate. I do not wish to develop that point further, but I should be grateful if the right hon. Gentleman would look at the matter to see whether there is the necessity to equalise rentals. If it has been possible successfully to break new ground at Irvine and to make use of converted buildings for which tenants have been secured, surely the same could be done on the Kilwinning estate.

I should have liked to have said something about transport and the use of diesel locomotives and diesel train units and what I think should be happening in the transport world. I consider that we should be making faster progress, and I hope that the financial cuts which we are to hear about to-morrow will not have too great an effect on the public sector of the economy. Where diesel train units are in operation the receipts are growing, as has been proved on the Glasgow to Ayr run, and we should have them on other routes. We should have diesel trains running between Glasgow and Largs at least until there is full electrification because there is money to be made on that route, and it is being made on the Glasgow-Edinburgh and Glasgow-Ayr routes.

I should have liked to have said something about tourism and the Highland roads. We heard today from the Postmaster General of an increase in newspaper and parcel rates and in telephone charges. At least one hon. Member welcomed the fact that the £2 per furlong connecting charge paid by people in remote areas is to be abolished. But surely he forgot that the additional £2 in telephone rental charges is to be paid by everyone, which will equalise that. In addition, new telephone connections in the remote areas will work out, as I estimate it, at £40 per mile. That is £5 a furlong. I hoped I was wrong about that, but at any rate there is to be an additional charge which I thought the Postmaster-General said was £5 a furlong, which works out at £40 per mile.

Does the Postmaster-General recognise what this will mean in the crofting areas? The additional rental will make many people think whether they can continue having a telephone. I deplore this when we are strenuously trying to populate the Highlands, for this will be another factor militating against that. I do not know what we shall hear from the Chancellor tomorrow. If what we have heard today is an indication of what we are to hear tomorrow, it will be a "blue day" for Scotland.

7.41 p.m.

Sir Fitzroy Maclean (Bute and North Ayrshire)

I find myself in agreement with a great deal of what the hon. Member for Central Ayrshire (Mr. Manuel) has said.

What has impressed me, as one who has no pretentions to be an economist, has been the way the debate has shown what one can do with figures. Having been dragged down to the depths of depression—I think rather lower than was necessary—by the hon. Member for Hamilton (Mr. T. Fraser), I found myself immediately afterwards raised to great heights perhaps a little higher than was necessary—by my right hon. Friend the President of the Board of Trade. The hon. Member for Hamilton drew a picture of unrelieved gloom, but my right hon. Friend, while dwelling, as the White Paper does, on the more encouraging aspects of the situation, at least admitted that much remains to be done and proclaimed the intention of the Government to do it.

I was very glad to hear that, although speaking from a narrow political constituency point of view, the Highlands are no concern of mine, except that I happen to live in them, I thought he was being a little mean with his promise of £½ million. I hope very sincerely that, whatever measures the Chancellor is to announce tomorrow, they will not serve to aggravate the situation in Scotland. I hope that if at all possible they will help to improve matters. The same applies to any decision the Government may take about the Common Market.

In so far as there has been an improvement—and I think even the hon. Member for Hamilton must agree that there has been an improvement, though possibly only a relative one—I naturally welcome it. Although many jokes have been made about various projects, I am rather inclined to agree with the hon. Member for Edinburgh, Leith (Mr. Hoy), who said that it does not matter which Government are responsible for those projects so long as they bring work to the people of Scotland. The same applies to the pipeline about which we hear many disparaging remarks. For some time we have all been echoing the Scottish Council in saying that what is needed is 12,000 new jobs a year for the next ten years to bring our rate of unemployment down to the United Kingdom rate. I think there is reason for saying that this year at least there is every prospect of getting those 12,000 jobs. If so, that is a very great achievement.

Speaking as I do for a constituency in large parts of which the unemployment rate is running at twice the Scottish rate—let alone the United Kingdom rate—I should be the last to encourage any tendency to complacency on the part of the Government, or of anyone else. I spent part of this weekend talking to local authorities, in different parts of my constituency. I found the picture, although perhaps not quite so worrying as it was a year ago, still very worrying indeed, and, according to present trends, not likely to get any better.

The hon. Member for Central Ayrshire spoke of the situation in his constituency. The interests of our two constituencies are so closely linked that much of what he said applies also to my constituency. The two main trouble spots are the area of Ardrossan, Salt-coats, and Stevenston on the mainland, and, secondly, the Isle of Bute. On the mainland the main trouble is that the I.C.I. factory at Ardeer is running down its labour force very fast. This has nothing to do with local reasons but with world reasons. It arises from the fact that new factories are being set up in Africa and Asia with the help of I.C.I. and a great many processes which used to be carried out at Ardeer are now to be carried out in other continents.

Until recently Ardeer absorbed any available spare labour, but that is no longer the case. On the contrary, with the running down and the introduction of automation, more and more men are being thrown on to the labour market. The same applies to Hunterston nuclear power station, which is now approaching completion and employing far fewer men than it did before. On a much smaller scale, the shipyard at Ardrossan, like other shipyards, is a declining force.

Mr. Rankin

There is a rumour that, before it is completed, Hunterston power station is already out of date.

Sir F. Maclean

The hon. Member's guess is as good as mine. I have not heard that rumour, but in any case the power station is not a continuing factor for employment. In twenty years it will be burnt out, but that is looking a long way ahead.

In the Saltcoats-Ardrossan area the rate of unemployment is at present 5.5 per cent. Although that is better than it was at 6.3 per cent. a year ago, it is still far too high. As more men are paid off from I.C.I., I am afraid that the position is likely to get worse. The only answer is to bring more industry into the district.

The hon. Member for Central Ayrshire has spoken of what has been done in the Irvine industrial estate and I join with him in his tribute to the Irvine Town Council, which has certainly done much to help to give employment to very many of my own constituents. Three miles away from that industrial estate is the Kilwinning industrial estate. That, too, is in the hon. Member's constituency, but it is also on the borders of mine, and it is within easy reach of the labour available in my constituency. That estate has only one factory which, I believe, is to be extended, but we need several more factories there.

I have talked to the people who work at the one factory, and there seems no doubt that the estate is ideally situated and, as is shown by this impending extension, the factory already there is flourishing. There are first-class road and rail, sea and air communications, and it is within easy reach of the industrial belt. It only lacks enough factories. Every effort should be made to publicise this estate, and to try to get factories to go there. If, as the hon. Gentleman suggested, firms are being kept away by unfavourable terms demanded for factories, I would join with him in urging the Government to make those terms more attractive.

We are here dealing with a development district, and firms going there can expect help from the Government. What I think puts an applicant off is the enormous length of time it takes for him to find out what help he will get from the Government if he extends his business or goes to a given place in Scotland. It takes a matter of months whereas, in other countries, it takes a matter of days. As long as that remains the case, a lot of firms that would otherwise go there will refuse. It is simply a question of dealing with these applications with greater expedition, and not putting people off by bureacracy and bumbledom.

On Friday I went to look at the site of a project on the sea front at Stevenston. Stevenston has probably been more affected than any other place in my constituency by what is happening at the I.C.I. factory; its whole nature is being changed by that event. The town has very creditably made an effort so to transform the slag heaps on the sea front as to have the beginnings of a seaside resort. It has grassed over some of the slag heaps, it has built a paddling pool and a kiosk, and the whole thing is beginning to take shape.

The town council applied under the Local Employment Act for a grant to build an esplanade, which could form the nucleus of what might become a tourist resort. There is no reason why Stevenston, in spite of its present rather grimy appearance, should not become a perfectly good tourist resort, particularly when one thinks of its situation, and of the flourishing resorts within my constituency that are also within very easy reach of it.

What is very unfortunate is that the application, made under Section 5 of the Act, has been turned down on the ground that the area in question is not entirely derelict. The only reason why the area is not entirely derelict is that the town council has made some effort to help itself. It is now rewarded by not getting any help from the Government in the building of the esplanade—

Mr. Emrys Hughes (South Ayrshire)

Does the hon. Gentleman really think that, after tomorrow, he will get any help from the Government for that local authority to indulge in such expenditure?

Sir F. Maclean

As has been explained from the other side of the Committee, we are having this debate today so that we might plant a few ideas in the Chancellor's mind. I do not hold any great hopes of being very successful, but I am doing my best.

Whilst I am on the subject of the tourist industry I should like to draw attention to one sentence in the Report, which says: While there was little change in the total number of tourists as measured by the number of persons staying in hotels, boarding houses and other residential accommodation, there was a further sharp increase in the number of overseas visitors. The reason why more people did not stay in hotels was that there was no room in the hotels, and I only hope that the sharply increased numbers of overseas tourists to Scotland did not go away disgusted because they could not find accommodation. It indicates the need for more hotels although, speaking as an hotel keeper it would mean additional competition for me. I should welcome that, however, because, at the moment, there is not only plenty for everybody but much too much for everybody in the season.

In January last the unemployment figures on the Island of Bute reached 12 per cent. Admittedly, that is partly seasonal, and this month it will come down to 2½ per cent., which is not more than the average for the rest of Scotland. Nevertheless, it is a problem that one has to keep in perspective because, at the same time, the population of the island is decreasing.

One thing that has upset my constituents very much has been the departure of the Third Submarine Squadron. If there was one place in Scotland that would have welcomed "Proteus" it would have been Rothesay, and I have been empowered to say that should another Proteus "come to Scotland, we hope that Rothesay will be borne in mind. 'That might drive away the hon. Member for South Ayrshire (Mr. Emrys Hughes)—although, on the other hand, it might bring him on one of his pilgrimages.

Apart from the Royal Navy, I am sure that there are openings in Bute for light industry. If the Government have any money left after tomorrow, one thing they can do for Bute is to improve the northern approach to the island. The Colintraive-Rhubodach ferry is at present approached by a 10 ft. road with passing places. The number of vehicles carried by the ferry has increased very rapidly during the last five or six years, and now 25,000 vehicles a year, many of them heavy vehicles, go over this road. The road quite clearly is unsuited for heavy traffic. Unless something is done soon, either the rate of traffic will have to be controlled or there will be a series of breakdowns.

Great encouragement has been given to people in Bute by the recent visit of my hon. Friend the Under-Secretary of State. He came and looked at the road and gave the impression, which I hope is justified, that he proposed to do something about it. Other newspapers have been quoted today, and I should like to quote one sentence from the Buteman and Rothesay Express: Were it not for previous promises and disappointments in Bute islanders would be heartened by the report of discussions at Colintraive between representatives of local authorities and a Government Minister. Although there have been disappointments in the past, I hope that my hon. Friend's visit will not prove to be a disappointment.

Looking through my files, I discovered an account of a previous visit by a representative of St. Andrew's House which includes this sentence: The number one technician from St. Andrew's House has looked over the road and is believed to have muttered under his breath that it ought to be a two-way road throughout. I hope that my right hon. Friend will see to it that that technician is promoted and that his recommendation is put into practice.

8.2 p.m.

Mr. Hector Hughes (Aberdeen, North)

What Scotland is suffering from today is lack of a constructive and coordinated plan for the whole country. One hon. Member said that this debate has an air of unreality about it. It has an air of unreality for that reason, and for another reason, namely, the fantastic doubts about whether the crisis from which Britain in general and Scotland in particular are suffering is a genuine or artificially engineered crisis designed to push Britain into the Common Market.

Recent speeches in this Chamber, daily newspapers and weekly magazines have been in unison singing a depressing dirge about the crisis in which Britain is and has been wallowing for the last eleven years due to Tory misgovernment. The question is whether the present financial and industrial crisis from which Britain in general and Scotland in particular are suffering is a genuine crisis or artificially engineered for that purpose. The Report on Industry and Employment in Scotland, presented to Parliament this month, does its best to put a good face on the situation but it does it with very little success.

Let me analyse the first paragraph of the Report, which some Members consider is cheerful but which I consider to be depressing. It states: Scotland's immediately predominant problem continues to be her long-standing unemployment … Her "predominant problem" implies, and truly implies, that Scotland is suffering from many problems. They have continued during the whole period of office of this Government. Conditions were better before the Government came into office eleven years ago than they are today, but this "long-standing unemployment" has continued during that whole period. The paragraph states that Scotland's unemployment: remains at a rate twice that of Great Britain as a whole. The mere fact that Scotland's unemployment rate was greater than that of Britain's unemployment rate as a whole should have arrested the attention of the Government long ago and should have induced them to present a constructive plan, but it has not done so.

The paragraph continues: This"— that is, unemployment— persists largely because the industrial economy is still too dependent on those traditional industries which for many years have tended to contract …". That is an expert statement based on evidence indicating at least one of the causes of Scotland's long-standing unemployment and industrial depression. The Government should have addressed themselves to that fact and should have formulated a constructive and coordinated plan to deal with it. However, although they have had eleven years in which to do it, they have failed to solve the problem.

The paragraph in the Report goes on: … traditional industries … for many years have tended to contract, but the developments of recent years and those now under way and planned provide grounds for confidence"— that is the first and only reference to planning and the first indication that a plan has lately been evolved— that substantial progress is being made towards a better balanced economy. That is not a cheerful but a depressing paragraph for Scotland and for Britain as a whole.

There are other problems with which I will not trouble the Committee. I began by saying that there is some doubt as to whether the crisis from which Britain in general and Scotland in particular are suffering is a genuine or artificial crisis. I make that point because other countries are doing better than Britain. The Observer yesterday very cogently stated: Meanwhile in Western Europe, according to the latest economic report from the Common Market, production is rising notably faster than seemed possible at the beginning of the year. With wages and profits increasing sharply, these European countries are sucking in more and more imports. Again, this gives British traders an opportunity to push forward further in a number of rich markets. There is the opportunity, but it is not being seized. Britain is not pushing forward in a number of rich markets. Therefore, these questions arise. First, is the condition of Britain today the result of bad Government? Secondly, has it been caused by the policy of the last eleven years? Thirdly, is it an artificial crisis planned by the Government for Britain alone to force Britain into the Common Market? The Sunday Times, which no one would call a Socialist newspaper, seems to think that the answer is "Yes" to all these questions, particularly the last. The City editor of the Sunday Times yesterday had this to say on the subject: It is worth while inquiring whether the Government has created this flap—if that is a permissible word for an unflappable administration?—by accident or on purpose. Public relations people are saying that the Government decided on severe measures some time ago and built up the crisis so that the public would accept the measures when they came. These are not measures justified by a crisis, but a crisis which is justified by the measures. If that is so, we have an unpatriotic Government and they should be hounded from office. There is more to the same effect, but I will not trouble the Committee with it.

A patriotic Government should evolve a plan which will solve the relevant problems, which have been clearly defined in the Report. I had a great deal more to say about Scotland and its problems and their solution, but in view of the time, I was asked to speak briefly to allow at least one other hon. Member to speak before the Front Bench replies. I shall, therefore, cut short what I had to say. I have made my point that this may be an artificial crisis engineered to force Britain, including Scotland, into the Common Market. The Government have produced no plan for the solution of the ills from which Scotland suffers, and I challenge them to do so.

8.12 p.m.

The Earl of Dalkeith (Edinburgh, North)

Last year, I made my maiden speech on this same subject. Because it was my maiden speech, I was not allowed to be rude to anybody. I was hoping that tonight I might have an opportunity to be rude, but on the whole the debate seems to have been so calm and peaceful that it is difficult to be particularly rude.

I was, however, a little mystified by the proposition put to us by the hon. and learned Member for Aberdeen, North (Mr. Hector Hughes) that eleven years of Tory misgovernment had brought us to this economic crisis and the suggestion which he proceeded to make that, possibly, it was only an aritifical crisis. I am, therefore, a little puzzled.

Nevertheless, the fact remains that this debate is overshadowed by the prospect of what may be said by my right hon. and learned Friend the Chancellor of the Exchequer tomorrow and what he may produce for us in the way of medicine. The guess it that there will be a certain amount of credit restriction, increases in Purchase Tax and other things of which we have already been warned, possibly cuts in Government expenditure and the introduction of the payroll tax. While, undoubtedly, some parts of the country need this medicine to be administered to them, there is no doubt that Scotland would be ill-affected by it.

It would be extremely disastrous to our prospects of increasing employment if we were to have a cut-back in Government expenditure imposed on us now just when our plans for the future appear to be going ahead rather more favourably than before. I therefore appeal very strongly to my right hon. and learned Friend the Chancellor of the Exchequer, when he produces his medicine tomorrow, to try, if possible, to administer it geographically. I know that there are immense difficulties in doing this, but if he can possibly do it, it would be of great benefit to Scotland.

Everybody agrees, both in the House of Commons and outside, that in this modern day and age unnecessary unemployment is intolerable from the humanitarian point of view in a civilised community. It is also intolerable on purely economic grounds. For example, the cost to the taxpayer of unemployment in Scotland last year alone was f13 million, and in 1959 it cost the taxpayer £14½ million. This is money paid out to people for doing nothing. I cannot help feeling that it would be better to spend two-and-a-half times as much as this upon various Government schemes to produce something useful at the end of the day, such as schemes for better roads and communications, in such a way that the money will at least be recouped. Indeed, this is one of the reasons why I support the building of the Q.3, because eventually it will show a return. Planning has been mentioned several times today as a result of the Plowden Report. As a forester born and bred, I am accustomed to planning, although not in terms of four or five years, but of fifty or even one hundred years. It is something which I have recognised as being necessary. There is, however, good planning and bad planning. The planning which has been produced from this side of the Committee has been, on the whole, much more satisfactory than the planning produced by the Opposition when they were in office.

Mr. Willis

Is that why we are in a crisis?

The Earl of Dalkeith

On the basis that £165 a head was the figure paid out last year to those who were unemployed, I suggest that if for every £10 million invested by the Government through the Local Employment Act they could ensure the employment of 6,000 people they would be getting a return of 10 per cent. on their capital. To my mind, that would be one of the best investments ever made by a Government. I ask my right hon. Friend the Secretary of State whether it would be possible to increase the attractions to industry to come to Scotland and at least to fight hard, as, I am sure, he will, to ensure that his right hon. and learned Friend the Chancellor of the Exchequer does not try to prevent him from paying out inducements in the way that he has been paying them so far under the Local Employment Act.

I have listened to the debate with great care and I have been waiting to hear constructive ideas about how our unemployment difficulties in Scotland will be solved. It is not so easy to produce constructive suggestions, whereas it is extremely easy to damn the Government. Damning the Government does not, however, produce one extra job. I am sorry to say that, for most of the time I have been listening this evening, what I have heard has been damnation. Whether or not it is deserved is largely immaterial.

I am a little surprised that the Opposition should criticise so vehemently in view of what happened when they were in office and were faced with almost exactly the same problem. The unemployment rate in Scotland was virtually double what it was in Britain as a whole, and yet they did virtually nothing about it. The difference is that this Government have done something about it under the Local Employment Act.

Dr. Dickson Mahon

What nonsense.

The Earl of Dalkeith

The fact that an extra 9,000 people are registered as employable and that last year's figure showed an improvement of 16,000 on the unemployment figure of the year before represents a net improvement in jobs last year of something like 25,000. I may be wrong, but that is my interpretation of it.

Dr. Mabon

Of course, it is wrong.

The Earl of Dalkeith

No doubt, I shall be corrected later if my arithmetic is faulty. This year the figures are running at approximately 10,000 better than last year. While that is obviously an encouragement and a step in the right direction, I entirely agree that there is no room for complacency anywhere. This is where I differ slightly from the hon. Member for Hamilton (Mr. T. Fraser) and other hon. Members who echoed his feelings that the White Paper reeked of complacency. I have hunted around extremely hard to find signs of complacency on this side of the Committee. If anything reeks at all of complacency, all I can say is that there must be a different collection of smells on that side of the Committee from what there is on this side. I can certainly find no sign of complacency in conversations which I have had with tight hon. Friend and with all my hon. Friends.

I should, perhaps, warn against over-optimism. We hear a lot of figures mentioned in connection with the pipeline, and it is getting fairly full. There are dangers in thinking that we shall have 39,000 extra jobs in a few years' time, because there will be a great many other industries which will be facing decline and facing acute competition from our competitors in other countries. This is obviously a gross figure which has been produced. We hope by the Local Employment Act and various other means to get industry to come to Scotland, but it is not a net figure, and we should bear that in mind so as not to be too optimistic.

It is sometimes suggested that the Government's aim should be to bolster up decaying and declining industries with subsidies, but that is not always a particularly good thing, because the money must, presumably, come from taxation. The taxation has to be paid by other industries which are exporting abroad, and that will increase the cost of their manufactured goods, so we have to be particularly careful about pushing that one.

A good deal is said about the tourist industry in our debates upon employment, and it is referred to fairly fully in the Report. I should like to congratulate all those who have helped to improve the tourist industry and the hotels and facilities. A lot of people have done a great deal of good in thus bringing in extra income which last year increased by something like 20 per cent. over the amount for the year before, but I should like to warn against certain dangers in connection with tourism. I think that there are certain hazards in becoming a nation of bed makers in that we are liable to be hit by other people's slumps, which would be a bad thing for Scotland.

On top of that, we have to equip ourselves to cater for tourists for a comparatively short season of three or four months, and then what is to happen to the people for whom there are no tourists to cater during the rest of the year? It is all very well if they are people living in an area where, perhaps, they want only occasional employment, such as wives and people who are already occupied in other jobs, but, if we build up a strong tourist industry and catering facilities, which will be idle for the rest of the year, for perhaps eight or nine months, we shall have rather unpleasantly high winter-time unemployment.

We can, perhaps, overcome this difficulty by increasing our winter resorts. I have never been to Switzerland, but I am told that we have amenities and facilities every bit as good as they have in Switzerland. There seems to be a growing yearning amongst people to break their necks and their legs by sliding down mountains. Well, if we cannot do anything else we can at least provide reasonably good medical services to cater for those who do break their bones.

On the question of new industries I should like to say a brief word or two about the mobility of labour. Obviously if we are to attract industry to Scotland we must increase the numbers of the necessary skilled manpower. The difficulty, as I see it, is that we have to try to synchronise the production of the skilled men at the same time as the industries. If we produce the skilled men before the industries come it means, obviously, that we are going to lose them to the Midlands and elsewhere where they will seek the jobs for which they have been trained. There is a delicate balance in getting the men and the jobs together at the same moment.

That is something which, I feel, can be done only by the Government. I think that the Government must organize—for instance, if the Government were to make contacts with industries in other parts of the country, industries which want to expand, to find out how many people for particular jobs those industries will want, and then were to organise an apprenticeship scheme to train the people who are wanted for those jobs. I do not think that that can happen without Government help.

I must say that I am very glad to see in the White Paper that the Government have introduced various new training schemes, and I shall be very interested to see how those go on, but I wonder also whether those training schemes can be extended to include apprenticeship schemes particularly for people in the building and construction industries, because I am always being told that one of the reasons why our slum clearance programmes and house building programmes cannot be pushed ahead faster is that there are not enough skilled people in certain trades in the building industry. I wonder, therefore, whether the Government could possibly consider an apprenticeship training scheme organised by the Government for people in the building industries.

On the question of the mobility of labour, we are obviously all of us sorry to see so many, particularly of our young, energetic and resourceful people leaving Scotland every year. This is, of course, a challenge. As has already been mentioned, some 13,000 more boys and girls will be leaving school next year than last year, and we face a very big challenge.

On the other hand, I do not think that we should be too pessimistic and parochial in our thinking about this, because, after all, the biggest take-over bid in the whole of British history was that in which Scotland took over England. I see some startled faces among English hon. Members opposite. But that is undoubtedly true, and not only did Scotland take over England but we took over most of the Commonwealth as well. Today she runs most of the Commonwealth. I know hardly a single-self-respecting Englishman who does not claim to have some Scots blood in his veins. Indeed, I expect to see such distinctive names as MacHughes and MacWillis seeking for registration in the clans of Scotland through the Lord Lyon's Office.

However, I think that we should not paint a false picture of Scotland being a vast maternity hospital exporting thousands of slaves to some distant lands like Siberia when, in fact, a great many of them are going only just over the Border to the South. We all live in the same small island and the Scotsmen, I dare say, will come back again—

Mr. Manuel

The money does not.

The Earl of Dalkeith

—bringing with them the training they have acquired and greater knowledge and thus benefit the Scottish economy. So let us not be too sad about it. We go on saying it in debate after debate, but it is no use being too pessimistic about this.

One must face a serious situation, of course, but I am certain that the Government are doing their utmost to push ahead under the Act to bring new industry to Scotland, and we must help, and to this end we must advertise our successes and our advantages which we have to offer and not go on magnifying our failures and disadvantages.

We must point out that we have the room to move, the space for industry to build and expend, fresh air to breathe, and, above all, talent: talent which has made the name of Rolls-Royce aero-engines famous throughout the world, the talent in the electronics industry in Scotland in connection with Ferranti which leads the world in this sort of electronic equipment; we have the talent of the knitwear and hosiery industries; we have the talent of the medical research industries and of medical scientists.

All these things are advantages to point to. I am perfectly certain that if we are determined to help ourselves we can face the challenge of the future and meet it.

8.28 p.m.

Mr. John Robertson (Paisley)

The take-over bid which we have just witnessed has not left me much time in which to make any decent contribution, because of the agreement which has been made. However, I will do my best in the limited time available to me. My hon. and learned Friend the Member for Aberdeen, North (Mr. Hector Hughes) quoted from Chapter 1 of Industry and Employment in Scotland. It is said in paragraph 1 of the Summary: This"— that is, unemployment— persists largely because the industrial economy is still too dependent on those traditional industries which for many years have tended to contract …". This is the most significant statement in the Report. It contains by implication the whole industrial history of Scotland. It tells us that Scottish industry has failed to move with the times and is still in the nineteenth century. It shows, too, that Scottish capital has been unwilling to invest in Scottish industry. Should we be surprised at that? After all, when social considerations have any effect on the direction in which private investment flows, it will be time for me to reconsider my political affiliations.

Scottish private enterprise has failed Scotland badly. We should keep on saying this. There is little hope of a solution in that direction. Another contributory reason for the present state of affairs is that there is not and has not been for hundreds of years such a thing as a Scottish economy. The problems which face Scotland are the same as those which face Northern Ireland and the north of England. They are regional problems peculiar to a national economy. We will salve Scotland's problems when we solve the problems of regions similarly affected. It is no use going into the question of why industry settled in the Midlands and the London area. What should worry us is that the concentration of industry and population is accelerating rapidly. Industry today settles where the market is, and there is little doubt that the added concentration which is taking place in London and the Midlands makes it more difficult for Scottish industry to establish itself.

It boils down to this. Industry will locate where the maximum profitability can be found. It follows that this condition is satisfied only in the main centres of population. The most significant and far-reaching trend, which prevents Scottish industry from expanding today, is the mass migration which is taking place. Migration is not new, but the pattern is new. The migration into England is such that the English population has increased by 352,000 in the last ten years. Last year the figure was 108,000. The northern regions of England in the same period lost 357,000. When to that figure is added the ¼ million lost to Scotland, we get some idea of the drift South and the concentration of markets.

I do not want to go into the question of migration from Scotland. There are so many varying figures that it is not easy to decide which one to pick. However, I do not accept the figures given by the Secretary of State because they are patently wrong. The Ministry of Labour showed us that there was a net loss in the year ending May, 1960, of 24,000 working population from Scotland. This is significant. We know from the age groups that it was young people who were, leaving. The fact that we are losing young skilled workers at this rate shows that Scotland is in a poor shape to develop new industries. I do not want to speculate about what would have been the results of the increase in population in Scotland if we had been able to keep these people over the last ten years. It is sufficient to say that Scotland would have been in a better position to expand, and the situation in which there is a shortage of skilled men in the midst of unemployment would certainly not have existed.

What are the prospects? To me they appear to be pretty poor. The fact is that the men who exercise most control over Scottish affairs do not sit in the House of Commons. The men who take the essential decisions are not accountable to the people of Scotland. I am convinced that if Scottish capital had been invested and was being invested in Scotland the Scottish economy would be thriving. We have all the factors for economic well-being, except one—the political will to bring it about

The political decision that has to be taken is the extent to which considerations of profit should be conditioned by considerations of social wellbeing. Only the Government are capable of doing that, but I am afraid that the present Government have neither the wish nor the will so to do. If we believe, as I do, that Scotland as a cultural unity is worth preserving, then we must provide the economic base from which it can go on. I have never thought of myself as being a Scottish nationalist, hut in the few months that I have been in this House I have been rapidly coming to the conclusion that the only solution is a Scottish Government.

8.35 p.m.

Mr. George Lawson (Motherwell)

My hon. Friend the Member for Paisley (Mr. J. Robertson) made an excellent speech in the short time at his disposal, except for that one little point at the end, which the substance of his argument tended to go against He has shown—I hope to show something of the same thing—that Scotland is suffering from Scottish people. But it is, in fact, suffering from the business man who runs Scotland. If we had a Scottish Government made up of these business men then, indeed, we would have to call to God to help us.

Mr. J. Robertson

If we had a Scottish Government now it would be a Socialist Government.

Mr. Lawson

If we had such a Government then the answer from God would have been "Yes". But at this point I put it that the business men have been running the country for years and have been making a damned bad job of it. This we have repeated and will repeat on many occasions.

The noble Lord the Member for Edinburgh, North (The Earl of Dalkeith) spoke of the calm and peaceful nature of the debate. I wonder if we can think of what that means. After ten years of Conservative Government we have a debate which, if the noble Lord likes, is calm and peaceful because we on this side of the Committee and Members opposite who have spoken have underlined the kind of argument that we have put forward over the years. We were making the same arguments five or six years ago. We were then described as painting not only a black picture but one which was out of touch with reality. The Parliamentary Secretary to the Ministry of Power will remember the occasions when he made the point that we were describing a scene which did not exist.

That point, however, has emerged in this debate from Members opposite very much as we have made it over the years, although perhaps they did not put it in such strong language. But we feel a little more strongly about it, because our roots are far more deeply buried in Scotland than is the case with so many Members opposite. After ten years we are having to have such a debate as this and tomorrow we will have a statement dealing with the difficulties which face the country and the proposals which will be made to deal with them.

Not so long ago, there was a similar position, though not so bad, arising after the boom which reached its peak in 1957, and again we had measures to deal with the situation. Those measures affected Scotland more severely and adversely than any other part of the United Kingdom. A large part of the argument advanced today by Members opposite—including the President of the Board of Trade—showed that there was an improvement in 1960 as compared with 1959, but that improvement arose precisely because the position was made so bad in 1958 and 1959. The situation from which we were recovering in 1960 was generated by the earlier measures taken by right hon. Gentlemen opposite.

I cannot resist quoting what Lord Polwarth said in another place on the 17th July. Lord Polwarth is an ardent supporter of the Government, but he said: Look at what happened in the previous crisis of 1957. There was already an upsurge of new industrial development at the time, particularly in Scotland"—

The Temporary Chairman (Sir James Duncan)

Order—

Mr. Lawson

I appreciate why you are rising Sir James. I cannot quote what the noble Lord said. The noble Lord made the point that measures which were taken by the Government clearly provoked the situation from which we are now said to be recovering. We are just recovering, and tomorrow we are to have new measures. What will they do to Scotland? It is a commentary on this Government and on the things for which the Conservative Party has stood that after these years we are back where we were, and we see no lasting improvement in Scotland. This is the point that I tried to make when the right hon. Gentleman was talking. He said that we were discussing this Report. We are discussing much more than that; we are discussing the state of Scottish industry and employment.

I put it to any hon. Member that we cannot understand what is happening in Scottish industry or in Scotland if we merely take one year and compare it with another. Two years do not provide a trend. We have to look over a number of years to see what is happening. The right hon. Gentleman told us how in certain respects Scotland compared in 1960 with 1959. It is either dishonest or very negligent. I prefer to think that on this occasion the right hon. Gentleman was not bothering very much, that he regarded it as an unfortunate task that he was asked to bother about Scotland, which has caused him so much trouble, and it was a bother that he should have to come along today and speak about it. For this reason, when I asked the right hon. Gentleman what the unemployment position was in Scotland in 1957, he did not know. If he had known, he would have appreciated that we were better off in 1957 than in 1960. The present improvement is an improvement only because we went down and have since risen again.

I repeat that if we are to look at our expenditure, see what is happening and judge what might happen, we must look at it over a period of years. The Report fails to do this. In fact, it is a condemnation of the Government that the Report is prepared in the way it is. Take the language which is used, for example. It is a language which in many ways "suggests". It says that "as far as can be suggested" things are going very well. We are constantly told about a "record". We are told that there was a "record" in this or that, and that the "excellent improvement" in this connection was not quite up to "the record in 1956" or that it did not quite reach "the record in 1957" There is this attitude of "a record" being created all the time.

In respect of the electrical engineering industry we are told that there is a record every year. But at this time of day we expect that our country's economy should be expanding. This is all nonsense. It is to be condemned. Whoever is responsible for the wording of the Report—it is the Secretary of State who is responsible—is to be condemned for talking in these terms.

For example, paragraph 22 of the Report says: The manufacturing industries in 1960 achieved a new high output record 7 per cent. above the 1959 level and exceeding the previous (1957) record by 5 per cent. The Report says that the electrical engineering industry: as a whole has continued to create new output records year by year. Paragraph 19 contains the words: 5 per cent. better than the previous record reached in 1956–57. Referring to textiles, leather and clothing, paragraph 45 speaks of the group: equalling its previous (1955–56) record. Throughout the Report we see this attitude.

The Report is what my hon. Friend the Member for Greenock (Dr. Dickson Mabon) says it is—a propaganda statement. Any hon. Member who is honest will agree. The Report is produced in this fashion to put the very best possible slant on the position. It is produced in a way which is useful to the Press, which is always looking for something to say in praise of the right hon. Gentleman and his Government. The Press fell over itself about this. Take the Scotsman, the paper which likes to pretend that it speaks with the voice of Scotland. It is always ready to crawl before the right hon. Gentleman. The Glasgow Herald, more particularly, fell over itself in its endeavour to paint a picture to show how everything was lovely in the Scottish garden. This kind of thing makes one a little tired.

I would ask the right hon. Gentleman to do us the credit of looking at our industrial scene over a number of years, and to do us the credit of thinking that we are very genuinely concerned about what is happening to our country. I ask him to believe me when I say, on behalf of my hon. and right hon. Friends, that we are very angry when we hear this kind of attitude in painting a picture which we know is not an accurate picture. Let us have the accurate picture, and let us face it. Let us not take one year, but a number of years. That is the first point.

Scotland need not be in this position. It is most advantageously placed. Let us look at the map and the position of Scotland vis-à-vis Europe. Let us look at our industrial belt in the Forth-Clyde Valley area. I am pretty certain that there is no part of the United Kingdom better suited for the location of industry. No part of it lies more than 15 or 20 miles from a port, and anybody located in this belt could reach out to either the North Sea or the Atlantic. If we were part of Europe, Scotland would be most advantageously placed.

When these American industries came here to look at Britain and to find suitable places to which to allocate their factories, it was to the industrial belt of Scotland that they came. The Caterpillar Tractor Co., Ltd., had no sentimental regard for Scotland. It looked at Great Britain and saw just what it wanted. Euclids had no sentimental regard for Scotland, and neither had Honeywell and the others any sentimental regard. They were concerned only in finding an excellent location for their factories. Here, there is a large belt reaching out to the Atlantic and the North Sea, with main roads running north and south, and based upon good main railway lines. One could hardly find a better place for locating industry.

Do we have any of the difficulties which are found down here? For example, the Chancellor of the Exchequer goes to address a garden fête, and has to get out of his car and try to walk five miles, then get on somebody's motor bike in order to get there. What a comment on the situation down here when, for example, we hear of town after town in the past year not wanting any more industry. Middlesex wants to stop the inflow of people into the area. In the case of Scotland, we are looking at a small country, where it seems to me there are practical advantages.

I appreciate the difficulties which the right hon. Gentleman is up against. We have all received a circular letter from an engineering firm protesting that it wanted to expand its plant down here, I think in the Nuneaton area, and the right hon. Gentleman stopped it doing so. The result is that the firm has gone to Germany. I appreciate that firms do this, but this again is a pretty bad comment on the patriotism of British industry. There are Scottish firms which do this, too. For example, the Distillers Company, Ltd. has taken a very considerable part of its development out of Scotland and into other parts of the country, and it will take development abroad, too. I am all for backing the right hon. Gentleman in his efforts to secure a sensible distribution of our industry.

There is so much to say and so little time in which to say it. Let me now refer to one point which the right hon. Gentleman made, when he said that Scotland was getting more than its due share of Government assistance. The right hon. Gentleman said that of all the assistance offered under the Local Employment Act, 47 per cent. goes to Scotland. Indeed, when the right hon. Gentleman said it, he thought it was really good that Scotland was getting more than its due share, but since he made the statement, certain of my hon. Friends have made inquiries. I myself made inquiries, too, but the Government could not give me the answer. My hon. Friends have found the answer for me, and this is it. The question is what proportion of the development districts of Great Britain is located in Scotland? What proportion of unemployment in the development districts is located in Scotland? The answer is 48.6 per cent., so that we are getting 47 per cent. of the aid and we have 48 or 49 per cent, of the unemployed population in these development districts. These are the figures.

These figures are taken from the Ministry of Labour Gazette and were provided by the Library. In England there were 43,388 unemployed and in Wales there were 9,385, a total in England and Wales of 52,773. In the development districts in Scotland in the same period there were 50,021 unemployed—48–6 per cent. of the total, if my hon. Friend the Member for Hamilton (Mr. T. Fraser) is right, and he made this calculation.

Not only has Scotland a higher proportion of the unemployed, but it has a higher proportion of the chronic unemployed. For example, I recently asked the Minister of Labour what was the proportion of young men under 20 years of age who had been out of work for more than six months and what was the proportion in Scotland compared with the rest of Britain, for example, the Midlands. The answer was that in Scotland the figure was 47 per cent., but in the Midlands it was 1.8 per cent., so that Scotland has practically half and the Midlands, a larger area than ours, fewer than 2 per cent.

In Scotland, 25.6 per cent. of our unemployed have been out of work for more than a year, a figure which is worse than the 23 per cent. in 1959. It is interesting to note that the relative chronic position worsens as the general state of the country improves. In Scotland we have more than a quarter of all those who have been out of work for more than a year. When the right hon. Gentleman the President of the Board of Trade speaks of 47 per cent. of the aid coming to Scotland, let him bear in mind that Scotland is getting less than what can be called its due share.

The hon. Member for Fife, East (Sir J. Henderson-Stewart) spoke of a breakthrough. I am very happy about the features of the development which he mentioned. At this stage I am not bothered about who gets the credit, and, like all my hon. Friends, I am happy about the development of the stripmill, B.M.C., Rootes and Pressed Steel, and I am sure that I speak for all my hon. Friends when I thank the right hon. Gentleman and the Secretary of State for their efforts.

However, what is significant, as the hon. Member for Edinburgh, West (Mr. Stodart) said, is that apart from Colvilles the firms are all incomers and are not Scottish. Nor would Colvilles have provided the stripmill but for the enormous political pressure, in which the Secretary of State no doubt played his part. What we have to appreciate is that what might be called the bright parts of the Scottish economy are due to industry coming from outside and certainly to the pressure of Government action. I do not think that the Secretary of State will challenge me about that. The Scottish economy will not get out of its rut unless and until the Government make still more effort. For instance, as the Government have succeeded in cajoling Colvilles into laying down a stripmill—and, incidentally, providing much assistance for it—why should they not succeed with much else? That is what we are asking for. We have no confidence in our Scottish businessmen. There are exceptions, but because of what has happened in Scotland, we have no confidence in them. We are asking for more Government intervention in industry in Scotland. If necessary, the Government should set up industries in those parts of Scotland where they are necessary.

Because of the shortage of time, I have had to cast aside a lot of the material I had prepared for this debate. Paragraph 11 of the Report deals with insured employees. I hope that the right hon. Gentleman will read this paragraph. It says: The total number of insured employees at the end of May, 1960, was 2,154,000, an increase of 9,000 from a year earlier. I am not disputing that increase of 9,000, but if one examines the increase it will be found that there was an increase of 14,000 women and a decrease of 5,000 men. Year by year, the number of male employees in Scotland has fallen. I will not weary the Committee with all the figures, but between 1955 and 1960 we lost 43,000 males. Whatever may be said about jobs in the pipeline, this figure is important. There were 43,000 fewer males in emloyment in Scotland in 1960 than in 1955.

Let us consider, for example, the numbers employed in civil employment. The figure includes employers, self-employed and employees. Between 1955 and the middle of 1960 the figure for Great Britain increased by 660,000. The number in Scotland decreased by 22,000. It is not that the population of Scotland does not increase as rapidly as anywhere else. The population is constantly being bled.

Those who travel South every week see examples of what is happening. On the main railway stations on any night of the week one finds young lads who are coming down South on spec. I frequently talk to these young fellows and ask where they are going. The answer is invariably that they are going down to London on spec. They come down here looking far jobs, in many oases having given up good jobs. Opportunities for employment in the South are better, the pay is higher, and opportunities fr training youngsters are better. The chance of a bay getting a job in the Midlands is many times greater than that in our area. We get this continuous process of youngsters leaving the country.

Let us consider the growth of manufacturing industries. Paragraph 22 of the Report says: The manufacturing industries in 1960 achieved a new high output record 7 per cent. above the 1959 level and exceeding the previous (1957) record by 5 per cent. This would lead us to believe that the position was a bright one, but when we look at the index over the years we find that we have been doing very badly. Starting in 1954, at 100, in 1955 there was an increase of 2 per cent., to 102; in 1956 it was 104; in 1957, again 104; in 1958 it was 102; in 1959 it was 103, and in 1960 it was 110. We have come up because we went down. Anyone would say that this represents stagnation. If the whole British economy is a stagnant one as compared with those of Germany, France and some other countries—which was the point of the argument last Tuesday—how much more stagnant is the economy of Scotland? Over that period, while the production of Scottish industries increased by 10 per cent. that of Great Britain rose by 23 per cent.

If we examine the Digest of Statistics we find that in every industry but two our record is bad compared with that of Great Britain as a whole. Let us take the basic industries. Mining declined more steeply in Scotland than elsewhere, as did shipbuilding. Textiles improved, but at a lower rate than for Great Britain, and even in steel our rate of development was much less than for Great Britain as a whole.

The one bright exception is drink and tobacco. The figures do not sort out one from the other, but I presume that the main factor is whisky. The Digest tells us that in drink and tobacco, whereas the Great Britain increase for 1954 was 26 per cent., the Scottish figure was 61 per cent. A large part of the industrial development that the right hon. Gentleman may be talking about shortly has been devoted to the building of whisky stores. He will remember how desperately we tried to stop him handing over the Carfin building for whisky storage purposes. Hundreds of thousands of square feet of factory space have ben built for storing whisky. My hon. Friend the Member for Dunbartonshire, East (Mr. Bence) once asked who wanted to store whisky anyway—but they do.

The figure of industrial building that I obtained for March, 1961, was 7,300,000 sq. ft. My hon. Friend the Member for Hamilton has shown that this represents only between 6 per cent. and 7 per cent. of the building going on in Great Britain. About 913,000 sq. ft. of this was for purposes connected with whisky in some form or another. That does not hold out much prospect in terms of jobs. In these days Scottish Members do not refer to themselves as being Scotch; that word has become connected with whisky. Many people say that it is wrong to use the word "Scotch" to describe our nationality, and that it should be "Scots". I dispute this. The word "Scotch" is an old and honoured term, which was used by Sir Walter Scott and Burns, among others, and I shall go on using it. But it has become synonymous with whisky. What has it given us in return?—empty bottles and empty purses.

The decline of our basic industries in Scotland over the years has been steeper than that of similar industries elsewhere. The expanding industries—the industries which, we are told, are now happily helping to bring about a better balance in our economy—we find, on the basis of the Digest figures, are expanding less rapidly than the same industries elsewhere. For example, chemicals is a rapidly expanding industry. In Scotland, the expansion from 1954 has been 31 per cent., measured against the expansion in Great Britain as a whole of 45 per cent. In fact, we are behind. Even in the industry which has been boasted about, the electrical engineering industry, our rate of development is 20 per cent. up as compared with 27 per cent. up. This is happening over the whole field.

From the evidence that emerges it is perfectly clear to me and my hon. Friends that there must be very much more of the intervention that has produced some of these bright spots if we are to get out of the difficulties that we are in. Do not let us have tomorrow something which will repeat, perhaps in a worse form than in 1957, the sort of circumstances from which we hope we are just beginning to emerge.

9.8 p.m.

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

The hon. Member for Motherwell (Mr. Lawson) said that he had to discard a lot of his notes. If he will pass them over to me I will deal with them. I think that he was trying to cause me a certain amount of gloom. I was going to congratulate him on speaking from the Opposition Front Bench for the first time, but I understand that he has spoken from the Front Bench before; I must have missed the previous occasions. I am sure, however, that he will do it more often in the future. Perhaps I might recall the words: What was he doing, the great God Pan, Down in the reeds by the river? Spreading ruin and scattering ban. Spreading gloom. That was what the hon. Member was doing.

I did not discern in the hon. Member's speech any very constructive thought about the future of Scotland. Nor did I hear throughout the debate as much constructive thought as I have heard in similar previous debates. Strangely enough, both of the hon. Members who opened and closed for the Opposition spent quite a bit of time telling me how wicked we had been in producing this document and in the way in which we had produced it. I thought that it was an extremely clear, concise and helpful document which sets out with considerable frankness what is bad and what is good.

I got mixed up during the speech of the hon. Member for Hamilton (Mr. T. Fraser). At one time he said that the Scottish Press had not read the whole of the document. Then I thought that he was attacking me for publishing a document which was unduly optimistic. But if he looks on pages 14, 15 and 16, the hon. Member will find a frank statement of the things which are difficult as well as a careful setting out of what is good.

We have heard quite a bit from various hon. Members about pipelines. Whenever there is any mention of pipelines hon. Members opposite make noises of a customary kind. I will give them two answers. Anyone who wishes to see results flowing from the pipeline should go down the A.8 to Bathgate where I have never seen a more effective piece of work carried out in factory construction. At Linwood there is a rather interesting bridge which is well known to the hon. Member for Paisley (Mr. J. Robertson) and there there is visible evidence of results flowing from the pipeline. The hon. Member for Glasgow, Central (Mr. McInnes) made an entertaining speech which I followed with great interest. He asked where are the jobs, but it is obvious that the hon. Member has not done his homework. If he turns to page 56 of the Report and looks at the table opposite, and if he refers to subsequent pages, he will see precisely where they are.

Mr. J. Robertson

I promised myself that the next time anyone mentioned "pipelines" I would suggest that we get Stewarts and Lloyds to tender for 800 men to start work on one, because they make pipelines.

Mr. Maclay

The hon. Member has to be careful. I am following his speeches with interest. He made one this afternoone in which his closing sentences caused eyebrows to be raised among his hon. Friends. I should like to explain the reason for those closing sentences, which is that the hon. Member is suffering from a few local problems and he was making appropriate noises to keep that part of his constituency under control. I heard the maiden speech which the hon. Member made in a Standing Committee. I did not hear his maiden speech in this Chamber, but I shall be very interested to hear him speak again, especially if he makes more speeches of the kind he made today.

The Report has been attacked as being optimistic. I do not think that it is if one reads it carefully. It would be quite wrong if we did not set out dispassionately what has happened in the year under review, and if we did not make an attempt to look into the future. That is what I have been pressed to do for years, and that is what we have tried to do. Of course, the subject is full of hazards and one cannot be certain about what will happen. Broadly speaking, I think that there can be no argument that, over the whole field, last year was a constructive year for Scotland, and the industrial progress which was made is described in the Report. Broadly speaking, the picture is satisfactory.

Some difficulties are inevitable. The problems of Lanarkshire were mentioned. In any progressive economy there are changes in fashions, in markets, in the availability and even in the sources of raw materials, technological advances in designs and methods of manufacture—all these result in new industrial growth and also in some replacement of traditional concerns. If that did not happen, it would indeed be stagnation of a kind which, in the long run, would prove disastrous for Scotland. No member of the Government can pretend that we can go through a period such as we are experiencing in the Scottish economy without there being setbacks as well as progress. That is inevitable in an economy which is not to stagnate.

I will repeat something which I have said too often before. Hon. Members of both parties are engaged in the major task of trying to change the traditional basis of the Scottish economy and to shift the balance so as to bring in new types of light industry and science-based industries so that Scotland is less dependent on the older industries like shipbuilding and heavy engineering which, while still extremely important and necessary, have ceased to have expansion potential and cannot sustain the same rate of employment as once they did.

Many of the figures which the hon. Member for Hamilton gave in his opening speech were confirmatory of the statement I have just made. In his comparison of the total number of unemployed in relation to total population he was saying in figures what I have said in words. We are engaged in a major operation to change the basic structure of the Scottish economy. The question we ought to have in our minds in whether this fundamental change is now approaching, or has even reached, the critical point when it can generate its own development.

It is too early to say this yet, but I am confident that the progress set out in this Report shows that the process is gathering momentum. Very substantial capital expenditure is now under way. The steel and vehicle projects alone involve an investment of £150 million over three or four years. The situation towards which we ought to be moving and which we must do everything possible to realise is one in which there will exist in Scotland a widespread and closely knit network of enterprises associated with and indeed making up substantial parts of the United Kingdom vehicle and sheet steel industries. This will make an extremely important contribution to the economy.

Not only will the vehicle projects be of great importance in themselves, but the Committee should note that about half their turnover will comprise bought-in materials and components. When they are in full swing these will represent the output of 20,000 workers. That gives some indication of the kind of opportunity which will be available for ancillary industries which supply the vehicle plants. There is already evidence that Scottish manufacturers desire to diversify their manufactures so as to become suppliers to the industry. There is also evidence of interest by component manufacturers in the South in establishing production in Scotland either directly or by association with existing companies.

I state quite categorically that a very major effort will be needed over the next two or three years if Scotland is to obtain the greatest possible benefit from this opportunity which is now there. Of course I should like to see Scottish factories supplying all the components and materials to the vehicle plants. That is what we should work for, but, even if and when we get half that, it could give employment to 10,000 workers—as many as the vehicle plants are expected to employ.

Furthermore, some of the companies also provide components to other consumer durable industries. This makes still more important opportunities available. Apart from supplying what at present has to be brought in, the existence of such industries in Scotland ought to have attractive capacity to the type of industry which uses their products. This is the kind of breeder industry which we want to get in.

I ask hon. Members in every part of the Committee to help in every way they can to encourage this process. The opportunity is there. It is up to all of us to seize it and make the best possible use of it by extension of some existing industries, the diversification of others, and the establishment of new companies.

As occasion serves, my right hon. Friend the President of the Board of Trade will use his powers to steer industry to Scotland and the Government will do everything they can to help, but I agree with my hon. Friend the Member for Edinburgh, West (Mr. Stodart) and others that much of the effort which is needed must come from Scotland itself. This is a challenge to both sides of Scottish industry, to local authorities and to everyone of us. If we can all play our part effectively I have no doubt that the fundamental changes Which we have under way can result in the more progressive industrial economy which Scotland needs. If we do not get that more progressive industrial economy for which we are all trying, the same speeches will be made by the hon. Member for Hamilton and by me for the next twenty-five years as have been made for the past ten years.

Sir Myer Galpern (Glasgow, Shettleston)

How does this beautiful picture compare with the most damaging and utterly untrue allegation made by the President of the Board of Trade that Scottish management was less efficient than that in England? [Interruption.] That was very definitely and categorically said. Hon. Members should see HANSARD tomorrow. That allegation, which is disastrous, was actually made by the President of the Board of Trade—that management in Scotland was less efficient than it was in England. If it were allowed to go out—something wholly untrue—it would be very damaging to the Scottish economy.

Mr. Maclay

I listened to my right hon. Friend's speech, and I did not hear him make that remark. I shall certainly look at HANSARD tomorrow.

The point to be taken here is that there is a flexibility of development in Scottish industry that was, perhaps, a little lacking for some years. That is what we have to encourage in every way we can. There has been need for a pump-priming operation and that is what has happened.

Let us get down to this dangerous word "planning" which rouses such emotions all round. There is planning, and there is planning. It is quite obvious that hon. Members opposite understand what I am about to say, but let them think carefully of what has happened in Scotland since we came into power. We have been working steadily, not to apply a rigid, detailed plan, or to blue-print precisely what was to happen here, there or elsewhere. One cannot get events to move like that, if we are to have a flexible economy. I do not say that that is what the Labour Party would have done if it had been in power, but hon. Members opposite certainly sound at times as though that was what they did want. We have been trying as far as we can to think out in advance when and how to take advantage of opportunity as it offers for the benefit of the Scottish economy.

There is the case of Bathgate. I know very well that the hon. Lady the Member for Lanarkshire, North (Miss Herbison) has often taken me to task in these debates for not referring as much as she would have liked to what is happening in North Lanarkshire. That area presents an immense problem. The shale oil industry—let us admit it—has been facing a period when it must run down, and just when that will be I cannot discuss now.

We have managed to get the British Motor Corporation to Bathgate, within range of the area and, as a matter of deliberate thinking out of what would be best for all concerned there, we are to put our next new town near to that area. There is the prospect—that is all I will say, a prospect; we cannot promise—that we may be on the verge of solving the problem in a very important area of Scotland which was facing the risk of becoming derelict. We may get that area rebuilt, and if that is not flexible, proper planning, I do not know what is. It is the right kind of planning—

Mr. T. Fraser

Is the Secretary of State claiming that he and his Department selected the site for B.M.C. development? I had always understood, on what I considered to be reliable information, that the decision was taken by the British Motor Corporation which, incidentally, it seems to me, has thereby selected the site for the new town.

Mr. Maclay

I was trying to make clear that in all planning of this kind we are not rigid. We have been watching for possibilities where this kind of development would be most useful and effective, and I am delighted that S.M.C. decided on that site—

Mr. Fraser

So am I, but the right hon. Gentleman did not do it.

Mr. Maclay

I did not say that we did. But we have been watching for opportunities for what was needed, and we were ready to take advantage of the chance to do whatever needed to be done. That is the right way to do it, not rigidly to decide beforehand what is to be done.

There has been a great deal of real industrial progress in North Lanarkshire, and last year was a very successful year in attracting new development. Last year, eleven new or extension projects were completed, and there have been four more so far this year. In addition there are a considerable number of further projects under construction or approved. Some of these may involve little or no additional employment, but an area in which there is all this activity is certainly no longer declining. It is estimated that the new development will give employment for over 5,000 workers, not counting any additional employment that may come from Colvilles' new strip mill, or from the advance factories at Coatbridge, East Kilbride, Shotts and Carfin.

Still more important, these new completions include particularly desirable developments in so-called science-based industry like the new extension for the manufaoture of thermostatic controls, and the new scientific instruments plant. There are under construction projects of the first magnitude, including the vast new steel developments, and further extensions for the light consumer goods industry at Cambuslang, and for yet another firm of thermostatic control manufacturers. The projects approved but not yet started cover a particularly wide range—cranes, mining equipment, electronics, food products, plastics, motor vehicle components. These do not exhaust the list. I do not think that any reasonable person can possibly deny the very considerable advance we have made in diversifying industry in this area and in bringing in expanding firms which manufacture the products of the modern age. That must be our objective all over Scotland.

I know only too well that Greenock presents its own problems. There was a bit of a mixed-up argument about the Greenock problem while my right hon. Friend the President of the Board of Trade was speaking. The hon. Member for Greenock (Dr. Dickson Mabon) knows as well as I do that the question of sites is a very serious difficulty there.

Dr. Dickson Mabon

What about Port Glasgow?

Mr. Maclay

Port Glasgow is all right. We are very co-operative in that part of the world. The hon. Member knows from the Adjournment debate which we had recently what my hon. Friend the Parliamentary Secretary to the Board of Trade has said about what is being examined in relation to Port Glasgow.

Let me repeat what has been said about advance factories. They always come up in this type of debate. There are occasions when advance factories may be the right thing. I assure hon. Members that it would give me the greatest pleasure to say that I was convinced that an advance factory was right far Port Glasgow and the Port Glasgow-Greenock area, but I do not believe that that is true at this stage, whatever may develop later. We might damage something that we want to do rather than advance it. That applies to other areas. Hon. Members opposite often argue from their experience in the immediate post-war years when, if a Nissen hut was built, industry would move into it. It would go anywhere under cover. That is to some extent the explanation of some of the figures which the hon. Member for Hamilton used at the beginning of his speech.

I have examined carefully, not for party political purposes, the course of events in the proportion of building between England and Scotland during the years since the war. I did so because there are lessons to be learned from it, apart from party political purposes. There are certain stages in the economy when employment over the whole country, including Scotland, is high and it is not easy to move industry. Even if things do not go in the steady upward curve that we want in Scotland, if there are setbacks in the progress that we want, the moral is to point them out in debate, but not to give the impression that it is disaster. There has to be added effort to be ready to catch the next wave of expansion and to move it in the right direction.

Hon. Members opposite did have good percentage figures for industrial building in Scotland compared with England and Wales in the years 1946, 1947 and 1948. By area, they were 16.6, 11.4 and 11.8. By 1949, things were changing. The percentage went down to 5.7 and in 1950 it was 6.5. There is an important moral to be learnt from that which I cannot develop tonight, but if any hon. Member wishes to reduce my salary by £5 I must give him time to do so. For £5 it is cheap at the price.

Question put and agreed to.

Resolved, That a sum, not exeeding £24,943,485 be granted to Her Majesty, to complete the sum necessary to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1962, for expenditure in respect of the Services included in the following Civil Estimates, viz:—

CIVIL ESTIMATES AND SUPPLEMENTARY ESTIMATE, 1961–62
	£
Class I, Vote 22, Scottish Home Department (including a Supplementary sum of £10,000)	870,285
Class VI, Vote 1, Board of Trade	4,046,950
Class VI, Vote 4, Board of Trade (Promotion of Local Employment)	20,026,250
Total	£24,943,485

The CHAIRMAN then proceeded, pursuant to the Order of the House this day, forthwith to put severally the Questions, That the total amounts of the Votes outstanding in the several Classes of the Civil Estimates, including Revised Estimates and Supplementary Estimates, and the total amounts of the Votes outstanding in the Estimates for Revenue Departments, including a Supplementary Estimate, and the Ministry of Defence Estimate, and in the Navy, the Army, and the Air Estimates, including a Supplementary Estimate for Army Services, be granted for the Services defined in those Classes and Estimates; and that sanction be given to the application of the sums temporarily authorised in respect of Navy, Army and Air Services [Expenditure].

1. CIVIL ESTIMATES AND SUPPLEMENTARY ESTIMATES, 1961–62
c157
1. CLASS I 298 words
cc157-8
2. CLASS II 216 words
c158
3. CLASS III 294 words
c159
4. CLASS IV 254 words
cc159-60
5. CLASS V 228 words
c160
6. CLASS VI 171 words
cc160-1
7. CLASS VII 213 words
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8. CLASS VIII 215 words
cc161-2
9. CLASS IX 199 words
c162
10. CLASS X 159 words
c162
11. ESTIMATES FOR REVENUE DEPARTMENTS AND SUPPLEMENTARY ESTIMATE, 1961–62 95 words
c162
12. MINISTRY OF DEFENCE ESTIMATE, 1961–62 68 words
c163
13. NAVY ESTIMATES, 1961–62 154 words
c163
14. ARMY ESTIMATES AND SUPPLEMENTARY ESTIMATE, 1961–62 104 words
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15. AIR ESTIMATES, 1961–62 104 words
cc163-4
16. NAVY EXPENDITURE, 1959–60 103 words
c164
17. ARMY EXPENDITURE, 1959–60 100 words
c164
18. AIR EXPENDITURE, 1959–60 114 words
c164
2. WAYS AND MEANS 64 words
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3. RIVERS (PREVENTION OF POLLUTION) BILL 3 words
c165
1. Clause 1.—(RIVER BOARD'S CONSENT FOR PRE-1951 DISCHARGES.) 100 words
cc165-6
2. Clause 2.—(PROTECTION WHILE APPLICATIONS ARE BEING DEALT WITH.) 278 words
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3. Clause 4.—(Protection for persons COMPLYING WITH CONDITIONS.) 141 words
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4. Clause 5.—(Review and variation of CONDITIONS GOVERNING DISCHARGES AND NEW OUTLETS.) 235 words
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5. Clause 7.—(OTHER PROVISIONS RELATING TO DISCHARGES AND NEW OUTLETS.) 221 words
c168
6. Clause 9.—{ESTUARIES AND TIDAL WATERS.) 240 words
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7. Clause 10.℄(SAMPLES OF EFFLUENT.) 43 words
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8. Clause 11.—(Restriction on PROCEEDINGS.) 39 words
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9. Clause 12.—(Restriction of disclosure of information.) 272 words
c170
10. POLICE FEDERATION BILL 6 words
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4. HIGHWAYS (MISCELLANEOUS PROVISIONS) BILL 3 words
c170
1. Clause 6.—(POWER TO FILL IN ROADSIDE DITCHES, ETC) 59 words
cc170-1
2. Clause 9.—(Supplementary provisions AS TO REMOVAL OF OBSTRUCTIONS FROM HIGHWAYS.) 366 words
cc171-6
3. New Clause A.—(OVERRULING OF OBJECTIONS TO STREETS BECOMING MAINTAINABLE HIGHWAYS.) 2,004 words
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4. New Clause B.—(STREET WORKS EXPENSES FOR PREMISES FLANKING OR BACKING ON THE STREET.) 293 words
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5. SUNDAY CINEMATOGRAPH ENTERTAINMENTS 35 words
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5. GREAT NORTH ROAD, GOSFORTH 3,404 words