SCOTLAND (INDUSTRY AND EMPLOYMENT)

HC Deb 19 July 1962 vol 663 cc653-715

3.58 p.m.

Mr. Hugh Gaitskell (Leeds, South)

I beg to move, to leave out "£7,078,200" and insert "£7,077,200" instead thereof.

In opening this debate, I naturally begin by offering our congratulations to the new Secretary of State for Scotland on taking on what I do not think he will find a very easy job. In doing so, I should like to express to his predecessor our condolences, and also our regret that for some time past his own life has been clouded by personal anxieties and difficulties. I also offer my congratulations to the President of the Board of Trade on surviving.

When someone who is only half Scottish intervenes in a Scottish debate an explanation is clearly called for. In my case, I say at once that I intervene in today's debate not because there is any need for someone who is not fully Scottish on these benches to come in and lend a hand. The new Secretary of State will soon find out, if he does not know already, the temper of the Scottish Labour hon. Members. I do so partly because I have some personal associations with Scotland—my mother was Scottish, as I think most hon. Members know—and partly because all of us, whether we are Scottish, English or Welsh, are concerned about the state of affairs in Scotland. If we are not, we certainly should be—all the more because this state of affairs cannot, in my view, be solved wholly on a Scottish basis.

I would go so far as to say that the convention that only Scottish hon. Members take part or even listen to these debates is, perhaps, something that should be reviewed. I am not sure that it would not be a good thing if a greater number of English and Welsh hon. Members listened to Scottish debates, for they might learn a little more about the situation in Scotland and be even more enthusiastic in pressing on English Ministers the necessity for more vigorous action.

I approach this problem, nevertheless, as an outsider. I have not, I cannot, have the day-to-day personal constituency experience of hon. Members who represent Scottish constituencies. I look at it from outside, but it may not be a bad thing to have at least one speech of this kind. I must say, recollecting the last occasion on which I had the honour to speak in such a debate two years ago, that comparing the picture then with the picture today I find it depressingly similar. Very little has happened to cause any considerable improvement in the industrial and economic situation in Scotland in these past two years.

I begin with unemployment. The last figure, for June, 1962, was 72,143. The figure last year was 59,000. So we have had in these last 12 months an increase in unemployment in Scotland of about 13,000. It is today, broadly speaking, at the same level as it was two years ago. If one looks at the longer table of figures showing the relationship of unemployment in Scotland to unemployment in the rest of Great Britain, the figures vary a little from area to area but, by and large, they remain obstinately the same.

While Scotland has some 10 to 11 per cent. of the total population, its unemployment share is 18 per cent. If one compares, for example, not just the unemployment figures but the way in which they have been changing lately, there is little room fox satisfaction. It is true that in recent months there has been some slight decline in unemployment, but it is less than the seasonal decline. The change, for example, between March and April of this year was a reduction of 1,106. The seasonal reduction—that is, what should have happened—was a figure of 4,200. For April and May the reduction was 2,572, while the seasonal reduction should have been 4,200. The reduction between May and June was 3,274, but seasonally it should have fallen by 5,100. So there is little comfort for us in these more recent figures.

If we turn to the ratio of persons out of work to jobs available, the contrast between Scotland and Britain as a whole shows that until recently for every job in Scotland there were four people out of work looking for it, whereas in Britain as a whole the figure was about equal. Today the position is slightly worse than that, because it is five out of work in Scotland for every job available, while there are fewer than two out of work in England for every job available.

Mr. Ernest Popplewell (Newcastle-upon-Tyne, West)

While my right hon. Friend is quoting the English figures, will he make a differentiation between the figures for the north-east of England and the rest of the country, because the figures for the North-East are comparable with those for Scotland?

Mr. Gaitskell

My hon. Friend is perfectly right, but there is to be a debate on unemployment in the North-East and I think that today, if my hon. Friend will allow me, I will contrast the position in Britain as a whole with the position in Scotland, leaving it to my hon. Friend and others to deal with the point he raised next week.

These figures of unemployment showing the contrast of unemployed in relation to vacancies need to be reinforced by three other sets of facts. It is still the case that there is a steady movement of population out of Scotland every year. Over the decade it has averaged about 25,000 a year, but in the Quarterly Return of the Registrar-General for Scotland, for the quarter ended 31st December last, it is stated: The natural increase in population during the year ended 30th June, 1961, was 37,600 and the estimated net migration loss was 34.200 of which it is estimated 25,900 was to other parts of the United Kingdom and 8,300 abroad. If one adds that to the amount of unemployment one gets a figure of very nearly 100,000 persons. That is what we have to think of. That is what we have to contend with.

Another figure which must be brought into the picture is the way in which there has been over the last five years a steady decline in male employment in Scotland. This has fallen from 1,606,000 in 1956 year by year to 1,554,000 in 1961.

On top of all this there is something else which must be borne in mind. The standard of living of a country or an area is not only dependent on the level of wages and the number actually out of work; it is also dependent on the proportion of the total population employed in gainful employment. In other words, there are some areas where one will find far more wives and women generally at work and far less in other areas. Professor Wilson, who was one of the members of the Toothill Committee, gave an estimate in a recent article. He said that if what he called the "Scottish participation rate"—that is, the proportion of the total population engaged in gainful employment—could have been raised in 1959 to the average for Britain, it would have involved another 90,000 workers at work in Scotland.

This is some indication of the general position that still obtains and has obtained all these years while the right hon. Gentleman and his colleagues have been in power.

What are the consequences of this obvious, indeed deplorable lack of balance in our British economy? First, there is the sheer waste involved—the sheer waste in unemployment, the sheer unhappiness caused by people being unable to get jobs and the sheer unhappiness caused by the fear of unemployment, always the greater when the level of unemployment is high.

Then there are the consequences to the rest of the country. This state of affairs in Scotland carries with it a steady flow of persons southwards to England, to the South and East and to the Midlands. And what happens when they get there? They add very substantially to the housing problems in the Midlands, London and the south eastern areas. Inevitably they increase the traffic congestion, and it is not altogether too fanciful to say that when we are considering the problems of the homeless in London and the Midlands, although one does not ascribe them to people coming down from Scotland, it is fair to say that this lack of balance in the development of the economy is one of the factors underlying that particular tragedy.

There is also the inevitable effect that such movements of population and overcrowding in the South-East have upon land prices. Indeed, unless we take control of this situation—and what I am saying now applies not only to Scotland but to the whole problem of the location of industry—we are going to get into a state of affairs when the greater part of our population will be confined in an oblong shape running from the north-west Midlands down to the South-East. Already the expert town planners call it the coffin, because it is shaped like a coffin, and it is up to us to see that we do not get incarcerated in this way.

There is one other argument to which I personally attach a good deal of importance, and it is this. We have had to contend in this country over the past years—it is almost a continuous problem —with the difficulty of achieving industrial expansion without inflation. One difficulty that arises from this is that as we expand in the areas of the Midlands and the South we run into shortages of labour very quickly, and because of those shortages of labour various inflationary tendencies are created.

If, instead of that, the demand, so to speak, could be spread out over the whole country so that the reduction in unemployment took place at the same level everywhere, we would be able to have a good deal more expansion without having the fear of inflation constantly upon us. Therefore, there is every argument—human, planning and economic —in favour of trying to correct the lack of balance which has plagued Scotland and indirectly plagued the rest of the country all these years.

Behind all this difficulty lies something else, and that is the low rate of production increase in Scotland. Quite rightly the Toothill Committee put its finger on this and has said that what is wrong is the lack of growth in Scotland, for if we have the growth we shall almost certainly have the employment as well. Indeed, the figure is a depressing one. If one contrasts the British record, say, between 1954 and 1961 the industrial production increased by 20 per cent. It increased in Scotland by 11 per cent. One has to remember in quoting these figures that the British rate is the worst but one in Europe. The Scottish one, therefore, is far below this.

It is true that in the last couple of years, in 1960 and 1961, Scotland expanded faster than England. The Scottish rate of industrial production went up 2 per cent. in those years, while the British rate went up by only 1 per cent. All we can say is that the only occasion when Scotland does a little better than the rest of the country is when the rest of the country is doing extraordinarily badly.

I submit that these facts are alone a crushing indictment of Tory policies and Tory rule over these years. Whatever they may have done, they show that no real impact has been made upon the problems of Scotland's economy. They show, indeed, that these policies have been what can only be described as an utter and complete failure. During the last few years we have had the addition of one Minister of State and one Undersecretary of State for Scotland, almost doubling the total force on the Scottish Front Bench—an increase from three to five. I can only say that I do not think that the two additional Ministers have earned their salaries.

What is the reason for the failure? In my view, it is essentially because the Government have neither planned nor carried out a plan to deal with the situation. After virtually neglecting the whole problem prior to 1958, when they did not really operate the development area Acts which were on the Statute Book, and broadly speaking allowed firms to go wherever they liked and gave very little inducement to firms to set up in these development areas, they then, and particularly after 1959, began to make some effort. None of us would deny for a moment the value of such things as the new strip mill, the B.M.C. works at Bathgate or the other works at Linwood. Certainly some jobs have been created. Nobody denies that, and I dare say that we shall hear again this afternoon that there are a lot more jobs "in the pipeline". I think right hon. Gentlemen opposite have pipelines on the brain.

The point—and it is very simple—is that it is no use talking about creating some jobs unless we relate these to the jobs which are disappearing. This is what has been happening and this is the reason for the failure. If the jobs had not disappeared the new jobs created by Government action would have had their impact on the unemployment figures, but they have not done so. What is needed is to set targets in relation to what is likely to happen—in other words, to estimate the losses of jobs that are likely to occur, to take them into account, to plan accordingly and to carry out one's plan.

What are the prospects? I must say, looking at the "Report on Industry and Employment in Scotland", that it is difficult to feel particularly optimistic. I turn to the part entitled "Developments affecting the future" and to the chapter dealing with "Productive Industry". Under "Engineering and electric-cal goods", the Report says: But since the prospects are that investment in plant and machinery in the United Kingdom will be little higher than last year, the rate of increase in the output in Scotland is likely to be less than it was in 1961—unless there is a sharp increase in production for export markets. On "Shipbuilding and marine engineering", paragraph 165 says: … the outlook for the shipbuilding and marine engineering industries in Scotland, as in the United Kingdom as a whole, is still far from promising. The paragraph dealing with "Metal goods not elsewhere specified" states: The immediate prospects for this group seem somewhat doubtful in view of the fall in their production in 1961… On the question of steel, the Report is rather surprisingly a little more optimistic. Seeing that the steel industry is working at only 60 per cent. capacity in Scotland, it would indeed be a very gloomy thing if we were to expect something worse than that.

Under the section dealing with "Textiles, leather and clothing", the Report describes the outlook as "not bright". Under "Food, drink and tobacco", it says: … there is little ground for expecting any marked increase in activity. Under "Bricks, pottery, glass, cement, etc.", it says: The outlook … depends to a very large extent on the available markets for refractory goods and building bricks. For the latter there is little prospect of any increase … Under "Timber, furniture, etc.", the Report says: … the outlook appears more settled than for some time, but the level of output is low. This is a pretty gloomy prospect which the new Secretary of State faces. Behind all that is the concern which we all feel at the prospect in the coal mining industry, and I should now like to say a few words about that industry. We recently had a statement from the former Secretary of State as to what the Coal Board thought was likely to happen. The Coal Board has carried out a survey, and none of us questions the need for that. On the contrary, it is the sort of thing which ought to be done so that we can get some idea of what is likely or might happen.

To what does it all amount? It amounts to this, that whereas already the manpower in the mining industry in Scotland has fallen by some 20,000 in the past four years and is now down to 62,000, this is going to be further reduced first of all by the absolute extinction and disappearance of the collieries in Class C—the ones where the physical conditions necessitate closure—where indeed some 8,000 jobs will be lost; then, if out of the 16,000 in Class B, that is to say, the collieries about which there is uncertainty, the future of which will depend on the economic situation, we take 4,000 workers—certainly not an unduly pessimistic figure—this means that by 1966 there will be no more than about 50,000 miners in Scotland.

Can this be stopped? Naturally, this is the first question we must all ask ourselves. Clearly, there is nothing one can do about loss of jobs as a result of purely physical decline. We all know that for some years there have been pits, particularly in Lanarkshire, Which have been going out. The jobs disappear with the coal. Moreover, I do not think that one can expect the National Coal Board, given the market situation which it faces, fox Which it is not responsible, deliberately to produce coal in more expensive rather than cheaper ways. This may seem hard to people who live in Scotland, but I feel bound to point it out. We must put ourselves in the position of the Board. I do not see how one could justify producing coal where it was more difficult to get it when it could be produced where it was easier to get it.

There seem to me to be two alternatives when one considers the Class B group of collieries. We may find—this is something to which the Government must give urgent attention—that the closure of collieries in this group would create very grave social consequences, that it would involve creating derelict areas, villages and towns, and that we could not tolerate these consequences. If that be so, and it is the view of the Government that those consequences must be prevented, there is a clear responsibility upon them to pay the Coal Board to keep the collieries going, in other words, to pay a subsidy. It is not reasonable to expect the Coal Board for any length of time to produce in an uneconomic manner because the Government cannot think of anything else to do with the labour which is available.

I do not believe that this is in the least a satisfactory solution. It may be necessary in some cases. It may be necessary for a short period. It may be —I do not want to press the point too far—that arrangements can be made with the Coal Board for it to sustain the inevitable losses over a short period.

The way out is clear enough. Alternative jobs must be provided for the redundant labour. This must be done not as a sort of last-minute afterthought. It must be done as part of a proper plan to take into account the reduction in employment created by colliery closures, known in advance, with the Government seeing to it that the new factories and other places of employment are available at the time, as and when collieries are to close. The time to plan is now. It is no use waiting. This is something which must be done from now onwards.

This leads me to the broader questions of policy in relation to Scotland as a whole. I say to the Government and to the new Secretary of State, for heaven's sake stop being quite as complacent as Ministers have been on this subject in recent years. Complacency is really defeatism for it implies that one can do no better, that one is satisfied with present circumstances. Also, Ministers must stop attacking those who think it their duty to put forward the facts. I have read all the debates and, in my view, there has been far too much in the way of reproaches passed upon anyone who says that something ought to be done. What does the President of the Board of Trade and his colleagues expect the Opposition to do? Is it not our job, as indeed it is his job, to realise what is wrong, to point it out, and to say what should be done?

When we say that the situation is very unsatisfactory and that there has been no improvement, as there has been no improvement—the figures show it— we are not decrying Scottish industry, we are not decrying the skill of Scottish workers, we are not creating a bad atmosphere. We are simply drawing attention, the attention not only of Scot- land but of Britain as a whole, to the facts and demanding that action shall be taken. Let us have no more of this nonsense. Let the Government accept that they have not solved the problem. If they start from there, they will, I think, get a somewhat better response from this side of the House.

I will give an example of what I mean. In the Report on Industry and Employment in Scotland there are several references to the "record" level of production in 1961. A man who talks about the record level of production in 1961 because production has gone up a bit although at an appallingly slow rate shows that he does not understand the first thing about growth. If one is interested in growth, one does not speak of a record just because one year is a little bit up on another. One speaks about records only when the pace of advance is much greater than it has been. Pace is what matters. There is an unpleasant similarity between these constant references to the record year of 1961 and the Prime Minister's famous remark, "You have never had it so good". Anything that is at all better, better than the year before, is regarded as satisfactory. That is the implication, but it does not do, especially in regard to Scotland.

In these Reports, instead of presenting us with a plain report about what has happened and an account of what is expected to happen, the Government should do something else. They should not write and speak as though the situation was beyond their control, as though such and such had happened and they are telling us that something else will happen. They should give us targets and compare the targets with what they have achieved. This is the kind of report which we shall expect from the Secretary of State next year. He can tell us what he is trying to do and how far he has succeeded. He may not succeed, but at least he would give the impression of trying if he were to set it out in that way instead of giving us this, so to speak, descriptive report which is all we have now.

I urge the Secretary of State to set himself definite targets. Here are some. They are vary much the same as those put forward by the Scottish Council (Development and Industry) which recently visited the farmer Secretary of State. Let him bring unemployment in Scotland down to 40,000. That would be at about the British percentage level. Another 30,000 jobs would have to be found in Scotland on that account. Bring the migration down to, say, 5,000. Some people would say that it ought to stop altogether, but I do not go so far as that. The movement of 5,000 one way or another would be so small as not to be worth bothering about.

Give Scottish industry the same target as the National Economic Development Council has given for Britain as a whole, 4 per cent. per annum. That is not a great deal to ask. Indeed, this is the figure now not for industry but for the whole economy. For industry it will almost certainly be higher. But I should be content for the moment if the Secretary of State were to accept 4 per cent. per annum increase for Scottish industry. Next, the Secretary of State should work out, on the basis of these targets, the number of new jobs which are likely to be needed, bearing in mind, of course, the number of existing jobs which will disappear.

These are not unreasonable proposals. If they were to be set out and accepted as targets, with everyone working towards them, this alone, I believe, would make a tremendous difference to the atmosphere.

I believe, strange as it may seem, that one of the factors which determines the rate of industrial expansion is the expectations of the industrialists. Therefore, if we set them a target which is not wholly unreasonable we have a better chance of getting there. If that applies to England, as I think it does, it can perfectly well apply to Scotland. I have not worked out the exact number of new jobs to be provided by the Government, but the Scottish Council on industry has done so. Does the Secretary of State accept the figures which the Council has put forward? I think that they suggest that he will have to find 15,000 jobs a year for the next eight years. Is that right? Does the right hon. Gentleman accept that? If not, where is it wrong, and what does he suggest as an alternative?

It goes without saying that was is planned for Scotland must be linked with what is planned for Britain as a whole. We have a National Economic Development Council, which is supposed to have, or was going to have, a plan for Britain. Can we be assured by the Secretary of State that within that plan there will be a regional plan for Scotland?

Having set the plans and targets and worked it all out, it has to be implemented. It cannot be implemented by the Secretary of State alone. What happens in Scotland depends in the last resort on what happens in the country as a whole. Unless we get expansion in Britain, we shall not get much expansion in Scotland. The easiest way to get firms to go to Scotland is to expand, and then they will be much more likely to go there because they will not be able to get workers anywhere else. There is, therefore, an overwhelming case for general expansion for the sake of Scottish industry.

There are specific measures which should be taken. There must be a tougher I.D.C. policy in London, the South-East and the Midlands. There must be a more vigorous policy of inducements to firms to go to Scotland. Let us have no more talk about direction of labour and direction of industry. No one has ever proposed this. Of course, we cannot direct labour in peace time, and no one suggests that we can. We cannot direct industry if we mean by that that we compel people to make losses. It is no use thinking in those terms. What we want is something that can be done, namely, to be extremely tough in refusing to allow people to set up in areas of full employment and be extremely generous, if that is the right word, in giving inducements to them to set up in areas like Scotland. That is a practical policy and it can be carried out.

Very belatedly, and after a great deal of pressure from this side of the House and encouragement from the Toothill Committee, I believe that the Government have conceded that there is some case for building advance factories. I believe that a couple of them have been built or are being built, but we could have a very much bigger programme of this kind.

There are some very interesting specific proposals in the Toothill Report about the financial inducements which might be offered to firms. I should like to know what the Government think of those proposals. Do they commend themselves to the Government? If not, what else can they suggest? There is undoubtedly the special problem of the shortage of skilled labour which might arise in Scotland when there is still unemployed unskilled labour. That points to the need for a very special policy of training in Scottish industry.

All of this must be associated with the right social policies. Here, I propose to refer to one matter only, but it is a matter of supreme importance, namely, housing. Two years ago, I referred to the state of affairs in Glasgow, and I do so again today. I propose to give the figures for housing in Scotland on 30th April this year which have been made available to me by one of my hon. Friends. This is the picture which is presented. Almost half the houses in the City have only one or two rooms and over 400,000 people living in them. In Central Glasgow, two-thirds of the houses are only one- or two-roomed houses. Thirty-four thousand people live more than four persons to the room, and 90,000 people live more than three persons to the room. Just over half of Glasgow's families have a bath in the house. Therefore, just under half have no bath in the house. Over one-third of them share a W.C. In the Gorbals, only one family in five has a W.C. in the house and only 3 per cent. a bath. This is today, 1962, not 1862, and this is allowed to go on.

The late lamented Minister of Housing and Local Government, who has departed from the Government Front Bench—[Interruption.] I have a certain affection for him. I was about to say that we can at least say this of him. Before he left office, he discovered that there were slums in Liverpool. I think that the Secretary of State might pay a visit to Glasgow and look at the slums there.

All this, of course, might be justifiable or, at any rate, there would be some excuse for it if in recent years every effort had been made to get rid of these conditions—in other words, if year by year the number of houses being built in Scotland was increasing. But, unhappily, exactly the opposite is the case. I am sure that my hon. Friends know these figures all too well. Nevertheless, I cannot forbear from quoting them. In 1955, 34,000 new houses were completed; in 1958, 32,000; in 1960, 28,500; and in 1961, 27,230. Year by year, the number has declined, and the decline is most marked in local authority housing, which alone can deal with the problem of Glasgow's slums.

In 1955, 24,000 local authority houses ware built; in 1958, 22,000; in 1960, 17,000; and in 1961, 16,800. The fall goes on. In the first quarter of 1961, 4,026 local authority houses were built and, in the first quarter of 1962, 3,333. At this rate, at the end of the year we shall be down to about 13,000 local authority houses. This is really disgraceful; there is no other word for it. It is really intolerable that people should be compelled to go on living in these conditions while the number of houses built which alone can relieve them is falling year by year. This must be put right.

The people of Scotland have their own culture, their own characteristics, their own beautiful country and their own skills. They have contributed a great deal to Britain, to the Commonwealth and to the world, but it is a sad fact that decade by decade, as a proportion of the people of Britain, their numbers are falling. In 1801, over 160 years ago, Scots people made up 18 per cent. of the combined population of England and Wales. By the middle of the century, the figure had fallen to 16 per cent., and by the end of the century to 13½ per cent. It has fallen decade by decade ever since until in 1961 it was down to 11½ per cent.

The question is whether this process is to continue year by year, decade by decade. If so, Scotland will cease to count effectively. This is something that we do not want to happen. We would regard it not only as bad for Scotland but bad for Britain as a whole. It must be stopped and it can be stopped, but that can only be done by policies totally different from those which have hitherto been pursued by right hon. and hon. Members opposite. They cannot solve the problem on the basis of their philosophy. Although I wish the Secretary of State well and although we hope for the best, I do not disguise from him my foreboding that he is unlikely to solve this problem, and that it is unlikely to be solved until we have a new Government with new men and new methods.

4.40 p.m.

The Secretary of State for Scotland (Mr. Michael Noble)

In the last two years, my longer speeches in the House, begging to move that we should adjourn, have been greeted quietly but often, I believe, with pleasure and relief by hon. Members. I thank the Leader of the Opposition for showing courtesy, understanding and, I almost felt, sympathy for the task that I have in hand. I am confident also that his hon. Friends have some of the same feelings—perhaps for the last time in a debate in this House.

The Leader of the Opposition has painted a picture of the Scottish economy which is serious enough. I do not in any way deny that this is the case, or that the people of Scotland do not have grave cause for anxiety. Old firms like the North British Locomotive Company prepare to close their doors, the shale industry in West Lothian approaches its end, and coal mines in several areas of Scotland, according to the National Coal Board's assessment last week, are becoming uneconomic. These are grim enough items in the Scottish account, and I will be no party to any attempt to bury them in easy phrases.

Unemployment generally in Scotland has increased within the last twelve months by, according to my figures, 12,000, and the rate has remained persistently twice as high as the Great Britain level. The fact that this has been a major preoccupation of all parties for generations does not lessen its vital importance, and the first pledge that I freely offer as Secretary of State is that I shall strive with all the energy I can command to help abolish this grim distinction between Scotland and England. In any such endeavour, I know that I can count on the good will at least of all parties, for in the long view this is a matter which leaps over all boundaries.

Taken at its face value, this unemployment picture would be deeply disturbing, but I have tried to take a look behind the scenes to see what else is also happening to find out whether there are things to encourage us. I say to the Leader of the Opposition that I do not do this in a spirit of trying to paint a rosy picture or to gloss over anything that is bad. Just as I accept that the Opposition have a perfect right, if they desire, to point out all the bad things that they see, so I regard it as my job to try to attract new industry to Scotland; and if I can find things that I consider genuinely right to point out to do that, I shall say them.

I know that the whole House will join with me when I say how much I regret the departure of my predecessor as Secretary of State. For many years, he has been battling with the tremendous task of laying new foundations for the national economy, foundations on which I hope I may have the good fortune to be able to build. In good times and in bad, my right hon. Friend has worked with one single purpose in mind: the good of Scotland. He has often had a rough time in the course of our debates and that is not an unusual feature of Scottish discussions. I think, however, that hon. Members opposite would agree that he has throughout retained the respect and affection of us all. [An HON. MEMBER: "And of the Prime Minister?"]

I am delighted that my right hon. Friend is still with us, and I am glad also to have the assistance of the noble Lord, Lord Craigton, who has been doing so much for Scotland at home and abroad, and my three Undersecretaries to help and advise me.

It is common ground among all of us that what Scotland needs is capital re-equipment. This applies both in the older industries which have a promising future—and there are many of these— and in the newer industries based upon newly-developed knowledge, skills and techniques.

When I come to take a preliminary look at the industrial scene, I find four significant places where development can be seen well under way. The first is in the construction industry, that part of our economy on which we are dependent for the building of factories, and so on. In the year 1961, the year which we are reviewing, the volume of work was up 10 per cent. on the previous year, beating the figure of 6½ per cent. for the corresponding increase in the United Kingdom as a whole. In the past, we have taken pride in such victories. In the future, we will strive to set the English a target which they will find hard to beat.

Even more recently, at the end of March this year, 8 million square feet of factory space was under construction and 5 million square feet had been approved for building. This suggests that the target of 7 million square feet per year proposed by the Scottish Council is within our reach and that at least some of the factories which we need so badly are going up.

The second of my inquiry points was directed at industrial plant. An impressive figure is recorded on page 39 of the White Paper which is before us. In the four years 1958 to 1961, expenditure on plant and machinery was £269 million. The 1961 figure was at least 57 per cent. up on 1958. I accept what the right hon. Gentleman said about using this sort of figure.

My third point was an inquiry into the balance of employment in expanding and contracting industries. This is, perhaps, the most important thing for a proper understanding of the processes which are now at work in Scotland.

The present evolution of Scotland's industrial economy comprises two opposing movements—on the one hand, the development of new industries and the expansion of some of our existing industries; and, on the other hand, the contraction of a few of our traditional industries. While such contraction creates difficulties, it is inevitable when the industrial pattern is being changed to meet the changing pattern of demand.

Just to study the figures can itself be misleading, because a new job in a developing and expanding industry is of much greater human importance than a job where the employee is looking over his shoulder and wondering when his industry may be forced to close. But too often so much emphasis is given to the contraction as to create the quite wrong impression that Scottish industry is showing little signs of life.

To show how wrong that impression is, let me quote some figures. Between mid-1959 and mid-1961, the main groups of industries Chat reduced their total employment did so to She extent of 37,000. This is a big loss, I agree, but against it the main groups of new and expanding industries increased their total employment by no less than 72,000. On balance, therefore, there were 35,000 more jobs in the middle of 1961 than there were two years earlier. For manufacturing industry only, the corresponding figures show a net gain of 28,200.

I know that the figures are not as good in the current year, but I would say to the Leader of the Opposition, who asked me to comment on the target, that the fact that in the two previous years we were able to come up to the target suggested by the Toothill Committee gives me confidence that if we work hard, we can do it again.

Mr. Thomas Fraser (Hamilton)

Is the right hon. Gentleman aware that in 1957 and 1958 the net reduction in the number of jobs was mo less than 48,000? Therefore, it is not surprising that there was some upturn after that tremendous fall.

Mr. Noble

As I tried to say earlier, I am not in any way attempting to disguise bad things which have happened in the past. What I am hoping to do is to reach the target which the Toothill Committee has set for us, and reach it soon.

The Scottish Council, in its recent Report, made a similar appraisal, and went on to say: The picture during this period is not that of an economy rushing downhill to disaster; it reflects the vigorous efforts made by all sections of the community producing new industrial growth sufficient to outweigh the inevitable decline in some of the older established industries. Fourthly, I sought to find out what Scottish industry itself was doing. Too often it is said that industrialists in Scotland are not doing enough to help themselves and that the real growth arises only from the incoming firms. This is simply not true. Our established Scottish industries in 1959–61 provided about three-quarters of the new jobs in manufacturing industry. This is not to minimise the great value of the new firms, to which the right hon. Gentleman referred, but simply to get our facts straight.

May I now look more generally at the whole picture. I should like to refer first to the Report of the Toothill Committee on the Scottish economy. This Report has made a substantial impact both inside and outside Scotland, and its emphasis on economic growth has now become widely accepted as being of the greatest importance to our economy. During the past few months the Scottish Council has itself been considering the Report and has decided that some of the recommendations can most suitably be followed up by the Council itself in conjunction with the other bodies concerned. Thus a number of recommendations which in the Council's view mainly affect, for example, the local authorities, the universities, the trade unions and bodies representative of management and employers, will be dealt with in this way.

Of the recommendations affecting the Government, those which have attracted most attention, because of their undoubted interest and importance, are the proposals which, broadly speaking, concern distribution of industry policy. The Toothill Report has, in fact, been one of a number of factors which have drawn attention to the contrast between the rapid development taking place in the already congested areas in the South and Midlands—the coffin, to use the right hon. Gentleman's lugubrious phrase— and the position in Scotland. The issues here are fundamental and a lot of new ground has to be broken. In the meantime, I can assure the Committee that a policy of controlling the issue of industrial development certificates to firms wishing to expand in the labour shortage areas—a point which the Scottish Council raised last week—will be rigorously maintained.

The Scottish Council, in its interview last week, laid great emphasis on the importance of defining more precisely the inducements we have to offer under the Local Employment Act, which was also stressed in the Toothill Report, and referred to by the right hon. Gentleman. This is a difficult problem. I myself admit frankly that I do not know the answer to it, but I will discuss it urgently with my right hon. Friend the President of the Board of Trade, in whose province it lies.

The Toothill Report also contains a range of other recommendations of a very varied nature which concern a considerable number of Government Departments—a not unusual feature in Scotland. A detailed statement of the Government's views on these recommendations is being prepared for the Scottish Council and this statement will be made available to hon. Members.

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

When?

Mr. Noble

Quite soon. Among the recommendations which will be dealt with in this statement are those relating to education and training, housing, and transport and communications, in so far as these have been referred to the Government. The House will, I hope, excuse me if I do not attempt to go through them all in detail this afternoon—a great many hon. Members wish to speak, and our time is short—but a few comments may be helpful.

We are in general sympathy with all the educational recommendations which have been submitted to us; we are also in broad agreement with the housing recommendations endorsing the need to pursue the housing programme intensively where the need is greatest—I agree with the right hon. Gentleman that it is great in Glasgow—and to encourage private house building for the supervisory and management grades. We have announced this week the decision that the 50 per cant. derating which industry now enjoys will not be withdrawn in 1963.

The Toothill Committee's investigation into the transport of goods was particularly valuable, and I think that it has done much to lay one of the ghosts which may lurk in the board rooms of potential developers. It concluded that, while manufacturing industry in industrial Scotland may be at some disadvantage in this matter, the significance of transport costs has, in its view, been exaggerated. Such costs are only one factor to be considered in choosing the location of an industry and in most new industries they may be quite small relative to the cost of the product. In all cases they may be offset by other considerations such as lower rents, availability of labour, and the proximity of good port facilities, and so on. I am not surprised at this conclusion since in my travels this spring round the United States of America—where distances are enormous —I heard no industrialist mention transport costs by themselves as a serious handicap.

What the Committee considered was a more important factor is the difficulty which distance sometimes imposes in obtaining supplies without delays and uncertainty. I have heard very little criticism of our Scottish ports, and we have been giving high priority to the improvement of access to them. On roads the Scottish Grand Committee has recently debated our road system as a whole,and we can now foresee in the next few years communications between our industrial belt, the Midlands, London and even the Channel ports being fully up to modern standards.

So far as railway communications are concerned, the review which Dr. Beeching is making of the services provided by British Railways should be completed about the end of the year, when it should be possible to begin an assessment of the future of our railway system. It is quite clear, however, from what he has said that the new British Railways Board will be eager to become competitive with other forms of transport and will improve railway freight services where it is possible for them to provide an efficient, quick and reliable service to manufacturers.

We are all anxious about the risk that considerable lengths of railway line in country areas may be closed entirely. Until the Beeching reviews are completed, no one can properly assess this risk. I can, however, make it quite clear that where a railway closure is the right course in the long run, we will ensure that it is not carried out in such a way as to leave an area bereft of adequate facilities for transport of passengers or freight.

It is clear from all that the Toothill Report said—as it is from day to day knowledge of the Scottish industrial scene—that we have an enormous task ahead in building up new industries, and this will make large calls on our capital resources. These, in the nature of things, cannot be unlimited, and must be concentrated where they will do the most good for the Scottish economy in the long run.

In seeking new industry we must make sure that the advantages we have to offer are as widely known as possible. To my mind they are space and manpower. By contrast with some other parts of Britain there is more than enough space available in Scotland to accommodate all the industrial development we could want—and it need not be only in the Forth and Clyde Basin. There are Dundee and Aberdeen and many country areas, including the Highlands, where sites and good labour axe waiting for development. We do not want to spread congestion in our central belt and produce our own national coffin through lack of foresight. To bring space and labour together we have the overspill arrangements for rehousing, in the new towns and other industrial growing points throughout Scotland, the 300,000 surplus population of Glasgow who are bound to be displaced from the city over the next twenty years as the clearance and redevelopment of its congested and obsolete central area proceeds.

Manpower is, I think, our major asset; it is today perhaps the scarcest commodity in Western Europe. We must use it effectively, and that means training and technical education. These in themselves cannot provide jobs, but they can help people to do their jobs better, and thus create conditions for securing the greater productivity and efficiency which are essential to the growth which has been mentioned so often.

Education authorities, with the support of the Government, have embarked on a major building programme to the value of over £22 million designed to provide a network of new and improved technical colleges up and down the country. We shall see many new centres coming into use over the next few years. Many local authorities have, with the encouragement of the Government, offered to help industry with its training problem by providing first year apprenticeship courses.

What can industry do for itself? Firms, I suggest, can look at their own training arrangements. Are their young workers getting effective instruction on the job? Is it supplemented by an appropriate course of study at a local technical college? There can be no question of firms saying that they cannot afford to train. In the long run, they cannot afford not to.

I am glad that the right hon. Gentleman the Leader of the Opposition has laid claim to the Scottish blood which flows through his veins, and that he stressed throughout his speech the feeling, which I believe is genuine among Members on all sides of the House, of wanting to try and help in getting the right answer for Scotland. I am a Scot, and I am conscious of the fact that I belong to a resourceful and imaginative people. We have come through 'bad times in our history with our colours flying so proudly that people have been forced to take note of us. It is not to be forgotten that, once before, when the old commercial fabric of Glasgow collapsed, the Glasgow merchants created a new industrial structure based on one of the great rivers of the world—which they themselves had formed out of a Lowland stream. And Edinburgh men once determined to build a new city for themselves, and produced a capital famous for its architecture, its learning and its art. Enterprise is natural to the Scots. I believe that it can be brought back into the very centre of Scottish life and thinking once again. This, at any rate, is what I covet.

I believe that a beginning has been made by my right hon. Friend the Member for West Renfrew to the laying of a foundation on which a new industrial renaissance can be built. But it is only a beginning. I believe that the Government now can create confidence and by vigorous and immediate action trigger off, when world conditions permit, a fresh surge forward. But the Government by itself cannot command the success we need.

I have shown, I hope, earlier in my speech the great part that Scottish industrialists and business men have in fact played in developing their side of our national life in the last two years. I assure them of the Government's knowledge and appreciation of what they have done, and would encourage them to do even more in the immediate future. Time is not on our side. [HON. MEMBERS: "Hear, hear."] This is very true. New ideas, new capital and enlightened management, with good labour relations, must become even more conspicuous. The Scottish trades unions, which have equally made a most useful contribution, have an important part to play, too. If I read the signs right there is a real willingness of many of their leaders to streamline and modernise their ideas, and so earn the respect of their members and of Scotland as a whole.

Local authorities are sometimes forgotten in the context of industry, and yet, with their planning powers—including the provision of industrial sites, and in special cases of factories, too—their housing duties, and their general responsibilities for creating an attractive environment, they have a major part to play. Speed in decision and action is no less important from them than it is from the rest of us.

I have tremendous faith in the people of Scotland—the men and women whose work has shown that "Made in Scotland" can be a real selling point in world markets. If we in the Government can give them the technical colleges and the training facilities to equip them fully for the new industries, as well as the best of the old, we need fear no lack of craftsmanship. But we need to ask more still from them. We need to provide the opportunities first, but then to inspire our younger generation with the feeling that there is still a great adventure for them. In this age, it is not necessary to cross the seas or even the English border. Their adventure lies at home—to rebuild a Scotland of which they and their children will be justly proud.

5.7 p.m.

Mr. John Strachey (Dundee, West)

Like my right hon. Friend the Leader of the Opposition, I should like to offer my sympathies to the departing Secretary of State, especially in his personal difficulties and problems. I should also like to join in my right hon. Friend's congratulations to the new Secretary of State. I am bound to say, however, that what I think we on these benches want to be able to do is not only to congratulate the Secretary of State, but to congratulate Scotland; and, so far, I must tell him that he has given us very little evidence in his speech of anything on which we can congratulate Scotland because of his appointment.

His speech seemed to me to be most agreeably read. I can say that for it, but, apart from that, it appeared to me to fulfil the worst predictions and forebodings of my right hon. Friend, when he said that he hoped that this speech would not be purely descriptive. It was purely descriptive. There was no hint of action in it of any sort that I could find, and I say to the Secretary of State that if he is to find a measure of acceptance on these benches for his future speeches there will have to be a little more meat in them, in the sense of proposals, and some suggestions of action, than in the speech which we heard today.

Quite frankly, in my remarks, I shall address myself mainly to the problems, and they are very acute problems, which my own constituency of Dundee faces. They are examples of the problems which Scotland as a whole faces. No great city of Scotland, such as Dundee, can possibly face these problems except against the background of the general problems which face Scotland. I ask the Secretary of State to realise the impact which recent announcements about the contraction of the heavy industries of Scotland, above all, coal mines and railways, have had. It is true to say that Scotland has been aghast at these announcements, and at the prospect which they bring up for the large industrial areas of Scotland, which are still so heavily dependent on heavy industry. My constituency in Dundee is not one of these. It is not essentially a heavy industry town. It is today a textile and engineering town, and, for that reason, it has been comparatively lucky. I say, quite frankly, that it is not at the moment facing as high a degree of unemployment as many other areas of Scotland. Still, we are already facing very severe problems, and we are rather suddenly faced today with a problem which may affect what is still our major industry of jute most acutely.

I refer to the position of the jute industry if we enter the Common Market. If the jute industry of Dundee faced sharp contraction as a result, then, piled on top of all the other blows which Scotland has suffered, and the impact of which Dundee must share to some extent, it would prove a terrible blow to the city.

Speaking in the House almost exactly a year ago, I said on the subject of the Common Market and the prospect of the jute industry in Dundee that I was by no means an unconditional opponent of entering the Common Market. Nevertheless, I said then and I repeat today that our entry can be supported only if industries such as the jute industry, which are highly concentrated in one particular place, have safeguards provided for them —if our negotiators make the opposite side in the negotiations with whom they are dealing in Brussels realise the intense human problem which would be occasioned by any sharp contraction in this industry. I know nothing of the way in which the negotiations for the jute industry may be going. It may be that they have scarcely begun. But I have tried to make it my business to understand Dundee opinion on both sides of the industry and to discover what Dundee feels is the prospect.

Sir James Duncan (South Angus)

This applies not only to Dundee but to the district around it, too.

Mr. Strachey

I am glad that the hon. Member made that point because it is not only Dundee which is affected, although he will agree that it matters more to Dundee even than to his constituency or to other neighbouring constituencies. But the whole district of industrial north-eastern Scotland is concerned.

As far as I understand it, the position of the industry in respect of entering the Common Market must be considered in two phases. If we enter the Common Market there will presumably be a transitional phase. We must expect that our negotiators will not plunge the industry, without years of warning time in which it can adapt itself, into the full effects which would otherwise arise from joining the Common Market. However, in that transitional phase the fact must, I suppose, be faced that the existing jute control would gradually be dismantled.

I will not attempt to detail the protective devices which in effect give a mark-up or tariff of more than 20 per cent. to the industry. These are what are above all in question, because they give a protective tariff in excess of the common tariff of the Six. If all these devices were progressively dismantled, the position, even in the transitional years, would be very serious for the industry, because I am informed that about 40 per cent. of it would be vulnerable to this reduction in protection—40 per cent. of the production and roughly 40 per cent. of the labour employed.

If and when that transitional period came to an end, I suppose about the end of the decade, in the 1970s, unless something further were done the industry would depend wholly upon the common tariff upon jute goods which, broadly speaking, today is about 23 per cent. By that time it might be lower. There is no guarantee that the common tariff on jute goods will not be lowered in the meantime, and this will be still more serious. But even with that 23 per cent. degree of protection against Asiatic jute goods, the position would be very grave indeed. There would be no protection at all against European-produced jute, but I do not much complain of that; it might have serious effects but I think that the industry can be asked to stand up to that competition. But with only 23 per cent. protection against Asiatic goods, the position in the industry might be very serious indeed.

I should have thought—it is only a forecast but it is widely snared in Dundee —that some 20 per cent. of the industry and 20 per cent. of the employment might close down, and that would mean an additional 3,000 unemployed workers in the city. Some hon. Members on these benches and elsewhere will say that that is perhaps not an enormous number of unemployed compared with some areas of Lanarkshire, for example. But this comes on top of a prospect which we in Dundee view with a good deal of concern even without this blow. A most well-informed committee, set up by the Lord Provost of Dundee, in which the industries of the city, the chamber of commerce, the trade union organisations and the universities all co-operate, believes that by that time there may be a gap of 5,000 jobs; that on present prospects the unemployment level of the city will be at least 5,000 at that time. With a contraction of the jute industry of the size which I have indicated, the unemployment level would be about 8,000, which is a very sub- stantial level of unemployment indeed and higher than it has been in Dundee since the war.

This prospect of the Common Market and its effect on the jute industry, therefore, must concern us very closely indeed, and we must expect from whoever replies to this or future debates for the Government some assurance that they are doing their very best for this industry and that there is a sticking point on this industry, as on others, at which they will insist on the interests of employment in the area being safeguarded. Otherwise the prospect which we in Dundee face in this highly concentrated industry—and, in part, in neighbouring cities, too—is very serious.

This problem is the same as the problem in other parts of Scotland. What dismayed me about the Secretary of State's speech was that there seemed to be no positive attempt to suggest the kind of measures for which he would be pressing within the Government on behalf of Scotland. For years we on these benches have been told, for example, that the question of advance factories was a sort of King Charles's head on our part; that we were attaching much too much importance to it and that there were great objections to advance factories. In the closing weeks of the late Secretary of State's régime this was changed and we were told that advance factories were, after all, a good idea. This shows the reluctance with which the Government move to take any positive action. This is because they seem to be governed in this problem by what is fundamentally a laissez-faire philosophy. They have shown no signs of recouping the necessity of positive Government measures adequate to meet the situation.

The Distribution of Industry Act very largely became a dead letter in Dundee. The very office of the Board of Trade in Dundee was closed down in the middle 'fifties. Now the Government are beginning to use those Acts a little, but so much ground has been lost, so little has been done—so little has been prepared. On balance the position gets worse instead of better.

Moreover, this special problem of the jute industry in Dundee haunts those of us who are and must be concerned with the industrial future of the city. In addition, we feel that something far more positive is required of the Secretary of State—some recognition that the laissez-faire philosophy will not meet the problem of Scotland. This is the very least that we can demand.

5.20 p.m.

Sir Thomas Moore (Ayr)

We on this side of the House are very grateful to the right hon. Gentleman the Leader of the Opposition for the generous tribute he paid to our friend and colleague the former Secretary of State for Scotland. As we all know, my right hon. Friend has earned not alone the friendship but also the affection of everyone on both sides during his term of office. At the same time, we also thank the Leader of the Opposition for his welcome to the new Secretary of State, with whose ordeal today I deeply sympathise, for we have all experienced it in our time when making our first speeches either as new Members or in new positions. We promise the new Secretary of State our good will and our support and we wish him well.

Several reasons have been given as to why the economic situation in Scotland is as it is. But in my view the fundamental cause of the present rate of unemployment, which unfortunately has lasted far too long, is that the Scots are by nature and tradition almost ultra-conservative. I admit that from the political angle the result of the last General Election and the recent result at West Lothian perhaps do not quite confirm that assumption, but apart from politics I believe that my analysis of the Scottish people's nature and traditions is correct.

For far too long, as we all know, Scotland has relied too much on her heavy industries—coal, steel and iron production, shipbuilding, agriculture and the like. Of course, these industries have paid good dividends to the Scots in the past. But the trouble is that the Scots never seem to have foreseen that other types of fuel than coal might come into use; that other nations might build almost as good ships as ours and cheaper; that Scottish-built locomotives might not find the ready markets they had been accustomed to practically all over the world; and that diesel engines might also come into use.

The same applies right throughout our national industrial production in Scotland. It was a state of mind which did not equip our people for the advent of new and unknown industries. Successive Governments of both parties have gradually appreciated the fact, but in deference to my own party and its Ministers, I must say that it was left to the Conservative Government since 1951 to introduce measures definitely to convince Scotland that such light industries, as envisaged in the 1960 Act, might well prove its salvation.

Of course, there were obstacles. Hon. Members opposite are not innocent of providing them. Certain speeches made by certain trade union leaders in Scotland have not been essentially helpful. [HON. MEMBERS: "Who?"] There was the speech by Mr. Moffat two years ago which was a singularly unattractive gesture to English firms which might have been persuaded to come to Scotland for good, available and reliable labour. Indeed, certain Members of the Opposition—and I do not blame them for this—in their desire to berate the Government undoubtedly undermined the confidence of what I call English industrial settlers who would have been willing to come to Scotland had they felt it safe to do so.

Mr. Archie Manuel (Central Ayrshire)

I am very desirous that the hon. Gentleman should prove his statement, quite apart from his slanders on trade union leaders. Can he name one firm debarred from coming to Scotland because of statements made in this House or by trade union leaders outside it?

Sir T. Moore

Of course I cannot. I am not in the confidence of all industrial firms who might have thought of coming to Scotland but were put off from doing so by such speeches as the hon. Gentleman might make. About a year ago, during Question Time, there were 13 Questions by Members of the Opposition to the Government—"for goodness sake, give us help—gimme, gimme, gimme." How on earth would prospective industrial settlers from England appreciate that point of view?

We have always held the view—and that, I think, includes hon. Members opposite—that Scotland can be relied upon to provide labour, ingenuity and skill that English or any other industrialists might reasonably require. That is beginning to be realised, I admit, but the funny thing is that when a Scotsman comes to England, provided he retains a Scottish accent, he is regarded as sound, wise and reliable. But leave him behind in Scotland and very few people axe willing to come and test his qualities on his home soil We have to get over that attitude.

I know so many of our workpeople. They are amongst the most highly-skilled and most reliable workpeople in the world. The sooner we all preach that gospel wherever we go the sooner we will be able to help our own country. Here I must pay tribute to the Scottish Council, which has done a magnificent job in informing British industrialists of the attractive opportunities awaiting them in Scotland. God speed it in its further efforts in this direction. It has done this work in conjunction with the Scottish T.U.C. which has a very powerful and important part to play in inducing or attracting new industries to Scotland. Provided that the Scottish Council and the Scottish T.U.C. work together, I am sure that success will come far more quickly than we expect.

Mr. Emrys Hughes (South Ayrshire)

Would the hon. Gentleman go as far as to agree with the Scottish T.U.C. that it is essential to direct industry to Scotland?

Sir T. Moore

I gather that the Scottish T.U.C. is rather in favour of this, according to some of the recent speeches, but it seems that the party opposite would be resentful of the direction of labour.

One result of the Local Employment Act put through by the present Government is the new town of Livingstone, but there have been many other benefits. I wonder how many hon. Members have studied the Report of the Board of Trade for the year ended March, 1961. It said that £45 million were allocated to Scotland for various projects, including the setting up of new factories, as against only £23 million for England and £8 million for poor old Wales. Amongst other things, 153 projects were covered in Scotland—the same number as for England—but there were only 50 projects in Wales. That does not look as though the Tories have neglected Scotland.

Mr. John Rankin (Glasgow, Govan) rose—

Sir T. Moore

Not again. I am sure that the hon. Gentleman will make a long and powerful speech if he gets the opportunity to do so, and he should reserve his comments till then.

I come now to the number of extra jobs created by this effort. We see that 34,000 extra jobs have been provided in Scotland, compared with 44,000 in England, although England is 10 times as populous as Scotland.

A few weeks ago the hon. Member for Dunbartonshire, East (Mr. Bence) asked my hon. Friend at the Board of Trade what progress had been made in the last two months in encouraging new industrial enterprises to go to Scotland. There have been so many changes in the last few days that I am not sure where my hon. Friend is now, and I am not sure whether to congratulate (him or not.

Mr. Rankin rose—

Sir T. Moore

Good heavens, not again! I do not propose to give way to the hon. Gentleman.

My hon. Friend replied: In the last two months approval has been given for 31 projects in Scotland, estimated to give rise to some 3,300 jobs, almost all of them in development districts. In addition, some 16 firms new to Scotland have been shown possible sites, but it is too early to say whether any of these will set up factories in Scotland."—[OFFICIAL REPORT, 3rd July, 1962; Vol. 662, c. 270.] That shows that the process is continuing.

Mr. Rankin

What process?

Sir T. Moore

Oh, my goodness, not again!

There is, however, one point on which in all honesty I must criticise the Government. More research should be centred in Scotland because I believe that research is an indispensable adjunct to almost any kind of industrial development anywhere.

Unemployment in Scotland is undoubtedly high. It is almost double what it is in England, but I wonder whether anyone has considered the figures given in the United Nation's Report published the other day showing a comparison between unemployment in Scotland and abroad? Here are the facts. The average rate of unemployment in Scotland is 3.1 per cent. compared with 6 per cent. in Belgium, 4.7 per cent. in Western Germany, 7.7 per cent. in Denmark, 9.5 per cent. in Italy and 4.7 per cent. in the United States. Although the unemployment figure in Scotland is far too high, there is some consolation in knowing that other countries are in a worse position.

The right hon. Member for Dundee, West (Mr. Strachey) referred to the effect on Scotland of our entry into the Common Market. I have been doubtful about whether Scotland would benefit. or lose by the United Kingdom going into the Common Market. I still have doubts, but I was comforted by the speech the other day of Lord Robens who said that Scottish, and indeed English, coal was the cheapest mined in Western Europe and therefore the National Coal Board had no fears about the advent of Britain into the Common Market. I gather from leading Scottish industrialists that they, too, have no great fears about the Common Market, and, as we know, there has always been a close link between Scotland and Europe, and especially France.

I come now to more recent developments. My right hon. Friend referred to such projects as the steel stripmill, the British Motor Corporation's works at Bathgate, the Rootes proposal to set up a factory at Linwood, and many others. The Toothill Committee's Report has been mentioned, and this, I think, puts all these matters into fairly reasonable perspective.

I do not want to overstay my time. I know that there are many hon. Members who want to take part in the debate, and if they speak as much as they have interrupted we shall indeed have a long session.

The proposed closure of uneconomic pits will affect us deeply in Ayrshire. Indeed, it will affect everyone in Scotland. It grieves us to think of all these decent honest, Scottish workpeople being bereft of the jobs in which they, their parents, and possibly their grandparents were brought up and to which they gave their lives. I have many friends amongst the miners in Scotland. I am not sure whether they vote for me—if they do they conceal it pretty well. Nevertheless, they remain my friends.

The fact is—and here I speak of what I know—that it is not possible to carry on a prosperous brickworks unless there are adequate supplies of suitable brickearth. It is not possible to run a prosperous cement works unless there are suitable and proper supplies, and indeed reserves, of limestone, chalk, and so on. The same consideration applies to coal mines. A coal mine cannot be run on a profitable basis unless there are the necessary reserves of coal to mine.

We are trying to overcome the problem by using the 1960 Act to find jobs to replace those which will be lost by the closure of the pits. I have every confidence that the Government, with the powers they have taken by that Act, will provide adequate jobs, and suitable training for those jobs, for the miners who are displaced from the pits. If I did not believe that, I would not be supporting a Tory Government.

5.37 p.m.

Mr. J. Grimond (Orkney and Shetland)

The hon. Member for Ayr (Sir T. Moore) seems to take comfort from the way in which some people in Scotland react when the weather is bad. They say that it is a good thing that it is far worse in the South. The hon. Gentleman's consolation to the Scottish economy is to say that other nations are worse off.

I start by joining in the good wishes which have been expressed to the new Secretary of State for Scotland. Although he is not here at the moment, I should like to put on record my gratitude for many kindnesses given to me by the right hon. Gentleman's predecessor. I disagreed with many of his policies, and even more with his lack of policy on many matters, but in courtesy, in kindness, and in the trouble he took, he was pre-eminent among Ministers, and I hope that his family troubles will improve and that he will have a holiday.

I do not think that it is necessary to go over again the state of Scotland. One thing which has been agreed on both sides of this House in this debate is that there is grave concern about our country. We may, in two years, have matched the figures suggested by the Scottish Council of 15,000 extra jobs per year, but in fact in the last year there was a decrease in the number of jobs, and soon between 7,000 and 23,000 people are to be thrown out of work in the coal mines, and an unknown number on the railways.

There is no need to pile on the agony or wring our hands about the situation. I want to try to make some suggestions about what might be done. There is one overriding consideration, which is that Scotland will never thrive if it is treated in all respects as an outlying part of Middlesex. The reason we are concerned about Scotland is because it is our country. It is a distinct country. It has traditions of its own and from those traditions it can make a great contribution to world civilisation. If someone does not believe that, he might as well accept emigration and let the people go to Luton, Coventry, or London. But if he believes it, then he must allow Scotland to develop differently from England. That means giving the Scots some responsibility and some power over their own affairs. The decline in Scotland is intimately bound up with the steady draining away of power and influence in political, financial and social matters to London and the South-East.

But even before we get the more radical alterations in our Government which are necessary, there is a good deal which could be done within the existing framework. The first thing that we should look at is the Scottish Office. We spend too little time discussing the instruments of Government. In particular we should look in the Scottish Office to see if there is any machinery for development within it. We cannot achieve expansion and the targets which I hope will be set before us unless we have the machinery to do it.

Is there a development unit in the Scottish Office? I may be told that there is, and that this Report on Industry is the first fruits of it. But is not this merely a reorganisation of departments inside the Office? What I mean by a development unit is not simply another administrative department. I certainly do not mean a big department; I mean a small unit of experts in such matters as trade, business, economics, sociology, statistics and town and country planning. What I want to see this unit doing is, first, suggesting initiatives in development and, secondly, co-ordinating the work of the departments within the Scottish Office and the other bodies in Scotland which are concerned with development, and also co-ordinating the work between the Scottish Office and the other Ministries in London.

If we are to have that we must have, in the machinery of Government, some new sorts of civil servant. I should like to see Scotland carrying out a pilot scheme involving some changes in the Civil Service. We have one of the best Civil Services in the world, and I pay very high tribute to it, but its job today is quite different from what it was 50 or 100 years ago. It should now recruit more people who are not trained exclusively in the arts disciplines. We must try to give civil servants a sabbatical year to refresh themselves, and try seconding people from the Civil Service to industry and other people from industry to the Civil Service. This must be paralleled by some changes in our procedure here. We should exercise a close democratic control over development in Scotland, and I am not convinced that we do this best by having a rather tightly packed series of Scottish debates in the late summer on the Estimates for the previous year. The Scottish Grand Committee might meet occasionally throughout the year and, instead of reviewing the past, review what is taking place in Scotland at the moment.

If we had such a structure for planning in the Scottish Office, I should like to see it paralleled lower down by development authorities in regions and for specific purposes. I have always thought that we should have a Highland Development Board, and I am more and more convinced of that. In point of fact, there are slight signs that this sort of thing is going to happen. We already have county development officers. I note that in the new town of Livingstone two men have been given the job of co-ordinating and planning development. These tentative steps must be followed up by St. Andrew's House, and brought together in a system. By that means we will create a network to undertake the business of development from the Government side.

This should be matched by getting firms to organise themselves, industry by industry, to undertake research and to provide better statistics and information, than we have mow, especially about the intentions of firms in an industry. This is done on the Continent, and it is a great help to any national system of planning. It is odd that we have to spend so much on Continental experience, and are now sending people to Norway to try to find out how to deal with remote communities.

Next, we must get rid of our love of amateurism. We are deeply suspicious of experts. We have carried this suspicion far too far. I do not say a word against the persons involved; I am talking about the policies or principles. But it is indicative of our attitude that the White Fish Authority, the Herring Industry Board, and the Crofters Commission, are all headed by people who have no expertise or long experience in the fields which they are meant to control or develop. This may be all right so long as they are simply administrative, but if they are to develop we must bring in a new type of man.

I am not saying that the White Fish Authority should have a fisherman at its head; far from it. I do not want the men on these bodies to be too narrowly concentrated on the technicalities of their own industries, but if they are to develop we must have at their head the sort of people who know about selling things, and marketing. We must also have people who are in the prime of life, and not people who are retired. We want people who are ready to make this their life's work and profession, and who will tackle it in a professional way.

All over Scotland today we find sick communities. They have suffered from depopulation for so long that they have lost all their best people, or their sole industry has closed down. It is necessary to put capital into these industries, but that is not always enough, because there is no local initiative. Here again, we want people who are trained in the techniques of sociology and so forth, who will carry out surveys of these communities and draw up a co-ordinated plan. I know that politicians love the word "co-ordinate", but it is important. When I went to the small island of Yell to see what could be done for it, I found there at least a dozen separate authorities who were trying to deal with the question of rehabilitation. None of them has any money, very few have power and not all have expert personnel, but there are a dozen or more of them. This is nonsense, and unprofessional. We will never develop Scotland until this is put right.

Let us consider the question of transport. Dr. Beeching is said to be considering the closure of railway services in Scotland. Is anyone at the same time considering the planning of regions in which lines are to be closed? Is there any co-ordination between the attempt to drive industry to the far north of Scotland and Dr. Beeching's plans to close railway lines? If such co-ordination can be created it will provide a framework of planning, which is what Scotland lacks today.

Now for some suggestions about what could be done in the framework. My first two suggestions in this connection are short, and are in the form of questions. Why cannot the Government do the simple thing of sending more of the offices and institutions that they control out of London and up to Scotland? When I ask that question I am told that they have done a very good job, but we know that two buildings in London have been taken over for new offices. This is a simple thing, directly within the Government's control. Secondly, what are they doing to encourage further education and retraining in industry? If we are to have many people thrown out of work in the mines, the shale industry and transport, they will have to be retrained. Have the Government a scheme ready to do this?

I suggest that the Local Employment Act is not enough. It is too negative a Measure. We must have some positive inducement for industry to go to Scotland. It must be discriminatory. If we want it to go to Scotland we must either offer it some advantage or remove some disadvantage, which is discrimination. I want to see more positive steps taken. One step would be to consider giving some fiscal advantages to industry in Scotland.

The inducements that we offer must be fair between firm and firm. One of the objections to the Local Employment Act is that an established firm may not be eligible for assistance because it will not provide any more employment. But if it does not receive assistance it may actually pay men off. If we provide fiscal advantages we can be fairer as between one firm and another. The inducements can take various forms. One form which should be examined is the encouragement of investment in Scotland.

Here again, the Government could do something directly. They could increase investment in the public sector in Scotland. In point of fact it has gone up hardly at all in the last three years. It amounted to £194 million in 1959, and £196 million in both the successive years. That figure could be directly increased by the Government. They could also encourage investment in the private sector by increasing the investment allowances in Scotland—

Mr. Emrys Hughes

Will the right hon. Gentleman state his attitude to the direction of labour in industry? If it is right to direct miners to Yorkshire I should like to know whether it is wrong to direct people in industry in Scotland.

Mr. Grimond

I do not want to speak for too long. I am not in favour of the direction of industry.

Mr. Cyril Bence (Dunbartonshire, East)

But the right hon. Gentleman is in favour of the direction of people.

Mr. Grimond

No, I am not. I am arguing in favour of giving fiscal advantages to firms in Scotland. The position is that the investment in the public sector is £196 million. In the manufacturing sector investment is running at about £113 million and, if my figures are right, the total overall investment in Scotland is about £480 million.

While Scotland is investing her proportion of the United Kingdom total in the civil public sector she seems to be lagging slightly in the private sector which is where, primarily, we need investment. Whatever we may think of the position of Scotland vis-à-vis the United Kingdom, she does not show up very well in comparison with foreign countries. Allowing for the difference in population, the rate of investment in Denmark seems much the same. But Norway, a much poorer country with a population of only 3½ million, is investing about £447 million compared with the total in Scotland which is not much more. Sweden, with a population of 7½ million, is investing £960 million, and Switzerland, with a population which is very much the same as that of Scotland, is investing £651 million.

I am sure that hon. Members will agree that if we are to get more jobs in Scotland, investment is important. The creation of business confidence is important. We cannot congratulate this Government on their efforts to instil confidence in the country, but they could do something directly to encourage investment in Scotland by giving higher investment allowances there than in prosperous parts of England.

If we are talking seriously about inducing industry to come to Scotland, we must consider the question of making some fiscal difference and I suggest that this is one method which might be examined. It would fit in with what is said in paragraph 17 of the memorandum from the Scottish Council where the Council point to the need for increased factory building. These are three suggestions. There are many more. But I think the time has come when it is the business of this House to make positive suggestions. I find it astonishing that the Government have made no suggestions of their own. They have picked up a few from the Toothill Committee and from here and there. But I have yet to hear one suggestion from the Government—and they have been in office for 11 years.

As I say, we are agreed that the Scottish situation today causes us great concern. Apart from unemployment, there is occurring the break-up of communities and continuing depopulation. If we cannot get some action taken, both in respect of the targets which have to be achieved and the methods and policies to be pursued, the decline in Scotland may become even faster than it is today.

5.53 p.m.

Sir Fitzroy Maclean (Bute and North Ayrshire)

The House has listened with interest to the speech of the right hon. Member for Orkney and Shetland (Mr. Grimond). I find myself in agreement with several of the things he said, most of all about the need for positive action, and I hope to deal with those points later. I should like to join with other hon. Members in congratulating my right hon. Friend the Secretary of State for Scotland on his accomplished performance at the Dispatch Box and I wish to do so both as a neighbour and as one of his constituents. I should also like to wish him luck—

Mr. Rankin

He will need it.

Sir F. Maclean

—in the very arduous task which lies before him. We have had some experience of my right hon. Friend as a Government Whip and I hope that he will use the firmness and determination which he showed in that capacity not only in dealing with hon. Gentlemen opposite, but also in fighting for Scotland's interests with his right hon. Friends in the Cabinet. It is very important that the Secretary of State for Scotland should do that.

In common with other hon. Members, I should like to remember my right hon. Friend the Member for Renfrew, West (Mr. Maclay), who has earned the friendship of everyone in this House by his kindness and the considerate way in which he has dealt with our various problems. We should not forget the great projects for which he was responsible and which are already beginning to bear fruit. I am confident that they will go on to bear more fruit. As was said by the Secretary of State, the right hon. Member for Renfrew, West certainly laid the foundations, very sound foundations, on which he himself can build.

I was glad to hear that the Secretary of State recognises the serious nature of the present crisis, because, of course, crisis it is. It is a crisis which has got worse in recent months. I was also glad to hear him repeat the oft-repeated pledge of his predecessor not to rest until the rate of unemployment in Scot-land had been reduced to something nearer the British average.

I wish to illustrate some of the points I propose to make by reference to the state of affairs in my own constituency, in particular in North Ayrshire. I make no apology for doing so because I think there is a certain merit in dealing in concrete and actual examples, and also because I think that many considerations which apply to my constituency apply also to Scotland as a whole. The present employment situation in North Ayrshire is typical. It is bad and it is getting worse. It is aggravated by all kinds of factors which are the fault of no one in particular, such as the automation introduced by I.C.I. and the approaching completion of the Hunters-ton nuclear power station, and it will be affected indirectly by pit closures and by rail closures.

I have always been among the first to recognise the limited powers of the Government in these matters. There is a limit to what they can do, and I think that the Leader of the Opposition made that quite clear when he said—it is an opinion that is not shared by all his hon. Friends—that there should be no question of the direction of industry or of the direction of labour, but even so —

Mr. Emrys Hughes rose—

Sir F. Maclean

—even though the Government's powers are limited, and although their responsibilities, therefore, are also limited, there is a lot which they could do. It is that which I wish to talk about tonight.

I have always believed that the situation calls for co-operation by all the parties concerned. To revert once again to my constituency, there we have a first-class labour force and very good employers. I would mention only I.C.I. I think everyone would agree that I.C.I. is an excellent employer. As a further example of enlightened private enterprise I would mention the recent purchase of the dockyard at Ardrossan. If that can be made a success of it may well do a very great deal to improve the local employment situation. We have good labour, good employers and a very good industrial relations record. We also have good communications and a good site.

In addition, I have always thought that it is very important for local authorities to make their contribution. In my constituency the local authorities and the trades councils in Saltcoats, Ardrossan, Stevenston and Kilwinning, which is not in my constituency, have got together and formed a Joint Industrial Committee which is taking active steps to publicise the facilities which we offer and make known all over the world what North Ayrshire can offer in the way of industrial facilities.

I have shown that we have labour and good employers. I have shown that the local authorities are playing their part. Now, what can the Government do? There are a number of ways in which they can help. In Scotland as a whole we do not get our proper share of research and development. We should get that. I also think that the Government could bring more Government installations and Departments to Scotland, and I should like, without being selfish, to see some of them come to my own constituency.

Mr. Emrys Hughes

Direct them.

Sir F. Maclean

The Government are in a position to direct their own Departments, even under our system.

Mr. William Ross (Kilmarnock)

How many Government establishments in Scotland were closed while the hon. Member was a member of the Government and represented an English constituency?

Sir F. Maclean

There are one or two in my present constituency which I think could be put to better use and one just outside my constituency which from being a War Department depôt has been turned into a very good industrial estate. That is just what I urge my right hon. Friend to do more of. So the Department with which I was once connected does not come out of it too badly.

The Government's principal instrument of policy in all this is the Local Employment Act. I have supported that Act. I still think that, properly used, it could do much good. What is required is a much more vigorous application of it. I think that the deterrents and inducements which the Act provides should be strengthened and used more vigorously. I also think, as the Scottish Council has suggested, that there should be "a much clearer prior definition of inducements". When I was recently in the United States, I had occasion to see what other countries do by way of attracting industry. One of the things that other countries on the look out for new industry do is make it abundantly clear exactly what they can offer. They do that quickly. They will tell any firm which applies exactly what it can expect and how soon. We take a very long time indeed. I hope that my right hon. Friend the President of the Board of Trade will bear this necessity in mind. It is very important to speed up the procedure.

The situation is so critical, and has been so critical for so long, that I am inclined to agree with the Leader of the Liberal Party that the Government should think about using fiscal inducements. Tax remissions are a very strong bait to a new industry. I wonder if something of that kind can be used in Scotland. The Government should at least think about it.

Finally, I want to say something about the problem of advance factories. I have always been inclined to accept the official view of the Government, or what has been the Government's official view up to now, namely, that it is much better to build factories specially to the specification of an industrialist coming to the area. Only the other day I had occasion to write to my right hon. Friend about an American firm which was thinking of coming to Scotland. I suggested that the firm should be sent to visit my constituency. I received the reply that it was not even worthwhile for the firm to visit North Ayrshire because there were "no existing premises" there. That makes me wonder whether we ought to have existing premises in North Ayrshire. That was one reason given. The other reason given by the then Parliamentary Secretary was that the firm could not be sure enough of being able to get the labour it needed in the area, after taking into account the prospective needs of other undertakings already established or under construction in the area."—[OFFICIAL REPORT, 3rd July, 1962; Vol. 662, c. 259.] That does not make sense, because surely my right hon. Friend knows the rate at which unemployment is running in North Ayrshire at present. What matters is the fact that there are men unemployed now, not the fact that a firm may conceivably find itself short of labour in a year or two.

That brings me back to the question of advance factories. I suspect that the reason why firms prefer any old advance factory, even if it does not exactly suit them, is that they believe that if they have one built for them by the Government years will elapse before it is ready and by then the situation may be changed altogether. I can quite understand their point of view.

It is true that under the working of the Local Employment Act Scotland has a fair share of benefits, but viewed from the narrow viewpoint of my own constituency—and that is how I am inclined to view it—the working of the Act has been very disappointing. I very much hope that my right hon. Friend in replying will be able to hold out some hope of speeding up the working of the Act and also of giving it teeth and making it really work.

6.8 p.m.

Mr. William Hamilton (Fife, West)

The hon. Member for Bute and North Ayrshire (Sir F. Maclean) referred to what he called the accomplished performance of the Secretary of State for Scotland. In my view, it was a disastrous debut. It was unfortunate for him that he had to go in at the deep end, as it were, and talk about something in which hitherto he has taken very little interest. He treated us to a speech carefully prepared by his advisers—a non-committal speech, telling us nothing, promising us nothing, giving us no hope whatever.

It is clear that today the Scottish economy is in the throes of a very painful industrial transition and, however carefully we plan that transition, there will be hardship. That is all the more reason for planning adequately. The Secretary of State is unfortunate in that he was the result for us of an extremely hasty, ruthless and bloody purge at the top. I take the view that it is no use shuffling a dog-eared pack when all the cards are marked even though the shuffling is done by the biggest cardsharper we have got.

That is how I approach this question of the Scottish economy today. The Prime Minister is responsible, and it is the Prime Minister who ought to be in the dock today. He does not even bother to come to listen to his new recruit. If he had, he would have fired him tomorrow. What does the Prime Minister do? Occasionally he visits Scotland. He was there a few months ago, not to see the Scottish T.U.C., not to see anybody who is intimately concerned with Scottish problems, but to see Jack Cotton and Mr. Clore and Sir Hugh Fraser. That was the object of his visit, not to discuss the problems which we are discussing today, but to discuss the means of replenishing the Tory Party coffers, and at public expense, too. But not all the Cottons and not all the Clores and not all the Frasers can save the Tory Party from being wiped out in Scotland at the next election. The more am I convinced of that after having listened to the speech of the Secretary of State this afternoon.

Whatever abilities the right hon. Gentleman has have been carefully concealed from the House since he came here. What are his qualifications for the job? He is a landowner; he was educated at Eton; and he grows rhododendrons. It will be interesting to hear from him in the future, he is in an industry very heavily subsidised with Government money, defending the Government's policy of getting the nationalised industries on to a sound financial basis and paying their way.

I can appreciate the Prime Minister's difficulties in making his extremely limited choice. He is in the position of the fellow who tried to make bricks without straw. The doctrine seems to be, "If you cannot appoint a relation, appoint somebody from Eton." The Secretary of State's predecessor was also a product of Eton.

Mr. John Maclay (Renfrew, West)

No, Winchester.

Mr. Hamilton

I beg his pardon. I had the wrong English public school. With the greatest respect to the right hon. Member for Renfrew, West (Mr. Maclay)—and I bear him no ill will as a person—his tenure of office was a disaster for Scotland. He is a likeable fallow. He should have gone into the Church, or perhaps the Liberal Party.

Dr. J. Dickson Mabon (Greenock)

He was in the Liberal Party.

Mr. Hamilton

I know exactly what his political antecedents were, but we will not go into those. He always gave me the impression, and I think the country, of being either unable or unwilling to fight within the Cabinet for the special claims of Scotland, for differential and preferential treatment. As the Scotsman said last Friday: A mistake the Government are making is that they are treating Scotland as a region of the United Kingdom whose problems call for exactly the same treatment as, say, those of Northern England. They are not making sufficient allowance for the fact that Scotland is a distinct nation and that there is a limit to the extent to which the Scottish people will allow their economy to be damaged. This is the Tory Scotsman which went on: The Government should regard Scotland as presenting them with an opportunity of demonstrating the virility of Conservatism. Virility of Conservatism!

Mr. James Dempsey

(Coatbridge and Airdrie): Senility.

Mr. Hamilton

It is like expecting virility from a eunuch. Eleven years of this virility have resulted in an increase in monthly unemployment from 54,700 in April, 1951, under a Labour Government, to 79,000 in April, 1962, very nearly a 50 per cent. increase under the present Government. There has been an increase in industrial production of rather less than 2 per cent. per annum and an annual average of only 1 per cent. for the last six years.

Taking 1954 as a base year, the Scottish economy has expanded at only half the rate of a very slowly expanding United Kingdom economy. It is this stagnation, or comparative stagnation, plus the green light for the unfettered oil competition, which has led to the great problems which the coal industry is now facing. It is not without significance that the same pressure group which has allowed oil to overtake coal in many respects has been operating to get the Pipe-lines Bill through the House with unseemly haste, and that almost all the advisers of the Government on this issue are people who have had connections with big oil firms.

The latest blow was last Wednesday's announcement, in my view a calculated attempt to conceal the facts rather than inform the House. It was very apt that that statement should have been made as the last major statement of the outgoing Secretary of State. It was the final act of humiliation for him. There was then a glorious opportunity for him to refuse to make that statement. It should properly have been made by the Minister of Power. The right hon. Member for Renfrew, West ought to have taken the opportunity then to resign. That would have been the greatest blow he could have struck as the last blow he would strike in the office of Secretary of State.

That statement was the direct consequence of the economic stagnation which I have been talking about, the refusal to establish a national fuel policy. The policy adumbrated in the Government's White Paper on the Financial and Economic Obligations of the Nationalised Industries, published in April of last year, made no mention of social obligations. Both Lord Robens of the National Coal Board and Dr. Beeching have quite rightly said that the social consequences flowing from the implementation of the policies in that White Paper must be the responsibility of the Government.

So obsessed are the Tory Government with the importance of the £ s. d. yardstick, that they completely ignore the possible social consequences of attempting to make the nationalised industries pay their way within five years. Again to quote the ultra-Tory Scotsman of Thursday, 12th July: The conclusion seems inescapable that the Government gave insufficient thought to the consequences of their policy, and that the White Paper should have been supported by vigorous and effective measures to create jobs for workers displaced. It was then, not now, that special action should have been taken. What is the special action which is to be taken even now? We had a statement about what is to happen to Donibristle. This is two or three years too late. It is at least two years since Fife County Council and I were agitating for the Board of Trade to take it over. The writing was then on the wall about the future of the mining industry in Fife.

Take the question of the increased training allowances. These will not be applicable only to Scotland; they will be applicable throughout the country. There is to be no different treatment in Scotland. In any case, what help will this be to a man in the pit aged 50 or 55, who is to be thrown on the scrap heap? He cannot be trained for another job and he cannot easily move home to another part of the country. What about those going to England? Some of my constituents have been going to work in the coal mines in England. They have to wait eighteen months or two years for a house. They have to suffer a considerable reducation in wages because they do not get jobs at the coal face in the English pits.

There is no evidence whatever that the Government are aware of these problems. There is no attempt as far as I know to collect detailed data on these things. The brutal truth is that the Government do not very much care about it. The workers are simply pawns on a capitalist board to be moved from one place to another.

The Government do not direct industry, but they direct the men. The Government protest that this is not true. We can see thorn giving disapproving glances. I am always delighted when I see that because I know that probably I am on the right lines. They say that they have provided more new jobs in the last two years than the number that have been lost. The ex-Secretary of State went very much further last Wednesday. He said, as reported in column 1349 of the OFFICIAL REPORT for that day, that there had been a net gain of about 30,000 new jobs in the last two years. That is not true.

Mr. Maclay

I do not want to interrupt the hon. Member because I have sworn not to speak this afternoon, but he must not misquote me. If he will look carefully he will find that I said it was from 1959 to 1961.

Mr. Hamilton

The right hon. Member said there had been a net gain of 30,000 new jobs in the last two years. I shall come to that figure in a moment and show how it is not true. Even if it were it has been drawn largely by getting the major motor car expansions, which in any case are not likely to be repeated for many years. Indeed this is the peak.

I got the facts in answer to a Question on 21st May. I shall not quote them except to say that between 1959 and 1961, according to those figures, the number of jobs lost was 46,150 and the estimated gain was 42,600. These are the years that the right hon. Member for Renfrew, West was worried about. In the first two years of the operation of the Local Employment Act, Scotland, with an average of 204 per cent. of all the unemployment in Britain, got 11.9 per cent. of the new jobs. Look at the other figures for the rest of the United Kingdom. England, where there was 72.4 per cent. of unemployment, got 79.7 per cent. of new jobs. Wales with 7.2 per cent. unemployment got 8.4 per cent. of the new jobs.

Look at the regions. I am referring to the Board of Trade, not the Ministry of Labour regions. The Eastern Region of England had 4.3 per cent. unemployment and got 12.1 per cent. of the new jobs. The North Midland Region had 4.5 per cent. of unemployment and got 7.2 per cent. of new jobs. The Southwestern Region had 5.4 per cent. unemployment and 7.9 per cent. of the new jobs. Even London and the South-Eastern Region with 15.4 per cent. of the total unemployment had 11.8 per cent. of the new jobs. London and the South-East got as big a proportion of the new jobs provided since the inauguration of the Local Employment Act as Scotland did with very much less of the total unemployment.

That is the result of the Local Employment Act. All the regions I have quoted got a bigger proportion of the new jobs than their percentage of unemployment warranted. These figures do not include the I.D.C.s granted before April, 1960. For example, the B.M.C. which the Government talk about as being the product of the Local Employment Act was nothing of the kind because the I.D.C. was issued before the operation of the Local Employment Act. In any case, in the first six months of this year another 13,400 have been declared redundant in Scotland, the greatest in any region.

The right hon. Gentleman and his colleagues have no cause to congratulate themselves on the "enormous success" of the Local Employment Act. At the very best we have stood still. This is no consolation for Fife, especially central West Fife. I do not want to quote the mass of figures I have—they are only too well known—but I will refer to one village, Kelty, about which I asked at Question Time this afternoon. There is the Aitken pit, with 890 men in it, scheduled for closure in 1963. There is the Lindsay with 800 men, scheduled to close in 1964. There are 1,700 men in one village and not a single job for them. They have a betting shop, but there is no industry at all.

If we look at the B and C lists we find that the total number involved in central West Fife is about 8,000 men. If we add their wives and families there are 30,000 people. Imagine them marching in protest four abreast and a yard between them. That would be a column four miles long, a column of worry and fear, bitterness and anger—anger against a Government which cares more for £ s. d. than men, women and children, a Government which shrinks from the direction of industry but positively relishes the idea of directing labour. Fife County Council has legitimate grounds for complaint because it has invested £17 million in houses, in schools, in roads and so on, based on plans put to it by the National Coal Board in conjunction with the Government. Unless something is done to bring industry to that area I fear that this social capital will be of no avail.

I shall enumerate what can be done. First, the Government have to recognise much more than they have up to now the complete inadequacy of their existing policies. Secondly, there has to be a national fuel policy based on a highly efficient coal industry financially reorganised. If the right hon. Gentleman can defend subsidies for farmers, I can defend them to a nationalised industry.

Thirdly, there must be an overall policy of expansion, not just as a pre-election gimmick or stunt. As the Guardian very cynically said on Monday, 16th July in its City column: It is natural to assume that the Prime Minister has cleared the decks for the next boom—and the next Election. Fourthly, we want a special regional policy for Scotland based on much more detailed statistics than we have today, comparative costs data and things of that kind. We also want major changes in budgetary policy and a regional differential payroll tax, thus increasing the cost advantage of location in Scotland. I also suggested in a Question today that there should be regional variation in the National Insurance employers' contributions, which would, again, be a means of differentiating in favour of Scotland in labour costs.

Other points put by other hon. and right hon. Members were that there should be more Government finance and research and, last but not least, that Scotland has a natural claim for the direction of industry. I believe that the only kind of industry that we can direct in a practical way is State-owned industry, and that is why I want more State-owned industry. We have had examples put forward recently. We have heard much adverse comment in the Press about privately manufactured drugs used in the Health Service and being put on the market which have resulted in deformed children. Why cannot the National Health Service produce its own drugs? Why cannot we have a nationally-owned drug industry in Scotland? Why cannot we have the production of all the bed linen and hospital requisites publicly owned and controlled? We could direct these in Scotland and have regard in that direction to the social consequences and implications. These are the things that need to be done, but the Government will not do them.

I could say the same about school equipment. Here we have a State enterprise. The educational system is basically State-owned and controlled and basically State-financed. Why cannot we manufacture and produce the furniture and all the school equipment in State-owned and controlled industries, and put them in the Highlands and in other areas where there are pockets of unemployment? The Government will not do that.

The Government, whose name is associated with betting shops, bingo halls, strip-tease, Premium Bonds and commercial television, are not concerned with the things that I have been talking about. The sooner they go the better.

Mr. Maclay

May I make this absolutely clear? Perhaps the hon. Gentleman will read HANSARD more accurately in future and not use figures quoted by me without getting them correct.

Mr. Hamilton

The right hon. Gentleman knows very well—and I challenge him to deny it—that he said that there had been a net increase of 30,000 jobs in the last two years.

Mr. Maclay

This is a small point, but it is a question of accuracy. I am quoting from HANSARD: In two years, from 1959 to 1961, there was a net gain of about 30,000 jobs in Scotland."— [OFFICIAL REPORT, 11th July, 1962; Vol. 662. c. 1349.]

Mr. Hamilton

I was not challenging the statement; I was saying it was not true.

Mr. Maclay

The whole point is that it was made very clear that the year 1961–62 was not a good year.

Mr. Hamilton

If that is the case, the right hon. Gentleman was deliberately deluding the House.

6.45 p.m.

Sir John Gilmour (Fife, East)

As an old Etonian and a grower of rhododendrons, I have the greatest pleasure in disassociating myself from the remarks of the hon. Member for Fife, West (Mr. W. Hamilton) about my right hon. Friend the Secretary of State for Scotland. I think also that several hon. and right hon. Members have been a little unfair on him today because, within a very few hours of his taking up the office of Secretary of State, he announced that he was going to continue this measure of industrial derating which at a time when Scotland is fighting for jobs is obviously of great importance to the industrial development of Scotland. I am certain that it is right that he should not, in the first few days of his office, start off with a lot of promises before he could possibly have had a chance to assess what it was possible for him to do.

The hon. Member for Fife, West shares with me the honour of representing the County of Fife. I know how worried everyone is in that county. I know what difficulties there are to overcome, but it is fair, I think, to record the progress which is being made in the town of Glenrothes, the plans for Donibristle and the private enterprise new town of Dalgetty, the details of which were in the newspapers only a few days ago.

I should like to return to the tenor of the debate set by the Leader of the Opposition, when he opened it today, on the question of taking a tougher policy with industrial development certificates. Yesterday there appeared in The Times a graph showing what was happening. There is no doubt that the bias was going definitely to the south-east of the country, and it is still going there. The Secretary of State gave details of the jobs that it has been possible to provide in Scotland in spite of the fall off in other industries, and very many of these have come from the expansion of existing industries, however great a part the new industries have played. That is what is happening all over the country. Nothing succeeds like success. Somebody starts a business and it prospers. One cannot suddenly stop it, pick part of it up and take it away. It must be within the ingenuity of the Secretary of State in conjunction with the President of the Board of Trade to try to arrive at some solution different from the present method of issuing industrial development certificates.

Many hon. Members today have mentioned the Toothill Report. In one paragraph the Committee wondered whether, as the right hon. Member for Orkney and Shetland (Mr. Grimond) said, we had exactly the right set-up in Scottish administration. Would it not perhaps be better to have a Scottish Undersecretary of State at the Board of Trade rather than an Under-Secretary at the Scottish Office Who is responsible for trade and industry? I hope that some change to try to help Scotland in this way may be made in the months ahead.

However keen we are on the immediate solution of the difficulties, which I am sure are being well looked after, I should like to say something about the longer term so far as it may help to improve conditions in Scotland. I refer to the timber trade. When the Forestry Commission started planting after the First World War it was very much with the idea of having a strategic reserve of timber, but in the nuclear age that same need is not there. On the other hand, we imported last year £176 million worth of timber and £117 million worth of pulp and waste paper. Soft wood consumption has risen by 70 per cent. in the last 10 years. British-grown soft woods amount to 2.7 per cent. of the total consumption, half of which comes from private forests and half from the Forestry Commission, but the Forestry Commission's proportion will increase as the plantings of the 'twenties come to maturity.

I know that the Secretary of State will have a real interest in the possible establishment of the pulp mill at Fort William. Of course, the coal pit closures and the cutting down of the amount of timber used in the mining industry highlights the need to find new outlets for Scottish timber. To do this, I think that we need a further review of how we can co-ordinate forestry and agriculture. I am certain that it may well be in the interests of Scotland as a whole if forestry and agriculture are put under one control. In Scotland we have only 8.3 per cent. of our land area covered by trees, and the proportion for the country as a whole is about 7 per cent. A large part of Scotland is mountain and moor. I have walked over many of the hills of Scotland and seen in many places the relics of forests which have now gone.

There is today a competition between agriculture and forestry. I suggest that this could be ended by having both under one control. In this way, we could ensure that the drift away from the Highlands and Islands was stopped. I live in the Lowlands and I know the problems there, but I know also that every time someone leaves a glen in the Highlands a job is lost for someone in the Lowlands. If we are to build up the Scottish economy, we must be prepared to look at not only what happens in the industrial belt, though that is a big problem on its own, but also to the future everywhere and plan to keep more people on the land. As a result of mechanisation, agriculture will employ fewer people as time goes on. Forestry offers the best opportunity.

Last summer, I went to Norway and saw people living there in communities far more removed from civilisation than anything we have in Scotland save, perhaps, in the very remote outer islands. The Norwegians have a co-ordination between fishing and forestry. Would it not be possible to lease to farmers and crofters sections of the Forestry Commission's land which they could work under direction so that, instead of having to bring in squards of men to do a particular operation, we could keep people permanently resident on the land who would be doing the work in these forests but under the supervision of qualified forestry experts? This is the sort of thing that is done in the Scandinavian countries, probably under private ownership, but in this country the resident people, fishermen and crofters, could help in the maintenance of our State forests.

If the total forest area were increased and if forestry and agriculture were put under one control, this would give great help in setting the economy of Scotland on a sounder basis in the longer term. In the meantime there are many short-term things to do to which, I am certain, the Secretary of State will apply his mind. On both sides of the House, I believe, we wish him the very best in his endeavours.

6.42 p.m.

Dr. J. Dickson Mabon

The hon. Member for Fife, East (Sir J. Gilmour) is a landowner, an old Etonian and a grower of rhododendrons, and he also makes speeches very like that which the present Secretary of State made from the back benches on one occasion during a Scottish debate several years ago. The right hon. Gentleman's one and only contribution—I am sorry he is not here at the moment—was to advocate from the back benches in a seven-minute speech—very commendable—the direction of pulp and chip mills to the Highlands and a speeding up of the D.A.T.A.C. procedure. I am sure that the right hon. Gentleman, being now Secretary of State and a prisoner of those promises, is bound to see that they are carried out.

However, this in itself will not solve the problem. In one way, I am glad that there has been a change in Secretaries of State because I believe that the right hon. Member for Renfrew, West (Mr. Maclay) has, if I may say so without disrespect, become the prisoner of his own past speeches. I hope that the new Secretary of State will tell his Under-Secretaries that the language of the past few years is now forbidden. From what the Secretary of State said today and the tenor of his remarks, although he promised us nothing, it seems that we are not to have the same old touch and the same old arguments, the hope of sunshine coming along soon without any clouds in the sky if only we will bide our time.

During the past few weeks, a kind of cemetery of Tory arguments has been built. Only a few months ago, the Under-Secretary of State who is at present on the Front Bench gave us the old "black spot" argument. Greenock is a well-known black spot in Scotland. I have become sick and tired of hearing the black spot theory and I am glad that it has now gone. The idea was that all one had to do was to pick on an area, add up the number of unemployed, produce a pipeline to match it, and then everything would be all right. To my great surprise, the former Secretary of State once told me in a debate that he had solved Greenock's unemployment problem, at least on paper. I prophesy tonight that if I interrupt the President of the Board of Trade he will throw back at me the argument that because there is a graving dock being built on the Clyde Greenock's unemployment problems are solved.

This is the unhappy feature of our situation. Having done certain things, the Government assume prematurely that all is well. The Clyde graving dock is being built. We are told that because it may produce in five years—there are arguments about it—about 600 jobs direct and, perhaps, 1,200 jobs on the Clyde river itself for ship repairing, all the local problems of Greenock and the neighbouring towns represented by the right hon. Member for Renfrew, West, the former Secretary of State, are solved. It is just nonsense. In any case, it is no argument for saying that we must wait for five years until the dock is built and allow unemployment to continue at its present level during all that time.

If one looks at the returns of the Registrar-General not in relation to Scotland as a whole—those are bad enough—but in relation to certain communities in Scotland, one sees that in the towns which are waiting for a solution to their unemployment difficulties the best skilled labour—the young people—is being driven away by the reality or threat of unemployment. This is the sadness of it. In spite of the British Hydrocarbon factory at Grange-mouth and all we were told about the B.M.C. factory at Bathgate, the problems are still there. One thing I learned from my short experience in West Lothian helping my hon. Friend the Member for West Lothian (Mr. Dalyell) in his campaign was that the coming of the B.M.C. has not been a complete answer to the problems there. Looking further up from Greenock to Linwood, we are told that the arrival of the Rootes factory will solve all the difficulties of the County of Renfrew. On the record of experience at Bathgate, this is just not true. The Government so far are failing to attract the industries ancillary and subsidiary to these large factories to Scotland. They ought to be large industrial complexes attracting more industries and more jobs than the main factories themselves represent.

In my constituency we have had one factory of 22,000 sq. ft. lying empty for nine months without a single firm having been enticed to come and take up occupation. It is incredibly difficult to believe that there is not some industry in the Midlands which would want to feed the Rootes factory at Linwood with its necessary materials for production which would not come and settle there if it were shown all the attractions of the area. What has happened? All the components for Bathgate are still brought up from the South. It was one of the arguments for settling the firm there that there would be subsidiary enterprises nearby to supply the factory. Is this a General Election illusion from which we have suffered all these years? Will not these places be growth points of Scottish industry?

I want an assurance from the new Secretary of State that he will regard it as one of his highest priorities to be at the Board of Trade as often as he can to remind the Board of Trade that it must make the necessary efforts. It is not for local town councillors, Members of Parliament or deputations of businessmen to be left to do it unaided. Officials of the Board of Trade and Ministers of the Board of Trade are responsible for going to all the firms in the Midlands and telling them of the advantages which are to be obtained by going to settle in Scotland.

Mr. John Brewis (Galloway)

Is the hon. Gentleman being quite fair? The Report points out that there ware four projects in Greenock and Port Glasgow in 1961 providing just under 700 new jobs and that two further projects are under construction.

Dr. Mabon

The hon. Gentleman must look at the unemployment figures in Greenock and the level of migration. Then he will not be quite so content with what might appear at first sight from the Report. I once challenged the Under-Secretary of State to publish a report not of jobs in the pipeline but of jobs which had been created. We have only just begun to have these details. Some of the figures can be immensely misleading, as I know very well.

A firm in my constituency was given an I.D.C. to make a certain extension which was to provide 700 jobs. When the extension was made, the firm recruited 50 new employees. I welcomed this, of course, but within three months the industrial labour force at that factory had fallen by 50. I do not blame the firm concerned. But such records of 700 new jobs being created is often just nonsense. We really must look at the thing more closely in terms of reality rather than what has been promised or what appears in the statistics of I.D.C. estimates.

As I say, in Greenock, there has been this complacent argument that we have the Clyde graving dock. I hope that we shall not hoar it any more. It is said that because it represents 1,200 jobs it is a solution of the local unemployment problem. I hope that we shall not be told that because one factory moves from one place to another and creates a certain large number of jobs there is a net gain of that number. I want no more cheating in the books. We have had enough of that.

It is very difficult for hon. Members to get at all the facts and figures because they are very cleverly arranged in Command Papers, Ministerial statements and Board of Trade letters. However, once one gets to the bottom of it, it is astonishing to find how we have been deceived by Government claims. It is still true that in Greenock we have 7 per cent. unemployment. We have had this figure of unemployment for many years —for as many years as hon. Members opposite have been in power.

The Under-Secretary of State for Scotland (Mr. R. Brooman-White)

I cannot accept what the hon. Gentleman says about cheating in the books. Perhaps he would like to have an argument with the Leader of the Liberal Party who asked us to give estimates. If a project goes forward at an estimated level of employment which is not met, we cannot be accused of cheating.

Dr. Mabon

That is a most unreasonable intervention, and I do not propose to answer it. The real answer to the question of whether the industrial and unemployment problems of Scotland have been solved is to find out the rate of industrial growth and the number of people in employment in Scotland. When one has done that, that, to my mind, is an end of the argument. I hope that we are finished with this argument about the so-called black spots and that people will realise that the industrial potential of Scotland as a whole must be widened.

The hon. Member for Fife, East said that nothing succeeds like success. I take his point further and say that nothing succeeds like excess. It is unreasonable to say about the Grange-mouth area, as the Board of Trade once said in a letter, that the reason why there were not more subsidiary industries there was that the Board of Trade was most anxious to deal with other areas of high and persistent unemployment scheduled under the Local Employment Act. What a silly argument. The Board of Trade has conceded that it is a silly argument and is now willing to encourage industries to go to the Grangemouth area. I should have preferred to see the whole of Scotland declared a development area including the Highland area as a whole and given adequate nation-wide assistance under the Act.

I now return to the other point of the Secretary of State. He complained as a back bencher that there were many delays in the work of D.A.T.A.C, which is now B.O.T.A.C Not long ago, the managing director of a small firm, not in my constituency, applied on behalf of his firm to BO.T.A.C. for assistance. After fourteen months the Board of Trade said that it could not give him the loan for which he was asking primarily because he did not have enough money to invest further in the firm. He contacted me. I do not wish to expose his personal affairs to public gaze, but he did this to the Board of Trade. His house was mortgaged and everything possible was put into this business, which on every other account was a good investment. It seems to me that B.O.T.A.C. adopted a narrow attitude in this case. I hope that under the present Secretary of State and by constant nudging of the Board of Trade there will be better consideration and fewer delays between the time when applications are received and the time that they are assessed and a final decision made.

Many business men, in fact, have been asking, "Where can I find an empty factory? What are the advantages that the Government can give me for settling in this area?" They are asking for bribes or inducements to go to certain areas. I am not against giving them bribes. In fact, I am all for giving them very hefty bribes provided that in the long run they settle down and stay in the area and then pay back the bribe.

One first-class large firm in my constituency, International Business Machines, was induced to come to Greenock in two ways. It was given the pick of the available land in Greenock—and, Mr. Speaker, if you know the topography you will know that that was quite a sacrifice—and it was given a tailor-made factory on splendid rental terms. This concern went to Greenock and settled down. It has decided to stay there and to buy its own factory and to pay back the assistance which came from the taxpayers. With the world being as sinful as it is, I am in favour of bribing private enterprise to do this. I am only sorry that the Government are not willing to do more of it.

A great deal can be done to attract private industry to Scotland, but it will not go there for patriotic or philanthropic reasons. Some of the suggestions made my a number of my hon. Friends today have been quite admirable in the matter of preferences for investment and plant and in the running of firms. This is a matter on which the Chancellor of the Exchequer should be asked to take action.

In July, 1960, we were told in a Press statement, which was supposed to be a "leak" from the Scottish Office, that the Secretary of State was arguing for entirely different treatment for Scotland under the July emergency measures of that year. It was said that Scotland would not suffer by a curtailment of its public investment programme. I thought that after four years in office the Secretary of State had learned what had to be done and was about to secure a great triumph. But it never came. The Scottish house-building, hospital-build- ing and school-building programmes and Scottish public investment generally were chopped just as ruthlessly as the English programmes, without any distinction. I suggest that Scotland does not deserve this kind of treatment. We must have entirely different treatment from the Treasury. Scotland is not a part of the United Kingdom in that respect.

I appeal to the new Secretary of State to try to sweep away the cobwebs of the past and to ginger up his Under-Secretaries of State and make them realise that they must not make complacent speeches. He must go forward with the Local Employment Act, but, above all, he must seize on some of the new ideas which we have thrust upon him so that Scotland may at least be given a Chance in the years ahead.

6.57 p.m.

Mr. John Brewis (Galloway)

The hon. Member for Greenock (Dr. Diekson Mabon) had many interesting things to say. I am much inclined to agree with what he said about the Treasury. I hope to take up some of the points which he made later in my speech. However, I point out to him that I have higher unemployment in one place in my constituency than even he has in Greenock.

Mr. Dempsey

What is the percentage?

Mr. Brewis

Over 8 per cent.

The Leader of the Opposition made an interesting speech. It may have disappointed some hon. Members opposite in that in his article in one of the Glasgow newspapers he mentioned that Labour's policies of public ownership had a big rôle to play. We heard very little about this in his speech this afternoon. Recently, the right hon. Gentleman cast his bread on the waters at Middlesbrough, East and said that he would not nationalise I.C.I. This came back before many days were past in the form of floating votes, as we all know. Similarly today, the right hon. Gentleman was not in favour of the direction of industry, which is one of the policies of the Scottish Trades Union Council and of several hon. Members opposite. In effect, what the right hon. Gentleman said came down to a tougher I.D.C. policy and greater inducements.

Appendix 38 of the Toothill Report gives some interesting figures about what has been spent under the distribution of industry and local employment policy. From 1945 to 1960, £7.8 million was spent, which is equal to about £500,000 a year. From 1960 to 1962, the figure had risen to £43.3 million, or £21 million—