HC Deb 06 March 1962 vol 655 cc360-72

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

10.55 p.m.

Mr. John Rankin (Glasgow, Govan)

I beg to call attention to the Report of the Toothill Committee. This Committee, which is now giving us that benefit of its work, was appointed in November, 1959. It was asked by the Scottish Council of Development and Industry to review the present position and future prospects of the Scottish economy, to define the forces which control the growth and location of manufacturing and other employment, to draw conclusions and to make recommendations. This it has done. It had Government backing for the job and, therefore. Government responsibility is involved. The Report is a document of some importance. It is plainspoken; at times blunt; and I hope that this debate, a short one, will pave the way to a much fuller examination.

The authors of the Report think that unemployment is not Scotland's real problem but that our worry lies in low production. The Report says: Scotland is suffering in an acute form from the ills to which the whole of the United Kingdom is subject … because our economy still rested on the old heavy industries when the new, light industries were expanding in the Midlands and south-east of England. The Committee said that this meant that Scotland entered the new industrial revolution with her resources deeply engaged in what are called the non-growth industries. These are christened by the Report "small quantity specialised industries" as against "large quantity, standard industries."

Examples of the first are given as ships, bridges or power stations. The Committee says that such articles are bought by those with unique and distinctive requirements. The second group may be purchased by a wide range of other manufacturers for consumption or as components, or as capital equipment, or by the public for personal or household capital or for frequently recurring consumption.

The manufacturer in such industries as these produces for stock-holding and sells through retail to the public. He has to assess and to influence by advertising what the public wants and what price it will pay. It is different in the "small-quantity" industry. Here, deep calls to deep. The top personnel on the construction side meets the top customer personally, and the outcome is the production of a special purpose article to order. There is no large volume production in response to a large users' market.

Scotland's handicap lies in the fact that the evidence suggests, according to the Report, … that it is not generally to be expected that firms experienced in the 'small-quantity specialised goods' fields switch without considerable difficulty to 'large-quantity standard' products and vice versa. Some argue that Scotland's distance from the main mass market in the London region hindered the development of these new industries in our midst because of heavier transport costs. Three-quarters of the Scottish firms surveyed reported that this factor increased their total transport costs by only 1 per cent.

There are other obstacles, however. There is the appalling apprenticeship system in Britain". The Committee refers to the failure to build up new industries in the new towns and the artificially low rents charged by Glasgow Corporation and other local authorities—a policy which penalises all mobility". These observations merely clothe old problems in new dress. For long the Labour movement has deplored Scotland's over-dependence on shipbuilding and heavy engineering. We have pleaded for the newer industries, with very modified success, due to failure on the part of our present business masters, on whom we are still to depend, or their Government. Toothill is not opposed to subsidies. He is quite ready to use them in offering "fast and frequent air services" at public expense to employers. He will therefore support them for bringing the new industries to the new towns. But he opposes them for dwelling houses, despite the fantastic increase in land values and the high price of money.

The Report laments "the deficiency" in air transport during 1960. It is strange that the inquiry did not discover the failure of the Vanguard to go into service when expected owing to engine trouble, for which the operators, of course, have no responsibility whatsoever. It is stranger still that with its own Report to help us, along with the White Paper on the Nationalised Industries and the periodic inquiries of the Air Transport Licensing Board, all of which were concerned "with these difficult problems" of "air organisation," the Toothill Committee should now recommend setting up another "independent and expert inquiry" on an issue which for twenty-two months was completely within the Committee's own comprehension.

Nor would one have expected to find a group of businessmen recommending subsidised air travel in quite costly aircraft for business purposes at a time when the executive type of aircraft, costing around £6,000, is becoming very widely used. Indeed, I believe that Messrs. Ferranti have pioneered this type of machine in Scotland for their own business purposes.

The trade unions were not represented on that Committee of Inquiry. The document before us is a businessman's view of how business could be organised along better business lines, within the present constitutional framework of the country, although not necessarily within the present legislative framework. Toothill accepts that management is responsible for taking the initiative in fostering good relations in industry. Employers should recognise the benefits of good communications with workpeople and the importance of the habit of consultation, he says. There is nothing novel in this recommendation, except perhaps its touch of paternalism, but once again on the matter of individual relations the ball is passed to the boss, and I hope that that fact will be very widely noted.

On the problem of industrial production the Report shows a Scottish index figure of 103 for 1959. This is the lowest for the whole of Western Europe. In 1960 the index figure was 109, still the lowest. That is for Scotland. The United Kingdom figure was 120. That for Germany was 161; for Italy it was 167. Even when all the modifications and qualifications have been made in these figures for special circumstances, Toothill says, … it is clear that the Scottish record has been disappointing. I hope that the Government spokesman tonight will be able to explain that charge by Toothill to our satisfaction.

Over the 12 years, from 1948 to 1960, industrial production rose by 32 per cent. in Scotland. In the countries of the Common Market it rose by 55 per cent. in the six years from 1954 to 1960, and by 42 per cent. in the O.E.C.D. group. These figures are taken from the Toothill Report. Inadequate investment could be a main cause of this backwardness. More factories, plant, equipment, power stations, roads, houses, schools and so on must be the ingredients in the doctor's prescription for Scotland's economic health. I hope that the Minister is taking careful note of these recommendations, because he will hear much more about them in the months that lie ahead.

The Toothill Report says that … investment in manufacturing industries will be necessary if Scotland is to develop a larger share of the more rapidly growing industries and to carry forward the modernisation of the older industries. More investment is also recommended in educational institutions. We are told that Urgent consideration should be given to the status of the major central institutions, particularly the Royal College of Science and Technology. This long-desired reform has been pressed repeatedly on the Government from this side of the House, as has been the need for a fifth university in Scotland, about which the Toothill Report says nothing, although a technological centre on the lines of the one in Glasgow is recommended for the east of Scotland.

The recommendations on education and training can be ignored by the Secretary of State only at Scotland's peril. In my view, if we are to face up to the nation's needs, there must be a national economic plan. Only in that way can we have economic planning for regions. The full weight of Government policy should be put behind the solution of the problem of overspill and the opportunity of development which it affords to Glasgow and the whole Scottish economy. Roads will play an enormous part in this development and it will be helpful if the Secretary of State, through the Under-Secretary, will give us full information tonight about his plans for Scottish roads over the next few years. I know that this information is available. There is no reason why it should not be published now so that its value may be properly estimated.

The lack of adequate investment contributes to the fact that there are 85,000 unemployed in Scotland as at 15th January last, the largest figure since 1959, which gives us the highest unemployment rate in the whole of the United Kingdom. It is true that compared with a rate of 6 per cent. in Belgium, 9.5 per cent. in Italy and 7.7 per cent. in Denmark, Scottish unemployment does not appear to be high, but the existence of so many unemployed in these Common Market countries will naturally cause more anxiety among Scotsmen than it causes in England where the unemployment rate is 1.9 per cent.

Apart from what is happening in other countries, there are far too many jobless persons in Scotland, with others facing unemployment, particularly in mining and in shipbuilding, about which the Toothill Report has practically nothing to say; although leading shipbuilders in Scotland declare that the shipbuilding situation continues to deteriorate. Order books last year fell far short of completions. If this trend continues in 1962 the tonnage of ships now building in the Clyde yards will drop by as much as 100,000 gross tons by the end of this year. At its annual meeting on 22nd February last, the Chamber of Shipping added its warning about the increasing difficulties that face British shipping. Shipbuilding, mining and marine engineering employ 150,000 persons in Scotland. Agriculture, with 97,000 workers, is the biggest single industry and is an important customer for others. Yet while admitting that agriculture is geographically basic for four-fifths of Scotland, the Report ignores these four industries along with fisheries and forestry. One-quarter of Scotland's employed people attract absolutely no attention; and there is no attempt to get to grips with the problems of the Highlands or the Borders.

These omissions are notable because, in its own words, as I have already quoted, the Report sets out to review the present position and future prospect of the Scottish economy. This the Committee has failed to do. Its examination is confined largely to the Scottish central belt and concerns itself mainly with the manufacturing side of industry in that area. I think it is not unfair to say that the problem which the Toothill Committee itself posed is not completely stated, as I have sought to show. As a result, the plan proposed disappoints most of us who have read the Report. It offers very little that is new; and certainly lacks imagination in its approach to Scottish problems.

Nevertheless, despite these criticisms, not offered in an unhelpful spirit, the work of this Committee, in my view, was well worth while within the compass that it covered. It has assembled a mass of statistical material which will be of great value to all of us who share its concern for Scotland's future; and its criticisms and recommendations may in turn provoke the action by the Government so long delayed and now so urgently required to redeem the economy of Scotland.

11.13 p.m.

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

The hon. Member for Glasgow, Govan (Mr. Rankin) has raised a most interesting subject, and I think this Report adds substantially to the indebtedness of all of us for the valuable and, I believe, dispassionate and objective work which the Scottish Council for Development in Industry has long done for the general benefit of our country.

In spite of some of the criticisms raised by the hon. Member, I think the Report ranges very wide. It makes no fewer than 81 specific recommendations, and in many oases, as the hon. Member has indicated, these are highly controversial. It covers not only the great issues of industrial development, but also related problems of education, communications, housing, research and many other matters.

I do not want to single out specific points in a general answer to a short debate such as this because it might give a false sense of balance, but I would say, on the research side, that the presence here of my hon. Friend the Parliamentary Secretary for Science is an indication in itself of the importance which the Government attach to that aspect of the matter.

But this is, in fact, a Report about national development in a wide sense and stops short, as the hon. Member in-dictated, only of the specific problems of agriculture, fishing and forestry. What is more, though it is a Scottish Report, it is interesting in a much wider sense than a purely Scottish one. This is not only because many of the 81 recommendations may involve decisions which may have to be taken in the United Kingdom context or would have substantial repercussions south of the Border if they were applied only in Scotland, but also in a broader sense, because, as the hon. Member said, this Report has recognised the fact that Scotland is suffering in an acute form from ills to which the whole of the United Kingdom is subject. That sentence, in fact, provided the headline under which the Economist commented on the Report when it was first published.

This diagnosis of Scotland's troubles is extremely relevant to possible treatment for Britain's troubles. I agree with what the hon. Member has said about the nature of the Report and the fact that the impact which it has already made is due very largely to the lucidity of its thinking and the clear-cut nature of its recommendations. Whether one agrees with all the recommendations or conclusions or not, there is no ambiguity about them.

Some of the thinking is new; quite a lot of it has been said before, but where it is repetition it is repetition set in a very solid framework of up to date and clear reasoning, and hammered in with great cogency. I think it fair to say that the main themes are—I take a broader line than the hon. Gentleman—that there is no panacea for our economic difficulties, that a number of measures are needed to overcome our problem, but that the more these measures can be co-ordinated and produced as part of one conscious and comprehensive campaign, the greater impact they will have, and, finally and most important of all, that the emphasis should be on stimulating growth rathet than on arresting decline.

This keynote on growth has, of course, been struck before. It was the main theme of Professor Cairncross's earlier and admirable Report in 1952, which was also produced under the aegis of the Scottish Council (Development and Industry). It has been on many occasions the theme of speeches from both sides of the House. It was the main theme of the maiden speech of my right hon. Friend the Secretary of State for Scotland in 1945. Perhaps I might be allowed to mention in passing that it was also the main theme of the maiden speech of the hon. Member for Rutherglen in 1952.

Nobody can deny that great headway has been made since those days. Nobody can deny the achievements of the Distribution of Industry and Local Employment Acts. Nor the achievement of my right hon. Friend the Secretary of State in this field. But the House does not want to listen this evening to statements about what has been done already. It is rightly concerned about what can be done next, what further steps can be taken in the light of this Report to carry us into the next stage of our advance.

So I must try to outline the present state of play about the Report. To put it very broadly, there are three fields from which action can originate. First, the Scottish Council itself. It initiated the Report by setting up the Toothill Committee which made it. It has now adopted the Report, that is to say, it has accepted it as a basis for possible lines of action. To decide on which of the proposals for action to pursue and to launch such action it has set up a new Economic Development Committee under the chairmanship of Lord Pol-warth, with Mr. Toothill himself as vice-chairman.

This Committee's job will be to study the Report, to take steps in consultation with other interested bodies to get action taken on the recommendations which they approve, and, as time goes on, to develop further proposals which may arise out of its experience with these initial ones. We propose, of course, to keep closely in touch with what Lord Polwarth's Committee is doing and to give all the help we can. In many cases headway may best be made by the Scottish Council taking the initiative, with our support.

The second field is that of action within the immediate powers of the Secretary of State, that is to say, action by the Scottish Office. To guide and co-ordinate action between the four Departments within the Scottish Office, my right hon. Friend the Secretary of State has set up a steering committee which has been active since before the New Year.

Thirdly, there is action which may be taken by other Departments or interested bodies, or by such bodies in concert with the Scottish Office. Hon. Members, of course, realise very clearly that most of the recommendations cannot be followed up without having a direct impact on a very large number of interest both within and without our borders—other Government Departments, local authorities, trade unions, educational institutions and many others. Not only did my right hon. Friend the Secretary of State, as soon as the Report was published, tell his own Departments to start a careful and urgent study of the recommendations within his orbit of responsibility, but he asked other Ministers similarly to study other aspects of the Report which primarily concerned their Departments. Subsequently, work has been going on at the Departmental level. So much for the machinery.

I do not think there will be much difference of opinion about objectives. The Report sums the matter up succinctly by saying: The question is how to get the economy to the point where growth becomes self-generating". We have been striving to do this in our existing policies, and we have been making headway. We shall continue these efforts, and we shall work on the Toothill Report to see what improvement or intensification of these previous efforts we can achieve.

As I have said, some of the recommendations are controversial. We shall try to approach them with an open mind and judge them on their merits. I hope that everyone else will do the same. It would be a great pity if we set a sort of double standard in this matter, if people were to start selecting from the Report simply those conclusions which buttressed their previously adopted attitudes, automatically rejecting those which pulled in the other direction.

Mr. James H. Hoy (Edinburgh, Leith) rose—

Mr. Brooman-Whiie

I have only a few minutes.

Mr. Hoy

I know that the Minister has only a few minutes, and that is what is worrying us. He has not said a single word in reply to what my hon. Friend the Member for Glasgow, Govan (Mr. Rankin) said. Can he tell us what action the Government intend to take? We do not want to be told that the Scottish Council has accepted its own Report. We understand that. That was the purpose of it. What action do the Government propose to take?

Mr. Brooman-Wbite

I do not think that the hon. Member or any other senior Member of the House would expect, in an adjournment debate of this kind, a series of detailed comments on 81 specific recommendations in a Report such as this, nor would it give a proper sense of balance to single out certain of the recommendations, comment on them, and then, through lack of time and, indeed, lack of preparation in many instances, discard or ignore others which may be of equal importance. I agree that this is a matter to which we may well return. What I have been trying to do in this brief speech is to give an indication of the general lines of the Report as we see them for the purpose of future development, and of the machinery which has been set up. It is machinery which is operating, and from which we hope that decisions will flow when the Scottish Council itself has made up its mind on which of the 81 recommendations it proposes to proceed, and we have made up our mind and co-ordinated our views with other Departments about which of them we shall ourselves implement or what changes in existing policy or further co-ordination of existing policies are necessary and desirable.

As is said in the Report, the last thing we want is that people should reach to defend their records rather than see the opportunity of doing things together to achieve the break-through that is desired". We accept that. We think that we have a good record to defend, but that is not the point. If we do not dig in to defend our perfectly defensible positions, if we do not take that approach and do not seek to use the Report to buttress what hon. Members opposite may regard as our particular prejudices, it is only fair to ask that, in return, they should not use the Report to try to buttress their prejudices. We want to use the Report as a basis for having a comprehensive reappraisal of Scottish development and trying to bring a new impetus into that development. I am sure that that is what the people of Scotland want us to do—

Mr. William Ross (Kilmarnock)

They want action.

Mr. James McInnes (Glasgow, Central)

They want jobs.

Mr. Brooman-White

—and that they will be prepared to face any practical difficulties or disturbance of preconceived ideas which may arise in the course of so doing.

11.25 p.m.

Mr. James H. Hoy (Edinburgh, Leith)

This is the most disappointing reply that we have ever had in this House. Over 85,000 people are unemployed in Scotland. That is a measure of the success of the Government's effort in the economic life of Scotland. It was to that state of affairs that we expected the Under-Secretary of State to reply. The responsibility to take action lies with the Government and not with the Scottish Council (Development and Industry). We are grateful to the Council for its Report and the information which it has collated and presented, and for anything that it has done, but that does not absolve the Government from responsibility. It is to that aspect that the Under-Secretary might have devoted the quarter of an hour that my hon. Friend the Member for Glasgow, Govan (Mr. Rankin) allowed him in which to reply.

At least, the Under-Secretary should have had a preliminary plan to offer Scotland and should have said what action the Government propose to take. Instead, he has merely told us that the Scottish Council (Development and Industry) has held a conference and accepted its own Report. We did not expect it to do otherwise. We wanted to know what action would arise as a result of it.

The Minister should have said that in view of the picture which has been painted, the Government had, not necessarily made up their minds, but would proceed along certain lines of action to relieve the situation. What faces Scotland is that—

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

Adjourned at twenty-six minutes past Eleven o'clock.