FORT WILLIAM PULP AND PAPER MILLS BILL

HC Deb 10 April 1963 vol 675 cc1377-436

Order for Second Reading read.

8.17 p.m.

The Parliamentary Secretary to the Board of Trade (Mr. David Price)

I beg to move, That the Bill be now read a Second time.

As my right hon. Friend the President of the Board of Trade explained last Thursday in the Committee of Ways and Means, the purpose of this Bill is to empower the Board of Trade to lend up to £10 million to Wiggins Teape and Company Limited for the construction of a pulp mill and a paper mill near Fort William. The Bill lays down certain conditions for this loan and empowers the Board of Trade to negotiate the other conditions with the company.

Wiggins Teape and Company Limited is one of the three largest paper companies in Britain, owning over 30 mills and factories in this country and with subsidiaries all over the world. The Fort William project is the culmination of a number of years of planning by the firm and by the Forestry Commission.

The undertaking will be a large-scale fully integrated mill, the only one of its kind in Britain, going right through from the wood to the finished paper. It will draw its supplies of softwood from the Scottish forests to a radius of over 100 miles from Fort William. By taking advantage of the Scottish timber in this way the mill should be well placed to compete with producers in forest countries which operate fully integrated mills based on large supplies of indigenous timber.

The construction of the mill will be in two stages. The construction of the first stage will begin immediately and is planned to come into production by the end of 1965. It will consist of a pulp mill producing about 80,000 tons a year of bleached chemical pulp and one paper machine using half of this pulp for the production of medium-weight papers.

At this stage, the remaining output of pulp will be sold within the Wiggins Teape group and to other paper producers. For the second stage, which should be reached sometime in 1968, the company will install a second paper machine which should come into production in 1970 and which will then effectively absorb the second half of the pulp mill's output. The whole project is estimated to cost about £19 million to bring into production, inevitably there must be a slight speculative element in the forecasting of costs towards the end of the period, depending upon our success as a nation in maintaining the current values of our money. But the commitment of public money is not open-ended.

The process which will be used is the very modern Stora process which has been developed in recent years by a Swedish firm. It is used in two large Swedish mills and in a new Canadian mill, and is just being installed in a French mill. It has a number of advantages over the so-called Kraft process normally used in pulp mills; for example, high yield, adaptability to all species of timber, full recovery of the chemicals for reuse and absence of air pollution. The latter feature is particularly important in that it should ensure that the mill is a "good neighbour".

In full production the pulp mill will use about 12 million hoppus feet of timber a year. If there is any hon. Member who does not know what a hoppus foot is, I will explain that it is a measure of timber. In the vernacular, one could say that it squares the circle and that one hoppus foot is 1.273 cubic ft. Four million hoppus feet will be imported hardwood and 8 million will be Scottish softwood, most of it from the Highland development area. It is planned to bring most of the imported hardwood direct by sea, up Loch Linnhe to the mill where a jetty will be built. Practically all the chemicals needed for the mills will be available in Britain; the main digestion chemical will be sodium sulphite. Much of the pulping equipment will have to be bought abroad, but the paper machines and most other equipment for the paper mill will be bought in this country, and so will the boilers. The total cost of buying the Stora machinery is estimated at £2 million, but everything else will be bought in this country.

A modern pulp and paper mill is not a major employer of labour in relation to its capital cost. This mill will employ about 750 people to start with, rising to about 1,200 by the early seventies. But the undertaking will create in the forest and in the transport of the timber even more jobs than those created in the mill. Fort William itself is not a district where there is heavy unemployment but these jobs will be filled very largely from development districts in Scotland and especially from the Highlands.

Furthermore, this project will undoubtedly bring additional employment to the area in the fields of commerce and of personal and community services. It is impossible accurately to quantify the further employment which is likely thus to arise. When one considers what the annual wage and salary bill for 1,200 employees may amount to—say, £2 million—one gets some idea of the multiplier effect of this project upon the economy of this area of the Highlands.

When Wiggins Teape and Company approached the Government with a request for a loan for this project we decided that a thorough investigation of the project was necessary. With the full co-operation of the company, the Board of Trade's accountants have made a detailed study of the capital cost of the project and of the estimates of costs of production, level of demand, prices and profits. On the basis of their report the Government are satisfied that the commercial prospects are good. As my right hon. Friend told the Committee of Ways and Means last week, there are strong economic arguments in favour of an up-to-date and fully integrated pulp and paper mill in this country.

The Fort William site has been chosen as being the best possible. The timber is immediately available and supplies coming forward will increase steadily over the next few years as the mill becomes established and gradually builds up to full production. Rail facilities are there—[Laughter.] Wait for it—although the project includes building new facilities at Crianlarich for handling timber. Crianlarich will be used as a railhead for the collection of timber from the forests of Argyll and Perthshire. To help the flow of material to the mill, the Forestry Commission will accelerate its programme for the construction and improvement of the forest roads within the area of supply.

There is the necessary supply of fresh water, which is an extremely important factor in the siting of a mill of this sort, and facilities for disposing of the effluent. There is a good deep-water anchorage. As for sales prospects, there has been a steady upward trend in consumption of all types of paper planned to be produced at Fort William and all market forecasters indicate that this upward trend will continue. Estimates indicate that this mill's output should be fully competitive in costs with imported paper. The Government are satisfied, therefore, that, regarded purely as an industrial enterprise, this project is soundly based.

I have confined myself to the industrial and commercial aspects, but these are not [he only consideration, of course. The jobs created in the mill, in the forests and in transportation will draw back to this district labour which it has been losing. It will be the source of new economic activity which the Highlands need. The Forestry Commission `s operations and those of private forests in the Highlands will benefit greatly from the new demand created by this project. My right hon. Friend the Secretary of State for Scotland, who is to wind up the debate, will be speaking more fully of these.

Mr. Malcolm MacMillan (Western Isles)

On the subject of labour and employment, in view of their interest and the substantial help which they are giving to this firm, are the Government to lay down any sort of conditions about the firm employing labour from the Highlands area itself as far as is possible? This has been done in other cases. Is it being done in this?

Mr. Price

I cannot give the hon. Member a categorical assurance on that, but the firm intends to employ labour from the Highlands. It will be appreciated that a number of skilled technicians will have to be employed and may have to come from elsewhere, but, so far as possible, labour will come from the immediate district.

However, it is obvious from the numbers involved, and from the ancillary employment which will arise, that it will also have to come from a good deal further afield than the immediate Fort William area. I understand that the firm is already receiving applications from natives of that part of the Highlands who wish to get jobs because they would like to return to the Highlands, which is something which the House will welcome.

Mr. Archie Manuel (Central Ayrshire)

I agree that this is very important, but is any proportion of the loan, or grant, being devoted to augmenting the provision of houses in that area? The local authority concerned is a small one, and obviously could not do the job off its own bat. Will the firm help in this aspect of the project?

Mr. Price

I understand that the firm has come to terms with the Inverness-shire County Council. My right hon. Friend would rather give the details himself, because he will go into the wider implications for the social infrastructure of the area consequential on this project.

I turn now to the reasons why, commercially interesting as this project is, it is necessary for special Government help to be given to finance it, and, in particular, why this is being done by special legislation instead of through the medium of the Local Employment Act. As my right hon. Friend explained last week, this is a big project; it is a new type of venture, never before undertaken in the United Kingdom, which can be carried out only on a substantial scale.

To operate economically a pulp mill must be large and, though this is not one of the largest size as pulp mills go, it nevertheless requires a major investment of capital. As will be seen from what I have said about the timetable of this project, it also takes a long time to bring it into full production. The pulp mill and the first paper machine at Fart William will not be fully in production before 1966. We are hoping that it will start at the end of 1965, and during the early months of 1966 gradually build up to full production. The project is novel. The time needed to get it started is inevitably lengthy, and it requires a lot of capital.

The Board of Trade's accountants have examined the position very carefully and have been satisfied that, given the level of the company's resources and of its other commitments, it could not finance this very large undertaking without some Government help. We are clear that in the light of the commercial prospects of the undertaking and of the more general contribution it will make to the Highlands, it is right that this help should be given.

Mr. William Hamilton (Fife, West)

Can the hon. Gentleman tell the House in greater detail than the President of the Board of Trade did why the project is not being financed under the Local Employment Act? The motor car industry investments in Scotland are on a comparable scale, and yet they were so financed.

Mr. Price

The hon. Gentleman anticipates me by about 200 words. I was proposing to develop that further. We are satisfied that the Local Employment Act is not the appropriate instrument for this purpose. In determining how to exercise its powers under that Act, the Board of Trade is required to have regard to the relationship between the financial assistance that is required from public funds by any particular project, and the number of jobs likely to be provided by it.

We can all do the simple arithmetic. The Bill asks for £10 million. The number of people who will be directly employed at the end of the project is 1,200. That gives a figure of just over £8,000 of public money per job. The point about some of the other big projects is that, although they are big capital ventures, they are more labour intensive than this project in relation to the total cash outlay.

This is the major reason why this could not be financed under the Local Employment Act, and I assure the House that even given the amendments to the Local Employment Act which were forecast by my right hon. Friend the Chancellor of the Exchequer, and in respect of which the necessary legislation will be introduced, the amount of money that would be available to the company would be substantially less, in fact by about a factor of five, than the financial assistance which we are proposing the company should have if the House gives us the Bill.

Dr. J. Dickson Mabon (Greenock)

The hon. Gentleman having made that clear, will he also make clear why this is the only firm involved? He said earlier that this firm had applied for this project. I assume that no other firm applied so there must be reasons, either economic or technological, why Wiggins Teape applied for the project.

Mr. Price

If the House wishes, I would be happy to go back a little over the history of the project. As Scottish Members know, this has been discussed in the Press in Scotland for quite a long time. It is known that Wiggins Teape looked into this project a long time ago.

Mr. George Lawson (Motherwell)

How long ago?

Mr. Price

Over ten years ago. The firm did not reckon, at that stage of forestry development, that the timber was available on a sufficient scale. The project was then re-examined and it was shown that a small-scale mill which was originally talked about would not be economic. This is one of many cases in modern production where one does not go up on a smooth curve, but in a stepped curve, doubling and quadrupling the sort of economic minimum that is reckoned can be worked—

Mr. Manuel

Like I.C.I.

Mr. Price

The hon. Gentleman has the point.

Originally, other paper companies were involved in this matter. But they withdrew when it became clear that the amount of timber available would be sufficient only to maintain a medium-sized pulp mill if it were to be integrated with the production of paper and board, and also that the types of paper to be manufactured in the paper mill were attractive principally to the firm which has gone ahead. The types were in the middle ranges of paper, carbon paper and ordinary white paper. The company concerned was most interested in producing this range of paper and the other companies dropped out because it did not appear to them that there was room for them all from a technical and commercial point of view.

Given this situation, and given what, in our view, are the special social features of this project, we decided that the proper course was to ask the House to consider this an exceptional case justifying special legislation.

Mr. Emrys Hughes (South Ayrshire)

The hon. Gentleman has referred to an exceptional case. Does he know anything about certain negotiations and the prospect of a similar mill in the south of Scotland?

Mr. Price

Rumours have reached me. But I do not think that they are particularly relevant to the argument which I am deploying tonight. We have no objection to firms within development districts—presumably they would get local authority planning permission—putting up paper mills, if they think that those mills would be successful. But this case has particular and very special features.

Coming to the Bill itself, the total amount of public money which we are seeking authority to lend is £10 million. We are not seeking lending powers beyond the end of 1972. In fact, the intention is that up to £8 million will be lent for the first stage of the project. That is for a pulp mill and the first of the two paper mills. This amount will be lent during the next two to three years. The remaining £2 million is intended for the second stage of the project, whose construction is expected to begin in 1968. It will, however, be lent only if, at that time, the Board of Trade is satisfied that the company needs further Government money to complete the project in the light of its financial position.

The Bill goes on to provide that the rate of interest is to be 5½ per cent. But it empowers the Board of Trade to make grants to the company in respect of interest falling due up to the end of 1966. That is up to the end of the period of the build-up of the first stage of the project. Our purpose is to make the £8 million to be lent for the first stage of the project free of interest during the years of construction and running in. The reason for empowering the Board to make grants in respect of interest, instead of simply providing in the Bill that there should be an interest-free period, is that the waiver of interest is, of course, equivalent to giving a subsidy of the amount of the interest that otherwise would be paid.

It was thought right that this subsidy element should be quite clearly disclosed in the Bill. There will, of course, be no actual payment of interest by the company, and balancing payments of grant by the Board of Trade, during this period. Only bookkeeping transactions will be necessary. But the effect will be that the subsidy element will be clearly disclosed to Parliament in the Estimates. The actual amount of grant needed will depend on the exact timing of the company's drawings on the loan. The figure of £1,300,000 in the Bill is a long-stop. The actual figure may well be considerably lower.

The Bill goes on to provide that the other terms of the loan may be negotiated between the Board of Trade and the company and that the resulting agreements will be laid before both Houses of Parliament. Thus, at a later stage, the House will be fully informed on all the detailed aspects of the loan. Clearly, it is not possible for any agreements to be made before the Bill has become law. But the terms of the loan have been discussed with the company and I think that it would be useful if I indicated to the House the broad lines of agreement which seem likely to emerge.

It seems likely that the repayment of the loan will begin at the end of 1968 and will take place over ten years on an annuity basis—that is to say, there will be ten equal annual payments including repayment of both capital and interest. This method is familiar as the normal way of repaying a house mortgage. While this is still under discussion it seems likely that the amount of the loan will be secured by a fixed charge on the Fort William premises themselves and that the Board of Trade will take a debenture on Wiggins Teape and Company.

There is one other point with which I should like to deal. During the course of the Budget debate last week it was suggested by the hon. Member for Cardiff, South-East (Mr. Callaghan) that this was another illustration of the way in which private enterprise was failing to do the job in the Highlands, and that since the Government are intervening to lend money for the project they should take a share in the equity. [HON. MEMBERS: "Why not?"] I do not at all agree that private enterprise is failing to do this job. On the contrary, I think that what I have said earlier makes it clear that this is an extremely enterprising and forward-looking undertaking.

For special reasons which I have explained, it is not within the firm's resources to finance this very large mill entirely unaided over the considerable period which must elapse before it is earning. But the fact that the Government feel themselves justified in making a comparatively short-term loan is not, in our view, any ground for seeking to play a permanent part in the company's affairs, which cover a very much wider field than the Fort William mill.

Mr. Cyril Bence (Dunbartonshire, East)

May I ask whether this company has made any attempt to go into the market for the money?

Mr. Price

We were quite satisfied that the company would not have been able to raise the necessary money.

I hope that I may have persuaded hon. Members opposite to my way of thinking on this issue, but, even if I have not, I feel sure that both sides will agree that this project is worthy of our support, first, because it pioneers a fully integrated, large-scale and competitive pulp and paper mill in Great Britain, and, secondly, because it brings to the Highlands what we trust will be a new and permanent centre of prosperity of a substantial order. Tonight, we are not merely legislating about a pulp mill and a paper mill. We are bringing new opportunities to the Highlands.

For many generations now some of the best sons of the Highlands have had to leave their homes to earn their living. The flow of brains, courage and ability from the Highlands has been the Highlands' loss, but it has also been Britain's gain. One can go further and say that it has been the world's gain.

I like to think that in approving the Bill tonight we in this House are doing something material to pay back that debt which the remainder of Britain owes the Highlands. As the son of a Highland officer, I am honoured to propose that the Bill be given a Second Reading.

8.44 p.m.

Mr. William Ross (Kilmarnock)

There is no doubt that the establishment in Scotland of the first integrated pulp and paper mill has already received a resounding welcome in Scotland, and that welcome will be echoed from this side of the House as well as from hon. Members opposite. There are three reasons for that. The first is that it will be using our indigenous resources of timber, resources which have been built up and husbanded over 40 years and longer by the Forestry Commission and State forests, and by private woodland owners, too—with, of course, generous support from the Treasury. If the Minister doubts me, he will find proof in the Estimates—at the moment £1¼ million a year.

I remember a debate of four years ago in which the view was expressed very forcibly by my hon. Friends that there was a certain measure of urgency about what we were to do with our timber. In other words, we grow timber to use and to sell. I remember the Secretary of State for Scotland, at a time when he made more speeches than he makes today, making this point in the Scottish Grand Committee. It was said that we required to secure markets for the increased output of both thinnings and mature timber.

There is the very serious matter of the fall in population in the Highlands and all the forestry areas. It seems to go with forestry that forestry has come in after the men have gone. To see industry now creeping back to the Highlands should be welcomed by every Scot in the House. We have, at tremendous expense, a point which I shall discuss later, a new growth point. We hope that it will not end with the pulp and paper mill. We hope that it will go on. I hope that other industrialists will note that certain people are not worried about the relative distance from what they consider to be their markets.

It will also have an effect upon local wages outside the pulp mill. It is shocking to realise that the basic wage in forestry for the people who do the original and hard part of the work in Scotland at the moment is about 172s. a week. As the Secretary of State knows, the rents of these workers are very much higher than many other rents in the area, certainly higher than those of agricultural workers. The right hon. Gentleman mentioned this point before he was converted to the idea that the salvation for Scotland lies in raising the rents.

While our immediate congratulations are due to the Chancellor on his sensible decision and prudent expenditure, there are others who merit our thanks. The last few generations of Forestry Commissioners toiled on despite the set-backs they experienced in 1932, when the Tory Government of the day decided to cut back on expenditure. It did not matter what kind of expenditure is was. Millions upon millions of young plants were burned. We could have done with that timber today. The Secretary of State will find this fact set out in the Forestry Commission Report of 1932.

There was a very considerable loss, certainly at national need, during the war. We should recollect the decision taken in 1943 greatly to expand over a long period the build-up not only of reserves but of resources of timber so that near the end to the extent of one-third of the timber we of this century we should be self-sufficient require. One man who deserves considerable credit for this is an ex-Secretary of State for Scotland, Tom Johnston. He not only continued this work but he also made possible by his concentration on building up the power supplies of the Highlands through the Hydro-Electric Board the fact that we are able to have this mill. We could not have a pulp mill without the power which will come from the Hydro-Electric Board.

All those who sneer at nationalised industries, including the Glasgow Herald, which has talked about the unbusinesslike ramifications of nationalisation, should remember that it is nationalised power which will make this possible. It is the nationalised Forestry Commission and the over-subsidised private owner. More thanks are also due to Dr. Beeching, who has laid aside his preoccupations with profitability and said that this line will stay.

It is worth considering what would have happened had Dr. Beeching been in his job a year earlier? We have public enterprise in the raw materials, the power, the haulage of the goods and in the financing of it. When we suggest that there might also be a certain measure of public responsibility in the control of it we are told, "Oh no". Where is the Liberal Party tonight? What about its ideas on co-ownership? It is only a fortnight ago that we had another bit of nationalisation in the transport industry of the Orkneys; but I must not get out of order in pursuing that matter. Nevertheless, I think that the Leader of the Liberal Party might have graced us with his presence.

In this case Dr. Beeching has spared the line, so that the woodmen can get on and they need not spare the trees. I hope that the Secretary of State appreciates that because we got this response on this railway line we are able to achieve this changed location of industry. He will, therefore, equally appreciate the relevance of the question put to him by my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes), because I do not think that this will be the last of these special Measures. I certainly hope it will not.

In this connection, I believe that the Town Council of Girvan has been doing a bit of visiting and pressure grouping about what we hope will go to the south-west of Scotland, perhaps to Girvan. I am sure that the hon. Member for Galloway (Mr. Brewis) will wish to put forward some ideas, particularly about the railways there—that is, if he can persuade the Minister of Transport to put the axe on Dr. Beeching in relation to the line in that part of the world. Hon. Members generally should consider the effects of Dr. Beeching's present and, perhaps, future plans for the whole of Britain because I know that other hon. Members have constituency interests in other pulp mills in other parts of the country. For this reason we should not be entirely denuded of the possibilities of getting the goods to the necessary places because of the lack of transport.

Having handed out the prizes I trust that I will not be accused of churlishness if I look the gift horse in the mouth. We should remember that this is an expensive gift we are making. We all want it done and it will be done; but should it be done in this way? It is certainly not the only way it might have been done. The firm could have built it themelves. I believe that it has 47 subsidiaries, mills all over Britain, some of them in Aberdeen. The company has mills all over the world—in Pakistan, Rhodesia and elsewhere—and has an authorised capital of £25 million. I am sure that the company could have raised the money in the City, although it would probably not have got as reasonable a deal as it has got from the Government.

However, the firm decided not to do it that way—probably because it realised that the Government were anxious to rehabilitate the area and to secure a growth point there. Failing that, was there any real reason why we could not have gone into partnership with the firm? It is a realistic and reasonable company. This is obvious if one reads the brochure it sent to hon. Members. That document stated: It will, at least for one corner of a neglected land, dam the steady wastage of manpower to the south and overseas". Thus we realise that it is a realistic and progressive company—and that it knows the Government for what they are. That "one corner of a neglected land" is, of course, the land over which this Government have had full dominion for the past eleven years.

We might well have gone into partnership. I am perfectly sure that a Labour Government would not have ignored the advantages of this company's sales organisation and industrial know-how, but I do not think that our financial conditions and terms would have been exactly the same. I am sure that this country might have accepted partnership. Was that even considered? We are entitled to know.

Everyone is enthusiastic about this being the right thing to do, but let us remember that, as the hon. Gentleman has said, there were four starters but only one was left by the end of the race. Suppose there had been none—what would the Secretary of State have done then? This is where we differ from the party opposite. We say that in such a case there must be public enterprise, as there is in every other aspect of this project. We could have gone the whole way in public enterprise.

This project is so important for Scotland, and for this part of Scotland in particular. That is our whole argument in relation to bring industry to Scotland and giving the neglected land, as Wiggins Teape describes Scotland, valuable help. The State contribution is £10 million, and there is to be this £1¼ million to cover the interim period to 1967. This may be a novel project, but it is not a novel Bill—it is familiar. The Cunard Measure was exactly the same, and I hope that Scotland will fare a little better out of this Measure than we did out of that last one, of exactly the same kind. There was a grant of £18 million to Cunard, made up, once again, of one part loan and one part to cover interest charges. I sincerely hope that we shall do better this time.

The Parliamentary Secretary is quite right in saying that the cost per job rules out the Local Employment Act, but that is just one of the other weaknesses of that Act—that in order to do a necessary job we have to come constantly to Parliament for special legislation. I hope that he learns that lesson. And when he is worried about costs per job, let him remember his last decision in regard to Kilmarnock, when he wrote me a really delightful letter which stated: Our advice was that in view of the relatively high present rate of unemployment in the Kilmarnock area the company would be likely to obtain most if not all of its workers, from the Kilmarnock group of Employment Exchange areas. This being so we have no powers to accept an application. We have too high a rate of unemployment in the area, so we cannot get help, not of £10 million but of barely £10,000. However, we have not to judge this enterprise by the cost per job but by what it does to this area and to other areas.

Let us appreciate that this mill will probably denude still further many parts of that very Highland area. Do not let us under-estimate the task of getting an extra thousand people, perhaps 2,000 people, into the Fort William area. It means that certain other parts of the Highlands will be further denuded and the Secretary of State will have a greater problem than ever before. Much of the labour will be in forests far from Fort William, but we must not close our eyes to the still further need for industry—indeed, industries based still on the products of our forests—in these other areas far from Fort William. If the hon. Gentleman thinks that the public investment stops at £10 million he is quite wrong—it only starts there.

Let us not minimise the difficulties. The Scotsman carried this comment from Dr. Frankel, the chairman of the new company: More work will need to be done on the roads. Getting them into shape will cost as much as the mill itself. Mr. T. Y. Gibson, who is also connected with the firm and is also on one of the advisory committees to the Forestry Commission and, therefore, is not entirely ignorant of the position, said: Unless there is a new approach to the road making, I do not know how we are to get the timber into the mill. Who will pay for the road making? It will not be Wiggins Teape. The local authorities will pay for the public highways and the Forestry Commission will pay for the forest roads.

A community of an additional 1,000 to 2,000 people cannot suddenly be built out of nothing. This will mean tremendous expenditure by the local authority. The Secretary of State for Scotland nipped round that one quickly by giving it to the Scottish Special Housing Association. I hope that the right hon. Gentleman will nip round the rent question as well. There will be tremendous local expenditure on the roads, housing and schools, and the regional hospital board will have to spend on hospital services.

This is all the more reason why we should have an element of responsible partnership, because the prosperity of the whole area will depend on this one firm. A decision by the firm can cause blight. My hon. Friend the Member for the Western Isles (Mr. Malcolm MacMillan) knows that there was one firm which was to have established a large-scale industry in the Highlands. It failed. The Economic Secretary to the Treasury told us the other night that one reason why the Government did not take equity shares in this venture was that there was an element of risk. If there is an element of risk, it is blight. This makes it all the more desirable that there should be a partnership, and parliamentary responsibility, not for day-to-day management but on questions of policy.

I should have liked to have seen this great enterprise placed under a Highlands development authority. If the Secretary of State does not accept the need for such an authority today, he or some other Secretary of State will eventually accept it. This is the proper approach to the planning of the whole area. This is a pilot scheme which is important not only to the area but to the whole of Scotland. It is not the first scheme that we have had for the Highlands. It is slightly novel only in that it has come about 200 years after the last one.

This is not the first London company which has taken an interest in the Highlands. It was in 1719 that the Governor and Company of Undertakers for Raising the Thames Water in York Buildings, whatever they were, decided to purchase forfeited estates in the Highlands. One of the estates leased was the Abernethy pine forest of Sir James Grant of Grant. The company set up sawmills and an iron foundry. It had 125 working horses dragging trees to the banks of the Spey. The trees were floated downstream to establish an industry. It has taken 200 years to do anything like it again.

I sincerely hope that this venture will be the success that it deserves, and which this part of the country certainly needs. Let us not minimise the difficulties nor maximise them, but let us appreciate that apart from the prosperity which the scheme can bring to the area there is, above all, a lesson in it for other pans of Scotland. I hope that the Secretary of State for Scotland, who has shown his interest and his knowledge of this subject in the past, will not stop and be satisfied with this. The forest areas of the south and south-west of Scotland, too, will require a mill, be it a pulp mill or a paper mill.

I sincerely hope that, in giving a welcome to this Bill, we can look forward to the next one very soon.

9.5 p.m.

Mr. Simon Wingfield Digby (Dorset, West)

The hon. Member for Kilmarnock (Mr. Ross) has spoken a little of the needs of forestry, and I am very glad that he has. He said that there was a lesson in the Bill for other parts of Scotland. My theme will be that there is a lesson in it for other parts of the United Kingdom, too. My reason for intervening in the debate is that I regard the Bill as in some ways a forerunner of what we hope will happen in other places. Indeed, I wish that the Long Title had been a little wider in its terms.

Fort William is a long way from Dorset, rather too far for Dorset to draw any benefit from this new scheme, but I should be the very last to begrudge the Highlands any financial benefit. I have spent too much of my life there and seen its needs too plainly to feel otherwise. However, I should like to think that we can regard this scheme in a wider context and see what lesson there is in it for other areas of the United Kingdom. My hon. Friend the Parliamentary Secretary spoke a great deal about the Local Employment Act, and, of course, it is very important at present, but there are many rural areas in the United Kingdom which could well do with a new industry of this kind.

The hon. Member for Kilmarnock dealt at some length with the principle of giving a loan to this firm and having an element of subsidy. I personally approach anything of that kind with some caution. I do not pretend to understand exactly what is proposed in the Bill and how big the element of subsidy will be. However, in any case, I am very glad that someone has been found to establish a big mill of this kind in a part of the United Kingdom, and a part which needs it very badly indeed. I am very glad that the railroad to Mallaig has been saved. It is, I suppose, really the "Iron Road to the Isles". I only wish that someone would come to my constituency and stave off Dr. Beeching for a few years.

The Bill is of great interest to areas such as mine where the forests are, perhaps, less concentrated than they are in Scotland. It is important, particularly, because of the growing problem of forestry output in this country. There is a very large public commitment in forestry and there is a considerable private one. The thinnings are coming along very fast, and the problem of marketing is real.

It is often forgotten that the United Kingdom has the lowest forest area of all the countries of Western Europe and that we now import 90 per cent. of our timber requirements. The hon. Member for Kilmarnock talked of a day when we should have to import only one-third of our requirements. I wish that that day were very much nearer than it is.

Mr. Ross

Two-thirds.

Mr. Wingfield Digby

Two-thirds—I am sorry. One striking fact is that the vast imports of foreign timber which we make do not always redound to the advantage of our own exports. We have an unfavourable trade balance, so far as one can determine it, with the four countries which send us most timber, Canada, Sweden, Finland and Russia. We certainly have an unfavourable balance of visible trade with three out of the four. With Canada we have an unfavourable balance already of £154 million. With Finland it is £33 million. With Russia it is £26 million. So it cannot be said that we derive advantage for our own industries by taking these prodigious imports of their timber.

Some of the imports come in the form of raw timber, but more and more are coming in finished products. The E.F.T.A. Agreement will probably make this problem worse. Therefore, the disposal of our own forest production is of economic advantage, a fact which has not been mentioned very much this evening. These four countries alone send us imports of timber worth £141 million, which is a considerable sum at a time when we are always considering our balance of payments.

Woodland output in this country has grown and is growing. The Forestry Commission is planting about 60,000 acres a year and people with private woodlands have planted no less than 345,000 acres since 1946. At present, prices are low and many of the traditional outlets for forest products are no longer open or are diminishing. I think specially of railway wagons in respect of which the demand for second-rate oak is going down very rapidly. The demand for pitprops is declining. The National Coal Board is a rather tough bargainer when it comes to buying home-grown timber for that purpose. The demand for sleepers is declining.

Mr. Bence

Good old Beeching.

Mr. John Brewis (Galloway)

Is my hon. Friend aware that nothing but Scottish timber is used in coal mines in Scotland?

Mr. Digby

I am delighted to hear it. I only wish that that were the case in the whole United Kingdom.

There are other ways in which this timber will be valuable, because the need for timber in Europe as a whole is increasing. It is estimated that there will be too little timber in Europe for the needs of Europe as a whole in about ten or twenty years' time.

Mr. Deputy-Speaker (Sir Robert Grimston)

Order. I am sorry to interrupt the hon. Gentleman, but I think that he is beginning to stray a little far from the Fort William pulp and paper mill. Perhaps he could indicate how what he is saying is related to the Bill.

Mr. Digby

I apologise, Mr. Deputy-Speaker. I am trying to show the need to find an outlet for this timber. This mill will find an outlet for a very large amount of timber in the north of England. But in other parts of England the outlet is less secure, and there will be a surplus of this timber unless we are careful.

Mr. Ross

With all respect to the hon. Gentleman, Fort William and Scotland are not in the north of England.

Mr. Digby

I beg the hon. Gentleman's pardon.

Some areas like the Fort William area are suited to a really large mill like a paper mill. Some years ago Canadian experts reported on the use of timber for pulp mills and hardboard mills. Their two excellent reports made clear that a very large forest area was needed in order to establish a pulp mill of the kind we are discussing. My contention is that there are also grounds for establishing more hardboard and chipboard mills. Some of these are in existence already. Hon. Members saw one at Brandon, in East Anglia, not very long ago and were impressed by it. In order to get more of these mills established, help and interest are necessary from the Board of Trade and the Government, and that is why I welcome their action today.

I do not know the details of this particular scheme, but I believe that it is a step in the right direction. I only wish that the Bill took rather wider powers and did not relate to a single place and a single firm.

9.14 p.m.

Mr. A. Woodburn (Clackmannan and East Stirlingshire)

My hon. Friend the Member for Kilmarnock (Mr. Ross) delicately pointed out to the Secretary of State for Scotland and to the Parliamentary Secretary to the Board of Trade that they must not be satisfied in thinking that they have done everything necessary for the development of industry in Scotland.

I propose not to follow my hon. Friend's hints, but to turn to the rather broader aspect of this problem and to consider what this mill means to Scotland. I welcome it unreservedly, for the reason that I am very glad that the Government have at last done something to show that what they do for the Colonies and for Malta can be done for Scotland: in other words, that the Government are prepared to put money into Scotland to stimulate private enterprise.

We have always taken the view that we are not against private enterprise doing the job in the Highlands. Tonight, in fact, the Secretary of State, the President of the Board of Trade and myself agreed to a development area being established in the Highlands for the very purpose of inducing private enterprise to come there. We have always taken the view that the simplest way of getting development is to start with private enterprise. If private enterprise does not come in—and it has not done so very much until now—we have taken the view that public instruments such as the Forestry Commission and the Hydro-Electric Board should be used to stimulate industry in the Highlands. If all these fail, the State itself has a duty to maintain the population in that part of the country by putting industry there.

I quite agree that to find a ready-made agency such as the firm in question to go into the Highlands is the simplest way, because it has its marketing arrangements, the scheme fits in with its already-established business and this is the quickest and simplest way of getting it done.

I cannot work up any passion about an interest rate of 5½ per cent. being easy money. If I had had to borrow the money to build my house at 5½ per cent., I would have felt that I was being "sweated", even by the local authority. We take exception to these high rates of interest, because they are one of the handicaps against anybody starting business in the Highlands or anywhere else.

My hon. Friend the Member for Kilmarnock forgets, I am sure, that we are partners in this industry. If it makes profits, the Chancellor will take 50 per cent. of them. Therefore, if it makes profits, we shall share in them. This firm is nationalised, but does not know it. Nowadays, the distinction between private and public enterprise is a great deal of nonsense. Hon. Members opposite should give up all the humbug which they talk about private and public enterprise. Today, the country is a mixed economy, as the late "Nye" Bevan called it. It is working as a mixed economy and the State has a share not only in the financing, but in the profitability of every firm in the country.

There is no reason why we should not get a bigger share, but I am quite willing to be generous to get firms into the Highlands. I am quite willing that the Government should spend a little more money on them and a little less on Cunard aircraft and other enterprises which are not necessary. No objection is raised when this kind of thing is done down here in this part of Britain. We can allow the Government to be a little generous, and even extravagant, if they are bringing industry into the Highlands.

That is tremendously important. In the past, when the trees left the Highlands, the people left the Highlands. When we were the Government, after the war, we were convincd that the one way to get the population back to the Highlands was to bring back trees to the Highlands. When we start planting a forest such as the Forest of Ae, we establish a village for the workers who will plant the trees. By the time the trees are 20 years old, the families of the foresters in the village are growing up and work is already waiting for them in the thinning of the forests twenty years after their fathers have planted them. A forest automatically creates work for generation after generation. This is one of the most hopeful things ever to have happened to the Highlands. If we can go on planting trees, we will make it possible for more and more people to live in the Highlands.

It is true that this project will involve roads. I have no worry whatever about who will pay for the roads. I was pleased that the hydro-electric people came in and had to build roads. I will be quite pleased if the Forestry Corn-mission has to build roads. So long as the Highlands get roads, we will get arteries on which the Highlands can live. If the new project brings roads, we will welcome them. Somebody will have to pay for them, and I hope that it will be the Government, through the local authorities, rather than leave it to everybody else.

One of the advantages of Fort William is that it does not altogether depend upon roads, because trees can be brought by sea. A great number of them, as well as the hardboard, will be brought in. If there is any failure in our own timber, it is almost as easy to bring timber from Newfoundland to Fort William as from Ross-shire or even Ayrshire. Therefore, this is a very good place for such a mill. It need never run short of timber because timber can come by sea, as some is already destined to come. I hope that the project will be a great success and will carry the prospect of a greater development of forestry.

The Labour Government, after the war, were so convinced of the importance of forestry that a programme of fifty years' planting was established for the Forestry Commission and private woodlanders. Here again, there is a combination of the community and private woodlanders. I pay tribute to private woodlanders. Most of our knowledge of the science of forestry arises from the fact that in the past rich men made a plaything of growing forests; they loved trees and experimented with them in the Highlands for generations.

As my hon. Friend said, these people are very generously treated by the State to encourage them to continue with tree development, but it is a very important contribution to the general realm of forestry. We sell them the seeds and also the trees. The Forestry Commission grows the plants and sells them to private woodlanders, who thus become agents for the growing of forests.

Mr. Brewis

Would it not be fair to say that Wiggins Teape also brought to the project 200 years of experience of paper-making, which was very valuable?

Mr. Woodburn

The hon. Gentleman is taking a ready-made instrument instead of having to establish it and gain experience. It is very useful, and one does not want to throw away skill and enterprise. If we were doing it ourselves, we should still have to bring in people with experience and skill. Whatever may be the agency—a nationalised board or a firm—it is a matter of convenience and not of principle. All the contest about nationalisation is the biggest bogy that eve' afflicted British politics. I wish that we would stop it and get on with the common sense of the business and help to develop Scotland.

Mr. Manuel

My right hon. Friend is talking to hon. Members opposite.

Mr. Woodburn

They have humbugged themselves and everybody else for a generation. Every General Election has been fought on this nonsense. A former Secretary of State for Scotland started nationalising shipping just after he had won a General Election by opposing nationalisation.

One or two problems arise about which I want to ask questions. Reference has been made to sawdust, a very great byproduct. One of our problems during the war was to discover what we could do with sawdust. The Germans devised a process to combine it with certain byproducts—nitrate, I think—from munitions manufacture and turned it into a food for animals. I do not know whether such experiments will be conducted in Scotland, but it is important to get the Department of Scientific and Industrial Research to go into the problem of what we can do with the sawdust. I should like to know whether it is capable of being used in the pulp mill, or, as it is sawdust, has the fibre been destroyed so that it can serve no useful purpose in the mill? This is a problem which should be tackled.

The Parliamentary Secretary said that we should get plenty of fresh water. But how long will it be fresh after the mill has been established? Some of my hon. Friends and I live on rivers where the salmon have been completely wiped out by the pollution from paper and other mills. Is the whole of Loch Linnhe to be polluted? What will happen?

Mr. D. Price

I can give the right hon. Gentleman an assurance on this point. This is one of the advantages of the new Stora process as against the Kraft process. The Kraft process gives a great deal of effluent and air pollution. I shall be happy to write to the right hon. Gentleman about the slightly more technical details which I feel it would not be appropriate to give here. I can assure him that the local objections which arose when the idea of a paper mill was first broached have been satisfied, and I understand that even the fish in Loch Linnhe are reasonably content about the project.

Mr. Woodburn

If we could get the German process we might convert it into food production.

Is all the quality timber to be eaten up by this mill? There is beautiful quality timber there. One of my projects was to establish a Remploy factory at Cannich, in the middle of a huge area of forest, to produce furniture. Could we not approach Sir Isaac Wolfson, or someone else who has a good market for furniture, to see whether he would take a furniture factory to this area?

This project is only a growth point and we want it to grow still further. This will be a centre from which other industries could spread out, using the timber of the forest. Certainly, quality timber could be used for furniture and other products. I believe that larch is used for bobbins in mills and there are certain side products of timber.

Then there is the possibility of developing industries for women. If one is to have a population of men working in this factory one must provide industries for the women. I had an arrangement—[HON. MEMBERS: "Oh."] I think that most men have—which I thought would come to success. This was with the Wilton carpet firm, for these carpets are capable of being made domestically. This is an area where there are sheep as well and, certainly, carpet manufacture would be a good ancillary industry. A man in Drumnadrochit developed a Celtic pattern and I understood that it could have been a success.

Perhaps the people of the Highlands will develop a passion for the factory hooter, which they have never had before. An Indian maharajah once saw a crowd rushing along the street to the sound of a whistle. He thought that this was magical, for he had great difficulty in getting people to work in the morning. It seemed to him that all one had to do in this country to get them to work was to blow a whistle. People in the Highlands, however, have never experienced that whistle. Now that they are to get it, will they like it? They are now to enjoy what we call modern civilisation. Up to now, they have been content to hunt, fish and shoot even though this did not give them much of a living. But perhaps modern machines and factory life will draw them, and in that case the women should have a share in the prosperity.

I welcome this project. Like my hon. Friend the Member for Kilmarnock, I hope that the Secretary of State and the President of the Board of Trade will not feel too satisfied and will not grow weary of well doing. I hope that they will not think that the job is finished with this project. This is just a swallow which I hope will herald a little more summer for the Highlands instead of the wintry blasts from the Government and industry that the Highlands have experienced in the past. Perhaps here will grow a nucleus which will act as a magnet to attract other industries to it. I wish it every success.

9.30 p.m.

Mr. W. M. F. Vane (Westmorland)

My hon. Friend the Member for Dorset, South (Mr. Wingfield Digby) has spoken of this as being an enterprise that will clearly be of great advantage to this area. My hon. Friend has spoken, too, about it being not just a local issue, even though the Title of the Bill leads us to believe this. This is a very important national decision. I think that we in the House of Commons this evening ought to try to see it in its true proportion.

Large sums of money are involved, and that, in itself, had cast doubts on the long-term soundness of the future of the timber industry in this area and beyond. Furthermore, there are important policy decisions here concerning the whale of the United Kingdom, not just Scotland, which we should consider, because, of course, the House of Commons has its duties. I think that we are entitled to know more about, and have full answers to, a number of questions, some of which hon. Members opposite have asked the Secretary of State, before we leave the Bill this evening.

In broad terms, what I think that we would all like to know is what is the policy for the utilisation of home-grown timber in the United Kingdom, which will increase rapidly in quantity every year, and which is already in far too great a volume 'to be absorbed by many existing rural industries.

Secondly, what are the full commitments under the Bill? The right hon. Gentleman the Member for Clackmannan and East Stirlingshire (Mr. Woodburn) has already spoken about the possibilities of a large outlay on roads. As we are considering large sums even in the initial stage, I think that we ought to think beyond that, because the costs of nearly everything—not just 10, Downing Street—in the end turn out to be very much larger than the estimates first represent. Then we have the secondary development to consider. Perhaps the roads are the biggest item, but there will be housing commitments, and, what I think is the most important of all, what precedents are we here setting, because the problem within 100 miles of Fort William is not unique to that district.

The problem repeats itself to a large extent in other parts of the country. Here I think that I should declare my interest according to tradition. An hon. Member referred to the fact, and I think that it is well-known, that I have been interested in timber problems. I am a woodland owner and, at one time, I was a member of the Forestry Commission Utilisation Committee—and a good Committee it was, although on too small a scale to deal adequately with this very large commercial problem now facing it. I am also a small shareholder in Wiggins, Teape. I did not buy the shares when this Bill was proposed. I have had them for a very long time. [An HON. MEMBER: "Have you sold them."] I have not sold them. Although I am not a Scotsman, I may stand to gain some small things from this project if it is successful, that is to say, if it reduces the competition in the north of England for the Scottish timber now flooding over the Border, dumped timber as we call it, because there cannot be found a sufficient outlet for it in Scotland.

I hope that my right hon. Friend will tell us tonight what is the Government's policy for the home-timber industry which, I think, it is admitted on both sides of the House is not in too good a state. Every Government in turn since the war has hedged upon this point. They have talked about planting. The right hon. Gentleman the Member for East Stirlingshire did so today. All the emphasis has been on planting and very little attention has been given to what would happen at the end of the day—and the day was not such a long one. My right hon. Friend the Minister of Agriculture has done more, I think, than any other Minister since the war on this commercial side. There was a conference of timber interests in his Department not long ago, but that ought to have happened thirty years ago and we would by now have been a long way further ahead than we are.

Only the other day the impression was being given that we in the forestry world ought, like farmers and fishermen, to be thinking much more about the marketing side of the industry than has been the case to date. However, unlike farmers and fishermen, there was no money to help any of these schemes or enterprises. But, suddenly, £10 million is written into a Bill and we are asked to approve it.

Why is there this lack of interest in the marketing of timber? I think that all are to blame, private foresters and the timber trade. If I may use the word, the infrastructure of the timber industry is probably very short of working capital. The Forestry Commission has used its great influence to date almost entirely in the growing of trees. I stand behind no one in my admiration of the technical and silvicultural achievements of the Forestry Commission, but the organisation of the commercial and salesman side is a long way behind a normal commercial undertaking with a capital of about £180 milion, a long way behind what Unilever or Shell, for instance, would think necessary to deal with such big business. Hence we have the present situation, and it is not limited to Fort William and the neighbourhood.

I exempt the present heads of the Forestry Commission from any charge which may be read into my sentences. I know that they are working hard to make up for lost time, but meanwhile there is a lot of unsaleable timber on their hands and on the hands of private woodland owners, or the Government would not otherwise be coming along and suggesting that we should approve the expenditure of about £10 million on one project.

In a certain sense, whatever great advantages it will bring to this neighbourhood, the Bill is a rescue operation rather than part of a properly considered policy. Nor does it fit in entirely with my right hon. Friend's Answers to recent Questions, particularly from my hon. Friend the Member for Rye (Mr. Godman Irvine), who is not here at the moment but to whom it was suggested that the setback in the market for timber was only temporary or short-term. If the set-back is only temporary or short-term, is it really necessary for us to start joint financing of a scheme in the Highlands on this scale? It looks as though the setback is more serious than it was represented to be the other day.

Those who follow these things will have noticed how in the last year approaches for help by different sections of the industry in various projects, modest help, too, have been turned down. The Timber Merchants Co-operative—and the word "co-operative" is magic in this connection—wanted a very small sum of money, between £5,000 and £10,000 a year for three years, to try to educate merchants and consumers about the qualities of our home-grown timber.

The right hon. Member for East Stirlingshire (Mr. Woodburn) will be interested in this, because the furniture trade looks automatically to supplies from overseas, and the good oak such as we have around us here panelling this Chamber is used in the trade only for work of this very high quality. The normal Ministry of Works type of desk is mostly made of Japanese oak or some such equivalent. However, the suggestion that there should be some help with the sort of work which the right hon. Gentleman had in mind was turned down on the ground that it did not have the support of a sufficiently large section of the trade, although it had the support of most of the trade, and because it was not usual for Government aid to be given to middle men or processors. It is strange having had those reasons that out of the blue £10 million should be provided for one firm of processors.

Mr. Bruce Millan (Glasgow, Craigton)

I am very interested in the arguments of the hon. Member for Westmorland (Mr. Vane) in this respect, but was he not the Parliamentary Secretary to the Ministry of Agriculture at the lime? What did he do about it when he was there?

Mr. Vane

I took a lot of interest in this subject, but the hon. Member does not understand the constitutional relationship between the Forestry Commission and the Minister of Agriculture. I pay tribute to my right hon. Friend for doing something which none of his predecessors had done. In any event, surely the House of Commons is the place where hon. Members are expected to say what they think about issues which come before them for discussion. Here we have something quite inconsistent with what has happened before, and I hope that my right hon. Friend the Secretary of State for Scotland will be able to give us something of a broader picture as well as answering the more local questions.

It must not be thought that pulp is the one and only outlet needed in the marketing of softwood timber. There are many others. Nor must it be thought that Fort William is the one and only area where this problem arises. Can we be told what the position would be if a similar case were put to the Government for the North-East of Scotland, where the circumstances are similar, and in the South-West where there is an area of timber which could be deemed appropriate to some such development?

The north of England is better prepared, but Devon could claim that from the timber marketing point of view it was the worst area in England, and possibly in the United Kingdom. Are we to understand that, if we give the Bill a Second Reading we are committed to spending about £10 million to £12 million every time another area can represent a similar case? If so, I think that we ought to have this cleared up.

It is no good talking about this as a first step. We ought to judge this most important proposal against the broad background of policy decisions. If my right hon. Friend is not able to tell us tonight what these policy decisions are. I hope that he or his hon. Friend will be able to do so before we part with this Bill and it goes to another place, because it is putting things in the wrong order to present us with this Bill without our knowing the broad lines of policy. This should have been done in the reverse order. I say that without any criticism of this project. I think that this has been presented to us in the wrong order, and I am sure that there are other hon. Members who feel the same as I do in this regard.

9.40 p.m.

Mr. Malcolm MacMillan (Western Isles)

I think that most hon. Members on this side of the House have a great deal of sympathy with the point of view of the hon. Member for Westmorland (Mr. Vane). Certainly, many of the questions which he asked will help to shorten our speeches.

When my right hon. Friend the Member for Clackmannan and East Stirlingshire (Mr. Woodburn) was speaking, I was reminded of a story of the Korean war, when an American officer met an aged Korean who had had all his clothes blown away in the heat of battle. The American asked this old Korean, "How does it feel to be liberated?" The Korean replied, "I can only say that we are like a blade of grass which does not care very much whether it is eaten by a horse or by a cow".

When it comes to the choice of employment being provided by private enterprise, or public enterprise, my right hon. Friend seems to be driven to very much the same conclusion. If people are desperate enough for jobs, and there is no other prospect of them being provided, they will grab the first prospect that comes along and hail it with the enthusiasm displayed for the Bill by my right hon. Friend.

My right hon. Friend had, of course, some reservations about this project, just as I have, and as I am sure that even the Secretary of State for Scotland has. But people suffering from job hunger are rather uncritical on the amount of expenditure per job created. On the other hand, here is something happening in the Highlands which has not even faintly looked like happening for a long time past. We had almost given up hope of any sort of relatively large-scale employment projects coming to the Highland areas.

I am glad and I welcome this project for the employment it will provide, for the relief from the desperate need for employment it will bring, and for the better standards it will, I hope, provide for at least a few thousand people out of the 100,000 and more in Scotland who are still looking for jobs. The total number of jobs estimated to be provided by this project is not large against a background of the present figure of around 120,000 to 130,000 unemployed in Scotland, but in the Highland areas it will make a big contribution to an extremely difficult situation.

When I say that, I add that we must aim at keeping the natural and proper distribution of population in the Highlands by the proper distribution of industry, and not permit gross over-centralisation. This project, as one part of a wider pattern of Highland industrial development, is welcome; but it is only the beginning and not the end of such things. As the hon. Member for Westmorland said, there are other areas, like the Scottish North-East, with great forestry resources, and there will still be difficulties in that area even in supplying Fort William with timber, because one comes up against difficult and costly transport problems. So we in the North-West in spite of our own difficulties would wish to be a little unselfish and ask more for the North-East and also than that it should be used merely to supply material for a project of this kind in the Fort William scheme.

I hops that Fort William will recruit in and from the Highlands population as much as possible. On the other hand, we must bear in mind the importance of not attracting populations away from other areas wholesale. The Secretary of State may smile at this, and it may sound contrary. But he knows that dilemma; and we must be sure that we shall not wholly denude areas which, because of their own lack of industrial development, have been losing population so rapidly that they are reaching the point of no return. The right hon. Gentleman must, therefore, do a lot of other things in a lot of other places very soon if the Fort William project is not to drain other outlying communities in such a way as to cause much harm.

Mr. Vane

The hon. Gentleman should bear in mind that there are other paper-making ventures in different parts of the country which may feel that this affects their business.

Mr. MacMillan

I quite understand that. I must put in this reservation. That there is sometimes the selfish point of view as well. In areas where there is little unemployment, it is possible to find people who will object immediately when there is a sudden drawing on the labour force in their area locally or by other areas. I came up against this in connection with another less creative development project, the proposed South Uist rocket range project, which eventually collapsed. There were some local employers who objected that local labour would be in great demand for the range, and the reason they gave was it would mean that wages would be forced up by Government employment and competition for workers. But still there is a case for the North-East and, as the hon. Gentleman has said, for the South-West of Scotland as well.

This has been a most interesting debate so far—perhaps I had better be modest and underline the words "so far". The essential long-term work here has been done by responsible public planning. Planting is planning and when we plant we are planning long term. It is a thirty, forty, fifty or sixty years' job—a job spread over generations before anything more than the first results in thinnings are discernible. Fundamentally afforestation, it has been a State undertaking and there is no getting away from that.

I should like the Secretary of State to tell us more about what was mentioned by the hon. Member for Westmoreland when he spoke of the difficulties about disposing surpluses, existing internal surplus. Our difficulty in connection with the supply of timber in two world wars taught us something rather different from that problem. In the First World War about 4 per cent. or 5 per cent.— possibly 6 per cent.—of the total requirements of the country were provided from our own domestic supplies. Immediately after the war the Acland Committee was set up and everyone was enthusiastic about big scale afforestation. Then the economy axe fell in 1931–32 and there was a recession in planting and reafforestation. In the middle of the last war, in 1943, we went into another planting timber supply panic when we realised that we could again supply from our domestic resources only about 4 per cent. of the war-time timber needs. The rest had to run the blockade. A 30-year scheme was put into operation, and we have good reason to be grateful that it was.

I wish to ask the Secretary of State whether he is satisfied that this Fort William project will meet all or most of its requirements from domestic supplies? Are we not to import, and to what extent from, say, Scandinavia? In passing, may I ask whether, if the Ministry of Works is using Japanese timber, as the hon. Member opposite has said, for desks, the Ministry of Labour does the same creating less home jobs than it might? Perhaps the Ministries could set an example. What will be the position regarding imparts for Fort William and to what extent is the Minister satisfied that suitable timber will be available from Scottish and United Kingdom sources?

I wish to ask the Secretary of State another question which is vital to the Fort William area and (the North-West. What is to be the position regarding transportation of timber from, say, around Kintail and that area? I have no doubt that the hon. Member for Ross and Cromarty (Mr. John MacLeod) will have that question very much in mind. It is in the county which we both represent.

This will be a big question. We want to know exactly what the effect of the Beeching policy will be in that area upon railways and therefore in the new burden cast upon the inadequate single-track roads. The Secretary of State has gone so often on record recently with the assurance that it is only over his dead body that anybody will close the Highland railways before the roads and other services are suitable to meet the requirements, that I hardly dare ask him to underline it again tonight. I take it from what he said that no question can possibly arise, with his agreement at any rate, of the closing of railway lines in our north-western part of Scotland until an adequate service by road has been provided. In other words, the roads and the services must be provided before any railways are closed down. Not that I agree with any closure in that area.

Once the mill has been built we shall have a fairly heavy weight of traffic, additional to the present traffic upon the roads almost right up to Kyle of Lochalsh. This is now to serve and be part of a developing timber-using and supply area, and if this project means as much as the Minister said it did, and as everyone is convinced it ought to mean, the railways and roads and the transport question will take on far more importance even than they have now. I therefore urge the Minister to give urgent priority to retaining the North Western railway line as well as the rail route to Fort William and Mallaig. Quite apart from the route to Fort William, the rail line from Kyle will be in many ways as important, and I hope that the Secretary of State has this very much in mind.

The point was well made by my hon. Friend the Member for Kilmarnock (Mr. Ross) that Government spending on this project in direct assistance to the firm is only the beginning of the public expenditure. Local authorities will be responsible for putting in the public services such as new and improved roads, water supplies and other services. In addition, the housing problem will only partly be solved by the housing association, which cannot solve it all. The Hydro-Electric Board will be called upon to make a contribution by making supply extensions in various directions, because additional electricity supplies will be needed for many purposes.

I hope that in his enthusiasm for this project, which with certain reservations we share, the Secretary of State has had regard to forest conservancy considerations, which are extremely important. We cannot chop down forests all over the place without care, without expecting detrimental results from these activities. There are many lessons from history in every continent along these lines—the creation of great dust bowls and deserts, for example. We cannot knock forests down and expect there to have no effect. We must have regard to the whole ecological cycle and background and implications. Within that, we must adopt a very careful conservancy policy, bearing in mind the long-term effects and needs. There must therefore be a substantial and early stepping up of afforestation and planting programmes at the same time as we speed up deforestation.

I should like to think of the Bill as the act of Governmental charity it has been called by some; but it is nothing of the kind. The trees happen to be there in the Highlands. They do not happen to be somewhere else. We therefore have to develop in this area. In the same way, the water power is in the Highlands and we must develop the hydro-electricity industry there. This applies to many other things.

We welcome the Bill, with the reservations which I have mentioned. I am sure that the Secretary of State agrees that this is only the first word and the first step, and not the last word and the last step in industrialisation, along appropriate lines, in the Highlands and Islands of Scotland for which we have waited so long.

The use of timber by-products could also be made a highly important source of employment, but I hope that any employment which is created will be under factory conditions and fully insurable conditions for the workers concerned. We want no more outworkers uncovered for unemployment and industrial injury insurance. We want people who are fully insured and fully covered by wages agreements and standards of employment no less than those in the industrial areas throughout the country.

9.55 p.m.

Mr. John MacLeod (Ross and Cromarty)

I am very pleased to follow the hon. Member for the Western Isles (Mr. Malcolm MacMillan), who represents the other half of my county of Ross-shire. I agree with much of what he said. As a Member for a Highland constituency, I am naturally, very excited that this pulp mill is to be built in the Highlands. It is one of the most exciting things that has happened to us since, perhaps, the Hydro-Electric Board was established in the Highland area. I have been talking about this scheme for twelve years.

At one time I tried to get a pulp mill in the Invergordon area. The experts then assured me that it was probably better to have it, if it could be established, at Fort William. I am now glad that it has come to Fort William, because it will have implications far wider than the immediate area of Fort William.

It is on these implications that I should like to dwell for a little tonight. They were dealt with fairly extensively by my hon. Friend the Parliamentary Secretary to the Board of Trade and by the hon. Member for Kilmarnock (Mr. Ross). As the hon. Members for Kilmarnock and the Western Isles said, we do not want to see all the labour taken away from areas of large population, but the only answer I can give—I have always said this—is that it is far better to stop the people somewhere on the fringe of the Highland area itself than to see them drift right down to the South, as they have been doing for years.

My hon. Friend the Parliamentary Secretary said that the company had been receiving letters from emigrants who want to come back to the region. This influx should certainly help. Other Highlanders who have gone abroad may want to come back. My own forebears went away from the Highlands because there was no work for them. I feel this very deeply. It is very encouraging to hear that the firm has received letters from people who want to return to the area.

This project will certainly be a very good investment on the Government's part, because it will help to stimulate other industries in the area. The right hon. Member for Clackmannan and East Stirlingshire (Mr. Woodburn) spoke of uses to which wood could be put. He mentioned furniture. One hopes that this will help to encourage other industries in the area to make use of timber. I hope that the company will use as many materials and as much equipment as possible which are produced, not in this country, but in Scotland, because after all we hope that this will benefit Scotland.

The hon. Member for the Western Isles asked the Minister from what area this home-grown timber will come. Will it come from the whole of Scotland; or will it be necessary to go out of Scotland into the north of England to get supplies?

As we know, the Forestry Commission and private owners will now have an outlet for their timber. I hope that this will encourage some people in the areas of the Highlands where it is questionable whether agricultural land is productive. I hope, taking the long-term view, that it will encourage some of these people to plant on land where it is questionable whether fanning is productive. As the hon. Member for Kilmarnock said, this is a natural, indigenous raw material.

It being Ten o'clock, the debate stood adjourned.

Proceedings on the Fort William Pulp and Paper Mills Bill exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[Mr. Noble.]

Question again proposed, That the Bill be now read a Second time.

Mr. MacLeod

There is no doubt that the lack of railways would disrupt the transport and communications of the area. This aspect of communications, particularly roads, was mentioned by the hon. Member for the Western Isles. My right hon. Friend has also said that more forestry roads must be built to bring out the timber.

I hope that there will be more coordination with the local authorities when the placing of roads is considered before they are built, not only for forest roads but also for those needed by the hydro-electricity boards. There has not been this co-ordination in the past and if it were to exist greater use could be made of these roads by the local inhabitants.

I hope that my right hon. Friend will also consider the bridge at Fort William over the River Lochie and whether it will be adequate to take the weight of the transport across it. I hope, therefore, that the new bridge will be sanctioned immediately. Bridges lead me to sea communications, which was mentioned by the right hon. Member for East Stirlingshire. In this respect, the hon. Member for the Western Isles represents a seafaring area and he will agree that it is hoped that we will be able to develop more of our sea communications.

I hope that my right hon. Friend has looked into these questions—and I have discussed them with my friends in the north of Scotland—because I wonder whether it would be possible to build some small piers along the Western seaboard, from where the maximum amount of timber will emanate It might be possible for the timber to be transported from the higher ground to these small piers and harbours. I suggest that it might be possible to have a modern type of "puffer" which could call in at the small piers and thereby save a great deal of expenditure on new roads. These "puffers" could be used for other purposes, including the development of lime deposits, bringing lime back to the more remote areas from where the timber is coming; and that would help the farming land, which lacks lime.

All this represents an exciting and intriguing development if the possible events are followed through to their logical conclusion. We hope that greater use will be made of the Caledonian Canal to bring more supplies from Invergordon and the Black Isle and Moray Firth areas, and I hope that the Secretary of State will say something about this when he replies to the debate.

It is interesting to note that Wiggins Teape and Company has entered into a 20-year contract with British Railways. I wonder whether the mill would have been built there had the railway been closed. I hope that the Secretary of State will take note of this fact and remember how important railways are north of Inverness. I hope that he will see that the railways are not closed until we have proved that we cannot get the industries we want in the area and we have tackled the problem of adequate alternative transport.

A further practical question is the supply of electricity. The Minister has said that at some future date there will be an extension of the mill for the addition of another machine, and that will mean further use of electricity. I know that in Ross-shire, at least on paper, two projects have recently been put forward, but there still remains the vexed question of the Nevis scheme. I hope that the Minister will announce that there is to be a public inquiry into this scheme, without any more nonsense about holding up the electricity supplies that will be needed in that area.

I have no doubt that this project will be of great benefit to the North. We all hope that it will lead to further development there. What must be remembered is that in the North we are no longer remote. One hon. Member spoke about the far North, but the Highlands are not remote. Nowhere in Great Britain is any longer remote. If we can go to Canada and America in six hours it is nonsense to talk about the Highlands being remote.

I hope that business executives will note that they can get to Wick, Orkney, or Shetland in an hour or an hour and a half; that they can go to their parties in London and the South, if they want to, at the end of a hard day's work, and still manage their businesses in the North. With their increasing supplies of electricity, and by other means, the Highlands can and will play their part in the national interest.

10.7 p.m.

Mr. Archie Manuel (Central Ayrshire)

I welcome the interest shown tonight by English hon. Members, and I extend an invitation to them to attend more of our Scottish debates, as this debate essentially is. We do not have enough of them—we are too insular. I should like to see more hon. Members getting together to try to get the best from debates, representing the views of their own areas, and telling us their opinions about any aspect of a Scottish Bill. We do the same with United Kingdom Bills and English Bills.

I warmly welcome this Measure, which will have a rich, rejuvenating influence over a very wide area, stretching west of Fort William and north-east to the areas mentioned by my hon. Friend the Member for the Western Isles (Mr. Malcolm MacMillan). The Parliamentary Secretary to the Board of Trade spoke of a radius of 100 miles. I do not know whether that means that we shall be getting timber from Dumfries, which is about that distance away, but we shall be out at sea in every other direction.

This is a project that undoubtedly catches the imagination. I know the area particularly well—better than any hon. Member now present. I was brought up in it. I fish there occasionally. I climb hills there—some of them have fences around them that I am not supposed to go through, but I go through, because I have always been against the idea of fences being put up to keep deer in and people out.

I can remember in my younger school days seeing fairly extensive areas covered with fine timber, first reaching maturity and then very often going past it and being blown down by the strong gales we have in the West. It was a scene of chaos and confusion, and there was a great deal more trouble in getting the timber out of the forest than there would have been if the forestry had been properly regulated.

I do not think that I can pay tribute to any woodland owner. After receiving money from the timber merchant, who took the timber from Arisaig and other stations on the Mallaig line and then floated it to Glasgow, the owner took no steps to replant the area properly. I started as a forestry worker as a youngster and my father was employed in the industry. Therefore I know something about it. There was a great lack of planting in the areas once the money had been taken out by the lairds and woodland owners. I would not pay the tribute which my right hon. Friend the Member for Clackmannan and East Stirlingshire (Mr. Woodburn) paid to them in this connection.

The consequence was that the Forestry Commission had to do the job. It has done it very well, but it has been curbed and crabbed in its activities and its programme is behind schedule. I do not know what views the Secretary of State for Scotland holds on this subject or whether he intends to obtain more capital from the Treasury to keep the planting abreast of the times. The Parliamentary Secretary to the Board of Trade mentioned that a million tons of timber were imported into the country and 8 million were home-grown, or some such figures of that kind.

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

The figures mentioned were 8 million hoppus feet homegrown, and 4 million hoppus feet imported.

Mr. Manuel

How long will this continue? Will there be a greater percentage of imported timber in future? Thinnings have not been used economically in the more inaccessible areas. I have asked Questions about this, but I have had no satisfactory answers and I do not know what is happening to them.

I hope to say something about the transport problems involved in this project when we come to debate Dr. Beeching's Report, but I wanted to men-lion a matter which was touched upon by my hon. Friend the Member for the Western Isles in connection with the public money which will be spent, quite apart from what is to come from the taxpayer in the shape of the £10 million loan and the interest-free percentage over the first three years. Undoubtedly a great deal of public money will be spent in the area on providing houses. It will not be easy to find sites, and when sites are found building will be much more expensive than it is in the South. There are no brickworks there and building components will have to be brought in over long distances. I hope the Secretary of State will recognise that it is not enough to say that the Scottish Special Housing Association will undertake this work. He must not put too great a financial yoke around the necks of the county council or the borough council as such. The rents of the S.S.H.A. houses will be very high indeed in that area.

Wiggins Teape is receiving substantial help. In my view, if the Government are providing more than half the capital outlay and public money is to be used to pay the interest on the loan over the first three years, the Government ought to have representation on the board and have something to do with policy. This is the way it ought to have been done. I warmly welcome this venture at Fort William, but it is monstrous that, if this company had dropped out along with the other three which were in the bidding at the beginning, this project would not have gone on because of the ideology of the Government. It is monstrous to condemn an area to decay, neglect and further depopulation because of their views.

Now, a few words about the forestry workers themselves. I know quite a number of the workers in the forestry areas of Inverness and Argyllshire itself. It is fairly young timber in parts of Argyllshire, fairly young plantings, but it is interesting to think of the young plantings down at Lochshielside where there is not even a road. There is MacBrayne's little vessel serving the 21 miles of the loch between Glenfinnan and Acharacle, but there are no roads at all. There will be much more public expenditure necessary than the £10 million, and this will fall on the local authorities to a great extent.

I want the Secretary of State to bear this in mind and to remember, also, that far more workers will be required in the actual forest areas for the extraction of thinnings and getting out the matured timber. There must be an augmented forest labour force, and, if the wages in the factory areas are to be fairly high compared with the £8 or £9 a week of the forestry worker, the Secretary of State will have to pay careful attention to this social aspect of the matter. The forestry workers will have to be paid a sufficient wage to meet the rents of the houses which are to be built in the forest areas for the augmented labour force which will be required.

I know of several places where very great mistakes of policy have been made in the provision of houses for forestry workers. I have in mind an area at Loch Doilet on Lochshielside where there is no road, no connection with anywhere, and no social amenities, but where the Government have provided 15 or 20 forest houses and expect people to live in them. It would have been far better to put these 15 or 20 houses at Acharacle, Strontian or Salen, three villages round there, where forestry vehicles travel each day to take the part-time workers to and fro.

Mr. J. Grimond (Orkney and Shetland)

The hon. Gentleman is stressing the importance of good communications. The Forestry Commission has, in fact, done this in some places and done it successfully.

Mr. Manuel

It is not for me to try to find fault where things have been done correctly. I am finding fault where, in the heart of the forest, 15 or 20 houses have been set down with no amenities at all, not even a road, where life is very difficult for the womenfolk and where the proper education of children is a great problem. The best thing to do is to build houses, when a small number of them is required in cases like this, added to one of the villages which are accessible to the forest area. If this had been done, there would have been a more contented labour force and there would not have been so many changes in it. Families would have been much more contented.

One of the best aspects of the scheme is that is will put a stop, to some extent, to the number of school leavers who are leaving the Highlands. There is not much employment in Argyllshire to which school leavers can go. The job opportunities just do not exist. This scheme can provide the job opportunities and the focal point for people who are at present migrating to Glasgow and further South to remain in the Highlands. I warmly welcome this new industrial enterprise, but I am sorry that the Government have not taken a stake in it and have not made sure of having a say in policy because of the financial help which they are giving to this firm.

10.21 p.m.

Sir Colin Thornton-Kemsley (North Angus and Mearns)

There were very disquieting rumours about last autumn that this eagerly awaited project was not, after all, to materialise. I am sure that Scotland owes a great deal to the Government, and, particularly, to the Secretary of State for Scotland for making it possible.

The need for this project is emphasised dramatically if we consider the increase in United Kingdom plantings of trees during the post-war period. Figures were published in The Times earlier this year in a remarkable article by Captain A. L. P. F. Wallace of Candacraig. He showed that in the ten years 1940–49 the average number of plantings per annum was 27,000. In 1950–59, the average had increased to 83,000 and from 1960 to 1962 it had increased to 93,000. That means that there will be a greatly increased output of thinnings in the years ahead, for which there is a steadily contracting market.

I should, as others have done, declare an interest in the growing of trees. Although we may not be able to send them as far afield as Fort William the whole market for thinnings will improve.

The difficulty in Scotland in recent years has been that the National Coal Board, because of its policy of pit closures, and because of mechanisation at the coal face, has had a very small requirement for pit wood. The 250,000 tons a year of Scottish softwood which the mills will require will have a considerable impact on the forestry industry in North and West Scotland.

The hon. Member for Kilmarnock (Mr. Ross) spoke about the contribution which public enterprise would be making to the establishment of the pulp mill. That is true, but it is also true that private enterprise is making a considerable contribution. The British Aluminium Company will supply process water, carried through three miles of pipelines, from the tail race of the Lochaber hydro-electric scheme, which it owns.

I was talking not long ago to Mr. Gordon Chalmers, the commissioner of the British Aluminium Company, which owns 170,000 acres in the immediate vicinity of the proposed pulp mills which the company acquired to control the water catchment areas for the hydroelectric operation of its factories. The company has a 20-year forestry programmes which will involve the planting of about 300 acres of trees a year, with a 60-year rotation. Mr. Gordon Chalmers told me that with the coming of the pulp mill at Fort William, it will be possible to reduce the rotation to forty years. This will have a considerable effect on the aim, which we are all trying to reach in Scotland, of achieving the target of 5 million acres of afforested land which was set by the Government of the day in 1945.

Not only in that way will the economy of the Highlands receive a useful "shot" in the arm. It is undoubtedly true that the increased planting of shelters could increase the inherent capacity of our hills to produce mutton and hardy store cattle for finishing on the lower ground. If more use were made of the Highlands as a reservoir of high-quality stores, less of the more valuable lower ground would be required for followers and more would be available for fatteners.

I should like to make a suggestion. I hope that my right hon. Friend will be able to persuade the company—he has every right to ask it to heed his suggestions—to appoint a consultative committee, composed of representatives of the Forestry Commission, the Scottish Woodlands Owners' Association and the Home Timber Merchants' Association of Scotland, which could be called together when required to consult the Board about questions of supplies, prices, and so on, so that there may be broad agreement among the producers and merchants of timber throughout Scotland and the policy of the Board may be interpreted to and understood by them. With this two-way channel of ideas, the Board could receive greater acceptance among its suppliers and the merchants who will bring much of the timber to its doors.

There are many things that I should like to have said, but I do not want to take up the time of the House at this late hour. My hon. Friend the Member for Westmorland (Mr. Vane) was, however, possibly more critical than anyone else on this side of the House about certain provisions of the Bill, which he described as a rescue operation rather than part of a considered policy. It is true that it is not part of a considered policy in the sense of a forestry policy, of which my hon. Friend was speaking. I doubt very much whether the Government introduced the Bill as part of a coherent forestry policy. I am, however, certain that it is a highly important part of a considered policy for creating employment in Scotland and for stemming the drift from the Highlands.

10.30 p.m.

Mr. William Hannan (Glasgow, Maryhill)

I agree with the hon. Member for North Angus and Mearns (Sir C. Thornton-Kemsley); no one would accuse the present Government of having any considered policy, particularly on forestry.

I welcome the proposals in the Bill, with, of course, much the same reservations as some of my hon. Friends. Those of us who have been speaking and asking Questions about forestry since before the Secretary of State for Scotland became a Minister have been watching with great trepidation the progress of the talks and the prospect two or three times that nothing would come of them. Whatever the Government's intentions are, it has certainly taken them a long time to come to firm conclusions about it, and now they have done so, I believe they have done it in the wrong way.

The Minister said that the company would be using the most up-to-date methods, as are employed in Sweden and France. This is to be welcomed. But in the very important process of the formation of the company they have fallen short of the modern methods which are employed in other countries.

When I returned from Finland in 1954 and spoke in the House about forestry, I said how pleasing it would be if small pulp or saw mills could be set up in the north of Scotland. The Secretary of State has one, if not two, in his constituency. But at the moment Finland has a project to establish a mill in Lapland which will create 400 jobs. Besides those jobs in the mill, it is estimated that a further 3,000 jobs will be created in forestry and ancillary work.

The point about finance is that it is the Government in Finland who have done this. The Government have representatives on the board. The mill is State-owned. But we have had 10 years' delay, and now the Government have acted at last for very much the reason put forward by the hon. Member for Westmorland (Mr. Vane)—as a rescue operation to create industry, making a virtue out of necessity. This may sound churlish, but the production of timber in Scotland is such that it is helping to create difficulties south of the Border, and so the mill project is being throttled.

There are one or two points on which I should like some information from the Secretary of State. Am I not right in thinking that a pulp mill of this kind would provide an excellent opportunity for developments in connection with not only paper and paper bags but cellulose and fibreglass—things of which Scotland has been short? I am not technically-minded in these matters, but I think it important to ask for information about them.

There is a second problem. What steps are the Government taking to guard against an increase in land prices which may develop in and around this area? There is never a honey pot but the bees are not so far away. I hesitate to go on using the insect analogy in case I am misunderstood, like one of my late right hon. Friends, but there is a certain well defined course which individuals so minded can take in an area like this.

The whole project is very desirable. This is something for which many of us have wanted for this area for a very long time. Out of this will come the building of roads and other services. This means, apart from the advance of £10 million, that there will have to be further subsidies for the provision of roads by local authorities. Public enterprise will provide all the facilities and all the benefits but will get no return. That is completely wrong.

It is silly to carry on the argument about private enterprise v. public enterprise in this context, but what is wrong with a partnership between the two? The Government have missed a great opportunity by indulging in this academic exercise, which will bring no satisfaction to the people who are unemployed; only the provision of jobs will do that. I hope that the Secretary of State will try to answer these important questions about the developments likely to arise out of this very welcome project.

10.37 p.m.

Mr. Robert Cooke (Bristol, West)

I shall not detain the House long at this late hour but, at the invitation of an hon. Member opposite, as an English Member I should like to add a few words. I shall not ask my right hon. Friend any questions. I am fully confident of his ability both to deal with questions and get on with the job. He has been in this House a much shorter time than I, and he is a good example of the young men of promise my right hon. Friend the Prime Minister has been choosing to place in high office in Government,, and I wish him well.

As a Member for Bristol, a city noted for printing and other uses of paper, I want to say how much I value this Measure. I do not take any gloomy view, unlike some hon. Members opposite, about this project. If we can manage to produce paper in this country from homegrown trees to sheets of paper and the printed column, that is a good thing from any point of view.

We have an unemployment problem in the South-West, although we do not say so much about it as hon. Members from other areas say about their problems. But we are anxious to help anywhere, and we shall be delighted to use some of the products of this factory.

I am delighted to disagree with the hon. Member for Glasgow, Maryhill (Mr. Hannan), who said that some of these products would be difficult to produce and that perhaps we did not have the technical "know-how". When I was in Virginia they assured me that they have a process from which they can make paper out of any tree of whatever size, shape or colour. I hope that we shall be able to do that too. I hope that nothing will hinder the foundation of the factory and that we shall see an ever-increasing flow of paper from it. As an English Member, I would like to place an advance order for enough paper from which to print 55,000 copies of my election address as soon as possible.

10.40 p.m.

Mr. Tam Dalyell (West Lothian)

On the principle involved here, there is a deep gulf between the Secretary of State and myself, but the subject I want to raises tonight is of a non-doctrinaire nature. It is the subject of financial accountability.

The Parliamentary Secretary said that this was a novel project, and we all hope that in some form or another it will be repeated, but would not the right hon. Gentleman agree that if this sort of project is to be repeated it must not only be above board but be seen by everyone to be above board, because even if nothing goes wrong there are likely to be suspicions and all sorts of rumours?

I see some of the right hon. Gentleman's advisers smiling, but I wonder whether they would smile if they had on their hands not the case of Wiggins Teape, which is a few hundred years old and a highly respectable firm, but the case, which is sub judice at the moment, of Baileys (Malta) Ltd.? The terms there were not entirely different, but let us leave that with the charitable thought that there may have been some misunderstanding.

Once one accepts that there are anxieties about the situation which has been created by the Malta firm to which I have referred, it is not fair to assume that at some future date there may be worries if we continue the sort of organisation that is proposed here? I ask the right hon. Gentleman what form of responsibility is to be taken on by the accounting officer. Will he give full details annually to the Public Accounts Committee?

My hon. Friend the Member for Glasgow, Maryhill (Mr. Hannan) raised the question of the social capital involved, as indeed did my hon. Friend the Member for Central Ayrshire (Mr. Manuel). Perhaps the right hon, Gentleman will remember that when the B.M.C. factory was constructed at Bathgate the social expenditure by the West Lothian County Council far exceeded the expectations of the right hon. Gentleman, and certainly exceeded the expectations of the county council.

I end by giving the Bill a welcome on behalf of people who might in the future be hit by the introduction of this project, the paper workers of West Lothian. Although they appreciate that they may be affected by this proposal, they are glad that this project has come to our country.

10.43 p.m.

Dr. J. Dickson Mabon (Greenock)

I shall be very brief. My hon. Friends have welcomed the Bill, and I join them in doing so.

I shall not underline the point which has been made about joint public and private enterprise. I think that the point has been taken. We have had many examples in Scotland, the details of which are not clear. For example, we do not know how much the Treasury has spent on the Rootes project. We do not know all the complications of the B.M.C. factory, the strip mill at Ravenscraig, or the graving dock on the Clyde. All these are out of the same stable as this pulp mill, and it is interesting to think that these are all the result of "Conservatocialism". This is not a conversion to Socialism, but in these days of high taxation and therefore, so Conservatives tell me, shortage of capital, this is an enormous sum. At least, this is sometimes the argument that I heard when we were in power, and therefore the Treasury has had to be the recourse of this money.

The right hon. Gentleman deserves to be congratulated on bringing in this Bill. I only hope that he brings in more Bills like it, but as my hon. Friend the Member for Kilmarnock (Mr. Ross) said, there is an Act on the Statute Book which foundered in Parliament's intention because the company concerned could not fulfil the obligations imposed on it and did not wish commercially to pursue the matter any further. I refer to the North Atlantic Shipping Act.

My hon. Friend the Member for Kilmarnock also asked what would happen if the company either did not apply, or, subsequent to the passage of the Bill, changed its mind. This is a very interesting point, which I hope the right hon. Gentleman will bear in mind.

In the first place, he has done something useful in the Bill and, secondly, he has adopted an anti-Beeching attitude in relation to this part of the country which I hope he will pursue in relation to other parts. But thirdly, a new broom may be willing to sweep a little more cleanly at St. Andrew's House and to look at the constitution of the Scottish Development Department, because possibly in its recruitment of officers and staff lies an alternative to the prospect of this future Act becoming null and void if the firm did not pursue it to its logical end.

I accept that the right hon. Gentleman cannot be expected to urge on the Government a Royal Commission to go into the question of the recruitment and qualifications of the Civil Service, but he should look at the question of the kind of men being recruited by the Scottish Development Department or the kind of men who will be recruited by it, because it is my firm belief that under either party in the next ten or twenty years we shall have to adopt some kind of public enterprise, using the Civil Service, whether men of business recruited at large salaries to do the job for the State or men brought up within the Civil Service to be able to carry out a commercial function as officers of this country.

I realise that this is anathema to the former Secretary of State, but his day is over in this respect. It is now the turn of the present Secretary of State and, I think, the turn of the newer Conservatives to try to face up to the prospects which may lie before them. I do not think that they have much of a future, but if they have a future at all they should prepare themselves for it. If we are to rely on our admirable Civil Service to carry out the wishes of Parliament and to exercise the instruments of Government as they should be exercised, it is inevitable that we shall have a Civil Service which has a training in industry. My hon. Friend the Member for Kilmarnock posed the problem of what would have happened if the company had not applied and what would happen if this future Act became null and void because the company did not pursue it. In considering this the right hon. Gentleman, I suggest, must not be doctrinaire and must not push such suggestions as I have made aside. He should leave the matter as open as possible. I believe that in the Scottish Development Department we have a Department which, with a sum of money of its own, independent of the Board of Trade, would be able to develop Scotland as it ought to be developed if it were staffed in the way to equip it for the future area of public enterprise which lies before it.

10.48 p.m.

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

The evening is wearing on and I know that some hon. Members on both sides of the House are wondering about their trains. I will try to do justice to the very interesting debate in which so many people have spoken, both from Scotland and from England, and at the same time to be reasonably brief.

In recent years in the Highlands most of the projects which we welcomed have been largely constructional—hydro schemes, roads, piers, N.A.T.O. facilities and depots. We welcomed them, but we realised that once the work had finished there were very few jobs left behind. To this extent this new project at Fort William is of tremendous importance.

If I may give the House a rough breakdown of the jobs which are estimated to arise as it develops, hon. Members will see what I mean. By the end of this year, with luck, we should be employing about 660 people in the area. Next year perhaps the total will reach about 1,800 and the year after that it should be up to about 2,400. Then it will remain steady for a year or two until Phase 2 comes into operation, and the total number of jobs created by the operation will probably reach about 3,500. In this respect it is a very valuable gain to long-term Highland development. As the hon. Member for Kilmarnock (Mr. Ross) said, the chance of industries thriving in the Highlands depends, at least to some extent, on whether they are using local resources. We have industries of all sorts in the Highlands, but where local resources are being used the chances of their continuing to be a success are that much greater.

The credit for launching this project rests with Wiggins, Teape and with the Government of the day, but its success is due, as I freely admit, to all my predecessors for the last thirty-five years, and particularly, as the hon. Member for Kilmarnock said, to Mr. Tom Johnston, who took such an interest in forestry, and to my immediate predecessor, my right hon. Friend the Member for Renfrew, West (Mr. Maclay), who carried out a lot of the preliminary investigations and talks with Wiggins Teape.

I should like also to join in the especial welcome for the Bill which will be extended by the forestry workers in the countryside round about. I know them very well, as does the hon. Member for Central Ayrshire (Mr. Manuel). Working on forestry is not always the most exciting task, and trees grow comparatively slowly. If someone knows that the work he is doing is producing trees which are not going to disappear abroad but will go back into the Highlands to create more work, it is an encouragement to him, and we owe these men and the Forestry Commission a word of thanks for providing the possibility of the scheme.

Mr. Bence

I appreciate the point that the workers in the forestry industry will be very happy to find their product going into this mill. However, as Wiggins Teape will be a monopoly consumer of the Commission's products, there must be a price factor. It is a monopoly consumer of the thinnings. How will the price factor be fixed? Will it be dependent upon the world price of timber? Will Wiggins Teape be free to buy a world product on a world market from a cheaper source?

Mr. Noble

No. The hon. Gentleman may not know this, but I think that my hon. Friend the Parliamentary Secretary to the Board of Trade said that Wiggins Teape has made a long-term contract with the Forestry Commission to buy its timber and it will be at world prices. The incentive to the forestry people is there, because the market is there in front of them.

The hon. Member for Kilmarnock raised many points. Most of them were interesting ones. I do not want to introduce any tone of controversy on the tricky subject of rents. It is true, as the hon. Gentleman said, that the rents of forestry workers are higher than the rents of agricultural workers, who in most cases have service houses. It is also true that they are a great deal higher than the rents in many large industrial centres where the wages are a great deal better. This point could be looked at from both directions.

The hon. Member also said that the availability of hydro power was one of the prerequisites of this scheme. We ought to get the fact right. Extremely important as the Hydro-Electric Board's activities in the whole area of the Highlands have been and will be for many of the ancillary things which will grow round this enterprise, in point of fact Wiggins Teape is producing all its own hydro power.

There is no dogma in the Scottish Office. We believe that public enterprise and private enterprise are right. After all, they have been combined in the growing of timber. They have been combined in manufacturing with Wiggins Teape. Hon. Members have pointed to the Highlands and Islands shipping services, which show that, though there may be some dogma on one side of the House or the other, there is certainly no visible sign of dogma in the Scottish Office.

Mr. John MacLeod (Ross and Cromarty)

Can my right hon. Friend say where the company will get the hydro power from which to produce the electricity it will use?

Mr. Noble

The company will produce thermal power itself as part of the process in the mill.

The hon. Member for Kilmarnock then said that the Highlands were a neglected land and he used for his quotation a paper put out by Wiggins Teape. Interesting and exciting though this project is, it is fair to record that there has been an even bigger development in the Highlands since the Government came to power—at Dounreay—and we should not forget this just because it happens to be further up the map near the right-hand corner.

I was asked to speculate as to what might have happened had the company dropped out and the last of the "little nigger boys" had gone. It has been suggested by various hon. Members opposite that the Government should then have stepped in and run a paper mill themselves. Personally, I should be extremely scared of doing that. In my limited experience, Governments are tremendous users of papers, circulars and so on. I do not think, to be honest, that they would be very efficient makers of paper. I shudder to think, if profits were going down, that the Government might decide that the only way to maintain them was to use more paper.

There is a serious point which the hon. Member for Kilmarnock made— as did his hon. Friend the Member for the Western Isles (Mr. Malcolm MacMillan)—about the problem of denuding the Highlands by "pulling" too many people into Fort William. This must always be a worry, but I do not think that hon. Members should become over-obsessed by it, because the whole of this project, by its nature, needs the combination of the growing areas for the timber and the people who are extracting and handling it, right down to the mill where it is processed.

So the nature of the Industry seems to avoid the greatest dangers of too much concentration. Nevertheless, we will certainly watch this point.

Several hon. Members spoke of the tremendous social expenditure which this mill will bring in its train. I accept this, but I honestly feel that the House must realise that if one goes in for development on a big scale, one must have the social expenditure to match it. That is as true in the Highlands at Fort William as it is at Linwood, Bathgate or any other place. It is desirable and it must be faced. One cannot claim that this is a hidden, extra thing because it is at Fort William. The same happens in any industrial area; and the Highlands have the right to do it, too.

It should not be thought that, because we are achieving the pulp mill, I now believe that everything is fine in the area for the rest of time. There are other projects and, as the House knows, I shall do my best to help them in any way I can and to get them to Scotland.

My hon. Friend the Member for Dorset, West (Mr. Wingfield Digby) shortly and simply put a few points. I am glad that already there is some help from England and that the money going to the Highlands is not grudged. My hon. Friend raised the problem of the growing output of timber and how it was to be used. He contrasted it with the growth of timber imports. The importance of this mill is that it will use a great deal of the surplus which goes across the Border to England. This point worried my hon. Friend the Member for Westmorland (Mr. Vane), but the mill will stop some of the surplus from adding to his problems.

The right hon. Member for East Stirlingshire (Mr. Woodburn)—who apologised because he had to leave—paid a very sensible tribute to the private owners of woodlands, and knew a good deal of what they were contributing. He asked one or two questions, which I will look into and let him know about, on the problems of sawdust and of quality timber. Big sawmills will almost certainly be set up in conjunction with this enterprise, and even if one cannot use the sawdust one will use the waste wood resulting. He said that the Highlands are not used to the whistle, but at least they have one at Kinlochleven; and that is not far away from Fort William. We cannot discuss the arrangements for women of which he told us, but there will be at least 200 women employed in the factory itself and, of course, an enormous number of extra women will come in on all the ancillary services.

I should like to deal in great detail with what was said by my hon. Friend the Member for Westmorland, but I think that I should be very largely out of order if I did so. But I do feel that to describe this as a "rescue operation" is completely unfair. For once, this has come in at exactly the right time. Eight or nine years ago, Wiggins Teape investigated whether it was a possible project—and it was not, because there was not enough timber. There now is enough timber, and although, to begin with, as has been said, only two-thirds of it will be home grown and the rest will come from abroad, in a few years' time it will be entirely home grown, and that seems to me to be an excellent and correct plan.

In considering this Bill, I do not think that we should worry too much about whether we are committed to accepting extra Bills for another £10 million if similar schemes come forward. If similar schemes do come forward, I believe that, if they are good schemes and viable schemes, the House would want the Government to bring in Bills, if necessary, to promote such development.

The hon. Member for the Western Isles said that the project was rather expensive in terms of money for jobs. That is true if we take just the jobs in the mill, but a great deal will flow from it. I hope that at least some of the wages will go to the buying of the excellent tweed made in the hon. Gentleman's constituency.

He also referred to planting in other areas, and this is very important. For the past ten or fifteen years, it is not easy, or it has not been easy, to persuade private owners, farmers and others to plant timber, partly because it is a very expensive operation and partly because, until there was a mill there to use it, there was no possible market for the timber if they grew it. That is an important aspect of this mill. It will encourage the planting of timber on a much wider scale and by a much wider range of people than in the past.

The hon. Member also asked about the quantities of imported and of homegrown timber. As was said earlier, to begin with, 8 million hoppus feet will be home-grown softwoods and 4 million imported hardwoods, I think that the firm itself hopes to find some suitable hardwoods at home, but later, as the mill develops, the whole 12 million hoppus feet will be home-grown timber. I will certainly look very carefully at the problem of rail and roads in Kintail and other parts of the Highlands. This is a very difficult problem.

I am perfectly certain that the conservancy problems that will arise will be watched, and we have the Nature Conservancy to give advice to myself or to my successors. I am confident, too, that the standards of employment to which he referred will be good. Wiggins Teape is a first-class employer, and this is important for the district.

My hon. Friend the Member for Ross and Cromarty (Mr. John MacLeod) was very generous in welcoming this mill at Fort William. When the Mill was rather "wandering" round the Highlands, my hon. Friend and I, and others, all hoped that it might settle in our constituencies. I think it is very nice of him to be so generous about it arriving there.

I think the point that the hon. Member for the Western Isles made about small people coming into forestry is a very good one. I should like to be forthcoming on the co-ordination of hydro roads and forestry roads, but I do not think that I should deal with that matter off the cuff because, if I did, I should run into difficulties about road safety, and so on, as some of the forestry roads are suitable for an experienced driver and a Land Rover but not for a tourist in a family saloon.

The bridge over the Lochy at Fort William is a bottleneck and that and other road problems we shall have to deal with as quickly as possible. I have always believed that one could do a lot with sea transport for the mill and I know that the Forestry Commission and Wiggins, Teape are looking at this problem.

The hon. Member for Central Ayrshire, who was interested in this part of Scotland, which I too know well, has an interest not only in forestry but in fishing. He raised two or three points. I think that he was a little unkind in some of the things he said about forestry villages, though the point in general is a good one. I think the hon. Gentleman was also a little unkind in what he said about private owners who do not always plant. I know that some owners have been better than others, but I believe that the present figure of 93,000 acres a year is being planted in the ratio of 55,000 acres by the Forestry Commission and 38,000 acres by private owners. That is not too bad a balance.

My hon. Friend the Member for North Angus and Mearns (Sir C. Thornton-Kemsley) spoke about the reduction in the rotation of timber, and this is extremely important. Views have been changing fairly fast on this subject, even before the pulp mill came to fruition. I think that the extra rotation will give us a great deal of timber. I should like to discuss with Dr. Frankel the point about the consultative committee because that might be useful.

The hon. Member for Glasgow, Mary-hill (Mr. Hannan) has been to Finland, as I have, and seen the small sawmills, two of which we now have in Argyll. I am quite certain that some of these will develop elsewhere. I should not like to answer the hon. Gentleman's point about cellulose and fibreglass because I do not know whether the process is suitable for this mill, but I will rind out.

The hon. Member for West Lothian (Mr. Dalyell) asked about control. I do not think that he would want me to delve into the control problem at this time of night, but the immediate answer is that all the facts and figures will be dealt with by the accounting officer. They will be in the Board of Trade Vote, in the annual Estimates, and will in that way be available to the House.

Mr. Dalyell

Will all the accounts be subject to the general scrutiny of the Comptroller and Auditor General?

Mr. Noble

I think they would be.

Mr. Dalyell

Can the right hon. Gentleman check this?

Mr. Noble

I can find out about this and let the hon. Gentleman know.

The social expenditure which he asked about by the West Lothian County Council is certainly a big thing. Inverness County Council is quite ready and eager to help in the supporting develop- ment for its own benefit, as it knows that it will be in the long run.

The hon. Member for Greenock (Dr. Dickson Mabon) warned us about Cunards. I do not believe from the discussions which I have had that there is the least likelihood of Wiggins Teape pulling out of this operation. The company has shown tremendous determination to get into the operation and is very anxious to get started immediately and quickly.

I am not quite certain that I can agree with the hon. Member about trying to change the whole nature of my Scottish Development Department. If I had to bring in people suitable for top management jobs in all the industries in which we might be interested in Scotland, I should have a very funny Development Department before long.

We have had an interesting debate and the Bill has been welcomed. I welcome it for four main reasons. In the first place, it gives considerable employment this year in an area which needs it. Secondly, we have a steady build-up for the next three or four years. Thirdly, I believe that it will be an encouragement to other industries to come to Fort William and round about and will encourage industrialists of other sorts to think that the Highlands are not an impossible place in which to develop. Fourthly, and perhaps most important of all, I think that it will play a most significant part in the psychological effect it will have in the Highlands where people will think something really important has come which will provide lasting employment there. I recommend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 38 (Committal of Bills).