SCOTLAND (INDUSTRY AND EMPLOYMENT)

HC Deb 05 July 1967 vol 749 cc1835-949

3.58 p.m.

Sir Keith Joseph (Leeds, North-East)

I beg to move, That this House regrets that Her Majesty's Government has not taken the action which is urgently required if Scotland is to make the economic progress that is essential for her future prosperity and development. It is for me a matter of pride to be taking part in a debate on Scotland. I know very well that a large number of my hon. Friends have a great deal of trenchant comment to make on Government policy, and I shall not attempt to cover any detailed points which they will want to make. May I first declare a personal interest: two companies with which I am connected are active in Scotland.

This Motion deplores the lack of effective action by the Government to meet Scotland's troubles, but nothing would be gained by pretending that the job of any Government is easy in this respect. Scotland had a very heavy preponderance of outdated and heavy industry and an inheritance of housing and other social assets which, after the war, rapidly became obsolete. It was the skill of Conservative Governments during their 13 years of power which set in hand the transformation of the Scottish economy and notably shifted the balance of industry from heavy and old-fashioned to modern and sophisticated. In the same way, the transformation of housing and social environment was begun.

However, a great deal remained to be done when we gave up power in 1964. I repeat that it is not easy for any Government to achieve this transformation and certainly not to do it quickly. Nor is it easy for work to be taken to the workers. We are one of the few great industrial economies which deliberately seek to take work to the workers, but we should not conceal from ourselves that this can be an inherently difficult operation.

The Secretary of State said in August, 1966: Scotland is in a far better position today than it has ever been."—[OFFICIAL REPORT, 2nd August, 1966; Vol. 733, c. 378.] This was nearly a year ago. He went on to say that he paid full credit to my right hon. Friend the Member for Argyll (Mr. Noble) and previous Secretaries of State. That was a very proper tribute. Unfortunately, I cannot reciprocate it. It is not possible to say today that Scotland is in a far better position than it has ever been.

Our debate is about jobs and industry, but there is a vital social background. There is desperate need for modern housing in Scotland and we know that the Government have twice failed to achieve their annual target, although we hope that they may succeed this year. School building is lagging, against a background of a rising school leaving age in 1970 and a rising child population.

There has been neglect of ports and airport development. The Government's Scottish White Paper made no mention of Common Market prospects, which should have led them to put money and investment into the relevant ports and airports for eastward communications.

After acknowledging the importance of this background, I turn to jobs and industry, and I shall not embark on selective statistics. We are only too familiar with the bellicose evasiveness of the Secretary of State and we are sure that he will give us—we hope not, but fear so—a great sheaf of selective statistics. Unfortunately, the position is only too clear and only a very few statistics will show it.

Only three years after a change of Government, there is a risk of double counting, with both parties seeking to claim credit for some successes as being attributable to them, but there can be no dispute about these two figures. Between 1960 and 1964, 157,000 new jobs came into being in Scotland. They were real new jobs. The Government's White Paper estimated that, in the corresponding period, 1965–70, there would be 130,000 new jobs, or about 30,000 less than Conservative Governments had achieved.

But the estimated jobs in the White Paper were of course only "paper" jobs and the events of the last year make them highly improbable of achievement. Thus, on the sheer count of job growth comparison, this Government have much to be ashamed of already. During the time of Conservative Governments, Scotland virtually monopolised the influx of American companies with their high capital investment, great management skill and the corresponding benefits for Scotland. Scotland also received more English companies than any other assisted area and gained more migrant jobs than any other except the North-West.

That excerpt from a Glasgow University survey sets a standard by which the present Government's performance must be judged. Scotland is not a closed economy. We must recognise that it is interdependent with the United Kingdom. Therefore, what is vital is the Government's success or failure in running the whole national economy. In 1964, the Socialist Government inherited a boom, which was not out of control. If anyone wishes to deny that, let him look at Paragraph 7 of this Government's White Paper of 26th October, 1964, which says: Apart from special problems of individual areas, there is no undue pressure on resources calling for action ". So they inherited a boom which was not out of control, and this was as true of Scotland as of the whole United Kingdom.

Therefore, the growth of jobs in 1965 and early 1966 was a legacy of conditions under a Conservative Government and it is no use this Government claiming credit for that harvest. Ships coming off the stocks now were ordered when my right hon. Friend the Member for Wallasey (Mr. Marples) was Minister of Transport—[An HON. MEMBER: "Rubbish."]—the hon. Gentleman says, "Rubbish", but it is undeniable that the harvest of ships now being completed was ordered under the previous Government.

The Socialists stoked the boom instead of damping it and then, when they recognised that they had misjudged the economic climate—[Interruption.]—if the Secretary of State wishes to interrupt, perhaps he will make it plain. When they belatedly recognised that the economy was running too fast, they began a series of furtive efforts, made abortive by their constant double-talk and clumsiness, to suppress the boom, but they continued to take credit for the superficial advantages which were by-products of it.

They inherited a boom, and, by their failure to keep it under control, they turned it into a slump; that is our charge against them. We all know the consequence of this failure of economic mastery. We remember the humiliation for the Government and, alas, for the country, of 20th July, 1966. They allowed the boom to get out of normal control during that time when, in the Foreign Secretary's importal words, "They were running the economy as no economy had ever been run before." The prosperity of 1965 and early 1966 in Scotland was due to overheating of the whole national economy rather than to any notable regional planing by the Government.

This party of planners totally failed to see the rocks for which they were heading, and of which they were constantly warned from this side of the House. Far, far, too late, and therefore far more sharply than would have been necsssary had they acted earlier, the brakes were applied and now Scotland is in trouble. Momentum and confidence are gone and all the fine words and promises and plans of the Secretary of State are swamped by rising tides of the triple evil of Scotland—unemployment, emigration and depopulation. My hon. Friends, with their local knowledge, will provide the stories of the effect of these problems on individual areas which have been worse hit. The facts are undeniable. Unemployment is relatively high, and a relatively high proportion of unemployment is relatively long. Combined with those two facts, there is the fact that there are in some areas acute shortages of skill.

Net emigration is at record levels.

Mr. George Willis (Edinburgh, East)

Selective figures.

Sir K. Joseph

The figures bear out all these assertions. In June, the latest month for which figures are available, there were 73,000 wholly unemployed, excluding school leavers, which made a seasonally adjusted percentage of 3.7. The underlying movement is upwards, with an average monthly increase of 2,600 in seasonally adjusted unemployment. It was the Prime Minister who, when he spoke in Scotland in March, 1966, called a level of 3.6 per cent.—0.1 per cent. below the present figure—intolerable.

The question we want the Government to answer is: how much higher will the figure go? We know from the record of past squeezes that there is normally a lag of 21 months between the impact of the squeeze and the peak of its economic effect. We would therefore expect unemployment to reach its peak level in February, 1968. We ask the Secretary of State to tell us what he expects unemployment to be in that month, given normal winter conditions.

I am sure that the right hon. Gentleman will remember now, if he has not remembered before when misusing statistics against this side, that in the winter of 1963 we had abnormally severe weather conditions. We certainly hope that the Government and the country will not face another 1963 winter. But even without such bad weather, unemployment may well be much higher than it is now, and we want to know the right hon. Gentleman's estimate of the figure.

It is not only the number of unemployed but the length of the unemployment. In Scotland, there is still a lead in this respect. There are more people unemployed for over eight weeks there than in the United Kingdom as a whole, and we all realise that but for emigration the unemployment figures would be far, far worse than they are now.

Emigration is running at rising levels. We know some of the reasons for it. We are glad to know from The Times yesterday that there has been a slight diminution in scientific and academic emigration in recent periods, and we welcome that information. But this Government have pledged themselves to cut emigration. In that same speech in Scotland, the Prime Minister declared that the Government were determined to reverse the tide of emigration. We want to know from the Secretary of State what the Government are doing about that, and what success they think they will have.

Emigration, too, tends to come to its peak about 18 or 20 months after the impact of a squeeze, so that we may expect that 1968 will show even worse figures than those for 1965 and 1966. At the present rate, the Government show a fair likelihood of achieving in two years half the emigration that, sadly, occurred during 11 years of Conservative Governments. We ask the Government for their views about this trend.

Mr. Willis

Rubbish.

Sir K. Joseph

The right hon. Gentleman says that it is rubbish, but his right hon. Friend the Secretary of State for Scotland used to make great play of the loss to Scotland of 174,000 people between 1951 and 1962. My reckoning is that during 1965 and 1966 half that number will have been lost to Scotland in net emigration—in two years compared with 11—[Interruption.]

Mr. Speaker

Order. Scotsmen will get a chance of making their contribution in a Parliamentary way.

Sir K. Joseph

I turn to new jobs. There are, of course, new jobs and we welcome all those that are brought to life in Scotland, but many of them were legacies of the last Government. There have been disappointments—Plessey, at Dundee, leaps to mind—but we welcome the 2,000 new jobs at Rank-Xerox at Kirkcaldy. We welcome all the new jobs, especially the sophisticated jobs. Nevertheless, I have here a very long list of cuts and closures, often in industries that are advanced in technology, and often in areas that are crucial.

These losses of jobs exceed by many times the number of new jobs in advance factories in the programme announced by the Government. Of the 43 advance factories announced by the Government, I understand that seven have been completed and occupied, providing 181 jobs, and that six further advance factories have been completed. We would like to know from the Secretary of State whether the six that have been completed have been let, though not yet occupied.

We would also like to know in how many of the Government's factories already in existence the occupants have either given notice to or dismissed labour since the squeeze began in July, 1966. What we have to look at is not just the number of new advance factories but the effect of Government policies on Government factories as a whole. I suspect that this will show a net loss of jobs since 20th July, 1966.

After setting out these facts—and to the best of my knowledge they are facts—one must ask what are the lessons for Scotland? I believe that the first and foremost is that Scotland, as with England and as with Wales, is totally dependent on the success of the Government in controlling the national economy, and it is the present Government's failure to control the national economy that has led to the present disastrous fall in confidence, jobs and momentum of development in Scotland.

The second lesson we have to learn is that while the squeeze has brought about an increase of competition, competition by itself, without incentives, is not really as effective as competition with incentives. Every Budget of this Government has hammered the incentives to managements, on which we on this side believe that economic progress to a large extent depends.

If control of the economy is the first lesson, and competition, coupled with incentives, is the second, the third lesson is the importance of confidence. In all these three—control of the economy, competition plus incentives, and confidence, this Government have failed. But it is not only in their general policy that they have failed. There are strands of individual policy that are especially harmful to Scotland, and I will only touch on them.

First, there is the change from the Toothill concept of growth areas to indiscriminate help over the whole of Scotland. We believe that this change is unlikely to encourage growth and progress nearly as much as did my right hon. Friend's use of the growth area concept enshrined in the Toothill Report. Second, we deplore the departure from free depreciation. Third, we believe the use of investment allowances, which gave help to firms and enterprises that were profitable, was a far sounder way of encouraging business than are investment grants that make no distinction between profitable and unprofitable enterprises.

Fourth, we have on many occasions made known our views about the Selective Employment Tax and the regional employment premium. We think that these tend to encourage inefficiency. They represent a very primitive view of the economy in their bias against the service industries which, in Scotland, in the form of tourism, are so important. We believe that the Government have introduced the R.E.P. only as a panic measure to try to minimise this winter's likely rising trend of unemployment. We fear that it cannot be effective in time, if it is effective at all.

We have also many criticisms to make of the Government's housing policy and of their transport policy. We would like to know from the Secretary of State whether there is to be a separate Scottish Plan for the period 1967–72, or whether Scotland is to be covered by the First Secretary's announced plan for those years.

I turn last to the right hon. Gentleman the Secretary of State for Scotland who is meant to be in charge of the interests of Scotland. I have quoted his tribute to my right hon. Friend the Member for Argyll (Mr. Noble); it does the right hon. Gentleman credit. However, I have read the right hon. Gentleman's remarks from both the Opposition Dispatch Box and the Government Dispatch Box and, however hard I tried, I could not find any impression whatever of humility. When he was in opposition he gave no recognition of the difficulty of the job which had to be done. He was an effective representative of his party in opposition, and I well remember how effective he was. But I have formed the impression that he has not been and is not being nearly as effective in Government.

In a recent speech, my hon. Friend the Member for South Angus (Mr. BruceGardyne) truly said of the right hon. Gentleman that his speeches in opposition were full of solutions, yet suddenly all Scotland's problems became intractable. Suddenly all the solutions which the Secretary of State had at his finger tips had become difficult.

The right hon. Gentleman's speeches from the Opposition Dispatch Box have been shown up as empty by his performance in Government. I said at the start that the task of any Government in this respect was difficult, but the Government have made it much more difficult for themselves, first by losing control of the economy and, secondly, by keeping the right hon. Gentleman as Secretary of State for Scotland. I quote from an article in yesterday's Scottish Daily Express. [Laughter.] Hon. Members would be foolish to laugh at an organ which is read by so many millions of people. Writing of the right hon. Gentleman, the article says: His assurances are meaningless and are unanimously criticised. This is not the reputation to foster confidence. [HON. MEMBERS: "Who wrote it?"] It is signed by Charles Graham. The right hon. Gentleman's speeches are as bellicose and as arrogant as ever. He may be a wiser man than he was, but if so he is hiding it. I can only say that pride comes before a fall.

In April, 1966, the Prime Minister said: The Scottish Office and every other Department of State are under instruction to do everything in their power to solve the unemployment problem, to halt migration and to improve diversification. So why has so little been done? Has the Secretary of State been effective in the Cabinet in Scotland's interest? We know that school building is lagging and we know that housing is lagging. The Secretary of State has not even obtained for Scotland her share of the rising number of civil servants under the present Government, and I have figures to prove that.

As for the Secretary of State's success in securing for Scotland any of the Government establishments which have been available during the last two years, his failure seems to have been total. I have a list of five main Government establishments which might have been set up in Scotland but which instead are being sited in other parts of the United Kingdom—the Royal Mint being set up in Cardiff, the National Computer Centre in Manchester, the headquarters of the Steel Corporation in London, the Land Commission in Newcastle and the Vehicle Taxation Centre in Swansea. Obviously, Scotland could not have had more than a small share, but each of the establishments might have been ideal for Scotland.

Surely the right hon. Gentleman has not come to today's debate empty handed. We very mch hope that he has some good news to give to Scotland. What about the tenth P.A.Y.E. computer centre with 2,000 jobs? One of the ten is still not allocated. We hope that the right hon. Gentleman will be able to tell us that he has got that for Scotland. If he has failed there, too, we can only assume that he has not been representing Scotland adequately where these decisions are made.

This will be the right hon. Gentleman's fourth Christmas in his present post. His fourth winter lies ahead. We want to know from him how high he expects unemployment to go by this coming Christmas, by next February, when the impact of the measures of 20th July should be reaching their peak, given a normal winter.

The Government have been in power too long to escape judgment. There can be no alibis now. They inherited a boom and turned it into a slump. They have wrecked the momentum of Scotland's progress. We wait now without much hope to hear what the Government intend to do to fulfil their pledges about jobs in Scotland, about unemployment in Scotland, about emigration from Scotland and about depopulation in Scotland.

4.26 p.m.

The President of the Board of Trade (Mr. Douglas Jay)

I think that this afternoon the House would like to hear some facts and a serious analysis of this problem rather than to follow the right hon. Member for Leeds, North-East (Sir K. Joseph) into the party political nonsense and misquotations from the Press in which he has indulged this afternoon. However, I agree with him at least in this—that if we are to bring to Scotland all the extra industry and employment needed for Scotland's future economic vitality, we must realise that this is a formidable, persistent and long-term problem which will need continuous effort without relaxation.

The fallacy in the past has been to regard it as a temporary problem. The right hon. Gentleman professed to have discovered that this afternoon, but it is somewhat pathetic to realise now that his party introduced the Local Employment Bill in 1959–60 designed to expire altogether seven years later in 1967 on the assumption that the problem would then have been entirely solved. We in the present Government have adopted an entirely different and far more realistic line of attack.

First, we regard it as a permanent problem requiring permanent legislation. Secondly, we have scheduled far wider areas as development areas—and I was interested to learn from the right hon. Gentleman that he would debar large sections of Scotland from the benefits of this treatment which we are now giving them. Thirdly, the Government now offer a much larger and more generous range of services and assistance to developing industry in Scotland than ever before—the availability of Government-owned factories and publicly managed industrial estates, investment grants for plant and equipment at 45 per cent. this year and next and 40 per cent. thereafter, building grants for private new factory building at 25 per cent. of 35 per cent. in some cases, and now the regional employment premium and a far more ambitious programme of advance factory building than at any previous time.

Even more important, we have used our industrial development certificate control throughout the whole country in such a way as dramatically to increase the share of new industrial development going to Scotland, and this is bound to tell increasingly in the years ahead as these factories get built and manned up. I should like to give some wholly unselective figures about this. The percentage going to Scotland of all new factory building approved in Great Britain in sq. ft. in the years 1961–64, about which the right hon. Gentleman boasted so much, was 10 per cent. In 1965 and 1966 it averaged 15 per cent., and in 1967 so far it has risen to 20 per cent. Meanwhile, in London and the South-East the share fell from 27 per cent. in 1964–64 to 15 per cent. in 1966 and the first six months of 1967. It has fallen also in the Midlands.

Even more striking—the right hon. Gentleman asked for non-selective figures —is the rise in the absolute volume of new factory development going forward in Scotland. The total area in Scotland approved in 1964–64 averaged 4,857 sq. ft. a year. In 1965 and 1966 the average rose to 9,610,000 sq. ft., and in the first six months of 1967 it hs run at the rate of 13.;7 million sq. ft. a year, that is, about treble the rate of the years before this Government came to power. To put it another way—I can put it in various ways, as the right hon. Gentleman does not like selective figures—the total of new factory space approved in Great Britain as a whole rose by 37 per cent. between 1961–64 and 1965–66, and in Scotland, it rose by 98 per cent.

The estimated additional employment from new projects approved in Scotland in the relevant periods has risen from an average of 13,000 in 1964–64 to 24,000 as an annual rate in 1965–66, and it is still at an annual rate of 19,000 in the first half of 1967. To put it plainly, this means that there is more factory building going forward now in Scotland than ever before, and this is bound to affect employment in the years ahead.

The totals which I have given, naturally, include both private and Board of Trade new factory building under the I.D.C. system, that is, everything over 5,000 sq. ft. In Scotland publicly financed factory building in 1966 was about 20 per cent. of total factory building. When I say "publicly financed" factory building, I include local authority, development commission, new town and Board of Trade building. The Board of Trade's own advance factory building programme in Scotland in total is only one part even of the total Board of Trade industrial building. The rest of our building programme consists of Board of Trade building for individual firms. This means that the advance factory programme is only a small part of the total of all industrial building going forward.

I mention that because some people fall into the mistake of thinking that this programme is the whole of the Board of Trade's building programme, or even that it is intended to meet the whole employment problem facing us in Scotland. It is intended only to meet one part of it. However, the special value of the advance factory programme is, I believe, threefold. First, it primes the pump by initiating projects which, very often, grow thereafter, often quite quickly. Second, it enables the Board of Trade to site these factories precisely in those areas, notably coal-mining areas, which other developments have missed. Rightly, we give considerable freedom of choice to private firms in inducing them to these areas, and it is, therefore, valuable to have an alternative method of providing development in areas which might otherwise miss it. Third, it enables us to offer a ready factory at short notice, which is often a great attraction to a firm.

Since the right hon. Gentleman struck his party political note, I shall give these further facts. Altogether, since November, 1964, 43 advance factors have been authorised for Scotland, including the latest nine which I announced on 2nd June. These 43 announced in two and a half years are to be compared with only 24 in the 13 years from 1951 to 1964. The 43 factories in the five programmes since 1964, including extensions, total over 900,000 square feet, at a total cost of about £4 million. Some 28 of these have been deliberately sited in areas of Scotland where coal-mining employment is expected to decline, as part of our overall plan for providing new work in those coal-mining areas.

The House will be interested to know that, of the 34 advance factories in the four programmes between November, 1964, and this June, that is, excluding the June programme, 13 have already been completed, 18 are now building, and 10 have already been allocated. Incidentally, three of the allocated ones have already been extended at the request of the tenants. The 10 allocated include two at Bellshill taken by Honeywell Controls, one at Cumnock by Chemstrand, one at North Cardonald by Bovril, one at Blantyre by Fabri-Tek Ltd., one at Queenslie by Phillips Drill Company, and one at Stranraer by a shoe company known as Baby Dear Shoes Limited. [HON. MEMBERS: "Hear, hear."] Perhaps that is an indication of advance consumer interest.

Mr. John Brewis (Galloway)

Has not one of those been taken purely as a temporary measure so that the firm may train its workers?

Mr. Jay

I did not properly hear the hon. Gentleman's question. Perhaps he will be able to catch the eye of the Chair later.

Mr. Brewis

One of them is taken only as a temporary measure.

Mr. Jay

I do not know what the hon. Gentleman means by that. These factories are not temporary. Once built they will last as long as any others.

Mr. Brewis

But the firm has taken the factory only for a month or two to use it as a training centre.

Mr. Jay

Apparently, the hon. Gentleman is referring to one factory which is being used as a training facility, I understand, with a view to expansion later on.

Most of these factories have been sited in the industrial and coal-mining areas of central Scotland, but we have also included in the programme factories at Aberdeen, Stranraer, Campbelltown, Inverness and, in this June's programme, at Banff and Dumfries.

Altogether, now, the Board of Trade owns 25 million sq. ft. of factory space in Scotland and 12 major industrial estates, including the new estate at Bellshill, which is being rapidly developed. Altogether, nearly 100,000 people are employed in Board of Trade owned factories in Scotland alone. We plan to develop industrial estates also at Falkirk, Cumnock and Dumfries, and we are buying land in advance to ensure a quicker rate of factory building in the future. The total of publicly owned industrial property in Scotland, as well as the employment offered in these factories, is thus now rising rapidly after the previous years of neglect.

At the same time, an encouraging number of new private industrial projects are being developed in Scotland, certainly on a bigger scale than for many years past. This is particularly encouraging in a credit squeeze period, and it shows that the powerful incentives now offered by the Government in development areas must have more than offset the supposed effects of the squeeze in recent months. The biggest of these projects—the right hon. Gentleman asked for facts—is the Rank Taylor Hobson plan for a major new factory at Kirkcaldy, to employ 6,000 eventually. Also at Kirkcaldy Nairn Williamson is planning a new unit to employ 600.

In addition, Borroughs Machines is planning a £9 million expansion which will provide 1,000 jobs in the next four years in Cumbernauld and the Vale of Leven. Ferranti has acquired the United Biscuit factory at Edinburgh, the closure of which, I know, caused disappointment, to employ 1,000. Honeywell is expecting to expand by 3,000 above the present level at Newhouse by 1970, that being in addition to the two new large factories at Bellshill which are now virtually ready for occupation. National Cash Register has taken over the 400,000 sq. ft. factory at Dundee which was vacated by A.E.I., and it expects to increase its employment in Dundee by another 1,000 over the next three or four years.

Babcock and Wilcox is expanding and diversifying, and expects its labour force to grow at Renfrew, Dalmuir and Dumbarton by 2,000 over the next five years; Chemstrand continues to expand at Drybridge, Ayrshire, with a target of another 450 jobs; and British Hydrocarbon Chemicals, at Grangemouth, backed by B.P., is to build a major new plant there which will more than double its capacity for producing synthetic rubber materials.

In addition, Rolls Royce is establishing a new precision forge at Hillington which will employ another few hundred workers when fully developed, and I can announce today that Rolls Royce has also decided to take over the old Kelvin Electronics factory at Hillington, and that this will contribute substantially to its planned increase of at least 360 jobs in the next 12 months. Part of the new space will be occupied by a central training establishment, which will bring together the various sections of training which have hitherto been dispersed.

I think that all this shows that, despite some disappointment and some inevitable closures, a great deal of new development by modern engineering and other science-based industries is now going forward in Scotland. The new survey carried out by the Scottish Council (Development and Industry) and published in the past few days shows that firms which have recently moved to Scotland from North America and elsewhere have greatly expanded their investment and employment in Scotland in the past three years.

I am sure that the Scottish economy has been greatly strengthened by the participation of Chrysler in the Rootes projects at Linwood, which should ensure the prosperity of the area for a long way ahead. The recent major relaxation by the Government of hire purchase controls on the motor industry should be of benefit to Linwood as well as to many other projects.

So also has Scotland's economy been strengthened by the Government's participation, together with trade unions and others, in Fairfields, which would other- wise have collapsed two years ago. In view of what the right hon. Gentleman said, I remind him that since Fairfields was given this special organised help, a number of new orders has been obtained —they were not obtained in the days of the previous Government—including that for a container ship for Overseas Containers Ltd., two survey ships for the United States Navy, and two cargo ships for Reardon Smith & Sons.

Mr. T. G. D. Galbraith (Glasgow, Hillhead)

This is very interesting, but could the right hon. Gentleman give an indication of the likely profitability of these contracts?

Mr. Jay

I was asked for the facts, and at the moment I am giving them rather than prophesies. But in view of what the hon. Gentleman and the right hon. Gentleman have said, and in view of the encouraging record of Fairfields under the new régime, with all that that means for Clydeside, it is rather amusing to reflect that when we announced the Government's action to sustain Fairfields 18 months ago the official spokesman for the Opposition said: … the whole country will see the method now selected … as being only the beginning of an extension of nationalisation into the private sector, …".—[OFFICIAL REPORT, 22nd December, 1965; Vol. 722, c. 2104.] If that was an example of nationalisation, I think that Scotland would like to have a great deal more of it. What the country will really note is that if the Tories had been in power in 1965 Fairfields would not have been in existence today, and these valuable contracts would have been lost to Scotland.

I am sorry that the right hon. Gentleman has raised these polemical arguments, and I shall therefore move on. As an incentive and help to all this industrial development which has been moving ahead, the Board of Trade has been steadily increasing its rate of financial assistance in Scotland over and above what was available from the previous Government under the Industrial Development and Local Employment Acts. The total has increased from an average of £12½ million in the four years 1961–64 to an average of over £15 million in 1964–66 and £19½ million in the financial year just ended.

Sir K. Joseph

While obviously we welcome each of the items announced by the right hon. Gentleman, will the Government answer the question put to them about the trend of unemployment between now and February, 1968?

Mr. Jay

I am coming to unemployment after giving all those figures, which are strictly unselected.

In addition to the financial assistance of which I have spoken, the recent speeding up in payment of investment grants—of which over £5 million went to firms in Scotland between April and the end of June this year—should be a still further incentive to industrial development. In the past year the effort to build up new employment and industry in Scotland has had to fight against some of the effects of the credit squeeze and the restraints imposed by our balance of payments difficulties. Over the past three years we also had to fight against the rapid decline in employment in the coal and some other older industries.

That is the answer to simple-minded people who are puzzled to find that, after so much effort and new development, the unemployment rate remains higher than one would wish. Because of the decline of these older industries, we have had to run very fast in order to keep still. To put it another way, everyone agreed a few years ago, and agrees now, that a great effort must be made to find new work for those released from coal and other declining industries. That is what has been very largely done; new industries have been taking the place of the old. Otherwise there would have been a serious rise in unemployment. The total fall in employment in coal-mining alone in Scotland in the three years up to mid-1966 was as much as 15,000.

The really significant fact is that during the past year—and indeed the past two years—as a result of the I.D.C. policies and everything else I have described the unemployment rate has moved in favour of Scotland, as compared with Great Britain or as compared with the South East or the Midlands. The rate for Great Britain in June of 2.1 per cent. total registered unemployed—not seasonally adjusted—was 90 per cent. higher than in June, 1966. In the London and south eastern regions, where by and large it is very low, it was 110 per cent. higher. But in Scotland it was only 47 per cent. higher. That is a significant shift, even though it may not be all we wish. Indeed, the June unemployment figure for Scotland this year was lower than in both north-east England and Wales.

Mr. J. Bruce-Gardyne (South Angus)

Does the right hon. Gentleman agree that if he looked back to the periods from June, 1961, to June, 1962, or from June, 1967, to June, 1968, he would find that the increase in unemployment in the United Kingdom as a whole was much more rapid than in Scotland, and that the comparison then was more favourable to Scotland than it is now?

Mr. Jay

That rests on the assumption that there will be a much faster rise over the next six months in Scotland, and I do not believe that this is true. Experience will show which of us is right. At any rate, up to date there has been a significant shift. To be non-selective, as the right hon. Gentleman asked me, if one takes the same period over the two-year period from June, 1965, to June, 1967, one finds that unemployment was 80 per cent, up in Great Britain, about 175 per cent. up in the Midlands, 95 per cent. up in London and the South-East, but only 37 per cent. up in Scotland.

This improvement is exactly what we set out to achieve. It does not mean that the job has yet been completed, or that there is anything for us to be in the least complacent about. There is a long and hard road yet to be trodden, but it means that the balance has been cleared and decisively tilted in favour of Scotland and the other development areas as a result of the efforts that I have described and of many others, which my right hon. Friend the Secretary of State will describe if he catches Mr. Speaker's eye later.

It means that progress is being made in the right direction, and that as the United Kingdom economy as a whole revives generally, Scotland will be far better placed to share in that revival. As long as we continue unremittingly on the present lines, as we firmly intend to do, we shall, on the evidence of the facts before us, succeed. I fully agree, indeed I warn the House, that there are strong natural forces working against us and there is a long way to go yet.

4.50 p.m.

Mr. Hector Monro (Dumfries)

From the long catalogue of events given to us by the President of the Board of Trade and from the cheers of his supporters behind him, one would think that the fact that there are 24,000 more Scots unemployed was of no major importance to them. How very wrong they are. I was very glad that the President of the Board of Trade told us towards the end of his speech that he was not complacent, because this is the right tone to set, bearing in mind the extreme difficulties that many of us can see. The right hon. Gentleman was very much more frank with the House than the Secretary of State, who seems to be eternally optimistic. He appears to be quite out of touch with events in Scotland, as he showed at the week-end, when he told a meeting of the tourist industry that everything in the garden was lovely. How the Secretary of State for Scotland can tell this to a meeting of the tourist industry and say that the Selective Employment Tax was to the benefit of the industry is incredible.

Mr. William Hannan (Glasgow, Maryhill)

It is time that some of these canards were nailed. The hon. Gentleman has just said that my right hon. Friend said that the S.E.T. had benefited the tourist trade. Does he want to repeat that statement? Will he not state the truth and say that what my right hon. Friend said was that S.E.T. was doing no particular harm? There is a distinction.

Mr. Monro

The hon. Gentleman is splitting the most enormous hairs. Anyone who read the reports of the speech—but no hon. Member opposite ever believes anything written in the papers—would have received the strong impression that the Secretary of State indicated to the tourist industry that it was doing jolly well, and all of us know that it is not. [Interruption.] If the hon. Gentleman the Member for Central Ayrshire (Mr. Manuel) wants to intervene, would he like to stand up and say something?

Mr. Archie Manuel (Central Ayrshire)

I would like the hon. Gentleman to admit frankly to the House, with his usual honesty, that his constituency has derived immense benefit from this Government in so far as there are two factories at Dumfries, and he has something in the mining area? Will he not admit this and be candid and truthful?

Mr. Monro

The hon. Gentleman is way ahead of me in my speech. I am coming to those points. There is one matter of accuracy in his statement, however. We have one factory in Dumfries. My right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) was right to set the tone of his speech by saying that all of the things done about jobs by the Government have turned out to be disappointing because the basic national economy was not right. One cannot isolate Scotland economically.

The reasons for this disappointing trend is that the original policy decisions made by the Government after 1964, when we had Finance Bill after Filance Bill, have done nothing at all to stimulate the situation. We have had S.E.T. which has not produced the jobs expected by the Government. We have recently debated R.E.P. We have talked about the pros and cons of grants as opposed to investment allowances, but none of these will do any good at all if we have a stagnant national economy. There is no doubt that business and the economy must be buoyant and profitable.

The party opposite continually set their faces against encouraging profitability, but we must have profits if we are to have investment in industry. This is what this debate is about, it is to get expansion in industry, to provide more jobs for people in Scotland. If there is no incentive to expand then business will not do so and that is what is happening now. There is a general stop on all fronts.

Mr. Gordon Campbell (Moray and Nairn)

Would my hon. Friend not agree that the President of the Board of Trade seemed to make a false comparison in Board of Trade assistance over recent years because he appeared to include investment grants under the Industrial Development Act as Board of Trade assistance in the last year or two, whereas they replaced investment allowances, which was Treasury assistance, and quite different?

Mr. Monro

I accept the point of my hon. Friend and thank him for it. The House might also bear in mind that if one works on a D.C.F. accounting system the old allowances were very much better than the present grants.

Mr. Jay

In reply to the hon. Gentleman the Member for Moray and Nairn (Mr. G. Campbell), I would point out that I only gave figures of investment grants from 1st April of this year onwards, and for the previous period I gave the comparative figures, which did not include investment grants.

Mr. Monro

Maybe I will be allowed to make my own speech without intervening in other people's. There are two obvious priorities, and the first is to get an upturn in the national economy. This must include lower taxation. This is of the very highest priority so that there will be more money to spend in the shops and to expand our home market.

Mr. William Baxter (West Stirlingshire)

Before the hon. Gentleman leaves this point of stagnation in Scottish industry and his statement that it is getting no incentives to go forward, will he tell us the industries which he knows which are stagnant and not receiving incentive to go forward? If he knows anything about business in Scotland he will know that every business is being encouraged to go forward and expand at the greatest possible speed.

Mr. Monro

If the hon. Gentleman had waited a little he would realise that 40 per cent. more people are unemployed in my constituency than there were 12 months ago. Industry there can hardly be expanding.

The second priority is to have another look at our development areas in relation to growth points. Development which is taking place is not necessarily going to those areas which need it most. I would never argue for the direction of industry, but I would argue for encouragement to be given through incentives. Now that the development areas cover virtually the whole of Scotland—bar Edinburgh and Leith; and it is extraordinary that, with the Government attempting to get into the E.E.C., the Port of Leith is not receiving all the financial assistance possible in view of the important part it will have to play, being one of our closest links with the Continent from the point of view of trade by sea—all these areas are competing with one another for new industries and it is even more difficult to attract industries to specific areas in Scotland.

The President of the Board of Trade rightly referred to areas of pit closure. I am particularly interested in the area of South Ayrshire and Kirkconnell and Sanquhar. In an Adjournment debate last March I spoke on this matter at length and will not today repeat the arguments I used. Suffice to say that a special problem exists in these areas. I am sure that the Secretary of State and the President of the Board of Trade appreciate these special difficulties and I trust that they are taking active steps to help. They must remember that the situation will become dramatically worse when the pits close. Every effort must be made now to have jobs ready when the pits close. I have urged this readiness all along, but I cannot see the Government taking action in time.

Mr. Alex Eadie (Midlothian)

I appreciate the hon. Gentleman's concern with the problems of the mining areas, and I assure him that we have a joint interest in this subject. Would he subscribe to the view of his right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) that only profitable industries should receive assistance? Would he be in favour of the mining industry being wiped out on the basis of that profitability argument?

Mr. Monro

No, and I would like to see the mining industry profitable. Although I appreciate the concern which is felt by the hon. Member for Midlothian (Mr. Eadie) for the problems of the mining area, I would prefer to see those problems solved by the pits being profitable.

I am pleased about the two advance factories being built at Sanquhar, but this is not necessarily the answer because I understand that no tenants are yet in sight. Of the 43 advance factories announced, only seven have been taken and, in all, only 181 people are employed in them. Considering the unemployment total of 77,000, that is only a small dent in the problem and the advance factory programme has not so far solved our unemployment difficulties.

I suggest that there should be a special category for areas which face particularly special problems. Perhaps we should go back to the idea of development districts, with small areas needing special help being given a name defining them as places in need of additional assistance. The blanket idea of the development area does not provide for these areas of special need. Perhaps there should be grants to local authorities to improve amenities, an important way of attracting new industries, and perhaps special and exceptional housing subsidies should be paid. Local authorities are keen to co-operate in attracting new industries, but they are already finding it hard to run their financial affairs. Selective help is required.

Following an earlier intervention by the hon. Member for West Stirlingshire (Mr. W. Baxter), I said that unemployment in my constituency had gone up by 40 per cent. during the last 12 months. This rise has been due to the general depression in the economy. It was wrong for the Secretary of State to say at Question Time a week ago that this rise in unemployment was due to a local pit closure. The pit in my constituency has not yet closed. That disaster may yet happen.

While these local figures are depressing—and I trust that hon. Gentlemen opposite feel depressed about them—they are reflected nationally. As my right hon. Friend the Member for Leeds, North-East said, there has been a drop of only 13 per cent. in unemployment between January and June, the lowest drop for a decade. The total unemployment figure is now exceptionally high. In June, 1966, it was 52,400, while the figure announced a week ago was 77,000; in other words, 24,000 more than 12 months ago. Hon. Gentlemen opposite cannot be proud of these statistics, particularly since they go right against the promises made by the Labour Party at the last election.

When discussing expansion, one must look at the figures of industrial production. They went up by 7.8 per cent. in 1964 and by 4 per cent. in 1965. The latest figure available for 1966 showed a rise of 2.9 per cent., while the National Plan is based on a growth rate of 4.8 per cent. The National Plan is now completely out of the window. It is high time that the Secretary of State agreed that it was, and told us what new plans he has in mind.

Mr. W. Baxter rose—

Mr. Monro

I will not give way. The hon. Gentleman has had a good innings. Perhaps he will be allowed to have another go later.

It is no use the Government being complacent and saying that the steps they have taken have worked, for they obviously have not. Advance factories will not cure all our problems. The Government should make every effort to create a buoyant economy in which industry is allowed to plough back its profits. The Government must ensure that the upturn takes place as soon as possible. Indeed, I would be happy to have another July Budget if it would ease things rather than restrict them. I want special help given to areas of special need, with more encouragement given to the mobility of labour.

I hope that the Secretary of State will address his mind to the recent report on council house waiting lists. It contained many points of benefit to Scotland, if they were implemented. More opportunity should be given for industrial retraining. I warmly support the claim of my right hon. Friend the Member for Leeds, North-East for more Government Departments to be sent to Scotland. The danger signals have been flying throughout this year and I hope that the Secretary of State will give us his honest view of what the position is likely to be in the coming winter.

This year's Budget concluded with the wonderful phrase, "Steady as she goes". Most people are now agreed that she is set steady for the rocks. Neither the Chancellor of the Exchequer nor the Secretary of State seems to be doing anything to get the economy into a shape which will encourage expansion and more industries to go to Scotland.

It is time that the Government stopped all this humbug about everything in the garden being rosy. The Secretary of State should say tonight what steps are being taken to improve Scotland's economy, what will be done in the next six months—before we reach the crisis point this winter—and what steps are being taken to remove this infuriating complacency which the right hon. Gentleman expresses in the speeches he makes throughout Scotland.

5.10 p.m.

Mr. William Hamilton (Fife, West)

I want to refer to the speech made at the opening of the debate by the right hon. Member for Leeds, North-East (Sir K. Joseph). It was an extremely unhappy speech, an extremely negative and ill-informed speech, consisting of widespread criticism with singularly little constructive thought in it. He indulged in vague generalisations about competition and incentives. We have heard all this before, but he did not spell it out or produce any evidence—nor could he—to show that there is a lack of incentive, nor that what he calls lack of incentive is an inhibiting factor in the economy at the moment.

He was particularly ill-advised to refer to shortcomings in the social infrastructure, in housing, education, ports, seaports and industrial training. Not a single statistic could he produce to sustain a case of those grounds. He decried the use of selective statistics, but in so far as he did use them he proceeded to deploy precisely selective statistics to sustain the case he was seeking to prove.

In October, 1964, when this Government came in, there were five Government training centres for Scotland with 529 places in them. At the end of last year, there were seven training centres in Scotland with 900 places. I give that one bare statistic to show the right hon. Gentleman that if he wants to take part—and we are glad to see him taking part—in Scottish debates, he must come armed with relevant statistics.

Sir K. Joseph

The fact behind the charge I made was that the Government, I am told, have cut short the technical college building programme in Edinburgh and Midlothian, and thus have fallen short of the expectation of training.

Mr. Hamilton

The right hon. Gentleman shifts his ground. He talked about industrial training, which means predominantly training in Government centres and in industry itself. If my right hon. Friend the Secretary of State takes this point at the end of the debate, he will be able to produce more up-to-date statistics than I can to show that the trend is very much in the right direction. It ill behoves the right hon. Gentleman to criticise us on that score.

The right hon. Gentleman spoke of failure in housing. I remind him, if he does not know, that the record of this Government in slum clearance is an all-time record in the whole of Scottish history. No other Government—certainly not his Government in 13 years—ever equalled the slum clearance statistics of today. In house building by the end of 1966 there was also an all-time Scottish record of over 50,000 under construction.

Sir K. Joseph

I very carefully said that the Government had failed for two years to achieve their own housing target of 40,000 additions a year, and that is true.

Mr. Hamilton

The right hon. Gentleman will be made to eat those words within 12 months. When he winds up tonight, I know that my right hon. Friend the Secretary of State will be able to tell us that we are on target.

Sir K. Joseph

I hope so.

Mr. Hamilton

I do not think that the right hon. Gentleman hopes so. When we looked at the faces of hon. Members opposite while the President of the Board of Trade was giving us facts, they looked as if they had lost the pools for every week of the year. They could not have looked more unhappy. When things are going well and the promise of the future is very great—although no one denies that there are problems—when future prospects for Scotland are good, it is quite deplorable that hon. and right hon. Members opposite should show their disappointment. I suspect that this is why the right hon. Member for Leeds, South-East is the "fall guy" on the Opposition Front Bench today.

Why did the Opposition not put up the right hon. Member for Kinross and West Perthshire (Sir Alec Douglas-Home), "the matchstick king", to open this debate? He was the "expert" who said that the economy had never been stronger when we took over. Why was he not put up to show the shortcomings of this Government compared with his own? Or why was not the right hon. Member for Argyll (Mr. Noble) put up? We would be interested to know why the right hon. Member for Leeds, North-East was chosen.

We are entitled to our criticisms and we shall make them, but it cannot lie in the mouths of hon. and right hon. Members opposite, after their 13 years' record, to criticise this Government for what they have done or failed to do in less than three years. The right hon. Gentleman mentioned unemployment. How the Tory Party has the nerve to talk about Scottish unemployment, I do not know. We may take any year in the whole of their 13 years, or any month in any of those years, and compare it with the comparable month or any year in our less than three years and find that we come out of the comparison extremely favourably.

I have a pile of Scottish statistical reviews, the Blue Books which were produced over the years since 1952–53. I have taken out the figures for May in each year. In May this year the numbers of wholly unemployed in Scotland were 77.8 thousand, in round figures. If one takes the May average for the previous six years of Tory Government, 1959 to 1964, when they said that they were getting on top of the job and were solving all Scotlands problems, one finds that it was higher than the average May figure for this year.

Of course, we claim that it is still too high. Many hon. Members on this side of the House still think unemployment figures are too high. My right hon. Friend would concede that. This is part of the price we have had to pay in trying to solve the problems which were left by the party opposite, despite what the right hon. Member for Leeds, South-East said about our being left with a boom. It was a boom which was completely out of control and was engineered for election purposes. They left a balance of payments problem which we are in process of solving. We shall not get rid of it, but we shall reduce it. There are very firm indications that the gulf between the development areas—which for us means practically the whole of Scotland—and the rest of the country has been quite significantly reduced. As a result of policies which the Government are now pursuing, it will be reduced still further in the next two or three years.

Having sought to defend the Government, I now turn to a different theme, in contrast to what hon. and right hon. Members opposite seek to do. I have paid my tribute to the efforts the Government are making. They are not negligible, but they are not enough. We can say that, but hon. Members opposite cannot say it. There is not enough being done in industrial training. Clearly, it has to be stepped up. That means a vast expansion in training facilities for instructors. It is not enough to provide the centres unless we have the instructors to man them. Greater incentives should be given to private industry to train within industry.

The hon. Member for Dumfries (Mr. Monro) mentioned an imminent rundown in the mining industry. We who represent mining areas all fear the social and economic consequences of yet another rundown of the mining industry. I am sure that many of my hon. Friends who represent mining constituencies pay tribute to the way in which the Government have sought to marry a rundown of the coal industry with the bringing in of new industry, and that is particularly evident in places like the County of Fife, where there are a growing number of science-based industries. Right hon. and hon. Gentlemen opposite can claim some credit for that. I do not deny it. However, they started too late. It was more than ten years before they came round to the acceptance of the principle of advance factories. For years they had denounced the idea.

The criticism which we make of right hon. and hon. Gentlemen opposite is not that they did nothing, but that they did too little far too late, and we are reaping the benefits or lack of them now. The present Government are trying to phase the inevitable running down of old-established industries and the creation of new ones by a combination of methods, including advance factories, retraining, the housing programme, and the rest.

If we are to get an expedited contraction of the coal mining industry, there must be expedition in the creation of more new industries in the areas concerned and, coupled with that, a more generous acceptance of the principle of compensation for the upheaval created in the lives of people who suffer from the rundown.

I want to put forward two propositions. The first concerns the commitment which we entered into at the last election on the need to establish publicly-owned and publicly-controlled industries in development areas. I need hardly remind hon. Members that it is a matter which I have raised repeatedly at Question time. It was an election commitment, and we have to honour it or give very good reasons why we do not.

The second proposition which I make concerns the power of Government Departments to purchase what they need. In answer to a Question on 29th June, one of the Treasury Ministers said: All Government Departments have power to purchase what is needed for the discharge of their functions and for purposes of internal administration".—[OFFICIAL REPORT, 29th June, 1967; Vol. 749, c. 125.] He then gave a list of the various Departments which spend enormous sums of money in public contracts of one kind and another. I will not read them all, but they include all the Defence Departments, the Ministry of Defence (Air), the Ministry of Defence (Army) and the Ministry of Defence (Navy), the Ministry of Health, the Ministry of Agriculture, the Ministry of Public Building and Works, and the rest. I hope that this will be followed up and that the Government will be asked what proportion for each of those Ministries is being spent in Scotland, because I am sure that the figures will show that we are not getting a fair share.

The Government ought to use their enormous purchasing power as a great instrument of regional development. If they use the much-abused S.E.T. as another instrument further to discriminate in favour of the development areas and against areas like the South-East and the Midlands, I am certain that what has been done in the last two and a half years will be done even more and with more success in the next two or three years, and then right hon. and hon. Gentlemen opposite will have to eat an awful lot of words.

5.25 p.m.

Mr. Anthony Stodart (Edinburgh, West)

I do not imagine that it will be taken amiss if an hon. Member representing a constituency in the city of Edinburgh takes the opportunity of a debate on industry and employment to discuss the relationship of that subject to the city of Edinburgh and to consider it in the context of the recent application to join the European Economic Community.

I do not wish to bore the House by reminding it in detail of the exclusion of the City of Edinburgh, together with the port of Leith, from the benefits which accrue to those in the development areas. I should not have been surprised if, when it was first announced in January, 1966, the businessmen of Edinburgh had raised a continual howl of indignation and that it had remained at that, because obviously they would be affected personally. But the proposal has met with universal condemnation from national bodies of repute such as the Scottish Council for Development and Industry, whose opinions are largely respected by hon. Members on both sides of the House. That body expressed its views strongly on 13th April last year when it said: In terms of employment trends in manufacturing industry and of population changes, Edinburgh is less favourably placed than the rest of Scotland taken as a whole". More recently, in booklets on the regional employment premium which it has submitted to the First Secretary of State and Secretary of State for Economic Affairs, it has said, in a paragraph headed, "The Edinburgh Area": There remains the further anomaly of the exclusion of the Edinburgh and Leith area, the focal point of growth in the East of Scotland, and containing one of Scotland's most important ports, from the Scottish Development Area. The effects of this situation will grow slowly but surely more serious as time goes on. This focal position of the Edinburgh area requires the acceleration of transition from some shrinking occupations to other and more vital functions". At least one leading trade unionist, Mr. Craig of U.S.D.A.W., has said: Difficulties will be most pressing in Edinburgh because the city is the only part of Scotland not classified as a development area. The reason for the exclusion has been given by the Secretary of State to Edinburgh Corporation and by the Minister of State, Board of Trade, to me in a letter of February last year as being mainly due to the low rate of unemployment. As a rider to that I would add that a lack of manpower, which is obviously a consequence of a low rate of unemployment, is bound to result in industry having to indulge in heavier investment in capital machinery of a labour-saving nature. It means, therefore, that this is biting savagely on firms in the Edinburgh area, because there can be no doubt that, when one couples the virtually 50 per cent. rate of investment grant with the wholesale withdrawal of investment allowances, industry in the city has been put under a severe disadvantage.

I wonder whether, when he replies, the right hon. Gentleman can give us an assessment of the situation as it is now, following the statement on 5th April of this year by the Secretary to the Edinburgh Chamber of Commerce that seven substantial firms have uprooted themselves to settle outside the City". It is significant that many leading industrialists, among them the managing director of one of the outstanding firms, Ethicon on the Sighthill Industrial Estate, have expressed grave misgivings about their future plans for expansion. So much for the City of Edinburgh.

I have always thought, and so have many other people, that the port of Leith, the Leith area itself, has reasons for being given special consideration. Indeed, when the right hon. Gentleman saw the Edinburgh Corporation in February of last year he was reported in the Press as promising to look again at Edinburgh and Leith, but saying how difficult it was to justify the inclusion of Edinburgh. The implication which it was fair to draw from that was that there might be a case for considering Leith. Prior to that the Chief Industrial Adviser to the Department of Economic Affairs had been making extremely helpful noises and favourable comments about the Leith dock area.

In March of last year Mr. Middleton, the Vice-Chairman of the Scottish Economic Planning Council, said at a Press conference that Leith needs special consideration if we are going to develop the port as we wish to develop it. Then there ought to be something going alongside in the way of industry". yet not many weeks ago the Chairman of the Leith Chamber of Commerce said that there was a reduction in the number of inquiries for sites in the dock area, and that a number of firms were considering moving out.

The person whom I finally wish to call in support of my argument is a member of the Scottish Council, Dr. Flanders, who has been chairman of a study group. The Scotsman of 11th April said: Dr. Flanders, whose committee are studying Scotland's transport facilities with a view to E.E.C., said the port of Leith was undoubtedly going to be important not just to the east coast but to the whole of Scotland. Its inability to benefit from the full investment grants could well mean that it would not be able to offer the most competitive charges. He added that Leith was going to be a 'key point' if Britain entered the Common Market. 'It must not be handicapped. If it is, it is going to affect the whole of Scotland', said Dr. Flanders. Good communications were vital to Scotland which would lie on the very periphery of the E.E.C. It seems inevitable that if double the grant is available only five miles away, people who are considering building factories will not build them at the Leith Docks. They will build them at Mussel-burgh or Dalkeith, with the inevitable result that double handling will have to take place, and the rates are bound to be high.

Throughout this period the Government's attitude has been extremely confusing. Indeed, I would have said that chaos had virtually been in command. As I said earlier, way back in February, 18 months ago, the right hon. Gentleman implied recognition of the special case of Leith, and in the House on 9th March, 1966, the hon. Member for Central Ayrshire (Mr. Manuel), whom many of us regard as one of the father figures on the Government benches. asked: Is my right hon. Friend"— he was referring to the Secretary of State for Scotland— aware that … assurances have been received from the Board of Trade that incentives will be available in the Leith Dock area?".—[OFFICIAL REPORT, 9th March, 1966; Vol. 725, c. 2079.] I was taken to task that day, and I remember the consternation which appeared on the right hon. Gentleman's face when he heard what was being said.

Only a few weeks ago there was a statement by the Minister of State for Scotland. I hope that he was not misquoted in the Scotsman. Under the headline: Leith Docks' Part in national Plan for development. Memorandum handed over"— I gather that the hon. Gentleman had been at the docks inspecting the splendid new deep-water site—the article said: He pointed out that the argument so far had been about Edinburgh, Leith and Portobello. Edinburgh had made their own submissions and these must be considered. What was now being argued was the case for the Leith Dock Commission. 'In fairness to the Commission', said Dr. Mabon, 'the Government has never examined it in this strictly narrow context. This is what we will have to go into quite shortly.' But, alas, on the 14th June of this year the Minister of State at the Board of Trade, when asked whether an examination was taking place, said: … we have no plans for altering the present boundaries". and when he was pressed he said: … this is not the time to alter the present boundaries".—[OFFICIAL REPORT, 14th June, 1967; Vol. 748. c. 550.] Can the right hon. Gentleman tell us exactly what is going on? Is an examination being made? Is there a special case? Is the Board of Trade running the Scottish Office, as we suspect perhaps it is?

Mr. George Lawson (Motherwell)

If the Government's policy for the development areas is as bad as the right hon. Member for Leeds, North-East (Sir K. Joseph) suggested, why does the hon. Gentleman want to drag Edinburgh and Leith into this policy?

Mr. Stodart

I hope that the hon. Gentleman will not anticipate my speech. I shall say something about that later.

Returning to the general situation, the position has been aggravated recently by the introduction of the regional employment premium. The industries which are particularly affected are printing and publishing, which are famous and which have built up a reputation of which they can justifiably be proud. Perhaps I might quote from a letter I received from one of the great firms in Edinburgh, Thomas Nelson, at the Parkside works. When I inform you that the effect of the Regional Employment Premium on a comparable competitive company of this size in an area which qualifies for Regional Employment Premium is a free gift of some £30,000 per annum which such a competitor would undoubtedly use to reduce his prices in a manner totally divorced from his standard of efficiency … you will realise that we have little alternative but to consider moving our business to some other part of the country. To underline the absurdity of the Regional Employment Premium being applied to the country in the manner in which it has been, I would point out that we have another company, doing largely the same business, in Glasgow … if the monies which they draw are used to reduce costs it would create a disparity of just over 1s. per hour for the same operation done in Glasgow as compared with Edinburgh. Such a disparity in an industry where business is lost or won on fractions of a penny per book would be quite disastrous. Since the Government have declared their intention to implement Regional Employment Premium, no few than six London Publishers have telephoned to me to state in the most emphatic terms that we will lose their business unless we can reduce our prices to the level which they are expecting to get from comparable book printing houses in development areas. I do not know whether it is the Governments intention to remove industry from the City of Edinburgh. I was interested in a remark made by the hon. Member for Edinburgh, East (Mr. Willis) in the debate on the Countryside Commission last night, in which he advocated—and I do not disagree with him on this—setting up the Commission outside Edinburgh and a general dispersal of what he described as "office premises" out of Edinburgh.

That, perhaps, is the hon. Member kneeling on the stool of penitence, because he and the right hon. Gentleman played a considerable part in adding over 600 extra office workers to one building in the course of 27 months. I am glad to hear the hon. Member say that we must disperse, disband and scatter some of those.

The future of Edinburgh does not and ought not to lie in becoming a great manufacturing and industrial city. I am sure that it does not. But it should retain those industries which it has, and Leith could do with more industry at the docks. The situation is not in the least like that in the overcrowded south of England, because Edinburgh, Leith or Portobello has yet to see any signs of an overheating of the economy.

I want to say something constructive about Scottish industry in the context of our application to join the Community. I was a little distressed to read the right hon. Gentleman's reply on 28th June to the right hon. Member for Orkney and Shetland (Mr. Grimond), who had asked how long Scottish Ministers and officials had spent examining problems in Brussels. The right hon. Gentleman said: The arrangements for interdepartmental consultation ensure that the interests of Scotland are borne in mind."—[OFFICIAL REPORT, 28th June, 1967; Vol. 749, c. 83.] The Scottish Office—and the Department of Agriculture especially—has now supplied three extremely competent attaches to the city of Copenhagen. They are outstanding in the jobs that they have to do. One is now in Brussels, at our mission there, quite fortuitously and not appointed to look after Scottish interests. He is a member of the Foreign Service and he is very largely in charge of the economic aspects of our entry into the Common Market, and, as so, is reporting to our Ambassador. When I was in Brussels I made a particular point of asking him and others whether there was any direct contact with the Scottish Office, and I was told that there was not.

Signals or dispatches are sent to the Ministry of Agriculture, the Foreign Office, the Department of Economic Affairs and the Board of Trade, and I hope that these are being disseminated and filtered, and are getting through. I was profoundly impressed. The most important thing I learned in my fortnight over there was that there is a tremendous difference between what is said in Brussels and what is done in the various countries.

In respect of questions such as the question whether or not subsidies on transport will be retained in Scotland, and whether development grants will be retained, the people in Brussels may say, "No", but if somebody were there permanently he might be able to find examples of what was going on and to discover whether or not our legal system would be able to fit into the situation that lies ahead if we join.

The problems which affect Scotland in particular—remembering that we are not one of the regions of the United Kingdom but have a nation of our own, and our own office of administration—are legion. Bearing in mind, also, the fact that the ambassador is anxious to get more staff because he believes that he is short of them, I urge the right hon. Gentleman—in what I hope will be taken as no carping spirit but as a useful and constructive thought—to take the view that it would be a good thing for the Scottish Office and for Scotland generally if an attaché could be added to the Embassy staff to keep an eye on those problems which may affect Scotland more severely than any other part of the country. I hope that the right hon. Gentleman will bear that suggestion in mind.

5.48 p.m.

Mr. James Hamilton (Bothwell)

I pay tribute to the hon. Member for Edinburgh, West (Mr. Stodart) for his very constructive speech. When his right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) was speaking it came home to us that it is now becoming a six-monthly exercise to attack my right hon. Friend the Secretary of State for Scotland. In my view this is becoming an obsession with Her Majesty's Opposition. Apart from the speech of the hon. Member for Edinburgh, West, we have heard nothing constructive from hon. Members opposite.

We can well criticise the Government, but bearing in mind the Opposition's record we can also take the view that they have a cheek even to attempt to criticise. I come from one of the development areas. Not only was it a development area during the time of Tory rule but it can be deemed to have been one ever since 1945. When the Labour Government came to power after the war they started a policy of advance factories and industrial estates and during that difficult period, to their credit, they did a remarkable job. The Tories took office in 1951, and there was then a departure from that policy. Although my colleagues before me in the House at that time exhorted the Tory Government to continue that policy, they were not prepared to do so. In fact, they reintroduced it only about two years before leaving office in 1964.

As the President of the Board of Trade has revealed, during their period of office the Conservatives constructed 34 advance factories. Since we came back to power in 1964, 43 have been constructed. Much criticism has been levelled at the fact that the advance factories which have been constructed are not providing the jobs which are so urgently required. Two advance factories have been constructed in the industrial estate in my constituency, and they have been occupied. When the computer manufacturing firm, Honeywell Controls, at Newhouse, started there in 1946, they employed 30 people. They now employ 3,500, and last week they made a statement which hon. Members can read in the Financial Times that by 1970 they expect to employ 5,500 people. We also have an American firm, Euclid, in my constituency, which has started an expansion programme. By 1970 a further 1,000 jobs will be found in that part of the country. This proves conclusively what can be done where we have the desire and where the industrialists move into these areas. Industrialists have said to me many times that the workers in Lanarkshire are second to none and that they are prepared to stay there and develop their interests.

May I make a constructive suggestion? I do not think that we have done enough about industrial training centres. We are now making progress with them, but we are not doing enough. We need the skilled craftsmen in Scotland. Without them we cannot employ the ancillaries. At the moment many of our people are unemployed, and yet we are screaming to high heaven for the craftsmen we so urgently need.

Hon. Members opposite have referred to the unemployment figures. Too often we talk about them as if they were simply figures presented to us, and at the end of the day we may give the impression to the country that they mean nothing to us individually. I have always taken the view that it is easy enough to talk about unemployment as long as one is not one of the unemployed. The 70,000 or so who are unemployed at present are 70,000 too many. The Opposition tell us that there was a boom in 1957. There was also a boom prior to the last election. They conveniently forget to tell us that in 1963 in Scotland we had 136,000 unemployed. In Lanarkshire we then had 19,500 unemployed.

I believe that the Government can do something to cut down the unemployment figures, especially in the construction industry. There are many construction factories in and around Lanarkshire. Many of the construction firms throughout the country are not working to full capacity. Although we were told that the squeeze would not affect Scotland. I can say categorically that it did affect the construction industry. There is now a move to expand production so that the fears which exist in all our minds may not be realised because of the impetus in that direction.

But may I draw attention to the new factories which are being constructed throughout the country? It is not good enough for industrialists to go to a development area, to draw the grants from the Treasury and the Board of Trade and then, after about three years, to close their doors and move out. This has happened in my constituency, and I refer to the firm of Moffats, manufacturing gas and electric cookers. This factory was constructed three years ago, with all the grants from the Treasury. A further expansion was carried out in that factory 12 months ago, but at the end of June 230 workers were made redundant and the firm contracted. As usually happens, such firms move out of Scotland and go back to the south.

We must also give serious thought to the price which is being paid by industrialists for coal. The steel industry is placed in a very difficult situation because it is paying 30s. a ton more for coal than its opposite numbers in the south. There is competition in the steel industry, and when there is a price difference of that character, it places the Scottish steel industry in a very serious competitive position. In their efforts to relieve unemployment in Scotland the Government should apply their minds to this problem.

Mr. Eadie

I know that my hon. Friend is concerned about selective coal prices. We are both concerned about that. But he should bear in mind, if he is criticising the Government, that they are carrying out a policy of selective fuel prices which was started by hon. Members opposite.

Mr. Hamilton

I am pleased that my hon. Friend made that point, because I was about to say that my criticism is in no circumstances against the Government. At the same time, I expect the Government to put right the errors perpetrated by the previous Administration.

It is not good enough to criticise any Government unless we are prepared to put forward a constructive alternative. Lord Polworth, the President of the Scottish Development Council for Industry, made a statement a few months ago that the economy of the country was the strongest that it had been for 70 years. We should note his point of view.

In relation to the rating relief given to industry, we give 50 per cent., as the previous Government did, but we must also recognise that Scottish industrialists are paying more than those in the South. This could help to attract vital industry. We must have some of the scientific industries. It was said that B.M.C. and Rootes, in Linwood, were directed to their present locuses by the last Government. The Opposition oppose direction of industry and, contrary to something said on this side earlier, it has never been this Government's policy to direct industry. It was the policy of the Scottish T.U.C., but was never accepted by the Government. When private enterprise does not go to development areas which need a particular industry, the Government have the right and the responsibility to direct or finance an industry in the interests of the unemployed.

I ask my right hon. Friend not to be complacent, just because the Opposition have put forward no logical reason why they should return to office. They try to say that they are the saviours of the unemployed and of the economy, but I want to prove beyond a doubt that this Government can fulfil their election pledges, solve the unemployment problem and give people in development areas the prosperity to which they are entitled.

6.5 p.m.

Mr. Russell Johnston (Inverness)

This debate has become an annual spectacle and is generally more spectacular than productive. We have had the usual claims, denials, affirmations and prophecies, but when one asks the age-old question, "Stands Scotland where she did?", the answer immediately comes—she stands exactly where she did. There has been no change at all.

It would not be difficult to make a rhetorical speech, in which, on the one hand, one attacked Conservative policy—because for them to put down this Motion is unctuous humbug, as their performance was little different in most respects and in some, like housing, roads and effort towards regional development, notably worse than that of the present Government—or, on the other hand, castigated the Government for failing to live up to many of their promises as quickly as they led us to believe that they would and, most of all, for failing, despite the overwhelming Labour representation in Scotland, to inspire any new revival in the last three years in industrial growth, social awareness or democratic participation. There has been no basic change in Scotland's mood. Scotland stands where she did, a nation with many advantages, skills and courages and with many short-comings. It would not be difficult or unfair to develop this theme, but it would not be very useful.

Liberals have stood for a long time for self-government, as the only way of creating the conditions of national assertion. But it is not a question simply of the establishment of a Scottish Parliament; the key question is, what can this or any Government do? I ask that not only as a Liberal but as a relatively new Member who has been here for less than three years.

I have steadily been driven to the conclusion that this Government, like their predecessors, lay far too much store by economic regulation and too little by economic encouragement. I suspect that many of our planning concepts are fallacious. Look at our experience. The first real attempt at planning was by the Labour Government of 1945–51 and one cannot perhaps blame them too much for making a bit of a hash of it because the circumstances were difficult and planning was in its infancy. But they failed.

The next stage was the Conservative concept of the 4 per cent. annual growth rate, from 1962. I have never been clear about why 4 per cent. was chosen. Perhaps the right hon. Member for Leeds, North-East (Sir K. Joseph) can explain it to me. It seemed quite arbitrary. It was half again as fast as in the 1950s and twice as fast as the growth rate of the previous half-century. Again I do not think one can just condemn the Conservative Party because this projected rate failed, because we have not good criteria for judging whether it could have failed or succeeded. However, there were certain results of fixing that rate. One was that the trade unions based their wage claims on it. Second, the social services expanded on the same assumption. We often say that we should spend more on education, and this will lead to growth, but, often, the more people are educated the more their power to choose is expanded, and they can choose things which are not especially productive or in the national interest to choose. Third, the nationalised industries did much of their planning on this basis.

The Labour Government's National Plan is now stotting to a stop. I believe we must look critically at our lack of success in regulation and ask whether the emphasis should not be much more on encouraging, facilitating and easing change. In effect, I am saying that we have not been very successful yet in laying down potential rates of growth and keeping to them, and it is very questionable whether we shall be very successful in future, either, whichever of the two sides may or may not be in power at any particular time.

What I should like to see is more emphasis on how we can help change by retraining, by providing the general infrastructure, by education, by tempering what may very often be painful changes, and in not placing obstacles in the way of industry which seems naturally to be expanding, and also by taking decision-making itself as near as possible to those affected by the decisions, remembering always that the Government themselves are now responsible for making a lot of important commercial decisions in industries over which they have assumed control.

Having put those general questions, which is the first part of what I want to say this afternoon, I should like to turn briefly to the general economic position and start by asking a question about the coal industry, which has been mentioned already by two or three speakers.

I wonder what the fuel policy of the Government is. We have not really had any definitive details of it. There have been some promises. The coal industry is contracting, and this is for many and various reasons, most of them not altogether under our control. The Government have said they are going to reduce coal production from the present 173 million tons a year to 140 million tons a year by 1970. I believe that is the figure.

Mr. Eadie

I have enjoyed listening to the hon. Member, and I know how constructive he is, but the Government have said no such thing, and I think it wrong of him to make such a statement. This is precisely why the argument is raging at present; the Government have not made any statement.

Mr. Johnston

Well, it may be that my information is wrong. As far as I know, it is sound. As far as I know, the official policy is that coal production, inevitably, will be reduced, but I am prepared to allow that the hon. Gentleman may be right, at any rate about the estimate. I would still say—and I do not think he will deny it—that the Government are looking for a reduction in coal production. I will not argue about the detail; my information may not be absolutely accurate as to that, and I do not know what the estimates at the end of the day may be, but, in any event, we have had a reduction of production and a reduction in the number of men in the mines from 72,000 to 48,000 between 1960 and 1965.

What exactly is being done about the retraining of these people? That is the first of my subsidiary points, and I think it is vitally important. As to the facts and figures of Government retraining centres, at the retraining centres in Scotland in 1964 43 miners were retrained; in 1965 22 miners were retrained; in 1966 21 miners were retrained. This is not, I think, a massive contribution to retraining. Indeed, I would have thought it would make as much impact as a mouse in the Usher Hall. I do not think there has yet been sufficient emphasis by the Government on retraining. A major bar to progress in Scotland is the shortage of skilled labour, and the facilities for retraining are totally inadequate.

We have—in June this year—76,972 unemployed, which is the highest June figure, as has already been remarked, since June, 1963, when the right hon. Member for Argyll (Mr. Noble) was responsible and we had a figure of 94,800. Emigration is equally at a new peak. For all these reasons particularly it is vital that the Government should lay much stronger emphasis on retraining than they have yet done, and I should like the Government spokesman winding up the debate to say something about this. I think it is very important indeed. We have the structure of old industry in Scotland and we are hoping to get this new turnover, and yet there is still no evidence of a really dramatic effort by the Government to face this problem.

Secondly, I think that the taxation structure devised by the Government is not well designed to give encouragement and to stimulate initiative, which are what we need. I do not want to bore the House by labouring the arguments again about S.E.T., but I fail to see this great distinction between service and manufacturing industry. It is not at all clear to me. Take the position of the tourist industry. This is an industry which everybody says has tremendous potential; everybody talks about boosting it; the Secretary of State says it is a splendid thing; but at the end of the day what do the Government do but penalise it by this particular tax?

Indeed, the treatment of the tourist industry by successive Governments defeats logical explanation. Tourism in other countries has expanded at the rate, roughly of 15 per cent. per year, but in Scotland it has been very nearly at a standstill since 1959. It has not been advancing at the same pace as it has in other countries, and one of the reasons is that official encouragement has been poor. We know that the Irish Tourist Board receives nearly £2 million a year from the Government of that country. Compare that with the £25,000 a year which the Scottish Tourist Board has from this Government.

Mr. John Rankin (Glasgow, Govan)

I am interested in what the hon. Member is saying about the tourist industry. Could he give us any figures to substantiate the statement which he has made? It does not tally with my own knowledge of the matter.

Mr. Johnston

I think that if the hon. Gentleman looks at the figures he will find that the tourist industry in Scotland has not been advancing at anything like the pace the tourist industry in Continental countries has been. At the same time, we have the new 40 per cent. investment grants which are not available for tourism. I think that extremely unfortunate.

Finally on taxation, I still think that it is about time that some Government looked at variations in taxation as a means of stimulating regional growth, whether we do it through National Insurance contributions or whatever.

Time, however, is pressing, and I do not want to take up too much of it. Therefore, I should like to put three quick questions.

The first question is about the position of the pulp and paper mill at Fort William. I would refer quickly to a review of Scottish industry in Barclays Bank Review last year, which said: The new mill"— that is, the pulp mill— will provide a vast outlet for the supplies of timber which will become available in rapidly increasing quantities from the post-war plantings of the Forestry Commission. During the next 20 to 25 years the Fort William Mill together with the chipboard factory at Inverness should be able to consume nearly all the smaller-sized timber coming from the Highlands. It has been estimated that output from the Commission's Highland forests will more than treble between 1965 and 1980. Now the E.F.T.A. tariffs have gone, and the surcharge has gone, and the wind from Scandinavia blows chill. The pulp mill itself is in some difficulty and is being forced to delay both the expansion programme and, apparently, negotiate with the Forestry Commission for new prices. The chipboard factory has closed and we do not know what will fill the gap in dealing with small wood. I should like the Minister to explain to us what the present position is and what, as far as he can say, the prospects are.

I should also like to hear a little more about Fairfield's. It was very pleasing to all the House to hear that this has so far been successful. Certainly the aim to raise productivity by breaking down demarcations in exchange for more complete security and increased rewards is very much in line with Liberal thinking.

Lastly, I would strongly re-echo what the hon. Member for Edinburgh, West (Mr. Stodart) said about the position of Scotland in the Common Market. What preparations are the Government making? I thought it rather unfair for the right hon. Member for Leeds, North-East to raise this point, because I do not recollect that all those special arrangements were made by the Conservative Government in 1961–62 when they were making a comparable bid. Nevertheless, I think it vitally important that there should be direct representation of Scotland and of the Scottish office on the negotiating committee in Brussels.

Secondly, and allied to that, I should like to hear more of the Government's thinking about the impact on Scotland of our joining the European Economic Community. Obviously, Leith was very much in the mind of the hon. Member for Edinbugh, West because of its links with Europe and questions of trade and air services.

I have three short points to make in conclusion. First, we must not overrate what we as politicians can do to regulate the economy. Paradoxically, I think that if we realise that we must not overrate it we may be more successful in doing something about it. Secondly, we ought to emphasise encouragement and incentive far more. Thirdly, we must reexamine the centralisation of the administration of the United Kingdom. I think that in the end this will inevitably mean a Scottish Parliament dealing with Scottish affairs. We have in Edinburgh Scottish civil servants of very high calibre, but there is no publicly-elected body in Scotland to direct their policy, and it is time there was.

Mr. Speaker

Many hon. Members wish to speak. If speeches continue to be of a reasonable length I may be able to call a large number of them.

6.22 p.m.

Mr. George Willis (Edinburgh, East)

I shall not follow the points made by the hon. Member for Inverness (Mr. Russell Johnston), because I want to make my own speech and not take too much time.

First, I would refer to the speech by the hon. Member for Edinburgh, West (Mr. Stodart) and follow up one or two of the points that he made about Edinburgh and the regional employment premium. When the decision was taken to exclude Edinburgh from the Scottish development area. I supported it. I thought the decision was right in the circumstances. It was right in view of what the hon. Gentleman said, that Edinburgh does not wish to attract a large amount of manufacturing industry. I do not think that anybody in Edinburgh wants this. So it seemed to me at that time—I still think that the argument was true—that Edinburgh did not need the benefits of being within the development area. But the introduction of the regional employment premium has brought a new element which causes serious concern to trade unionists and manufacturers in Edinburgh.

Manufacturing industry which has been in Edinburgh for seven years is now to be placed at a serious disadvantage compared with every other region in Scotland. One shipyard out of all the shipyards in Scotland has to face up to this competitive disability. One paper mill out of all the paper mills in Scotland is penalised in this respect, having to face this disability. That paper mill is probably further away from the centre of Edinburgh than the Inveresk Paper Mill in my constituency, which does not have to suffer this disability. In my constituency I have probably one of the best known knitwear firms in the country, and that has to face up to this competitive disability, and this means—I have sent the figures to the Board of Trade—that the cost of the jumpers that it produces will be between half a crown and three shillings more than previously. This is a tremendous disadvantage for these industries.

One wonders what the Government expected to achieve by this. As the hon. Member for Edinburgh, West said, Edinburgh is not over fully employed; its figure has been low, but it has not been over fully employed, certainly not in its manufacturing industries. Is it desired that employment should leave Edinburgh, that some of these industries should go outside Edinburgh? I cannot see that this would serve any purpose. The people employed in Edinburgh will go if the industries move over into Midlothian. All that we shall have achieved will be the creation of a transport problem. We shall not have done anything to assist the other parts of Edinburgh.

We are content in Edinburgh that any new industry coming to Scotland should go to the other regions there, but we want to keep what we have got. We now stand a very serious chance of losing it because of the proposal with regard to the three employment exchanges. If that happens, it will mean that Edinburgh will become even more of an office employing area. In my view, there is already considerable unbalance in the economic situation in Edinburgh. As I said last night, I should like to see some of the Government employment go out to other areas.

The Scottish Development Department takes pride in the fact that in the four new towns there is office employment for 1,258 people. We could double that number tomorrow if the Government put out some of the office employment which it maintains in the City of Edinburgh. I could think of one or two departments that could easily be moved out of Edinburgh. If it is desired that some of the employment in Edinburgh should go elsewhere, this is the way to do it, rather than driving out of the town the few manufacturing industries that we now have. In Edinburgh it is difficult to accept what is happening because it threatens the jobs of a very large number of people. I take it that this matter will be looked at in the light of experience, and I hope that it will be looked at with a view of doing something about Edinburgh.

I have said that Edinburgh does not want a vast new volume of employment but wants to keep what it has. In any case, there is not much room for new factories in Edinburgh apart from the Leith area. But there is another point that I wish to raise which often causes me considerable thought. It arises from the fact that we have now scheduled the whole of Scotland, with the exception of Edinburgh, as a development area. Anybody going to any area of Scotland with the exception of Edinburgh can now obtain the various grants and inducements offered to those going to development areas.

It seems to me that as a result of that there is a great danger that we may create in the central lowland belt of Scotland the very thing that we have been suffering from for a great many years in the South-East and Midlands of England—a coffin area. I know that my right hon. Friend is very conscious of this, but what is happening? We are spending vast sums of money developing the infrastructure in the central lowland area—1 think it is necessary and do not quarrel with it—but considerably smaller sums in all the other areas—the North-East, the Highlands, the Borders and the South-West.

I was interested in the very powerful and cogent speech of my hon. Friend the Member for Aberdeen, South (Mr. Dewar) in the debate that we had on roads. He pointed out the difficulties that are being created in the north-eastern region, and he quoted a business man, who had gone to the North in response to the efforts of the Scottish Hydro-Electric Board to attract industrialists to that area, as saying: The north of Scotland has failed because Scotland ends at Dundee. That was a rather melodramatic statement but there is some truth in it.

We are not providing in the rest of Scotland the necessary inducements to industrialists that are provided in the central belt. An industrialist who goes north can set up outside Edinburgh, which is a very fine capital city, with all the cultural amenities he could wish for, with very good shopping facilities for his wife and with educational facilities at hand. He can join all sorts of clubs there; or he can go west and get the same facilities in Glasgow; or he can go to Inverness. If the inducements offered in all three places are all the same, where is he likely to go? In nine cases out of 10 he will select the area most favourable—

Mr. Michael Noble (Argyll)

I should like to congratulate the right hon. Gentleman, not only on his Privy Councillorship but on the fact that he is now saying exactly what I said in earlier debates, but with which he disagreed. There is no doubt at all that what he says he fears is the exact consequence of R.E.P., and so forth.

Mr. Willis

The whole of Scotland, except Edinburgh, is eligible for R.E.P., and I am in favour of that. I welcome this £40 million, but that is no reason why I should not suggest that certain improvements might be made and that certain problems arise. All policies, when they start to operate, reveal certain weaknesses. No human being has ever devised the perfect policy—nor any Government. Hon. Members opposite should apply their minds to this fact—

Mr. Ian MacArthur (Perth and East Perthshire)

When the right hon. Gentleman says that the whole of Scotland except Edinburgh is eligible for R.E.P., I hope he will qualify that statement by saying that only a minority of Scotland qualifies for it, because it excludes the service industries, agriculture and the tourist industry, on all of which Scotland very largely depends.

Mr. Willis

It is still available to all Scotland except Edinburgh.

Mr. MacArthur

On an arbitrary basis.

Mr. Willis

I recognise that loans and grants can be given by B.O.T.A.C. to industrialists who choose to go to the more difficult areas, but I wonder whether the time has not come to look at the complete blanketing of Scotland with exactly the same inducements to industry in the form of investment grants, and so on. We will probably have to think in terms of giving some extra inducements to the more difficult areas. I do not want to cut the inducements to the central belt—we must develop there—but if we are to avoid the possibility of too much concentration in that area, with a consequent drain of population from the rest of Scotland, we must think through what we are doing.

What we have done is good, but we have to think ahead and visualise some of the problems that will still be there—

Mr. Robert Maclennan (Caithness and Sutherland)

My right hon. Friend would be less than fair to himself if he did not animadvert to the initiative and initiation of this idea of regional differentiation which he and his colleagues started by setting up the Highland Development Board with its powers to make this kind of differentiation.

Mr. Willis

Some inducements might prove useful in these other areas. I am not certain how it should be done, but I think that there is a case for it because I agree that in most of these areas the effects of the S.E.T. are heavier than they are in the industrial areas, though not to the extent claimed by hon. Members opposite. There is a difference between the effect of S.E.T. in industrial areas and its effect in other areas, but hon. Members opposite have at times worked out a fantastic figure, which is quite wrong.

In the Highlands we have the Highlands Development Board, which can be used to give this additional assistance and inducement and, after all, that Board covers three-fifths of Scotland. We have here a weapon for doing something more, and I hope that the Government will use it. I feel sure that they will. In other areas, however, we have to think in terms of giving the additional assistance necessary to prevent what I feel would otherwise happen.

For the first time since I became a Member of this House of Commons—on and off since 1945—we can see in operation a real endeavour to plan Scotland. I have never seen this before. It is now going on, not only in the industrial belt but in the Scottish Economic Planning Council and the various other bodies set up in the North-East, the Borders, and elsewhere, to give to the Secretary of State for Scotland the advice necessary for the determination of the rate of flow of industry into these other regions. We have the Highlands Development Board, thanks to the Government and my right hon. Friend, and I think that the prospects are good.

I would also say that I know of no Secretary of State for Scotland who has done a better job than has my right hon. Friend. For the first time we see this being done in Scotland. The right hon. Gentleman the Member for Argyll (Mr. Noble), laughs, but, as I told him on one occasion, he and his colleagues have created a tremendous mythology of what he did, but it is a mythology and does not bear very much relationship to what we in this House saw.

For the first time we have seen this deliberate, conscious effort and, despite what has been said by the hon. Member for Inverness, it is achieving results. The speech of my right hon. Friend the President of the Board of Trade showed this. The results are being seen in the numbers of jobs. Incidentally, results were also being seen between 1945 and 1950, when about 20 per cent. of new jobs were coming to Scotland. I want the Government to pursue their present course, and at least to examine the suggestions made in this debate. If that is done, I am sure that we can look forward to a settled, growing and improving Scotland.

6.39 p.m.

Mr. Alick Buchanan-Smith (North Angus and Mearns)

We have all enjoyed the speech of the right hon. Member for Edinburgh, East (Mr. Willis), and not least his attitude to the situation as between Edinburgh and the rest of Scotland. If I may turn a phrase slightly, we listened to the gamekeeper turned poacher. We also enjoyed the right hon. Gentleman's tribute to the previous Government's policy of growth points, and helping those areas more that needed help most.

My right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) was absolutely right to draw attention to the country's general economic atmosphere of stringency. In a period of stringency such as we have been experiencing it is inevitably the areas further away from the centre which suffer most, and for Scotland those are the areas outwith the central belt.

I draw attention to a Question which I asked the President of the Board of Trade a week ago about the number of liquidations of companies in Scotland over the last three years. I appreciate that to some extent all liquidations illustrate the organic movement of business life in any country, but what is alarming about these figures is the rate of increase over the last three years. In 1964, there were 314 company liquidations in Scotland, whereas by 1966 the number had riesn to 617. This illustrates that Scotland has suffered from economic stringency and from the restrictive policies of Government over the last three years.

Mr. W. Baxter

Can the hon. Gentleman indicate what capital was involved in these companies?

Mr. Buchanan-Smith

I asked for more details, particularly about the numbers employed, but the right hon. Gentleman was unable to give that information. He could only tell me the number of companies involved. Apparently, the other information was not available. I would have particularly liked to have known the number of employees involved. That is important, because it puts into perspective the picture which the right hon. Gentleman tried to paint this afternoon about the number of new jobs created, without any reference to the number which had been lost.

I want now to deal with the problems of those areas away from Central Scotland. I represent a constituency part of which until recently did not enjoy the benefit of being a development area. I welcome the extension of the definition of a development area to include areas with low unemployment but with a very high rate of migration. However, since the development area was extended to the whole of my constituency, not one new industry has come into that part of the constituency which was not formerly a development area. New industry has come to that part which already was, but what disappoints me is that not one new industry has come to that part of the constituency which has now become a development area. Therefore, although development areas are now spread to the whole of Scotland, that has not necessarily brought to those parts of Scotland the industry which the Government led us to hope that we could expect.

In the north-east of Scotland we still suffer from the scourge of hidden unemployment in the form of depopulation. As the 1951 and 1961 censuses showed, the counties of Aberdeen, Banff and Kincardine were the three counties of Scotland which suffered the highest rate of emigration at 12 per 1,000 per annum. This problem is still not solved and the measures which the right hon. Gentleman mentioned this afternoon have done nothing yet to stem the emigration and have done nothing yet to solve the basic problems of areas such as that which I represent.

I am becoming increasingly worried about the greater imbalance which is being created between the areas outwith central Scotland and central Scotland itself.

Mr. Hector Hughes (Aberdeen, North)

The hon. Gentleman said that those measures have done nothing yet for the north-east of Scotland. Is he not aware that the President of the Board of Trade has visited the north-east of Scotland several times and that, as a result of his efforts, advance factories have been built there and new industries have been started and Aberdeen is a flourishing place?

Mr. Buchanan-Smith

I would not have said that the right hon. Gentleman's visits had done very much good to encourage industry to go to the North-East. They have done nothing for my constituency. I do not believe that he has even visited my constituency. There are parts of the North-East to which new industry has come but, equally, industry has been deterred from going to other parts of the North-East. The hon. and learned Gentleman will not get a correct picture if he looks at only one side of the coin.

Mr. George Younger (Ayr)

Will my hon. Friend remind the hon. and learned Gentleman that of the two advance factories announced for Aberdeen, one has not yet started building and, although the other is to start fairly soon, it has not yet started?

Mr. Buchanan-Smith

I believe that to be correct. Certainly what the right hon. Gentleman has done has not created any jobs for the people of the North-East.

The right hon. Member for Edinburgh, East put his finger on the important thing, which is the increasing imbalance between central Scotland and other areas of Scotland. This imbalance was recognised in the Plan for the Scottish Economy, but it has unfortunately been further emphasised and encouraged by the introduction of the Selective Employment Tax. I do not intend to go over all the arguments on that subject, but a tax with a far heavier impact on areas outwith central Scotland than on central Scotland will inevitably increase the imbalance.

It is emphasised still more by the regional employment premium. All luck to those firms which are to benefit from the introduction of the regional employment premium, but although 37 per cent. of those in employment in central Scotland are in manufacturing industry, in other words, are in industries of a kind which will benefit from the premium, in other areas of Scotland a far smaller proportion will benefit. For example, in the Aberdeen area only 26 per cent. of people employed are employed in industries which will benefit from the premium. The position in south-west Scotland is even worse with a figure of 18 per cent., while the figure for the Highlands is only 10 per cent. The further an area is from central Scotland, the less benefit it will get from this extra money which the Government are putting into Scotland and about which they take so much pride.

But that is only part of the picture. In my constituency one manufacturing industry, the jute industry, employs a high proportion of female labour, which does not attract the same amount of regional employment premium as male labour does. For example, in central Scotland 70 per cent. of the employment in manufacturing industry is male and only 30 per cent. female labour, whereas in the North-East 60 per cent. is male and 40 per cent. female labour. Therefore, not only between manufacturing and other industries but even within manufacturing industry itself nothing like the same amount of money goes to these areas as the Government would claim. Although the premium is to act as a topping-up, particularly in central Scotland where 90 per cent. of our manufacturing industry is, at the same time it completely fails to replace what has been drained away in Selective Employment Tax from areas like the North-East, the Highlands, the South-West and the Borders.

Representing a constituency outwith central Scotland, I am anxious that in central Scotland we should not have the kind of concentration of manufacturing industry which we have seen in the Midlands and the south-east of England. Having seen what has happened in England, if the Government and the Secretary of State allow the same thing to happen in Scotland, the right hon. Gentleman will have to take responsibility, because we in the North-East and in the other areas of Scotland want to share in the development of manufacturing industry, and we are not doing so at present.

Another of my worries is that the Government are so much taken up with the problems of central Scotland that they do not pay enough attention to the problems of the remoter regions. I have in mind a proposed development by a distillery in Stonehaven in my constituency. This development was deferred by the Scottish Malt Distillers for the reason which has been discussed at other times in the House, that is, the confirmation of the extra surcharge on the whisky duty. Last week, I asked the Secretary of State whether he was aware of this deferment and the effect which it would have on employment in the north-east of Scotland. He replied that only the creation of a small number of jobs had been deferred as a result of that decision. He is quite right, it is only a small number of jobs, but what may be small in the eyes of St. Andrew's House, Kilmarnock, or somewhere else in central Scotland means a good deal to the people of Stonehaven. We do not write off these small developments as the right hon. Gentleman writes them off.

Much more concern must be shown for the problems of the smaller towns and remoter areas. The right hon. Gentleman went on in his reply to say: … the Government are continuing to encourage industrial development through such means as advance factory programmes."—[OFFICIAL REPORT, 28th June, 1967; Vol. 749, c. 89.] As my hon. Friend the Member for Ayr (Mr. Younger) has already said, the advance factories are not yet in operation and are doing nothing for the North-East, and for my constituency the thought that there are advance factories somewhere else gives small comfort.

A word now about the problem of rising costs which affects not only householders but industry as well. One example—I appreciate that it is beyond the Government's control—is the rise in petroleum fuel prices. There is a report in today's newspapers that the increase of 2d. a gallon is likely to put an extra cost of £250,000 a year on the Scottish trawling industry. This is the sort of extra cost which my hon. Friend the Member for Aberdeenshire, East (Mr. Wolrige-Gordon) and others of us with fishing interests in our constituencies must regard with great concern in the present period of economic stringency. It is very difficult to carry such extra costs on top of the other impositions which the Government ask us to bear.

Another example is the application now made by British European Airways to raise its fares not only between Scotland and England but within Scotland itself, the size of the increase being as much as 50 per cent. on, for example, the winter fare between Scotland and England. Air travel is becoming part of everyday life in Scotland, and we cannot be expected to put up with increases of that kind. I hope that the Secretary of State will strongly resist such increases in charges, particularly those which affect the air services to the remoter districts and the Highlands and Islands.

The hon. Member for Bothwell (Mr. James Hamilton) has already mentioned coal prices. Not only are there higher coal prices in Scotland in relation to England, but in the North our coal prices are higher than they are in Central Scotland. This is another extra cost for areas away from central Scotland which the Government seem to do little to alleviate.

The increase in electricity charges is a further burden. The North of Scotland Hydro-Electric Board is increasing its charges by 10 per cent. Here is a comment made in a letter sent to the Secretary of State by the President of the Aberdeen Chamber of Commerce: While it is not disputed that some increase in charges must be accepted, the authority granted by you to the Board to put up its charges by 10 per cent. on 1st July, 1967, does not appear to us to match the Government's declared policy of urging industry and commerce to do everything possible to prevent price and wage increases after the end of the period of severe restraint on 30th June". That is what people think in the northeast of Scotland. In more picturesque language, Mr. Low, the convenor of the public services committee of the Aberdeen Chamber of Commerce, had this to say: I have no doubt that industry and commerce will be asked to absorb the extra cost and not to pass it on to customers. In my view, this is another instance of the Government saying, 'Do as we say, not as we do'. This is the sort of thing which we in the north-east of Scotland dislike. We are asked by the Government to do one thing while they themselves do quite another.

I have stated the problems which we have to face away from central Scotland. The Government do not take all these factors fully into account, and, for that reason, we condemn the economic policies which they are pursuing in Scotland.

6.55 p.m.

Mr. Alex Eadie (Midlothian)

As the debate ranges, it becomes obvious that a period in oposition has made some hon. Members opposite more militant than they were in government. The speech of the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) is a classic example. He now rages against differential coal prices. Ever since I came into the House, I have spoken against differential coal prices, and I have been trenchant in my criticism of the Government on that score. I know what the difference costs. I know what it means for industry and for employment. I wish that the hon. Gentleman and his hon. Friends had done something about it when their Government first brought the system in and operated it. As I say, a period in opposition seems to make some hon. Members more militant than they were in earlier years. It is a pity that they did not join with us in urging a change of policy in years gone by.

However, I am not sure that I should want to man the barricades with the hon. Member for North Angus and Mearns. He seemed to advocate the direction of industry. There have been a good many debates not only in the House but in other organisations outside about that. Perhaps his Front Bench spokesman will tell us what the Opposition's approach is to the idea.

My right hon. Friend the Secretary of State has no need to fear criticism from the benches opposite to-day. His record so far is excellent. It ill behoves hon. Members opposite to be ultra-critical of him. At the last two elections, the people of Scotland expressed a decisive view on their record, and the level of representation on the benches opposite to-day demonstrates the contempt which people have for them and their attempts to solve Scotland's economic problems.

I hope that my right hon. Friend will not apologise for his record, which is a very good one, despite the economic blasts which we have had to suffer in Scotland. He can truly claim to have sheltered Scotland from the worst effects of the squeeze and freeze. If any hon. Members doubt that, let them read the speech of my right hon. Friend the President of the Board of Trade today, which showed that the charge sometimes made against my right hon. Friend the Secretary of State of not being vehement enough in voicing the claims and rights of Scotland is quite ill-founded. The evidence before us in the debate today shows that his voice has been very loud and it must have been heard.

My right hon. Friend the Secretary of State can claim to have seen in perspective the long-term future prospects of Scotland in relation to its potential in skill and manpower. I would expect him to be able to do this because, before he came into the House, he worked in education. He knows that we cannot discuss economic prospects without taking into account the available talents of Scottish men and women.

My right hon. Friend answered a Question from me last month about the number of women graduates and undergraduates. I was greatly impressed by the answer because one of the problems we have in Scotland is the loss of skill and talent, and also because next February sees the 50th anniversary of the suffragette movement. I am sure that its members will be proud that the figures my right hon. Friend gave me show that in his period of office there has been a substantial increase in the number of women graduates and undergraduates. He said that in 1960–61 the total of women undergraduates was 4,734, and in 1964–65 there was the grand total of 7,150 women trying to get diplomas and first degrees. This shows that my right hon. Friend has realised that we must consider the talents of our womenfolk as well as all the rest of our people if we are to get the economy of Scotland right again.

There has been discussion today about training to make sure that our young people are adequately prepared to take their place in industry. I put a question to my right hon. Friend on 28th June on the number of our younger people who could receive at least three years' post-primary education. He told me that in 1964 73.8 per cent. were getting three years' post-primary education, and he must be congratulated because in the year ending June, 1966, the figure had risen to 78.1 per cent. This means that the Government's education policy has widened the avenue of opportunity for our young people, which is bound up in the long term with Scotland's prosperity.

There was a reference today to the Scottish Council (Development and Industry) Report, in an excellent, constructive, and thoughtful speech by the hon. Member for Edinburgh, West (Mr. Stodart). He gave some statistics and impressed the House, because the Council is a very authoritative body. But if we are to quote authoritative bodies in our discussion of the economic progress of Scotland it is only fair that we should not go right back to April but should be more up to date.

I have here a report from The Times of 3rd July, headlined, "New blood gives boost to Scotland". The report says: The results of a survey carried out by the Scottish Council (Development and Industry) show that during the past three years, companies moving into Scotland have invested £288 m., and now employ 102,000 people. It was not the Government that made this pronouncement, but the Scottish Council (Development and Industry).

The report also reveals some excellent figures. It says, for example: Last year these firms produced £473 m.-worth of goods, of which they exported £152 m., or 32 per cent. The Council says that the hard core of this impressive growth by new companies is made up of firms producing instruments, electronic equipment and business machinery. To some extent this underlines the points made by my right hon. Friend the President of the Board of Trade. The report continues: In 1966, these firms had a total investment in Scotland of £65m., employed 24,400 people, and produced £105m.-worth of goods, of which £60m.-worth, or 57 per cent., was exported. Only two years earlier, this same sector had investment worth £33m., employed 18,900 workers, and produced £56m.-worth of goods, of which 49 per cent. went abraod. The Council claims that the incoming firms have made a considerable impact on the Scottish economy. They now employ 14 per cent. of total workers in manufacturing industry, produce 16 per cent.… and so on.

The employment prospects of the mining industry and the sustenance which the industry provides for people in Scotland have been mentioned today. My right hon. Friend should use his influence as much as he can to make sure that we do not have a rapid, substantial rundown of the industry in Scotland. If it runs down in that way, he will be in difficulty in providing alternative jobs for the displaced miners. I am very conscious of what has been done by the Government to try to cushion the effects of contraction within the mining industry. But I am not sure that we should not have a new approach to the whole issue. If we employ the test of profitability, for example, which seems to be the test the right hon. Member for Leeds, North-East (Sir K. Joseph) wants, certain aspects of the economy and industry of Scotland will be in a bad way.

I ask my right hon. Friend to consider carefully the Government's policy on the regional employment premium. Would they give an incoming manufacturing industry about £2 per worker if it came in to make, for example, nail files or shirt buttons? It seems to me that it would be a bit ridiculous if we applied the test of profitability to the mining industry, where people are already in employment, and then tried to get an industry that might not produce anything as worthwhile as coal. It is time we looked for other ways to use coal for the nation's benefit.

I hope that when we consider the regional employment premium my right hon. Friend will impress upon the Government that we should be considering using the oil from coal process. I know that cost is involved here, but the jobs which could be produced are fairly substantial. I wrote an article a few months ago for my trade union journal, with the assistance of information from the Library of the House. For the cost of something equivalent to an organic power station we would be able to have oil from coal-burning installations. In view of the international climate this is something which must be economically viable.

I do not use "organic" in a derogatory sense because the miners in the area are very grateful for this project. In this month's issue of Scotland there is an article written by a colleague of mine, the General Secretary of my area trade union. He says: The Dutch State Mines claimed last year to have developed a process for making from coal the synthetic amino-acid of lysine, one of the most important of the amino-acids required for building body proteins in man and animals. It was claimed that production would be possible on a commercial basis. I understand that there has to be contraction in the mining industry, but I do not think that hon. Gentlemen opposite always appreciate the type of contraction that one can have. Mechanisation in industry will create contraction. My point is that if we allow the men in the industry in Scotland to leave, the jobs will be lost for ever, and we will be facing great difficulty. I trust that my right hon. Friend will bring pressure upon the Government to take action over the contracttion of industry. I have enjoyed listening to the debate. Some of the speeches, from both sides of the House, have been very constructive and helpful.

7.12 p.m.

Miss Harvie Anderson (Renfrew, East)

I will refrain from following in any great detail the speech of the hon. Member for Midlothian (Mr. Eadie), tempted as I am to enter into the realm of women's suffrage. I would also like to apologise to hon. Members for not being present at the earlier stages of this debate, for reasons which I have explained to them in advance. I am particularly grateful for being allowed to take part in this debate, because, like other Scottish Members, I am particularly concerned about the position of industry and employment in Scotland. I am even more so at present, because I see certain disturbing trends, of which I am sure the Government will be aware, and which I believe require emphasis.

In my constituency there have been a number of closures. There has been a closure in the cotton industry and in the biscuit manufacturing industry, and there have been other closures in the Hillingdon Trading Estate, as the Under-Secretary of State will be aware. Elsewhere there are industries in Scotland ceasing to make what they have made for many years. A small but important instance would be the Scottish Co-operative Wholesale Society's soap factory at Grangemouth. We see the changing pattern of Scottish industry reflected in these closures. We also see a trend which places on the employment market in Scotland those whose skills are either limited or are no longer required.

We have a happier picture, too, and I understand that reference has been made to this. In my constituency we have the enormous help that the Rolls-Royce project will bring, and the hope of the new Rootes and Pressed Steel project. We must do our utmost to see that we have the practical means of ensuring that those industries and developments are offered the labour force with which they can make the most effective production.

It is with those particular problems that I wish to deal. Here is a situation in which we have a labour force, difficult to find and develop. We have problems peculiarly pertinent to the Scottish economy. I would like to quote from the remarks of the chairman of one of the largest factories in my constituency, with whom I have had many discussions over a period of months on the problems which we are now discussing. He says: Scotland is faced with the paradoxical situation of an unemployment rate very much higher than the non-development areas of Britain and at the same time a shortage of labour which is now sufficiently serious to retard both growth of existing firms and new firms thinking of starting up in the area or transferring their activities to Scotland. I am glad to see the right hon. Gentleman the Secretary of State taking a particular interest in this point, and it encourages me to go on further with this particular quotation from this very senior Scottish industrialist. He says: If you look at one of the large labour exchanges"— hon. Members will know that there are only a few of these in Scotland— you may find as many as 1,000 registered unemployed living within daily travelling distance from a factory. Half of these will be labourers and of the 500 who are not, you will be lucky to find 50 skilled and semiskilled men suitable for your particular job. What a tragedy it is if, when we are on the fringe of a great development pattern, certainly in central Scotland, we are not expanding the training opportunities and engaging the interest of men in retraining to match the requirements of developments of this order.

There are one or two smaller and less important points which contribute to the situation which I have described. The most noticeable one is the length of time for which men and women are unemployed. Others will have noticed the high number of persons unemployed for over a period of eight weeks. In a country as sensitive to unemployment as Scotland, and all the horrors surrounding the factual situation, eight weeks is a very long time and it is sufficiently long to do two things.

First it turns a man's mind to employment without any thought of the quality of employment or of his own qualities, which might be capable of retraining. At the same time it brings the first aura of apathy, which is the very last thing that we want the people of Scotland to feel. These are dangerous trends caused by the length of time that a man remains unemployed, and it covers over what is, to me, the vitally important consideration of the type of employment which we are seeking to offer in Scotland. Of course, we want more employment. But we also want—or, at least, I want—better employment.

I do not wish to delay the House for very long, but I must make reference to perhaps the most serious problem of all, that of under-employment, again in respect of the central belt of Scotland. What does it mean? It means short time; it means overtime; it means unemployment benefits operating instead of or supplementary to wages. It means wage rates disrupted and it means union powers upset.

Any solution must include housing and training, and in this respect we have not gone very far. The controversial subject of housing is very well known, but I ask hon. Members on both sides of the House to look at the July edition of the magazine Scotland and to examine carefully—and to cross-examine themselves when they have read it—the table which is set out in the article on housing. It cannot possibly be right in a £3,500 house to find that it costs annually in Government grant £87 and in subsidy from the rates £116, while the occupant of that house contributes £40 in rent. I will not develop the argument, because it is highly controversial and it would take far too long, but if people are to improve their opportunities of employment they must be able to exchange their houses. The need for more houses in both the public and the private sectors is all too clear when we see the pattern of development in industry.

I want to dwell particularly on the question of training, and I shall quote from the Journal of the Glasgow Chamber of Commerce where there has been a powerful discussion on the subject. This month the Journal says, The validity of allowing market forces to operate to establish equilibrium in training situations is seen to be defective. In Scotland, due to inadequate training in the past, there is a recognised shortage of particular skills which are needed to create viable production units and so employment opportunity for other skills. It seems to me that that is very important, because we must now seek methods to make the Scottish economy more viable and more strongly based. The plea which I should like to put forward is the plea for a longer-term policy in training. There are many things essential to training and to the training programme. The first is that training must be attractive to the man, and that means that special attention must be given to the payment which he receives during the period of his training. Secondly, it must be agreed with and accepted by the unions and that, alas, is not always the case at present. Training can either be an extension of Government training centres or by industry itself or—and I think that we are now all agreed about this—preferably by both.

When I say that I want to see a longer-term policy for training, what does a "longer-term" mean? It is not particularly easy to assess the industrial requirements of the nation about 10 years ahead, and yet it is quite unrealistic to think in terms of a policy which does not take into account at least five years ahead. I hope that that would be taken as a minimum for an assessment of training requirements and for a training programme to meet the demand. I do not think that it would be unrealistic to take national steps along these lines and, in the process of so doing, possibly to achieve great advances in certain fields where I consider that our outlook is predominantly 19th century. That includes some aspects of apprenticeship and the length of apprenticeships which are sadly behind the times.

This has been a very brief survey of future requirements as I see them. I ask hon. Members to look at the picture in the Scottish industrial field. They may well find that Britain's requirements, as we have often said in the House, are based on the pure scientist, the applied scientist, the development engineer and the production engineer. These form a pyramid. In Scotland today we are quite unable to support the ideas of the scientist and to translate them into hardware. It is when we translate them into hardware that we shall keep the brains, because we shall then have an objective in Scotland at which the brains can aim and there will be a practical opportunity for them to use their knowledge. That is the result for which I hope, a result which would reverse the brain drain which we are at present enduring. Those who are now frustrated because their ideas are not taken up would have an outlet, which would be developed in this country rather than being developed, as they often are today, in America. I therefore hope that the right hon. Gentleman will urge a more forward look in this direction and will take a passing interest in the points which I have made.

Before concluding I would refer, as others have done, to growth outwith the central belt. We are already facing a situation in Scotland in which about 80 per cent. of the population is concentrated in the central belt. Whatever the fate of the central belt of Scotland—and, as I have explained, in my view it is a developing picture—we cannot ignore those areas which are far beyond it. With the right hon. Member for Hamilton (Mr. Tom Fraser) and the hon. Member for Inverness (Mr. Russell Johnston), I have the honour to be a member of the Royal Commission on Local Government in Scotland. I ask hon. Members to think of the terms of reference of that Royal Commission and connect this with growth points beyond the central belt in Scotland. It is our duty as Commissioners to consider the structure of local government in Scotland in relation to its existing functions; and to make recommendations for authorities and boundaries, and for functions and their division, having regard"— and this is the relevance to the present debate— to the size and character of the areas in which these can be most effectively exercised and the need to sustain a viable system of local democracy. If hon. Members look at the pattern of Scotland and Scottish industrial life today they cannot avoid the dominance of the central belt of Scotland, with its heavy concentration of population, and they cannot help but wonder how we are to promote, and to promote in time, growth beyond that central belt.

Some of us have great concern for development in the Highlands. As the right hon. Gentleman knows, I am greatly concerned about development under the Highlands and Islands Board because I cannot see reality in growth points which are paid for by the taxpayer in millions of pounds with little prospect of viability. As the right hon. Gentleman knows, when those growth points are developed, whether by the Board or any other means, the people of Scotland have a right to an assurance that the projects which are absorbing so much of the taxpayers' money will be viable.

I shall not detain the House longer. I end as I began by saying that I am particularly grateful for the opportunity to take part in this debate because there can be no subjects of greater interest and importance for Scotland than those we are discussing tonight.

7.30 p.m.

Mr. William Hannan (Glasgow, Maryhill)

I am particularly glad to follow the hon. Lady the Member for Renfrew, East (Miss Harvie Anderson). I am sure that most of my hon. Friends welcome assistance, but the speech she has made came about 20 years too late. I remember that when we were talking about planning new towns the party opposite voted against the New Towns Bill. I recall that when there was a proposal to build a hydro-electric power station in the Highlands, it was opposed all night because hon. Members opposite did not want industry or anything resembling industry to go into those areas.

I read the article in Scotland from which the hon. Lady has quoted. I hope that hon. Members opposite will read the latest Report of the Cullingworth Committee, which gives the lie to the suggestion—or at least shows that there are not so many municipal tenants who have motor cars. The average incomes are mentioned in that Report, which shows that heads of families have incomes of £l1 and £12 a week.

The hon. Lady hoped that my right hon. Friend will take "a passing interest" in training for industry. That is going a little too far. He is engaged at this moment—

Miss Harvie Anderson

If the hon. Member does me the courtesy of reading my words tomorrow, he will note that the reference he quoted as "passing interest" applied to my suggestion. I have never disputed anyone's genuine interest in this matter, and I do not think that it should be approached in the way in which the hon. Member is approaching it.

Mr. Hannan

If I have done the hon. Lady an injustice, I certainly withdraw the remark immediately. My right hon. Friend is engaged in the process now of putting into effect the proposals of the Brunton Report on the raising of the school leaving age to 16. This is linking up the later stages of secondary education with the further education in training colleges. In that matter, the Government have not done too badly. In October, 1964, Scotland had five Government training centres with 529 places. Now we have seven centres with 900 places. By the end of this year two more centres will be built and four will be enlarged, providing a total training capacity of 1,400 places. This means 2,500 trainees annually. I accept that these figures, although an improvement, are quite inadequate for the purpose and for the forward look which the hon. Lady projected.

Scottish industry must bear a very large responsibility in this matter. The Report of the Scottish Technical Education Consultative Council asks very pertinent questions. It says: It is even more open to doubt whether an obligation to generate ideas on further education is recognised throughout industry. Yet the acceptance of such an obligation is surely in its direct interest. The Report also pleads for industry to co-operate and asks for an exchange of industry's manpower to come into the colleges to have a share in the vital teaching in fields where teachers are so scarce, in science and technology.

Here are the figures of day release classes in Scotland compared with those in England. Scottish employers do not come out of the comparison very well, and have not done so for many years. All students under 18 attending day release classes for mining and quarrying in Scotland amounted to 33.8 per cent., and in England to 40 per cent. In shipbuilding and marine engineering in Scotland there were 42.8 per cent., and in England. 49.9 per cent. In gas, water and electricity in Scotland there were 51.9 per cent. and in England 74.7 per cent.

Those figures are indicative of the laxity of Scottish employers and Scottish industry generally in giving attention to this vital feature concerning the progress of Scotland. The Scottish Council for Industry reported the other day A remarkable story of industrial growth in Scotland which disclosed that in 1966 incoming companies had invested £288 million and were now employing 102,000 people. The investment was up by 33 per cent., output by 29 per cent. and exports by 37 per cent. The key sectors of industry making the contribution to this success were instrument-making, electronics and business machines.

The hon. Member for Renfrew, East was right when she said that we have a complete dichotomy and that, while our unemployment problems are not yet solved, there are instances of shortages of skilled labour. For some years past, we should have been paying more attention to the boys and girls going to junior secondary schools, leaving at the age of 15 and continuing their education at night schools, because it is from that source that we have been getting our engineers, draftsmen and others upon whom industry depends to such a large extent.

I have listened with some restraint to criticisms which have been made about the lack of action by the present Government. It astonishes me that some hon. Gentlemen opposite refuse to recall the facts of life. Last summer, for example, before the credit squeeze, the figures of unemployment were 20,000 lower than they were when Labour came to power. Even today, they are a good deal lower than at the comparable period in 1963. The fact that Scotland's unemployment figures are going up at a slower rate than in Britain as a whole is proof that the Government's policy is being successful in protecting Scotland from the worst effects of the squeeze. I hope that the Glasgow Herald will take note of that fact, because it was extremely critical today in its leader.

Unemployment amongst Scotland's building workers is practically unknown today. Factories are still being built or extended on all our industrial estates, and 23,000 jobs are expected to result from the industrial development certificates which have been issued. Lord Polwarth, who is not an insignificant figure in Scottish industry and is President of the Scottish Council, is on record as saying that the base of Scotland's economy is now stronger than it has been for seventy years. Do hon. Gentlemen opposite accept that statement or disagree with it?

Scotland's science-based industries continue to expand. If a small old-established works happens to go to the wall, like the many pit closures in Scotland, it is a sign of the change which is going on. However, what some hon. Gentlemen opposite appear to want is to hold on to the old, hoping that the new will stand side by side with it. We have to make up our minds. It is one or the other.

When we come to the difficulties of raising the school leaving age to 16, to help to achieve what we all want to see, I hope that the Government will not yield to outside pressures, not only on grounds of education alone but on some of the grounds which the hon. Lady has advanced. In addition, I believe that it will take young people out of circulation and remove from them opportunities for mischief and vandalism when they are offered continuity from the primary school through to further education in junior colleges or technical colleges, from all of which the nation will benefit at the end of the day.

In the course of his speech, my right hon. Friend referred to the expansion of Ferrantis at Edinburgh. Incidentally, that is one of the places where there is a shortage of skilled labour. The accommodation which Ferrantis have taken over was formerly used by United Biscuits, the chairman of which is Lord Craigton, a former Member of this House and a former Minister who had the special job of persuading industry to come to Scotland. However, he has left Scotland to come down here—

Miss Harvie Anderson

I am sure that the hon. Member for Glasgow, Mary-hill (Mr. Hannan) will have received a copy of the circular letter which was addressed to all Scottish hon. Members by the chairman of United Biscuits, pointing out that the reorganisation of the business would contribute greatly overall. In those circumstances, it is only fair that both sides of that decision should be on record.

Mr. Hannan

The hon. Lady must also be fair. Let us not talk with our tongues in our cheeks. Many Scottish industrialists have been slow to contribute to efforts in the past which could have helped to solve our difficulties. If we want to be critical of this Government, it is only right to remember some of these points.

I want to urge upon my right hon. Friend the importance of industrial training. The Scottish Council stressed it as one of its objections to the R.E.P. All credit should be given to the Government for agreeing to the representations of the Council, which were based upon two grounds, one of which was the point which has been made by the hon. Lady about industrial training. Lord Clydesmuir, the Council's chairman has said: The original proposals did not contain any reference to training and retraining. We believe this is a crucial modification and one that will allow not only new growth to be started but existing growth to be maintained. The Government are to be congratulated on that. I hope that they will pursue that policy with vigour through the Minister of Labour, because the principal responsibility for training in industry is that of industry, and not the education services. I know, too, that my right hon. Friend the Secretary of State will pursue it with energy and with enthusiasm, so far as his responsibilities permit.

7.48 p.m.

Mr. George Younger (Ayr)

We are having an interesting debate on this subject, and I only wish that it could be debated more often.

Several hon. Gentlemen opposite have indicated in their individual ways that we should not be too critical of what has been done for the Scottish economy in the past few years. However, I have no intention of being deterred from being critical by the views of hon. Gentlemen opposite. Just as I expect them to speak their minds and say what they think, they should respect us for doing likewise.

Mr. Archie Manuel (Central Ayrshire)

A very brave fellow.

Mr. Younger

I do not recall hon. Gentlemen opposite being all that squeamish when it came to being as critical as they wished to be when they were in opposition.

In his opening speech, the President of the Board of Trade gave us a long and impressive list of the jobs which had come to Scotland. However, he was rather in the position of an honorary treasurer of some society giving us all the facts on the income side of the balance sheet but none of the facts on the expenditure side. I think that there is no time, probably not even during the worst period in our economy, when one would find it difficult to give a long list of jobs and prospects which have come along. Jobs and projects must be coming along at all times. What matters is the net increase in the number of jobs coming to Scotland, taking into account those that are being lost.

I am the last person to be pessimistic, and the last thing that I want to do is to give the impression that there is nothing but loss, but there is another side to the position which the President of the Board of Trade outlined. In April there were 260 redundancies at Fred Braby and Company, Glasgow. In 1966, 300 clerical staff were declared redundant at Colville's. At Singer Sewing Machines, 350 staff were declared redundant in October last year, at Beards and Scottish Steel there were 465 redundancies in January of this year, and at William Beardmore Ltd. there were 120 redundancies in the same month.—[Interruption.] I think that it would be helpful if I were to carry on with my speech and make it in my own way.

Mr. James Dempsey (Coatbridge and Airdrie)

The hon. Gentleman has referred to firms in my area. The loss of 1,450 jobs was due not to the squeeze but to the fact that there were old industries, and the owners preferred to line their pockets rather than plough the profits back into modern industries and make them competitive.

Mr. Younger

I am grateful to the hon. Gentleman. I did not say that these redundancies were caused by the squeeze. All I am saying is that it is no use the President of the Board of Trade coming here and expecting us to listen to a story about the jobs which have come in if he is not prepared to take into account the jobs which have been lost.

I hope that hon. Gentlemen opposite will not be led into thinking that everything is fine, merely because it is possible to refer to some period when things were worse than they are now. They are right to keep this in mind, but we would be foolish to blind ourselves to the fact that, barring one month, this is the worst June figure for 10 years. I can see almost a film coming over the eyes of hon. Gentlemen opposite when this kind of argument starts, but this is the background to the debate. It is unfortunately true that between January and June this year the unemployment rate in Scotland fell by only half the amount that it normally falls between winter and summer. This is something which can give nobody in the House any satisfaction. It is a figure which we must not ignore. We must not forget our duty to consider this, to discuss why it has happened, and to see what we can do to make things better.

I think that that figure leads us to consider the general trend of the Scottish economy at the moment, and I suggest that there are three things which give us cause for concern—and many people would say grave concern—at the trend for the months ahead. First, the forward investment trend for Scottish industry can give no cause for satisfaction. I do not need to go into detail, because this has been done on many occasions at Question Time and otherwise, and my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) has mentioned it more often than most. It is a bad sign for the future.

Secondly, the index of industrial production has been behaving in a most depressing way during the past 12 months. In 1964, industrial production in Scotland went up by 7.8 per cent. In 1965 it was up by 4 per cent. I am not in possession of the latest figures, but the most recent figures which I have show a rise of 2.4 per cent. last year. We must take this seriously. It is no use brushing these figures aside as small local difficulties which will disappear of their own accord in due course.

When talking about the rising trend of unemployment, one has to consider, too, the length of time for which people are unemployed, and this is higher than for the rest of the United Kingdom. The fact is that 65 per cent. of those unemployed in Scotland at the moment are unemployed for eight weeks or more. This is higher than it was last month and previously. This, too, is something about which we must be concerned.

I come now to deal with the placing of people in work by the Ministry of Labour. It is difficult to make comparisons, but if we compare May of this year with May, 1962—a comparable period of the last economic cycle—we see that in 1962, 19,654 placings were made by Ministry of Labour offices, whereas in May of this year the figure was only 12,695. There may, of course, be many reasons for this. Not everybody is placed in a job by a Ministry of Labour Employment Exchange, but this is another trend which we must consider seriously.

Many hon. Members have mentioned, and quite rightly, that very soon—indeed it has already begun—there will be a further contraction among those employed in the mines. This will cause grave problems in many areas, and particularly Lanarkshire, about which the hon. Member for Bothwell (Mr. James Hamilton) was talking earlier on. Difficulty will also arise in Ayrshire, where there is grave disquiet about the effects which this will have.

Overhanging all these matters is the problem of emigration to which many hon. Members have referred, and which appears to be running at a record level at the moment. This in itself tends to make the already serious trend in unemployment look less serious than it might be.

In the face of all those trends, what have the Government been doing? I propose to consider, first, the interesting question of the abandonment of the growth point principle. The Government made the decision which they were entitled to make, but they now have to take the consequences of it. They decided that it was preferable to give equal inducements to all the parts of Scotland, with the exception of Edinburgh and Leith. It was a fair decision, but the consequences of it are beginning to be seen, and the right hon. Member for Edinburgh, East (Mr. Willis) was the first swallow which may make a summer. He was right to point out that when the same benefits are given everywhere, this has the effect of reducing the attraction of areas further away from centres of population.

I realise that it is politically attractive to give these development incentives to all areas, and many people then say that it is marvellous to be in a development area, but, as my hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith) said, many people are beginning to realise that those at the far end of the pipeline have lost some priority, and it follows that we in Scotland who are furthest away from the overcrowded South-East, and those in the North of England, the North-East, and the South-West, have suffered some lowering of the attraction of industries to come to our area because so much of the rest of the country gets the same incentives as we do.

I do not put it any stronger than that, but I want to make a last point of which I hope the President of the Board of Trade and the Secretary of State will be conscious. As far as I can ascertain, in almost every other European country the vast majority of planning experts strongly believe in the principle of growth points. Very few provide a uniform flat rate incentive over whole areas. I suspect that the right hon. Gentleman's Department think that way, too, because, as my hon. Friend pointed out earlier, within the new system under which every area is a development area there is no doubt that there is still a strong exercise of discretion, when I.D.C.s are granted in favour of the old development districts.

It is very strange to give a blanket incentive and then still seek to attract industry to the old development districts. This happened in my area. Over a year ago I asked the right hon. Gentleman to consider the possibility of establishing an industrial estate at Prestwick Airport. He was very courteous and helpful about it, and eventually sent me a letter—which, by a coincidence was just four days before polling day—saying that he did not think that he would establish such an estate because at the moment he wished to concentrate development in the Cumnock area, which was in the former development district. I do not quarrel with that decision, but it is a slightly strange way to proceed to give a locality the benefit of being in a development area and then still favouring development districts.

I now turn to the effects of the Selective Employment Tax and the regional employment premium. These have been much discussed and I am sure that everybody is beginning to get tired of the arguments. I urge the Government to think—and if they cannot do so publicily, to think privately—whether it is not disastrous for a country like Scotland, depending for over half its jobs on the service industries, to have the millstone of S.E.T. hung about its neck. There is no question that it is a millstone that costs Scotland £27 million net. It would be had enough if the effect were spread all over evenly, but this £27 million falls most heavily on those areas which are under-developed and which do not have manufacturing capacity.

R.E.P. merely compounds this error and illustrates the futility of the theory that we prefer people to work in manufacturing industry. If they are working as well as they can and in whichever work they are doing, they are of equal benefit to the economy. I cannot agree that there is something intrinsically so special about manufacturing industry that all this money should be pumped into it, at the expense of workers in other industries. I hope that, sooner or later, this fact will get home to those who have to consider these matters, and that they will realise that this is a bad tax, which is very damaging to Scotland and ought never to have been imposed.

Advance factories have a part to play in helping the economy in times of stress, but we should get into perspective what they can do, and we should at least question whether we are getting value for money in establishing them. I am not yet prepared to say that we are not, but I suggest that the relevant figures should be carefully studied. Of the programme announced by the Government, of 43 advanced factories, only seven have been completed and occupied, as we discovered through a Parliamentary Answer this week. A further six have been completed but are not yet occupied—because there are no tenants for them—18 are still under construction, and 12 have not yet been started.

I appreciate that it takes time to construct such factories, but what shook me was the fact that the total number of people employed in the seven advance factories which have been completed and occupied is 181.

Mr. MacArthur

How many?

Mr. Younger

One hundred and eighty-one. That seems rather astonishing—an average of about 25 jobs per factory.

The Secretary of State for Scotland (Mr. William Ross)

Will the hon. Member tell me how many people were employed in the first factory that Honeywell went into in Hamilton.

Mr. Younger

Without the resources of the Department I am not able to do so, but the right hon. Gentleman's Depart- ment should be able to tell him, if he passes to the hon. Member behind him one of those cryptic notes that he occasionally writes.

I am delighted to have any number of jobs provided—10, 20, 30, 100 or any other number—but when we spend £4 million in providing these factories and the total number of jobs provided is 181, I wonder whether none of us can think of a better way of spending £4 million and providing many more than 181 jobs.

Mr. Jay

The hon. Member must realise that he is getting the time scale wrong. By the time these 43 factories are built and fully manned up—which will naturally be some years hence—the total number employed will be far greater than the number he has mentioned—perhaps 10 times as great.

Mr. Younger

I sincerely hope that it will be. I am questioning whether we are getting value for money. These factories are being provided at a cost of about £25,000 per job. I am prepared to be told that we are getting value for money. But nobody should be impatient if we ask this question. We must decide the best way to spend our money. We should not brush this question aside as not worth considering.

I do not question the desire of hon. Members on both sides of the House to do the best they can for Scotland and the Scottish economy, but I suggest that the Government will be deluding themselves if they forget that they have made three crashing mistakes in what they have tried to do in the past two-and-a-half years. First, they should never have allowed the Selective Employment Tax to be applied to Scotland. Having imposed the tax, they have coupled with it R.E.P., which is its son and which makes all its effects worse.

Secondly, they have never produced any big Government-sponsored projects. We hoped to see a Ford Motor Company project, a computer centre and many other such projects, but so far we have not had them. Perhaps the Secretary of State will be able to announce one tonight.

I suggest that the Government have made a great mistake, and that it will become more apparent now that we have moved from the principle of growth points. We shall discover this every month that goes by. We shall regret having gone away from the growth point principle because this action has reduced the incentive for people to come to Scotland, and especially to the remoter areas. On these grounds we are fully justified in having initiated this debate, and I hope that everybody will find it useful.

8.10 p.m.

Mr. James Dempsey (Coatbridge and Airdrie)

The hon. Member for Ayr (Mr. Younger) criticised practically every aspect of the Selective Employment Tax except the L.E.A. grants for building hotels and public houses. This is the aspect which I would criticise in the tax. In a wide-ranging debate, we have discussed even the teaching shortage, but one thing which has been omitted is the subject to which I referred earlier. I was happy to hear the President of the Board of Trade's outline of the Government's achievements in Scotland, which are remarkable and encouraging and which would be applauded by anyone who is honest. But even my right hon. Friend cannot control the closure of older industries. I was surprised to learn that private enterprise does not have to warn the Board of Trade of closures, which prevents effective planning of full employment.

North Lanarkshire has been mentioned, especially the new industrial estates at Newhouse, my own constituency of Coatbridge and Bellshill, but these successes have been prejudiced by abrupt closures. This is disgraceful, and I am surprised that the Government tolerate it. Three steel industries which were closed in Coatbridge were old and dilapidated because private enterprise preferred to line its pockets with profits rather than to plough them back to modernise the industries and to keep them competitive in world trade. We are paying the price; in spite of the excellent efforts of the President of the Board of Trade and his Department—especially his Controller and staff in Scotland, who are doing an excellent job in the face of these almost insuperable difficulties—we have the highest unemployment which we have had for a long time.

I was surprised at the Answer which I received on 26th June to the effect that 8,877 are unemployed in North Lanarkshire, the main part of the county, of whom 5,437 are men. This is our main problem. There are 2,874 unemployed in the two towns of my constituency, of whom 1,787 are men. This is one of the largest totals ever and is cause for concern. I know that the Board of Trade has a number of jobs in the pipeline and that factories and employment cannot be provided overnight. It will take a few years, but what should we do in the interval?

More than a third of Lanarkshire's unemployed are in my constituency because industries are closing rapidly without giving adequate notice to allow alternative employment to be prepared. I cannot understand why an up-to-date industry cannot have an effective trade trends department to anticipate conditions a year in advance and to forecast the feasibility of closures. Why cannot they notify the Board of Trade to enable it to help provide alternative employment? I therefore beg my right hon. Friends to help to overcome this situation.

Container depots are being established and the Minister has insisted that they should be adjacent to railway marshalling yards, which we accept. Unfortunately, many yards and stations in my part of the country have been closed, but there are excellent sites for freightliner depots, and I hope that my right hon. Friends will use their influence to steer such employment into that part, because it is mainly for men. In this respect, we could contribute practically to a solution.

I was surprised to hear that even industries which deal with welding and making chassis for lorries and other vehicles are not eligible to tender for National Health Service ambulances. In spite of the method of contracting by the ambulance service, now that it is the responsibility of my right hon. Friend in Scotland, I hope that he will try to devise some system by which firms in development areas will be able to tender for this work. It is constantly irritating to me—I am not a Scottish Nationalist and do not have a claymore with me—to find English firms receiving carte blanche from the Scottish Education Department to build training colleges in Scotland with no competition, in spite of the fact that the most reputable timber building firms in the United Kingdom are in that part of the country.

There is no opportunity for them in the South, because they are not members of the National Building Agency. Therefore, they are given no consideration in the South and are ignored in the North by my own Education Department. I hope that my right hon. Friend will take steps to eliminate this problem and see that there is no recurrence of such a policy by St. Andrew's House.

As a Member for a development area, I find this extremely unfair to many of our firms. The Board of Trade has tried many things, such as advertising factories and offering the provisions of the Local Employment Act, the new grants and allowances and regional employment premiums, to steer industry to these areas. If the criticism of the hon. Member for Ayr is sound, there is only one alternative, and whether we like it or not it is direction of industry.

I attended a conference of councillors trade unionists, commercialists and industrialists, at which we unanimously agreed that the only solution to unemployment in my part of the country was direction of industry. I believe that the Scottish T.U.C. has expressed the same opinion. We are used to direction of labour; in the war, we did it all over the United Kingdom. When people in other parts boast to me about how they have solved their problems, especially their unemployment problems, I am sure that the only way it is done is by direction of labour.

The time has arrived when thousands of our workless who are anxious to work, who believe in the two fundamental rights of society—the right to work and the right to leisure—should have those rights provided by the Government. We in North Lanarkshire and Scotland as a whole are conscious of this important desire. I understand and have the greatest sympathy with the problems of the North-East and the Highlands; but have they 6 per cent. of their population unemployed? The two busiest Government departments in Coatbridge and Airdrie are the two Ministry of Labour offices, and the two busiest officials of the British Government in my part of Scotland are the managers of those offices. They are excellent persons doing a difficult job in very trying circumstances.

The present situation would have been very much worse but for the wisdom, foresight and initiative of the Board of Trade in building advance factories and developing industry. The situation would have been one of chronic unemployment and perhaps "back to the 'thirties" but for the efforts and intelligence of my right hon. Friend and his Department. On behalf of the people I express gratitude for the service which he has given our community.

However, what has been done is not enough. We are like Oliver Twist, wanting more. We cannot await the acquisition of ground, contracting for new industries, the building of new factories and the finding of tenants. That takes time. We are looking for jobs now. One way in which an effective contribution can be made is for the two Ministers concerned to use their good offices with their colleagues of the spending Departments and encourage them to steer contracts into North Lanarkshire. We have factories which could be working to capacity and the skilled labour for work which could be done for the Post Office, the Service Departments and other technological branches.

Ministers could play a decisive part in assisting us in that respect. Some of our works are engaged on manual activities for the Post Office and are in process of losing contracts because of technological misunderstandings. It would be a tragedy for an area with nearly 2,000 men unemployed to lose work of that nature. In addition, we have factories which could undertake work for the Royal Air Force, the Royal Navy and the Army and work in connection with telephones and so on. I appeal to my right hon. Friends to have consultations with the spending Ministries and impress upon them the necessity to steer contracts immediately into this area.

I believe that my appeal will not fall on deaf ears. In spite of the most difficult circumstances, the Government are doing an excellent job for Scotland and Lanarkshire. I am sure that they will never rest on their laurels until as a result of a sound economic policy our people in Lanarkshire in particular and Scotland in general are within striking distance of achieving for the first time the possibility of full employment.

8.25 p.m.

Mr. John Brewis (Galloway)

We have covered a great deal of ground in the debate. I do not think that everything that the Government have done in the last three years is bad. They have done one or two good things, such as tightening up the I.D.C. system in the Midlands and south-east of England. This should have been done, and I am glad that they have done it. However, at the same time they have done several things which have been very unwise from Scotland's point of view.

First, the Selective Employment Tax hits my constituency very badly indeed because we have only 14 per cent. of our people employed in manufacturing. Consequently, the tax is drawing money out of the constituency when money should be put into it.

Another thing which has been mistaken in some ways is the extension of the development districts to cover all Scotland, except Edinburgh and Leith, and also large parts of the north-east of England. From one point of view this is undoubtedly good because areas now have a chance of getting industry which they did not have in the past. But from the point of view of a place such as Stranraer, which has a very high rate of unemployment, one which is going up, and which was in the old days a development district, it is most unfortunate, because now the attraction of other districts, such as Newcastle on Tyne or Liverpool, is such that any industry on the move is much more likely to go there than to Stranraer.

The Government ought to have a two-tier system. There should be a one-tier system for the present development areas, but the more critical areas—these include large parts of the Highlands, part of my constituency and parts of remote areas—should have a different system whereby they get larger grant than the rest. I am told that this is not something which can be done. But we are doing it already with our investment grants. There is a differentiation between development districts and non-development districts. The system is used in various other countries; for example, in Italy there is the Vannoni Plan for getting the south of Italy going. So there is no real reason why this should not be adopted. Making the whole of Scotland a development district has made it very much more difficult for places with critically high unemployment to get new industry.

It has been suggested that far too much is going to central Scotland. I do not think that this is entirely a valid criticism. I think that the solution to the problem of the distribution of industry lies in Birmingham and the Midlands. By publicity and exhortation we must induce people to move not just branch factories but entire factories from the Midlands into the development areas. I have been reading an interesting article by Mr. Loasby in Lloyds Bank Review of January. In this he points out that of 200 firms which moved out of Birmingham—either a branch of a firm or a whole set-up—nearly all of them were extremely pleased; they had not known that conditions would be so good. If we take a wide view of the distribution of industry policy I am sure that is something which we must try to do, to move entire firms out of the congested areas of London, Birmingham, and the rest.

It is very interesting that one of the few firms which have come to my constituency and set up a branch factory at Stranraer kept its headquarters in Walsall but has now decided to move the headquarters also so that the entire firm is in Stranraer. Another firm set up a branch at Dalbeattie and it expanded enormously, so that the branch at Dalbeattie is now very much bigger than the main factory which is situated in Liverpool. I feel that this is something which we should be working at, to get a better distribution of industry policy.

Another point I would make is on the question of planning. In the elections many people, I think, were misled by this emphasis on planning from the party opposite. They thought that, by planning, things would just happen, that industry would just move and the problem would be cured. But this has not happened, nor can it ever happen like that, but it has had the effect of making county councils and burgh councils think they could relax their efforts and need not worry and that all would come right by planning. This is a danger with the regional economic groups. They have a purpose in deciding what industry is most suitable for their areas. I think that they have a very considerable purpose here, but it was never intended that these groups should act as regional development groups, that they should go out and visit industrialists and attract them to the areas: it seems to me that there is a gap now, and that in regions like the southwest of Scotland nobody is going out and publicising the region and getting industrialists to move to the area.

Earier this week I was going round the new town of East Kilbride, which is extremely interesting. When I was there I was told that in the new town they have something like 140 new factories which have come to the own in the last 20 years. Several of them were very large factories indeed, obviously of the size which would usually be in the central belt, but the vast majority were small factories of 5,000 sq. ft. or 2,000 sq. ft. The interesting thing is that they did not come so much because of the Board of Trade, but the new town development corporation had gone out—gone to America, gone to Birmingham—and by publicity and personal contact had got those factories. I could not help thinking that if some 80 or 100 of those smaller factories had been located in the smaller places of Scotland—I am thinking of small places in my constituency like Newton Stewart and Whithorn—we would have a very much happier country for employment through distribution of industry.

I would like, lastly, to touch on one other matter, and that is the question of research centres and Government-sponsored schemes. It seems to me that there is no doubt that a good research centre, perhaps allied to one of the universities, can have a remarkable effect in bringing industry into an area. Again to mention East Kilbride, one sees there the National Engineering Laboratory, which, I am sure, has had a considerable effect in bringing more industry into Scotland. It seems to me in travelling round the outer London area, a great pity to find so many of these Government research centres—the Road Research Laboratory, the Timber Improvement Laboratory, all Government-sponsored and Government-controlled in the congested parts of the south of England. Many more of these projects could be located in Scotland, and they could have a very considerable influence on attracting industry—and so, of course, could many of the bigger things which we have been hearing about during the debate, things like the computer centre which, I believe, has gone to Manchester.

I conclude on a more gloomy note. The unemployment figures for Scotland have been rising sharply. The figures for this month are the worst, with only one exception, for about 10 years and we cannot but feel extremely gloomy about this trend. These statistics drive home the fact that the economy of Scotland is an integral part of the economy of Great Britain as a whole. If things go wrong at the centre—and they have gone sadly wrong lately—that has a bad effect on Scotland. This always will be the trend and the solution is not to try to separate Scotland from England. By all means shelter Scotland against the economic hazards, but let us be clear that when things go wrong at the centre, Scotland suffers. This has been happening in the last two or three years.

8.35 p.m.

Mr. George Lawson (Motherwell)

The hon. Member for Galloway (Mr. Brewis), like every one of his hon. Friends, criticised my hon. Friends for having abandoned the growth point policy. This theme has run through every speech I have heard from the benches opposite. In trying to make sense of this criticism, I am puzzled, particularly when I recall what could happen under the growth point policy.

It was of such a concentrated nature that a part of my constituency, what we call the joint burgh of Motherwell and Wishaw—which is really a single unit—was divided in two. The Motherwell end was included within the growth point area while the Wishaw end was outwith it. Subsequently, however, Wishaw was brought within the growth point area. Indeed, the growth point policy was so concentrated that a division of this sort could not only be perpetrated but actually occurred. I should, perhaps, mention that there is no great difference between the two parts of this burgh. It is essentially an industrial town, although it was split for this purpose right down the centre, which shows how narrow the concept of growth point areas could be.

Hon. Gentlemen opposite have, while speaking about the growth point area concept, tried to argue that there should be Lowlands, borders and various other places. They cannot have it all ways, although they try to argue as though they should. They complain about the policy of making Scotland a development area, with all the advantages that go to such areas. My right hon. Friend the Member for Edinburgh, East (Mr. Willis) and the hon. Gentleman the Member for Edinburgh, West (Mr. Stodart) know full well what these advantages are, particularly since they are crying out to have Edinburgh and Leith brought within this scheme of things.

It makes no sense for hon. Gentlemen opposite to argue the merits of the growth point area concept, which concentrates on very small areas, and to go on to argue that they want to see factories here, there and everywhere, dotted all over the countryside, the whole thing spilling over into very large areas. They cannot have it both ways. If they want this type of policy they must think in terms of concentration and the benefits that accrue from it.

A fair amount of criticism has been made of the industrial belt, but there is no future for Scotland if the industrial belt cannot thrive. It has a great concentration of people, skill and wealth-making capacity. We can take it that if the industrial belt is thriving the other parts of Scotland will thrive—they just could not thrive if there were difficulties in that industrial area. If we are to have growth points in the larger area sense, let us think of the very great possibilities of the industrial belt. The belt is only 40-odd miles between the two great estuaries, reaching out into the Atlantic on one side and out into the North Sea on the other. It is wonderfully accessible to the sea. It is on the main roads north and south, and has many other advantages, as is proved by the fact that it is here that industry has grown up.

I want to see the industrial belt booming and developing in all sorts of ways. It is one of the longest-established industrial areas in the world, and it is there, perhaps more than anywhere else, that the Industrial Revolution started. In many ways, that is what the area is suffering from now, because so many of the old industries were and are concentrated there, particularly on the west side.

Very great changes are rapidly taking place, and I grant that various things were done for the industrial belt by the party opposite. Nevertheless, as my hon. Friend the Member for Glasgow, Mary-hill (Mr. Hannan) said, what was done was too little and done too late—

Mr. Noble

I am quite fascinated by what the hon. Member says. I am casting my mind back to an exactly similar debate in 1964. I cannot remember what the hon. Member said then, but I can remember a great many of his hon. Friends attacking me for saying that, in the first place, we had to concentrate on the central belt.

Mr. Lawson

I have just repeated the kind of attack I made then. At that time the concentration was over tiny areas, and I am now talking of concentration on very much larger areas. I also say that if people or firms want to go to Inverness, or the Borders or Galloway, by all means make it easy for them to go. That is the great difference between us. The idea of growth areas—and that is a better term than growth point areas—is sensible. It is not the point but the area that one has to think of, and of how the area will affect others.

The right hon. Gentleman has made me diverge from what I intended to say. I wanted to compliment him for various good things done in his day. A substantial part of the motor industry was brought to Scotland because of the efforts, perhaps, of the right hon. Gentleman and his friends. There was a considerable development of the steel industry in my area, where a strip mill was established at Ravenscraig. A pulp and paper mill was also established.

Various other things were done, but I do not think that the right hon. Gentleman would grudge my saying that they were all done under great political pressure. They were not done because they were thought to be what Scotland needed, but because of the recognition by hon. and right hon. Members opposite that seat after seat was being lost in Scotland, and that unless they could do something really big they would have no seats left in Scotland—even in the Highland area, as the hon. Member for Inverness (Mr. Russell Johnston) knows.

For years we have argued that if Scotland was left to the tender mercies of industrialists, including Scottish industrialists, the biscuit manufacturers and others, those industrialists would pull up or maintain their roots only as it suited them. There is no patriotism when profit is involved. The fact that Scotland was dropping behind the Midlands and the south-east of England was not due to the Government in London so much as to the failure of the Scottish industrialists to keep pace and by their readiness to shift as it suited them. We said that, circumstances being what they were, unless the Government intervened on a large, continuous and systematic scale, Scotland would become nothing much more than an area for tourists. I do not want my country to become nearly wholly dependent on tourists. I think that I am here speaking for the hon. Member for Inverness as well. We want to earn a living in ways other than merely by having tourists, not that I have anything against tourists, although I want one bit of the country which is not flooded by them. I refuse to be described as a tourist in my own country, which is the sort of thing which is now happening to us.

A very important feature of the area of the central belt is the steel industry. We know how the steel industry grew up and how it came to be planted in this area. Many improvements have taken place in the steel industry in Scotland which, like the steel industry in Great Britain, is in bits and pieces. Some parts are very efficient while many are not efficient and many others are in between.

Now that the industry is nationalised, there can be no doubt that there will be considerable rationalisation and that many of the existing units, including some in Lanarkshire and other parts of Scotland, will not continue. There will be a telescoping, a rationalisation, a concentration, a picking out of the most efficient parts and the knitting together of those efficient parts, as there must be if Scotland's steel industry is to be as efficient as the industries of any other part of the world. I have discussed this matter with some of the most knowledgeable people in the industry in Scotland and they have assured me that we have the makings of an industry able to face any steel industry anywhere.

But considerable changes will have to be made. If there are extensive changes and a concentration of the industry, the problem with which my hon. Friend the Member for Coatbridge and Airdrie dealt with will be greatly aggravated. We should be thinking now of the substantial changes which will have to be wrought in this area and we ought now to be acting to anticipate the developments which will arise from those changes. There will have to be developments to take up the skill and the manpower which will become available. We must take such action if we are to have an area able to fit in with the rest of the development of Scotland and if we are to make Scotland as competent and as high an income producing area as any other part of Great Britain.

One or two problems must be looked at in this connection. I am sorry that I did not hear the speech of my hon. Friend the Member for Midlothian (Mr. Eadie), who represents so much of our coal mining industry. It is a fact that the Scottish steel industry is handicapped by having to pay a substantially higher price for its coking coal than is paid in other parts of the steel industry. I understand the problems here, and they apply not just to Scotland. Higher prices are paid in parts of England, too, but for the steel industry in Scotland there is a substantial burden being carried as a result of the differential.

A good argument can be made by the coal mining industry on this score, but I want my hon. Friends to bear another factor in mind. Coal imports are regulated. If there were a uniform price for coal charged to industry, one could justifiably say that the importation of this kind of coal should not be permitted. If, on the other hand, there is a differential, perhaps quite a substantial differential, a very good case can be made for permitting this section of industry to import cheaper coal if it can.

Mr. Thomas Swain (Derbyshire, North-East)

Is my hon. Friend advocating the import of cheap coal when there are 40 million tons of British coal lying about?

Mr. Lawson

I am saying that, if an Industry such as the steel industry has to pay for its coking coal a substantially different price in different parts of the country, there is then an excellent case for saying that it may import cheaper coal if it can get it. The alternative is to see that the industry is treated alike over the whole country.

Mr. W. Baxter rose—

Mr. Lawson

I should like to give way, but I have to sit down very soon.

I put this point to my right hon. and hon. Friends on the Front Bench. They are not all here at the moment, but I shall see to it that they hear what I have to say. The steel industry in Scotland is not yet complete. There is an important unit at Ravenscraig. That unit can turn out steel cheaply of a quality as good as can be found anywhere, but, if that part of the steel industry is to be as efficient as it must be so that Scotland may thrive, the completion of the industry requires the installation of a tinplate mill. I see that one or two of my hon. Friends question that. I say it for this reason. The range of products at Ravenscraig is too narrow. If the whole of the steel making capacity is to be taken up, the range of products must be broadened, and what is necessary is the establishment of a tinplate mill.

I realise that there can be arguments from other parts of the country about what should be done there, but I am not concerned' about them. I am concerned for Scotland, the whole of Scotland, the Highlands as well as the Lowlands. We need to have this industry efficient, and, for that purpose, there must be that complementary part added to Ravenscraig. With that done, we can look anyone in the face. We can feel that the back of our problems will be broken and we can go right ahead. It will help even Edinburgh, I am sure. With that said, urging my right hon. Friends to keep the point very much in mind, I shall sit down and let the debate proceed.

8.55 p.m.

Mr. Michael Noble (Argyll)

We have had, in many ways, an interesting and instructive debate. Without wishing to strike a discordant note in the Secretary of State's absence at the moment, I express the hope that he will next year consider publishing some form of report on industry in Scotland such as we have had in the past. We now have various economic planning councils all reporting to the Secretary of State. This may be very valuable for him but the councils are totally valueless to us because we never see anything that comes from them. Perhaps he would consider this matter before our debate next year, so that it can be based on the best factual information available.

The whole tenor of the debate is important for everybody who lives in Scotland because its real hub—although this did not come out as clearly as it might have in all the speeches—is the question of the chances of employment for every man and women in Scotland over the next year or 15 months. We heard speeches from my hon. Friends the Members for Dumfries (Mr. Monro) and Galloway (Mr. Brewis) and from the hon. Member for Coatbridge and Airdrie (Mr. Dempsey) stressing that unemployment in their areas is already increasing sharply. In my own constituency of Argyll we have also had three or four distressing closures—not of great businesses, because we do not have them in Argyll, but businesses that were very vital to their area.

If our debate had been opened by the Minister of Labour and not the President of the Board of Trade, I am sure that he would have told the House very seriously that he and his Department were worried about the trend of unemployment in Scotland. To anybody who has studied it, the picture is very worrying at present. Even before last July, no one studying the figures carefully found them very cheerful.

I know the enormous temptation to be selective with statistics in debates like this. But if we consider the latest figures for employment in England and Wales and in Scotland for the year July, 1965 to July, 1966—and it is because they are the latest that I have chosen them—we see that employment in Scotland rose by 4,000 jobs. Perhaps this is all right, but employment in England and Wales rose by 130,000 jobs in the same period. That means that there was three times as great an increase in employment in England and Wales as there was in Scotland for the last year for which we have had full records. This should make the President of the Board of Trade a little careful in quoting the statistics he gave us, designed to show how very much better Scotland was doing than it was before. Perhaps it is, but the trend is still three times as good in England.

My second point has already been very well made by my hon. Friend the Member for Renfrew, East (Miss Harvie Anderson). She talked about the problems of her constituency and its fears of closures, but she also made an impassioned plea not only for more jobs but for a higher quality of employment and an attempt to increase the importance of the work force in Scotland. This theme went through a number of speeches today. It is true that we have not enough skills in Scotland today, and everybody has admitted this. It is true that the Government, I am sure very unwillingly, decided that one of the measures they had to take was to cut down on the technical college budgets.

This is an important part of the training of our new skills. It is also unfortunately true that we have had, as my hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith) has said, a very disastrous period of high emigration. The picture that is presented to all of us who have taken the trouble to think about this is that there are very large numbers of men, mostly young and skilled, leaving Scotland because they feel that there are not enough opportunities there for them. Whether they are right or wrong, they feel that if they get on the gangway of a ship to Canada, America, New Zealand or Australia, or on a train going south, in some way the opportunities there will be better.

Whether or not this is true, it is the impression which has been created in Scotland and it is having a much more rapid and dangerous effect than it had in the past. I am prepared to admit that part of this lack of opportunity is due to certain of the older industries in Scotland which used to boast that they had no graduates on their staff.

I do not want in any way to detract from their share of any blame, but this picture is changing very fast and the newer industries which were attracted when we were in office, and which the Government are successfully attracting now, are the sort of industries which tend to employ graduate labour and to give them full recognition for their skills. This picture ought to be better, but it is worse. Let us not shirk that in our debate.

Part of our trouble is that the people of Scotland are not finding the Government or Secretary of State entirely credible. He and many of his hon. Friends laughed when my right hon. Friend the Member for Leeds, South-East (Sir K. Joseph) quoted from the Daily Express. Newspapers have their own views, and I have been abused just as freely by the Daily Express as the right hon. Gentleman is today. The Daily Express is as lavish with its abuse as it is scarce with its praise, unless it can find something particularly good to praise.

It is not just the Daily Express. There is a cutting here of 9th June from the Daily Record, the voice of Scotland. There is an article entitled, "What are promises worth?". Whether it is right or not, it is a very damaging sort of article to be read by young people who, if they feel that the Prime Minister and the Secretary of State make promises to Scotland which they do not keep, may well decide that there is no opportunity in Scotland for them. Unless we face up to this fact we shall not solve the problems which confront us.

I should like to congratulate the President of the Board of Trade on having made one of the shortest speeches that I have ever heard from the Front Bench. Perhaps it was short because he was playing to us exactly the same record—I am not saying that it was a cracked record—that he played in the last two regional debates. I can remember very vividly when he was sitting on the other side of the House and the then President of the Board of Trade was making the same sort of speech as he made.

There were tremendous abuse and catcalls, and the then Opposition said that there were jobs in the pipeline. When the President is talking about large numbers of square feet, these are not only not jobs in the pipeline; in many cases they are merely the size of the pipeline, so that as such they are not necessarily the full answer. I agree with him that in two-and-a-half years he has produced 43 advance factories and that this is enormously more than we produced in whatever the number of years was before that. It is also fair to say to him that in 1,000 days—as it will be next week—43 advance factories have been announced and, as we see from an Answer given last Monday, the total of the jobs which they have produced is 181.

I take the point that in a year or two they will be very valuable, we hope, when the economy picks up. But the point which I make, and which is valid, is that through all the period when the Government could have seen, because of their own actions and the information reaching them, that the economy was running down, they decided to go for advance factories, which could not be built and could not be effective in time to help the immediate problem which we have now and shall have next winter. I make the criticism only in the narrow framework that we already have a very large number of empty factories in Scotland—well over 100, apart from the advance factories. There is ample space available for industry to expand if it is able to expand. The point is that at the moment it is not so able.

I remember the right hon. Gentleman's predecessors at that Box, when we were on the other side of the House, reading out lists, as he did today. Very welcome they were, and they were greeted with cheers from our side of the House, as they were greeted with cheers from the right hon. Member's supporters today. They were figures of the jobs which would be created in, let us say, Rolls-Royce and Burroughs Machines. I know how they are obtained. One telephones a firm and says, "I have to make a speech. What is your plan for expansion over the next three or four years?" But on the right hon. Gentleman's own figures these 3,000, 2,000 and 4,000 were not jobs which were ready. He said that with luck they would come about between now and 1970. That is fair. It is what has been done in the past.

But anyone with industrial knowledge—I know that the President of the Board of Trade is aware of this—knows that whether firms' plans laid down for three or four years ahead in fact come into existence depends entirely on the economic climate of the time. Suppose we disappoint the President of the Board of Trade and get into Europe. I would expect these figures to be enormously greater. If we do not get into Europe, these might be very much less. Though they are good cheering points for the right hon. Gentleman's back bench Friends, they do not mean a great deal in terms of the real problem which we face over the next five or six months.

Mr. W. Baxter

Has the deception which the right hon. Gentleman is illustrating been going on for a number of years?

Mr. Noble

It has been going on in exactly the same form from the Board of Trade. Everybody connected with it knows exactly how the operation is carried out. The cheers from the Government side of the House today were exactly the same as the cheers from our supporters when we were in office. The boos from the Opposition were exactly the same as the boos from the Opposition today. But unfortunately that does not alter the fact that the main situation today is grave.

When the President of the Board of Trade related these matters to terms of money—£12½ million in 1964, £15 million in 1965–66 and rising beyond that—did he include the very large amount which the Government have spent on Wiggins Teape? If so, that can hardly be put to his credit—although I suppose that he could have stopped it.

We had a most interesting speech from the hon. Member for Fife, West (Mr. William Hamilton). He wanted to know why my right hon. Friend was asked to open the debate. My right hon. Friend is shadow President of the Board of Trade and has just as much right to speak in Scottish debates as has the President of the Board of Trade. He made the fair point that the number of training places today is 900 compared with 529, but he should bear in mind that even though there were 529 places in training centres in 1964, we could not get even half of them filled because the trade unions refused to employ people who came out of these centres. In these circumstances, it would have been folly for a Government enormously to increase the number of places.

He made a perfectly fair point, which all Governments make, about the problem of running fast to catch up with the rundown of industry. I have not the statistics with me, but I am certain that the rundown in mining and railway workshops during the two years when I was Secretary of State was a great deal larger in total than the rundown in the last two-and-a-half years.

It was interesting to hear the right hon. Member for Edinburgh, East (Mr. Willis) and my hon. Friend the Member for Edinburgh, West (Mr. Stodart) practically embracing in agreement on the problems of Edinburgh and Leith and the problems of regional employment premiums. It was interesting to me to hear the right hon. Member talking about the dangers of the coffin area and the extra money which the regional employment premium would push into it to the detriment of outside areas. I hope that the Secretary of State will bear in mind—I am sure he will—the point which my hon. Friend made about the possible use of someone from the Scottish Office being very closely in touch with Brussels during the Common Market negotiations if he is not permanently there.

My hon. Friend the Member for North Angus and Mearns, in a particularly good speech, drew attention to one or two things I have mentioned and said two extra things which I think important. First was that no new industry had yet offered to come to that part of Scotland which is now a development area. I should like to have a long debate with the hon. Member for Mother-well (Mr. Lawson) on the growth area concept, his description of it and my thoughts about it. Of all the development that has happened in Scotland, a great part has happened in those growth areas which we originally designated. I hope that if the point made by my hon. Friend about the extra cost to trawling fleets of the increase in the price of fuel is a valid one, the Secretary of State will look at it and help the fishermen concerned in some suitable way.

If we are to regain the sort of position which we want for Scotland, it has to be done by a combination of both private and public enterprise. If the private sector is to be able to play its full part in any real development, it has to be profitable because it is only from its profits that it can make the investment which is necessary and it has got to have confidence in the Government. These three things are at the moment lacking. This is why, although the C.B.I. at this stage says there is some levelling out in the investment forecasts, it is levelling out at a very low level indeed and something has to be done to inject confidence there.

We are delighted with the report which the hon. Member for Midlothian (Mr. Eadie) read from the American firms which have come to Scotland and made a success in this country. They have been a very useful asset to us. Can the Secretary of State tell the House today whether there is any information about the position of the very big enterprise in the Highlands, Occidental Oil? If he cannot do so, we shall understand it. I believe he is going to Inverness on Friday and we shall have a debate on this subject next week.

I want also to ask him if he can tell us anything about the position of the shipbuilding industry. We have the Geddes Report, and the Working Party finished its work last month. Only when firms have been blessed by Geddes can they go ahead and order the machinery and equipment which they want, and only when a firm has been similarly blessed can a shipowner get a grant for a ship to be built. If we are to get shipbuilding going again on the Clyde, there is a high degree of urgency in seeing the Working Party's Report.

On the public sector, we welcome the two developments about which the Secretary of State has been able to tell us in the past two years, the first one being Dounreay, and the second one being Hunterston "B". Apart from that, there has been a great silence. We have heard nothing about research and development, though we heard a large number of speeches on the subject when positions in the House were reversed. We have heard nothing about Government controlled offices. We have become aware that the Computer Centre will go to Manchester and that the Mint is to go to Wales, although I do not think that there was ever a better case for something to go to Scotland than the Mint. In spite of the huge rise in Government employment, Scotland has received no sort of share in what has been going on. I am told about the possibility of petrol rationing. Perhaps the office which is going to do all that might start working in Edinburgh. I dare say that the printing could be done in the right hon. Gentleman's constituency, where they are running into troubles over printing.

We heard all these arguments about what the Government ought to be doing from the Secretary of State and his right hon. and hon. Friends when they were in Opposition, but they have failed in every one of them since coming into office, and it does not present an attractive picture to Scots.

The hon. Member for Fife, West spoke about Government contracts. It so happens that I have received a letter from a gentleman who works for a big clothing firm in Glasgow, which has been trying desperately to get clothing contracts from one or other of the Government Departments, without success.

On growth areas, if the Government believe that their much larger sweep of country into the development areas is right, surely they must have been prepared to increase the infrastructure money to service that much larger area. That has not happened. If one considers the whole of the north of England up to Scotland, excluding Leith, there is not a large amount of extra money above what was already planned—

The Under-Secretary of State for Scotland (Mr. Norman Buchan)

What about roads?

Mr. Noble

As the hon. Gentleman knows, all the road programmes are planned on a rolling basis three or four years ahead. Equally, by direct Government action, the cost of petrol has risen twice—I do not talk about the extra 2d., which was not the Government's fault. When one considers the cost of air travel, it looks as if that will go up. It was interesting to see what B.E.A. had to say about it. According to the Corporation, the European firms are able to keep their fares within Europe very low because they make profits on their international and transatlantic flights. On the other hand, because B.E.A. cannot put up its fares to Europe, it will have to put up its fares to Scotland, because that is the only way it can make money. If the Government let those firms behave like that, I shall have even less regard for the Government than I have today.

My serious fear is that the Scottish Office has to a considerable extent lost touch with what has been happening in the country during the last two and a half years, and I should like to quote a few particular things to illustrate my point. There were the seamen's strike, the floods in Inverness, the agricultural crisis in the store markets last year, the Highland Development Board's effort starting last November, and the tourist industry last week. In respect of each of these five things Scottish Ministers came to the Box and said that there was nothing to worry about, that everything was all right, that the strories printed were greatly exaggerated, and then a week, a fortnight, or perhaps a month later the full story came out, and they had to eat their words.

I am sorry to have to tell the hon. Gentleman that that is the fact, and if he wants another illustration of how out of touch the Scottish Office is, I have here a Press release dated 22nd June issued from St. Andrew's House which says: As promised by the right hon. William Ross, Secretary of State for Scotland, at his Press Conference on Friday 16th June, following a meeting of the Scottish Economic Planning Council a summary has been prepared of encouraging progress in physical planning and development in the various regions of Scotland since the publication of the White Paper on the Scottish economy, January, 1966. I suggest that that should be circulated to all the right hon. Gentleman's hon. Friends.

The Press got it, but it did not even rate two inches in any newspaper. Most newspapers totally ignored it. I will willingly give it to anybody who would like to read it, but it is, without exception, the dullest document that I have ever read from any Press department, even the Scots'. It is dull, not in the nature of its writing, but because there is no content of which anybody can say, "Look at the record of what we have done in the last year".

It is on that theme that I would like to conclude my remarks tonight. The main charge that I have against the Government is that, as my right hon. Friend made clear in his opening speech, they have had a full two and a half years in government. For the last year the storm signals have been there, and plain to see. Some time last year I made, I think, a realistic speech pointing out the real anxiety which I had about the way the situation was developing in Scotland. As with other things to which I have referred, the Secretary of State said that my statement was totally unfounded, that the Scottish economy was in a very healthy state, and that there was nothing to worry about, but if the right hon. Gentleman will go to the Board of Trade, or to the Ministry of Labour, and look at the situation today, he will find that it is almost precisely the same statistically as it was in July, 1962, when I took over as Secretary of State. The storm signals are there, absolutely clear for everybody to see, and although the President of the Board of Trade has told us what he is hoping to do in the way of factories, which may be very useful in 18 months or two years' time, the Government have not faced up to the task of tackling the problem which I believe may well be with us this winter.

All the evidence that I can get—it is not complete, and a great deal of what I have said today links with it—is that the right hon. Gentleman has failed in what is the Secretary of State's most important single task, which is to carry his Cabinet colleagues with him to take action early enough, and effectively enough, to deal with Scottish problems.

In 1964 the main structural problem of unemployment in the North-East, Merseyside and Wales had largely been overcome, but Scotland remained as the single really tough nut to crack. The Secretary of State took on the challenge willingly and tried to crack that nut. But in the last two-and-a-half years, if one liked to put on a postcard the record of all the things the Secretary of State has done one would find that not half the postcard was used. Unless the right hon. Gentleman can do a great deal better than that, Scotland will not forgive him.

9.25 p.m.

The Secretary of State for Scotland (Mr. William Ross)

This has been a very pleasant debate in terms of the nature of the exchanges that have gone from side to side, although there were certain barbs an the speech of the right hon. Member for Leeds, North-East (Sir K. Joseph). I welcome his intrusion, or entrance, into Scottish affairs. We are delighted that he should take part. I shall have something to say about his speech later.

The hon. Member for Argyll (Mr. Noble) made a very illuminating confession when he said that when he became Secretary of State the storm signals were already there. Earlier in his speech he said something about the Daily Express. I have a copy of the Daily Express printed a few months after he became Secretary of State. I shall not quote the abuse, because it went on for a long time—we expect it—but I want to quote his own statement on 26th October, 1962, at Strachur, when he said: I do not see the problems of Scotland being settled in a couple of months, but during the next year or two. Then, three days later, the man who had already seen the storm signals said, at his Argyllshire home, Everything is ready for a massive step forward. This country is now equipped to surge ahead industrially. What the planners call the infrastructure is ready. That was followed by 18 months when the monthly average of unemployment was 100,000. It was followed by a winter in which we had 136,000 unemployed in Scotland. And he presumes to lecture us!

He talked about the unemployment situation today, as did at least three of his hon. Friends—the right hon. Member for Leeds, North-East, the hon. Member for Dumfries (Mr. Monro) and the hon. Member for North Angus and Meatus (Mr. Buchanan-Smith). I was asked to state what the unemployment figure would be next winter. I am not going to do so, because I do not presume to be a prophet in that respect—and I would advise them not to begin prophesying this year, as they did last year. Last year they prophesied that the unemployment rate would be over 100,000 and they were bitterly disappointed.

I direct their attention to the words of the right hon. Member for Enfield, West (Mr. Iain Macleod) in 1957. In a very interesting speech, when asked the same question, he said that he did not intend to forecast what unemployment was going to be a year ahead. He said that the last time it had been done it proved disastrous.

It was just as well that he did not. When the right hon. Gentleman prophesied that things would be all right we reached 100,000 unemployed in Scotland, after which things went well everywhere else and then we were hit again by yet another economic crisis and the figure went up to 130,000. And during these 18 or 20 months, when the monthly average was 100,000, the Prime Minister, Mr. Macmillan, was going about the country saying, "We never had it so good." But we did not have it so good in Scotland, and there was no sense of closing the prosperity gap between Scotland, the north of England and Wales and the rest of England.

I do not see us fighting our way out of our difficulties in a year or two years. I have never said so. When the right hon. Gentleman talks about my aggressiveness on that side of the House, he must appreciate that I entered the House in 1946. I saw the build-up of industrial development in new estates. I saw the training centres and I saw them all scrapped and discarded from 1951 onwards. Why was only one of the old industrial training centres, that at Hillington, left? Not until 1963–64 did hon. Gentlemen opposite even start thinking about training. Then there were four or five, Irvine and the rest, and there will soon be nine, with a considerable expansion in the number of places–2,500 by the end of next year.

But that is not all. The right hon. Gentleman said that we had inherited a boom. We also inherited a debt of £800 million, which killed this economy. There are two Members of the then Cabinet sitting smiling at this. What a position it was for them after all these years, when time after time they were just pulling their way out. After all this time, when they were going to do all these wonderful things, they finished by talking of a boom. They left us bankrupt, not booming, and that was not the first time that a Labour Government had to take over the country—[Interruption.]

Sir K. Joseph

Then why, two weeks after taking power, did the right hon. Gentleman's Government publish a White Paper saying that there was no pressure on resources at home?

Mr. Ross

We have been talking about an overseas debt, and the country must pay its way. This so-called boom which never reached Scotland was being paid for by debts which we could not meet.

In the middle of this, the right hon. Gentleman suddenly realised that there would be an election, and in a speech in Glasgow at the Highlanders' Institute—

Mr. Manuel

The right place for him.

Mr. Ross

—on 26th August, 1963, he said: In the next few months we will put Scotland firmly on the right road to prosperity, with modern cities, schools, roads, transport and with great new housing schemes. What had they been doing in the previous 12 years? We shall keep more of our able young Scotsmen at home with the promise of such a future and begin to cure our unemployment blight". Having created it, they would only "begin" to cure the unemployment. We shall then win and deserve to win the next Election. The right hon. Gentleman was never a very good prophet. Whenever I hear him prophesy gloom, I cheer up.

Let us look at the "great achievement" by those who condemn us today. The figure for housing in Scotland in 1952 was 39,000. The year before the right hon. Gentleman opposite took office it had reached 27,000. In 1962, when the "skeely skipper" came along, it was 26,761. So for a decade we had fewer and fewer houses being built in Scotland year after year. Where was the interest of the noble Lord in housing at that time? He came here and became Parliamentary Private Secretary to the right hon. Gentleman, but it did not help the housing figures. The position in relation to housing is such that hon. and right hon. Gentlemen opposite ought to hide their faces in shame. They made one bit of a boost in 1964; thanks to our efforts on completions during the last three months, the figure rose to about 37,000. But the houses started and the number approved that were going to lead on just were not there.

Today we have the highest number of houses under construction and waiting to start. The number of completions is not falling, as has been suggested by hon. Members opposite, but is rising. The hon. Member opposite who dealt with this subject is not the best one at figures. He relies far too much on the leaders in the Glasgow Herald. He should know by this time that they are not reliable—especially the one today.

The same thing is true of school buildings. The hon. Gentleman spoke about school buildings and got that wrong as well. He also got the road construction figures wrong. It was not until 1960 that hon. Members opposite managed to allot £10 million for roads in Scotland. By the time they left—our first year, 1964–65 —it was about £24 million. Last year we spent £32 million on roads in Scotland and this year the figure will be over £34 million, nearly treble what hon. Members opposite spent. Yet the right hon. Member for Argyll said in 1963 that the infrastructure was there. As my right hon. Friend the Member for Edinburgh, East (Mr. Willis) said, we are planning Scotland for the first time, and the people of Scotland realise it.

The hon. Member for Ayr (Mr. Younger) was suggesting that I should take Ayr out of the development area and deny its privileges to Prestwick. Will he suggest that to the industrialists in Ayr who are looking forward to the advantages of being in the development area with the regional employment premium? Will he go to Ayr next week and say that he advises that it should never have been applied to Ayr? Will the hon. Member for Galloway (Mr. Brewis) go to those parts of his constituency which have for the first time development area status and say the same thing? Will the hon. Member for Dumfries go and say that? Of course they will not. They just come here and nark.

Several Hon. Members rose—

Mr. Ross

I have not all that much time. There was not a speech from the Opposition benches in which I was not mentioned, but I did not seek to interrupt.

The right hon. Gentleman got all these things wrong. He and others referred to new industry coming in their days. It was all right for them to have new industries coming in but it was another matter, they said, for us. The hon. Member for Moray and Nairn (Mr. G. Campbell) did not speak today. However, we had a repeat of something which he said the last time we had a debate on these matters. Incidentally, we have had far too few debates on Scottish industry and employment since hon. and right hon. Gentlemen opposite have been in opposition. When we were on their side we used to take two days every year. Hon. and right hon. Gentlemen opposite have been very silent. But we got a repeat today of something which the hon. Gentleman said on 26th July, 1965, when he was talking about the taxation system and the changes which were being made. He said that they had the effect of frightening foreign businesses, particularly American businesses who have been so successful in Scotland in the past, from settling in Scotland."—[OFFICIAL REPORT, 26th July, 1965; Vol. 717, c. 148.] All right. Would he like me to read out the list of foreign businesses which have not opened up during the days of this Government? Shall I start at the beginning and go right down the list of 17 or so of those which have come in and of the others which have been expanding? There are Phillips Drill Company of the U.S.A.—at Queenslie; Chestex, making heating exchangers at Kilbirnie; the Dictaphone Company at East Kilbride; Flow Laboratories at Irvine; Fabritex Incorporated at Blantyre; Butler Buildings Ltd. at Kirkcaldy; Optical Coatings Ltd. at Inverkeithing; Andrew Antennae Systems Ltd. at Cowdenbeath; Bourns (Trimpot) Ltd. at Inverkeithing—all of the U.S.A.; Robson Lang Ltd. from Canada—and all the others. They have not been frightened away. They are coming, and coming in greater numbers, and settling; and, having settled, they are expanding.

Hon. Gentlemen talked about advance factories. Many of these firms—and the right hon. Gentleman should know this, too—started with small factories and then, after a few years, expanded—

Mr. Dempsey

Honeywell Control.

Mr. Ross

Yes, I got the date wrong about Honeywell. It was about 1957 they came in. They started with one factory employing a few people, they expanded, and they are now employing thousands of people. So hon. Gentlemen should not sneer at advance factories, and should relate their cost to the eventual employment and the number of people they are presently employing. This was rather a cheap remark.

Part of the central core of the debate has been the question of growth areas. It was amusing to hear hon. Gentlemen proclaim growth areas—the hon. Member for North Angus and Mearns and the hon. Member for Dumfries—because where were all the growth areas? Where were all the growth areas which were selected by the former Government? They were all in central Scotland. Not one of the hon. Gentlemen who spoke about this represents a constituency in central Scotland. Their areas were frozen out under the Central Scotland Plan.

I thought a very notable contribution today was the speech by the hon. Lady the Member for Renfrew, East (Miss Harvie Anderson) and she made this point about what is to happen concerning depopulation and drawing everything into the centre. This is what my hon. Friends and I have been concerned about for years, and we do not represent those other constituencies. But we do feel about Scotland, and we do feel about the need to retain the population in those areas and the need to build them up. But those areas were completely frozen out. The Central Scotland Plan was debated in this House on 3rd December, 1963, and I can remember the right hon. Gentleman's final words. They amounted to a condemnation of that side of the House and they should have silenced hon. and right hon. Members opposite today, because he finished up by saying that that was the first time, that they were trying to put things right in Scotland.

What they were doing was to aggravate the contrast of central Scotland with the rest of the country. If hon. Gentlemen opposite go to Prestwick and ask the Town Council there how it feels about this matter, they will see that there is nothing to prevent town councils in any development area from going forward with advance factories. I do not know why the right hon. Member for Argyll is smiling at this remark. I assure him that this is being done by many councils throughout the area and that Prestwick is thinking of it. I assure the right hon. Gentleman that they would not be able to think in these terms without the help of the Local Employment Act and the additional help that will come through the regional employment premium.

Mr. Noble

I hope that the right hon. Gentleman will have sufficient time in which to tell us what he is going to do for Scotland and will not spend too much time talking about the past. But when talking about the past, will he remember that when the central plan was published it was also said by me that plans for the rest of Scotland would follow as soon as we could do that? Is he aware that he is totally ignoring that fact?

Mr. Ross

It took hon. Gentlemen opposite 13 years to produce the Central Scotland Plan. How long would it have taken them to produce plans for anywhere else? What was required was not just plans but help so that hope and opportunity were given to these other areas.

I am asked to state our policies. Our policies are to give the rest of Scotland an opportunity as well. This has been followed up by the establishment, in the various areas of Scotland, of consultative groups of people from trade unions, chambers of industry, technical colleges and universities, all coming together in each of the areas—not creating disparate demands from every little town and village for industries but determining where are the best places technically at which to concentrate them.

I urge hon. Gentlemen opposite to consider what has happened in, for example, the border areas. We have been able to achieve a certain measure of cooperation and agreement about the lines of attack to solve their problem of depopulation. This is being done—for example, in the North-East—and we have being doing this not after 13 years in office but in quite a short time. It was only in January of last year that we were able to afford the expansion of the development area to the whole of Scotland. When one realises how short a time that was after we took office, one realises that we have not been long in getting the people in the areas concerned to appreciate what must be done for their own prosperity; and they are co-operating so that the advantages of these various measures may accrue to these areas.

Nobody should underestimate the effect of the national economy on Scotland as a whole or on any part of it. I could quote one speech after another made by hon. Gentlemen opposite in which they pointed out how we must get the national economy right and keep it right. But in the past when we ran into difficulties, it was Scotland who was hit first and which was the last to recover. Reflation and boom usually landed us in another Tory disaster, and Scotland was left behind. [Interruption.] The hon. Member for Folkestone and Hythe (Mr. Costain) is interested in building and construction. He knows what happened in Scotland during the Tory years of depression. If he would compare that with the amount of work that has gone on in the construction industry in the past three years, continuously and increasingly—in housing, school-building, hospitals and industrial building—he would smile a little less and would pay more tribute to the Government for carrying out their pledges and for helping to shelter Scotland. Important investment in advance factories, for companies, many of whose names I have mentioned, has gone on. But before that, this type of development was halted.

Mr. A. P. Costain (Folkestone and Hythe) rose—

Mr. Ross

Sorry. I will not give way. I have much to say.

Hon. Members

Give way.

Mr. Costain

I hope that the right hon. Gentleman realises, when he refers to me, that we set up a factory in Scotland and had to supply goods from that factory to London during his régime.

Mr. Ross

In other words, it was worth the hon. Gentleman's while setting up a factory in Scotland, obviously because the work was there; and he will agree that the construction work has been there. The Government have clamped down on the busier areas such as London, the South-East and the Midlands.

My hon. Friend the Member for Fife, West (Mr. William Hamilton) made mince-meat of the right hon. Gentleman the Member for Leeds, North-East. He remembers the coal mining closures in his own area in Tory days and in Labour days, and he will appreciate the plans we have made. The way we have been able to bring about recovery is something to stagger the people there—not only in getting new industry to come, but in getting the right kind of industry. We see that in Fife, in Dundee, in Lanarkshire, and I hope to see it in some other areas that are threatened.

The hon. Member for Dumfries expressed concern about pit closures. He has discussed the matter with myself and the Board of Trade. He had better watch himself. Do not let him talk the N.C.B. into the premature closing of some of these pits.—[HON. MEMBERS: "Oh."]. That is what comes about. There is no need to talk about the closure of a pit when that closure is not in the near future. The hon. Gentleman is all but doing that in this case—

Mr. Monro rose—

Mr. Ross

No, time is running short. My right hon. Friend the Member for Edinburgh, East and the hon. Member for Edinburgh, South (Mr. Clark Hutchison)—whom I am glad to see has returned, though I realise why he missed the earlier part of the debate—spoke of Edinburgh and the development areas. Hon. Members opposite must face the fact that this spread of the development areas is either worth while or not worth while. They cannot argue one minute that we should not have the spread and then say, "But, having it, let us take in Edinburgh, too".

The simple fact is that the employment figures in Edinburgh do not justify its inclusion as a development area. Not only are its figures lower than in any other part of Scotland, but they are among the lowest in the United Kingdom. To do as is suggested would, of course, have repercussions elsewhere. In any case, I do not think that Edinburgh's future lies in manufacturing industry, or that the Corporation of Edinburgh is interested in large-scale manufacturing industry. Edinburgh's own development plan does not show that. I would ask hon. Members opposite to appreciate the justice of this case, and the difficulties that exist.

The hon. Member for Ayr spoke about seasonal trends. I, too, am concerned and always have been concerned about seasonal trends. It is one of the reasons why the Government have introduced the regional employment premium. The regional employment premium itself, adding £40 million to manufacturing in- dustry in Scotland, will be a tremendous help. Hon. Members opposite seem to forget this. One of them asked what is so important about manufacturing industry. Well, what is important about it? Where do our exports come from?

Mr. Younger

The tourist industry.

Mr. Ross

Will the hon. Gentleman tell me how many tourists there are in Ayr today spending money, bringing in dollars and the rest?

Mr. Younger

The Secretary of State knows perfectly well that the tourist industry in Scotland makes a very large number of American dollars and other foreign currency every year.

Mr. Ross

Of course, that is true—but "Johnnie Walker" in Kilmarnock makes far more.

The whole basis of our export drive is manufacturing industry, and every hon. Member opposite knows that to be true. We must get manufacturing industry modern, efficient and expanding. Who are the tourists who are going into the north of Scotland and into the North-East? They are the workers in the factories of the manufacturing industries in central Scotland. If we do not look after that base, the tourist industry will suffer.

We have heard a lot about the tourist industry, and what I am reputed to have said. I have an account from the Tourist Board itself of the prospects in Scotland for this year. It says that in the Highland area the forward prospects for July, August and September are exceedingly good; in the Aberdeen area there is the beginning of a soaring upsurge of traffic and prospects are extremely good; in Arbroath there is expected to be a better season than last year; in Oban forward bookings for July, August and September and inquiries are increasing; at St. Andrews good trade is expected. Yet it is said that we have killed the tourist traffic. That is nonsensical.

Earl of Dalkeith (Edinburgh, North)

On a point of order. Is it possible to extend the debate so as to give the Secretary of State a chance to say one word about what he is to do to help future prospects in Scotland?

Mr. Speaker

The noble Lord knows that that is not a point of order.

Mr. Ross

I can assure the hon. Gentleman that I am explaining what we have already done to make a stable base of manufacturing industry, and I am saying that in so doing and with the backing of the regional employment premium we are improving the prospects for Scottish industry and not harming the tourist industry.

Mr. F. A. Burden (Gillingham) indicated dissent.

Mr. Ross

The hon. Gentleman has just appeared and I do not want to return to many years ago when he and I served together in South-East Asia.

Mr. Burden

On a point of order. If the right hon. Gentleman wants to return to the time when he was a signals officer, it is perfectly obvious that he is still suffering from static electricity.

Mr. Speaker

It is not a point of order, and it is not very good.

Mr. Ross

It is not a point of order and it is not even funny, and yet it is one of the best jokes that I have ever heard the hon. Gentleman make.

Training is absolutely essential, and it is worrying that there is a shortage of certain skills in certain areas. But there is a certain misuse of skills in certain Scottish industries and there may well be men who are skilled in a job and who might be needed in a new job, but who, because of unemployment in the past, are working at something below their skill. I shall look at this problem.

I must tell the hon. Lady the Member for Renfrew, East and my hon. Friend the Member for Fife, West and my hon. Friend the Member for Bothwell that the main source of training for skill is with industry itself. I hope that the hon. Lady, who spoke about this subject, appreciated the statement by my right hon. Friend the President of the Board of Trade pointing out that one of the expansions of Rolls-Royce was in connection with its own training scheme. This is important and the same thing has been happening with firm after firm in Scotland. The Ministry of Labour has given £710,000 to 295 firms in respect of the training of more than 22,000 people in Scotland. We now have 19 training boards and 17 group training schemes.

For the first time we are getting things right in Scotland. The infrastructure is being provided; the houses are going up; the roads programme is being expanded and the skills for the new industries are being provided. In 1965, 1966 and the first part of 1967 more new industry has come to Scotland than at any other comparable time in Scotland's history. It is because of this that there is confidence in Scotland among Scottish industrialists.

Why are the Scottish Tories so despondent? It is because they see that

their days on that side of the House are long numbered. I can assure them that there is confidence in Scotland because the Government's policies are succeeding in Scotland and nationally in getting us out of the economic difficulties and in providing for reflation ahead in a way which will ensure that Scotland gets more of its share than it has ever had before.

Question put:—

The House divided: Ayes 234, Noes 295.

Division No. 427.]	AYES	[10.1 p.m.
Alison, Michael (Barkston Ash)	Eden, Sir John	Kershaw, Anthony
Allason, James (Hemel Hempstead)	Emery, Peter	Kimball, Marcus
Astor, John	Eyre, Reginald	King, Evelyn (Dorset, S.)
Atkins Humphrey (M't'n & M'd'n)	Farr, John	Kitson, Timothy
Awdry, Daniel	Fisher, Nigel	Knight, Mrs. Jill
Baker, W. H. K.	Fletcher-Cooke, Charles	Lambton, Viscount
Balniel, Lord	Forrest, George	Lancaster, Col. C. G.
Barber, Rt. Hn. Anthony	Fortescue, Tim	Legge-Bourke, Sir Harry
Batsford, Brian	Foster, Sir John	Lewis, Kenneth (Rutland)
Beamish, Col. Sir Tufton	Fraser, Rt. Hn. Hugh(St'fford & Stone)	Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)
Bell, Ronald	Galbraith, Hon. T. G.	Lloyd, Ian (P'tsm'th, Langstone)
Bennett, Sir Frederic (Torquay)	Gibson-Watt, David	Lloyd, Rt. Hn. Selwyn (Wirral)
Bennett, Dr. Reginald (Gos. & Fhm)	Giles, Rear-Adm. Morgan	Longden, Gilbert
Berry, Hn. Anthony	Gilmour, Ian (Norfolk, C.)	Loveys, W. H.
Biggs-Davison, John	Gilmour, Sir John (Fife, E.)	Lubbock, Eric
Birch, Rt. Hn. Nigel	Glover, Sir Douglas	McAdden, Sir Stephen
Black, Sir Cyril	Glyn, Sir Richard	Mac Arthur, Ian
Body, Richard	Goodhart, Philip	Maclean, Sir Fitzroy
Bossom, Sir Clive	Goodhew, Victor	Macleod, Rt. Hn. Iain
Boyd-Carpenter, Rt. Hn. John	Gower, Raymond	McMaster, Stanley
Boyle, Rt. Hn. Sir Edward	Grant, Anthony	Maddan, Martin
Braine, Bernard	Gresham Cooke, R.	Maginnis, John E.
Brewis, John	Grieve, Percy	Marples, Rt. Hn. Ernest
Brinton, Sir Tatton	Grimond, Rt. Hn. J.	Marten, Neil
Bromley-Davenport, Lt.-Col. Sir Walter	Gurden, Harold	Maude, Angus
Brown, Sir Edward (Bath)	Hall, John (Wycombe)	Maudling, Rt. Hn. Reginald
Bruce-Gardyne, J.	Hall-Davis, A. G. F.	Mawby, Ray
Bryan, Paul	Hamilton, Marquess of (Fermanagh)	Maxwell-Hyslop, R. J.
Buchanan-Smith, A lick(Angus, N. & M)	Hamilton, Michael (Salisbury)	Maydon, Lt.-Cmdr. S. L. C.
Buck, Antony (Colchester)	Harris, Frederic (Croydon, N.W.)	Mills, Stratton (Belfast, N.)
Bullus, Sir Eric	Harris, Reader (Heston)	Miscampbell, Norman
Burden, F. A.	Harrison, Brian (Maldon)	Monro, Hector
Campbell, Gordon	Harrison, Col. Sir Harwood (Eye)	Montgomery, Fergus
Carr, Rt. Hn. Robert	Harvey, Sir Arthur Vere	More, Jasper
Cary, Sir Robert	Harvie Anderson, Miss	Morgan, Geraint (Denbigh)
Channon, H. P. G.	Hastings, Stephen	Morrison, Charles (Devizes)
Chichester-Clark, R.	Hawkins, Paul	Mott-Radclyffe, Sir Charles
Clark, Henry	Heath, Rt. Hn. Edward	Munro-Lucas-Tooth, Sir Hugh
Clegg, Walter	Heseltine, Michael	Murton, Oscar
Cooke, Robert	Higgins, Terence L.	Nabarro, Sir Gerald
Cooper-Key, Sir Neill	Hiley, Joseph	Neave, Airey
Cordle, John	Hill, J. E. B.	Nicholls, Sir Harmar
Corfield, F. V.	Hirst, Geoffrey	Noble, Rt. Hn. Michael
Costain, A. P.	Hobson, Rt. Hn. Sir John	Nott, John
Craddock, Sir Beresford (Spelthorne)	Hogg, Rt. Hn. Quintin	Onslow, Cranley
Crosthwaite-Eyre, Sir Oliver	Holland, Philip	Orr, Capt. L. P. S.
Crouch, David	Hooson, Emlyn	Orr-Ewing, Sir Ian
Crowder, F. P.	Hornby, Richard	Osborn, John (Hallam)
Cunningham, Sir Knox	Howell, David (Guildford)	Page, Graham (Crosby)
Currie, G. B. H.	Hunt, John	Page, John (Harrow, W.)
Dalkeith, Earl of	Hutchison, Michael Clark	Pearson, Sir Frank (Clitheroe)
Dance, James	Iremonger, T. L.	Peel, John
Davidson, James (Aberdeenshire, W.)	Irvine, Bryant Godman (Rye)	Percival, Ian
d'Avigdor-Goldsmid, Sir Henry	Jenkin, Patrick (Woodford)	Pike, Miss Mervyn
Dean, Paul (Somerset, N.)	Jennings, J. C. (Burton)	Pink, R. Bonner
Deedes, Rt. Hn. W. F. (Ashford)	Johnson Smith, G. (E. Grinstead)	Powell, Rt. Hn. J. Enoch
Digby, Simon Wingfield	Johnston, Russell (Inverness)	Price, David (Eastleigh)
Doughty, Charles	Jones, Arthur (Northants, S.)	Prior, J. M. L.
Douglas-Home, Rt. Hn. Sir Alec	Joseph, Rt. Hn. Sir Keith	Pym, Francis
Drayson, C. B.	Kaberry, Sir Donald	Quennell, Miss J. M.
du Cann, Rt. Hn. Edward	Kerby, Capt. Henry	Ramsden, Rt. Hn. James
Rawlinson, Rt. Hn. Sir Peter	Steel, David (Roxburgh)	Wall, Patrick
Rees-Davies, W. R.	Stodart, Anthony	Walters, Dennis
Renton, Rt. Hn. Sir David	Summers, Sir Spencer	Ward, Dame Irene
Ridley, Hn. Nicholas	Tapsell, Peter	Weatherill, Bernard
Ridsdals, Julian	Taylor, Sir Charles (Eastbourne)	Webster, David
Robson Brown, Sir William	Taylor, Edward M. (G'gow, Cathcart)	Wells, John (Maidstone)
Rodgers, Sir John (Sevenoaks)	Taylor, Frank (Moss Side)	Whitelaw, Rt. Hn. William
Rossi, Hugh (Hornsey)	Teeling, Sir William	Wills, Sir Gerald (Bridgwater)
Royle, Anthony	Temple, John M.	Wilson, Geoffrey (Truro)
Russell. Sir Ronald	Thatcher, Mrs. Margaret	Wolrige-Gordon, Patrick
St. John-Stevas, Norman	Thorpe, Rt. Hn. Jeremy	Woodnutt, Mark
Sandys, Rt. Hn. D.	Tilney, John	Worsley, Marcus
Scott, Nicholas	Turton, Rt. Hn. R. H.	Wright, Esmond
Sharples, Richard	van Straubenzee, W. R.	Wylie, N. R.
Shaw, Michael (Sc'b'gh & Whitby)	Vickers, Dame Joan	Younger, Hn. George
Sinclair, Sir George	Wainwright, Richard (Colne Valley)
Smith, John	Walker, Peter (Worcester)	TELLERS FOR THE AYES:
Stainton, Keith	Walker-Smith, Rt. Hn. Sir Derek	Mr. R. W. Elliott and
		Mr. David Mitchell.
NOES
Abse, Leo	Delargy, Hugh	Houghton, Rt. Hn. Douglas
Albu, Austen	Dell, Edmund	Howarth, Harry (Wellingborough)
Allaun, Frank (Salford, E.)	Dempsey, James	Howarth, Robert (Bolton, E.)
Alldritt, Walter	Diamond, Rt. Hn. John	Howell, Denis (Small Heath)
Allen, Scholefield	Dickens, James	Howie, W.
Anderson, Donald	Doig, Peter	Hoy, James
Archer, Peter	Donnelly, Desmond	Huckfield, L.
Armstrong, Ernest	Driberg, Tom	Hughes, Emrys (Ayrshire, S.)
Ashley, Jack	Dunn, James A.	Hughes, Hector (Aberdeen, N.)
Atkins, Ronald (Preston, N.)	Dunnett, Jack	Hughes, Roy (Newport)
Atkinson, Norman (Tottenham)	Dunwoody, Mrs. Gwynth (Exeter)	Hynd, John
Bacon, Rt. Hn. Alice	Dunwoody, Dr. John (F'th & C'b'e)	Irvine, A. J. (Edge Hill)
Bagier, Gordon A. T.	Eadie, Alex	Jackson, Colin (B'h'se & Spenb'gh)
Barnes, Michael	Edelman, Maurice	Jackson, Peter M. (High Peak)
Barnett, Joel	Edwards, Rt. Hn. Ness (Caerphilly)	Janner, Sir Barnett
Baxter, William	Edwards, Robert (Bilston)	Jay, Rt. Hn. Douglas
Bence, Cyril	Edwards, William (Merioneth)	Jeger, Mrs. Lena (H'b'n & St. P'cras, S.)
Benn, Rt. Hn. Anthony Wedgwood	Ellis, John	Jenkins, Hugh (Putney)
Bennett, James (G'gow, Bridgeton)	English, Michael	Jenkins, Rt. Hn. Roy (Stechford)
Bidwell, Sydney	Ensor, David	Johnson, Carol (Lewisham, S.)
Binns, John	Evans, Ioan L. (Birm'h'm, Yardley)	Johnson, James (K'ston-on-Hull, W.)
Bishop, E. S.	Faulds, Andrew	Jones, Dan (Burnley)
Blackburn, F.	Fernyhough, E.	Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)
Boardman, H.	Finch, Harold	Jones, T. Alec (Rhondda, West)
Booth, Albert	Fitch, Alan (Wigan)	Judd, Frank
Bottomley, Rt. Hn. Arthur	Fitt, Gerald (Belfast, W.)	Kerr, Mrs. Anne (R'ter & Chatham)
Bowden, Rt. Hn. Herbert	Fletcher, Ted (Darlington)	Kerr, Dr. David (W'worth, Central)
Boyden, James	Foley, Maurice	Kerr, Russell (Feltham)
Braddock, Mrs. E. M.	Foot, Sir Dingle (Ipswich)	Lawson, George
Bradley, Tom	Foot, Michael (Ebbw Vale)	Leadbitter, Ted
Bray, Dr. Jeremy	Ford, Ben	Ledger, Ron
Brooks, Edwin	Forrester, John	Lee, Rt. Hn. Frederick (Newton)
Brown, Hugh D. (G'gow, Provan)	Fowler, Gerry	Lee, Rt. Hn. Jennie (Cannock)
Brown, Bob (N'c'tle-upon-Tyne, W)	Fraser, John (Norwood)	Lee, John (Reading)
Brown, R. W. (Shoreditch & F'bury)	Fraser, Rt. Hn. Tom (Hamilton)	Lever, Harold (Cheetham)
Buchan, Norman	Freeson, Reginald	Lever, L. M. (Ardwick)
Buchanan, Richard (G'gow, Sp'burn)	Galpern, Sir Myer	Lewis, Arthur (W. Ham, N.)
Butter, Herbert (Hackney, C.)	Gardner, Tony	Lewis, Ron (Carlisle)
Butler, Mrs. Joyce (Wood Green)	Ginsburg, David	Lipton, Marcus
Callaghan, Rt. Hn. James	Greenwood, Rt. Hn. Anthony	Lomas, Kenneth
Cant, R. B.	Gregory, Arnold	Loughlin, Charles
Carmichael, Neil	Grey, Charles (Durham)	Lyon, Alexander W. (York)
Carter-Jones, Lewis	Griffiths, David (Rother Valley)	Lyons, Edward (Bradford, E.)
Castle, Rt. Hn. Barbara	Griffiths, Rt. Hn. James (Lianelly)	Mabon, Dr. J. Dickson
Chapman, Donald	Griffiths, Will (Exchange)	McBride, Neil
Coe, Denis	Gunter, Rt. Hn. R. J.	McCann, John
Coleman, Donald	Hamilton, James (Bothwell)	MacColl, James
Concannon, J. D.	Hamilton, William (Fife, W.)	MacDermot, Niall
Conlan, Bernard	Hamling, William	McGuire, Michael
Craddock, George (Bradford, S.)	Hannan, William	McKay, Mrs. Margaret
Crawshaw, Richard	Harper, Joseph	Mackenzie, Gregor (Rutherglen)
Cronin, John	Harrison, Walter (Wakefield)	Mackie, John
Crosland, Rt. Hn. Anthony	Hart, Mrs. Judith	Mackintosh, John P.
Grossman, Rt. Hn. Richard	Haseldine, Norman	Maclennan, Robert
Cullen, Mrs. Alice	Hattersley, Roy	MacMillan, Malcolm (Western Isles)
Dalyell, Tam	Hazell, Bert	McMillan, Tom (Glasgow, C.)
Darling, Rt. Hn. George	Healey, Rt. Hn. Denis	McNamara, J. Kevin
Davidson, Arthur (Accrington)	Heffer, Eric S.	MacPherson, Malcolm
Davies, Dr. Ernest (Stretford)	Henig, Stanley	Mallalieu, j. P.W.(Huddersfield, E.)
Davies, Ifor (Gower)	Herbison, Rt. Hn. Margaret	Manuel, Archie
Davies, S. O. (Merthyr)	Hooley, Frank	Mapp, Charles
de Freitas, Rt. Hn. Sir Geoffrey	Horner, John	Marquand, David

Marsh, Rt. Hn. Richard	Peart, Rt. Hn. Fred	Steele, Thomas (Dunbartonshire, W.)
Mason, Roy	Pentland, Norman	Stewart, Rt. Hn. Michael
Maxwell, Robert	Perry, Ernest G. (Battersea, S.)	Stonehouse, John
Mayhew, Christopher	Perry, George H. (Nottingham, S.)	Strauss, Rt. Hn. G. R.
Mellish, Robert	Prentice, Rt. Hn. R. E.	Summerskill, Hn. Dr. Shirley
Mendelson, J. J.	Price, Christopher (Perry Barr)	Swain, Thomas
Mikardo, Ian	Price, Thomas (Westhoughton)	Swingler, Stephen
Millan, Bruce	Price, William (Rugby)	Symonds, J. B.
Milne, Edward (Blyth)	Probert, Arthur	Thornton, Ernest
Molloy, William	Pursey, Cmdr. Harry	Tomney, Frank
Morgan, Elystan (Cardiganshire)	Rankin, John	Urwin, T. W.
Morris Alfred (Wythenshawe)	Rees, Merlyn	Varley, Eric G.
Morris, Charles R. (Openshaw)	Reynolds, G. W.	Wainwright, Edwin (Doarne Valley)
Morris, John (Aberavon)	Rhodes, Geoffrey	walden, Brian (All Saints)
Moyle, Roland	Richard, Ivor	Wallace, George
Mulley, Rt. Hn. Frederick	Roberts, Goronwy (Caernarvon)	Watkins, David (Consett)
Murray, Albert	Roberts, Gwilym (Bedfordshire, S.)	Watkins, Tudor (Brecon & Radnor)
Neal, Harold	Robertson, John (Paisley)	Wellbeloved, James
Newens, Stan	Robinson, Rt. Hn. Kenneth (St. P'c' as)	Whitaker, Ben
Noel-Baker, Francis (Swindon)	Robinson, W. O. J. (Walth'stow, E.)	White, Mrs. Eirene
Noel-Baker, Rt. Hn. Philip (Derby S.)
	Roebuck, Roy	Whitlock, William
Norwood, Christopher	Ross, Rt. Hn. William	Wigg, Rr. Hn. George
Oakss, Gordon
Ogden, Eric	Rowland, Christopher (Meriden)	Willey, Rt. Hn. Frederick
O'Malley, Brian	Rowlands, E. (Cardiff, N.)	Williams, Alan (Swansea, W.)
Oram, Albert E.	Ryan, John	Williams, Alan Lee (Hornchurch)
Oswald, Thomas	Shaw, Arnold (Ilford, S.)	Williams, Clifford (Abertillery)
Owen, Dr. David (Plymouth, S'tn)	Sheldon, Robert	Williams, W. T. (Warrington)
Owen, Will (Morpeth)	Shinwell, Rt. Hn. E.	Willis, George (Edinburgh, E.)
Page, Derek (King's Lynn)	Shore, Peter (Stepney)	Wilson, William (Coventry, S.)
Paget, R. T.	Short, Rt. Hn. Edward (N'c'tle-u-Tyne)	Winterbottom, R. E.
Palmer, Arthur	Silkin, Rt. Hn. John (Deptford)	Woodburn, Rt. Hn. A.
Pannell, Rt. Hn. Charles	Silkin, Hn. S. C. (Dulwich)	Woof, Robert
Park, Trevor	Silverman, Julius (Aston)	Wyatt, Woodrow
Parker, John (Dagenham)	Skeffington, Arthur	Yates, Victor
Parkyn, Brian (Bedford)	Slater, Joseph
Pavitt, Laurence	Snow, Julian	TELLERS FOR THE NOES:
Pearson Arthur (Pontypridd)	Spriggs, Leslie	Mr. Harry Gourlay and
		Mr. Harold Walker.