HC Deb 06 November 1970 vol 805 cc1463-502

12.57 p.m.

Mr. William Hamilton (Fife, West)

You will probably know, Mr. Speaker, that I gave notice to the Scottish Office that I should raise the question of the effect of the budget—for that is what it is—on the Scottish economy. I gave the Scottish Office notice, in the hope that the Secretary of State would be here, but he has sent the office boy along instead. It is an insult to Scotland, now that we have the opportunity of three-and-a-half hours' debate on the Scottish economy. The Scottish Secretary of State has not opened his mouth since we came back from the Summer Recess. He owes a debt to this House. Up to now we have had government of Scotland by smoke signals. I thought that the right hon. Gentleman would have taken this opportunity—I was giving him the chance, and helping him out a little—to justify the policies that are threatened, and that are threatening the future prosperity of the Scottish people.

I recall that immediately after the election there was a great publicity stunt at St. Andrews House. The civil servants were lined up to welcome the new Secretary of State for Scotland. So much for the impartiality of those servants.

In addition to all that, although the promise was given that there would be a reduction in the Civil Service there has already been an increase of 78 civil servants in St. Andrews House since 18th June. I wonder when we will see the reductions. Before coming specifically to the effects on Scotland of the budget I want to say a few words in general about the effect that the Chancellor has produced. No budget since the war has had such a universally hostile response. Not many would have the temerity to deny that the package represented the most barefaced, cruel and unfair onslaught on the poorer sections of our community.

However the Chancellor may try, however much the hon. Gentleman may try, not all these sugar coated lies can be sweeten this pill. It is in open declaration of class war and was made with a light heart and accompanied by shoulder-shaking smirks on the face of the Prime Minister. Not only that, it represents in our view and in the view of a large number of people in the country, a gigantic fraud upon the electorate. This is particularly so in the case of the Prime Minister. In his foreword to the Tory Party's election manifesto he said: A better tomorrow for all: … for the children still in poverty, and for the old and lonely. He went on: we will give priority to those most in need, giving first priority to reducing income tax. The one contradicts the other. By definition the people most in need are not paying income tax. He went on to say that there would be help for everyone to build a better tomorrow for themselves and their families. The manifesto said: … We will give overriding priority to bringing the present inflation under control. We had this week the Prime Minister's denial of the use of the phrase "at a stroke". When my right hon. Friend the Leader of the Opposition was Prime Minister he was often accused of lying by hon. and right hon. Gentlemen opposite. I wonder who is being dishonest now. Neither the Chancellor's budget nor any of the measures asociated with it are relevant to any problems enunciated in the Prime Minister's foreword to the election manifesto nor to the election manifesto itself.

Take the question of inflation which was and still is the overriding problem in Scotland and the rest of the country. This package, far from controlling inflation, still less reducing it, will make a gigantic leap in accelerating it. I need not quote many figures but there is time for a few. The Prime Minister as a single man earning £14,000 a year will be about £300 a year better off, that is, £6 a week as a result of this tax concession. At the other end of the scale a married couple with two children under 11 and an earned income of £900 a year—and there are many in Scotland on that kind of figure and less—will get a tax concession not of £6 a week but of £1 3s. 6d. a year, 5½d. a week. A couple earning £1,500 a year and they are pretty thin on the ground in Scotland, that is, £30 a week, will get tax concessions of £12 16s. 10d. a year, less than 5s. a week.

There was a letter in The Guardian a few days ago from a minister which I would like to quote. It was from the Reverend John R. Farley, 13 Sale Hill, Sheffield. This is what he said: I am a Methodist minister with four children of school age. In addition to my basic stipend of £1,080 the statutory children's allowances and the usual rent-free manse, I have a small amount of income from other sources, making me, perhaps, a little better-off than the average Methodist minister. The effect of Mr. Barber's budget is that I shall pay £12 less in income tax in the year, and £41 3s. 4d. more in the year on school dinners (making the total that I shall have to spend on school dinners alone £107 13s. 4d. or 10 per cent. of my basic stipend). If that were all, I should be the loser by £29. But that, of course, is not all. I cannot calculate so accurately how much more it will cost me to meet the increased food prices and medical and dental costs which are consequent on the same budget; I shall be very surprised if this does not amount to at least £23 in the year"— I think he was under-estimating. Thus the Government which, through its leader, made the election promise to cut prices "at a stroke", has, through its Chancellor, at a stroke increased my cost of living by at least £1 a week. In his television appearance on the evening after his budget, Mr. Barber, speaking to me and other listeners as though we were of a mental age of about 8, kindly explained that we were now free to spend our money as we choose. How right he is. I am now free to choose which I shall cut down on: the children's new clothes or their annual holiday or my donations to Oxfam, Shelter and Christian Aid. Before his budget, I did not have to choose. I could fit them all in. This is a bitter commentary and could be repeated thousands of times particularly in Scotland. For a married couple with two children the break-even point in the calculations of many people will be not less than £40 a week in earnings. A man in that situation will gain about £22 11s. 3d. in his tax cut. All of that and more will go in charges because a man on that kind of salary gets nothing of the exemptions from health charges or anything else.

Virtually all below that figure will lose. Either that or they will be subject to heaven knows how many means tests. It would be interesting to know how many additional snoopers and interviewers will be going round asking intimate personal questions in what will now be an almost completely means-tested Welfare State.

What will happen at the other end of the scale—to the fellows earning £100,000 a year? There are not many of them in West Fife and I should be surprised if any of them voted for me. These chaps will get a tax concession of £2,445 a year, or £50 a week. Is this relief for the needy?

The Prime Minister talked about building one nation and resolving the conflict between one section of the community and another. He is doing the very opposite. No doubt the Government will say that they have a mandate to do these things. They said they would cut direct taxation, and they are doing it. They said they would reduce public expenditure, and they are doing it. But they did not say how they would do it. They could scarcely have invented a more unfair way of doing it than by the measures contained in this package. One of the most unfair and inequitable ways of cutting direct taxation is by reducing the standard rate.

Under the last Budget introduced by my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) two million of the lower-paid people were taken completely out of the tax range by increased allowances. That was the fairest way to go about tackling the problem because the biggest benefits went to those who needed them the most.

But to couple such a manifestly unfair reduction in direct taxation with an even more brutal, iniquitous bunch of proposals—increased indirect taxation in the form of increased charges for dental and optical services, prescription charges, school meals, rents, abolition of welfare milk and so on, not to mention sickness, unemployment and injury benefits—is a policy of callous political and economic, sadistic obscenity.

Very few words have emanated from the Government, even in this week's two-day debate, about regional policy. Much play was made not long ago by the Under-Secretary of State for Development and his hon. Friends about the need to reduce unemployment. They said that they would massively increase industrial training facilities and spend a lot more on improving the infrastructure—which means more money on roads, schools, hospitals, houses and the rest—as well as making a switch from what they called wasteful investment grants to investment allowances.

They also said that they would rely more on the provisions of the local employment legislation. I wonder whether the Under-Secretary has studied the Report of the Estimates Committee for the Session 1962–63 on the working of the Local Employment Act. My right hon. Friend the Member for Kilmarnock (Mr. Ross) has frequently quoted from that document, which pointed out that the percentage rate of unemployment in the development areas in April, 1960, before that legislation got going, was 4.5 per cent. In April, 1963, after it had been going a while, it was 7.7 per cent. That all-party unanimous Report said: These facts show that the Local Employment Act has at best had a limited impact upon development districts"— as they were then called— at a time when the general level of business activity has been low. Expenditure under the Act seems to be falling in fact, at a time when the need for it is generally agreed to be greater than ever. Your Committee consider that the inducements which have been extended to industry have not been as effective as was intended when the Act was passed. Is this the legislation on which the Government intend to rely in Scotland and the development areas generally to solve these problems? There can be no doubt, whatever the Government say, that they are intending to cut public expenditure in the development areas. That will clearly happen as a result of their regional policies.

Small firms are already saying that they will be hit hard by the switch from investment grants to investment allowances. Even the C.B.I. has qualifications about this policy. Indeed, the Under-Secretary was a member of the Select Committee on Scottish Affairs when these matters were debated. Has he taken to heart what was said during that Committee's deliberations?

I recall that when Labour hon. Members met my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) during the recess we discussed how the Estimates Committee had made a recommendation that investment grants should be investigated. But the Government have decided to switch from the use of investment grants to investment allowances before the relevant report is available. No wonder my right hon. Friend, when winding up the debate for the Opposition last night, described what the Government are doing as a leap in the dark. There has been no research into the comparative effectiveness of investment grants as against investment allowances.

When we made our representations to the Secretary of State during the Recess we mentioned the Hunt proposal to increase the limit at which I.D.C.s can be granted. People wanting to build a factory of over 5,000 sq. ft. must obtain their I.D.C.s from the Government. Hunt recommended that that should be increased to 10,000 sq. ft., but the Labour Government rejected that idea. We have a suspicion that the new Conservative Government might renege on that, and that would have a considerable adverse effect on Scottish development.

In Scotland the provision of a new factory of 5,000 sq. ft—or one of under 10,000 sq. ft.—can make an enormous impact on relatively small communities. I am speaking of the sort of constituencies that the Under-Secretary represents, those outside the industrial belt. Even in Fife we have units which, if this restriction were lifted or eased, would be hit. I am speaking of factories which at present go into development areas but which, if the Hunt proposal is approved, will seek to be established in the South-East or the Midlands.

There is no indication of that improvement in the infrastructure of which the Government talked. There will be no increase in housing expenditure or housing provision under the Government's proposals. There will be no increase in the speed of road construction. There is to be no increase in the hospital building programme. So where the accelerated improvement of the infrastructure is to come from I am at a loss to understand.

The fact is that while all these announcements have been made by various Ministers, the Secretary of State for Scotland has sat on his contented backside while Scotland is sold down the river. In the last few weeks the Secretary of State for Scotland has been adept at issuing Press statements and giving interviews to journalists. But we have not had a squeak from him in the House of Commons. On 23rd January, before the right hon. Gentleman became Secretary of State, he gave an interview to the Glasgow Herald and made some of the points I have been mentioning: rapid progress in industrial growth; modernisation; building. He said that he would build up conditions: … in which all Scottish industry can thrive and expand by their own efforts. He said: We shall concentrate on transport, training, and improving the assets generally". That is vague phraseology—it could mean anything to anyone.

Can the hon. Gentleman tell us what plans the Government have for increasing industrial training? From all the indications they have given so far, it will not be through Government training centres but through industry itself. The Under-Secretary of State knows as well as I do how reluctant Scottish employers have been to give day release to their young workers. Even when they have considerable incentives to increase their training we have had very disappointing results. I wonder what increased incentives the Government intend to give to enable more in-training to be provided by the industrialists.

In that interview with the Glasgow Herald, the shadow Secretary of State for Scotland, as he then was, said: The greatest task will still be housing. If necessary we shall adopt particular measures for dealing with Glasgow. The right hon. Gentleman sat on the Treasury Front Bench while his right hon. Friend the Secretary of State for the Environment, a millionaire English Minister, talked about Scottish housing, Scottish subsidies and Scottish housing policy. We were in the position, whether we liked it or not, of having to ask the English Minister about Scottish housing, Scottish rent subsidies and Scottish policy. He said that Glasgow would get extra special financial help in housing. No figures were given. We want the figures. We have a right to demand them.

When the Chancellor of the Exchequer made his statement about savings in housing subsidies, he spoke of a floor of £100 million and a ceiling of £200 million. I take it that the Scottish figure must be included, which means that the Scottish Office must also have a ceiling and a floor. We want to know what they are. Is it a £20 million floor and a £30 million ceiling, or what? What will be the effect on rents. There is bound to be a substantial increase, and that must lead to substantial demands for wage increases which, in turn, will give another twist to the inflationary spiral.

The right hon. Gentleman gave an interview to Hugh MacPherson of the magazine Scotland. He was there rather less than forthcoming. And the hon. Gentleman the Under-Secretary need not look at the clock—I shall be another hour at least. On public expenditure, the right hon. Gentleman said: The important thing is that the proportion of expenditure in Scotland should not be reduced. The Government quite clearly intend to reduce total public expenditure, so that if Scotland just maintains its proportion it will be a proportion of the reduced overall figure, and there must therefore be a reduction in the total overall figure that is spent on Scotland.

The White Paper contained a figure of cuts in the capital expenditure of the nationalised industries. How much of that applies to Scotland? It is very important that we should know how much less is to be spent by the coal industry, by British Rail, by the gas and electricity industries and by the Hydro-Electric Board. The capital expenditure of these industries clearly plays an important part in providing jobs in Scotland, and if that expenditure is reduced even marginally it will have some considerable effect on the Scottish employment situation.

The Secretary of State also said: I am concerned about giving the right kind of support to industry in the right places. As the hon. Gentleman well knows, during the last two or three years when the Conservatives were in Opposition they talked about a change from development areas to growth points. When the right hon. Gentleman was shadow Secretary of State for Scotland he used to go round Scotland telling every area in which he spoke that it was a growth point. He made Scotland seem like measles—spotty all over. Wherever he went, he said, "You will be a growth point." The tune has changed. The right hon. Gentleman saw that that was a loser as, of course, it was in the election.

I must here remind the hon. Gentleman that the Tories are in a very tiny minority in Scotland. They made no headway there at all. That is why they dare not bring controversial legislation before the Scottish Grand Committee because even when they hi-jack 15 English Members to the Scottish Grand Committee, and even with two Liberals and the S.N.P.—even were there such a unholy alliance of that lot—we of the Labour Party would still have a majority on the Scottish Grand Committee. The Government therefore have no mandate to inflict on Scotland these policies which they choose to inflict on the rest of the United Kingdom.

If they impose this policy of growth points, and remove Scotland, apart from Edinburgh, from its position of being a complete development area, it will be a disaster of the first magnitude. But, of course, they are not saying that now. What they are saying is that they do not intend to change the development area, but that within it there will be growth points. What does that mean? Does it mean that they will give extra-special help, extra-special financial inducements, to the growth points? If so, what are they to be? The special development districts were set up by the Labour Government. I have one in my area, the Methilhill district, consequent on the big fire at the Michael Pit. Are they to remain? Are they still to get special help, or are all growth points within the development area to receive extra-special help? If so, what is to be?

I come to the much more important answers to questions which the Secretary of State gave to someone who interviewed him on behalf of the Sunday Post last Sunday. Typically, the interview was in a non-union, gutter newspaper of the worst kind, the most scurrilous type of newspaper in Britain. The Secretary of State chose to go to that, or it came to him. Anyway, he gave the paper that interview. The first question he was asked was about curbing price increases. His reply was: The measures"— the Chancellor's measures— will have no significant overall effect on prices … because they reduce taxation. If he believes that, he will believe anything. All the experts, all the impartial pundits, have condemned the package, mainly on the grounds that it is infla- tionary. It does nothing to curb price increases. On the contrary, it does a lot to give them a boost.

The Under-Secretary of State was interested in agriculture. He is shaking his head, so apparently he is not. Whether he is or not, I will say a word or two about it. The Government's policy on agriculture is deliberately, with malice aforethought, to increase prices. Indeed, the Minister of Agriculture is on record as saying just that. A total of £140 million a year is to be taken off taxes and put on the housewives grocery bill. We can work out what this means; it is a simple sum. We will say for simplicity that the total is £150 million, so with 50 million people that is £3 per head per year. For a family of four that means £12 per year on the grocery bill—240s. That is five bob a week on the food bill, as a consequence of the Government's agricultural policy, and that does not take into account the import levies. How on earth could the Secretary of State for Scotland say that the measures will have no significant overall effect on prices because they reduce taxation?

In some ways I wish the Under-Secretary of State for Health and Education, the hon. Member for Glasgow, Cathcart (Mr. Edward Taylor), were replying to the debate. He is a single man on £5,000 a year, and he will receive a £92-a-year concession—£1 16s. a week. I hope that he will go to his constituents in Castle-milk and explain the justice of that kind of situation.

Apart from the agricultural policy, the Secretary of State has clearly forgotten the effect of the school meal price increases in Scotland. The prices are to go up from 1s. 9d. to 2s. 5d., though I suspect that it will be 2s. 6d., in April of next year, rising to about 3s. on 1st April, 1973. We have not been told at what gross level of parental income exemptions will be made. I hope that the hon. Gentleman will tell us this afternoon. He must know the figure. What we were told in the White Paper was that there would be a net saving of £20 million next year. That is taking account of the exemptions and assuming that all those entitled to them claim them.

One of the great disadvantages of the means-tested Welfare State is that we know from experience that the people with the right to exemptions do not bother to claim them, through ignorance or pride, or both. We were told in the White Paper that the net saving on school meals would be £20 million in 1971–72 and £38 million in 1974–75. The Scottish Office must have worked out the comparable figures for Scotland. Short of a Scottish White Paper on all these things, I ask the hon. Gentleman to give us those figures—the number of exemptions the Scottish Office reckons there will he, and the total net saving on school meals in Scotland as a result of this proposal.

The same applies to school milk. There is to be no school milk for the kids from seven to 12—an obscene proposition. The saving is to be £9 million a year, and a proportion of that is in Scotland. There is a saving of £35 million a year on cheap welfare milk. There was a little item in The Guardian about this matter on the day of the Chancellor's statement. It said: The Government was last night urged not to cut the subsidy on school and welfare milk in today's "mini-Budget". The challenge came at a hastily convened all-party meeting at the House of Commons. Mr. Peter Mills, dairy farmer and Conservative MP; Mr. Alf Morris, Labour MP from an industrial city; and dairymen and nutritionists all joined forces in an attempt to spike what they fear the Government is about to announce. Professor John Yudkin,"— and everyone knows what a great expert he is on nutritional matters— Professor of Nutrition at Queen Elizabeth College, London, said the cuts would be 'the most retrograde step that could be taken'. Children and adults were increasingly being tempted to consume things of low nutrional value. To offer a child at playtime a soft drink instead of milk was to offer it an almost irresistible alternative. Someone had to divert the child's hands from the soft drink bottle to the milk bottle. I notice that the hon. Lady the Member for Merton and Morden (Miss Fookes) is present. She was a school teacher, so she will know very well the truth of that statement. She must know the value of school milk to the children. Professor Yudkin, a member of the Department of Health's committee on the medical aspects of food policy, said the children's milk issue had not been put to the committee. I wonder what the equivalent Scottish Department's experts have said about this proposition and whether the Ministers have acted against the advice that they have been given.

Professor Yudkin went on to say: What the hell's the use of sitting on the Committee if it is not asked about this supremely important issue? Its own expert committee was not even asked for its advice on this question. The Tory Member referred to, the hon. Member for Torrington (Mr. Peter Mills), said: I don't think the Government will deny the value of milk. I think it will say that this is a responsibility that the parent must bear. There had been very strong feelings among Conservatives, he said, about the terrible waste of … welfare milk.' He had no doubt that welfare milk was being abused. Mr. Mills said it would be better to save the £44 million spent on school and welfare milk by reducing family allowances. 'We know what happens to the children's allowances—bingo and the rest of it. There is no benefit to the child at all'". This reveals an interesting attitude on the part of hon. Members opposite to benefits in money. I heard it said more than 30 years ago during a General Election, in a mining constituency in Durham, that working class women could not be trusted with financial benefits because they would waste them on cigarettes and drink. This is the attitude here, that because there may be an element of waste—and, no doubt, there is; I have seen it—we have got to stop the thing altogether. Are we going back to the provision of welfare benefits in kind or in the form of food vouchers and the rest? I hope not. The saving in cheap welfare milk is going to be £35 million; the saving on prescription charges is to be £32 million for the United Kingdom as a whole. We have not been told the Scottish figure and I hope that we shall be given it. The same with dental charges—a saving of £14 million, but no figure for Scotland.

May I now quote the British Dental Association—not a Labour organisation. Dentists, like doctors, have never been known for enthusiastic support of the Labour Party. This is what the British Dental Association said about the proposed dental charges, according to The Guardian of 31st October: The Association said it would do everything possible to prevent the new charges coming into effect. 'If the Government is not forced to change its mind, dental treatment in this country will step 20 to 30 years backwards.' A campaign to convince the Government the new charges would do 'great harm' to Britain's dental system would start at once. 'The Government is proposing a tax on illness', a spokesman said after a meeting of the association's council. If a patient goes to a dentist for a filling, and the dentist later finds that root treatment is needed, the patient will have to pay for both the filling and the expensive root treatment or he will decide to have the tooth extracted. That is an appalling situation.' The proposals were also false economy. 'Dentists are paid for their time as well as their work, and dentists will now have to spend far more time than ever before explaining the situation to a patient—how much detailed work will cost and what the alternatives may be. This will certainly force costs up.' There was also no doubt that poorer areas of the nation would suffer most in terms of the quality of dental work. 'Poor people simply will not be able to afford expensive work—they will choose drastic but cheaper solutions.' The Socialist Medical Association Dental Group yesterday called on dentists to hold a two-day strike in protest at Mr. Barber's proposals. They wanted the strike to demonstrate 'solidarity with the patients' against the increases"— partly, no doubt, because they fear that dentists may be put out of work. We would have unemployed dentists signing on at the employment exchanges: There were only 12,000 National Service dentists to treat a population of 53 million. The proposed new charges"— I presume this is the estimate of the Socialist Medical Association— will close 20 per cent. of dentists' surgeries and put another 30 per cent. on part time. The Secretary of State for Social Services last night said that the maximum dental charge would be £10. I am sure people were dancing in the streets at that news—that they could go to the dentist knowing that they would not have to pay more than £10. Although the man on £900 a year will get 5½d. extra a week in tax incentive, he will take jolly good care not to go to the dentist. His teeth can be dropping out, but he will not do that. I do not know why the Government think it right to give the man on £100,000 a year an incentive of £50 a week tax reduction, and the working man a kick in the teeth. These are the two kinds of incentives that have been given.

But when the Secretary of State was asked this question by the Sunday Post he said: Never forget, as a nation, we manage to spend far more on TV, cigarettes, drink"— The Under-Secretary of State is interested in drink— pet foods, foreign holidays, cinema than we'll be asked to pay for teeth, spectacles and the like. I suppose the obvious answer to that would be to put swingeing increases in taxation on cigarettes, beer and gambling and all the other social evils that so few hon. Members in this House, particularly on the benches opposite, dare speak about. A lot of their support comes from the breweries and beer companies, including those with which the Under-Secretary is associated, or has been associated, for years.

The right hon. Gentleman went on to say that, in any case, "half the population would be entitled to exemption from the charges. Is that right? Can the Under-Secretary of State confirm that half the population of Scotland will be entitled to exemption from prescription charges, dental charges, ophthalmic charges, and the rest? The right hon. Gentleman added: Besides … an extra £5 million is to be spent in the next three years on primary schools in Scotland". That is roughly £1.7 million a year. How many primary schools does the Minister think he will get for that? Two or three?—not more. And that represents about one-seventh of the total saving on welfare milk in any case, so it is, "Thanks for nothing" on that score.

The Secretary of State said that he proposed to spend an extra £11 million on health and welfare services. Over what period? Over thre years, over four years, up to 1974–75, or what? In 1968–69, the figure for expenditure on health and welfare services in Scotland was £188 million, so £11 million on top of that, even in one year, would represent only a 6 per cent. increase, and spread over three years it would represent 2 per cent. each year.

The other price increases I come to now are more important—rents. I have asked the hon. Gentleman whether he will now tell us the floor and the ceiling of the subsidy reductions. In my view—I have said it in the House and elsewhere—rents in Scotland have for long been on the low side. They were moving upwards. The question of rents is a political hot potato in Scotland, but they were going up, and partly at the instigation of the Labour Government. But incomes also were going up. My right hon. Friend the former Secretary of State used to give periodic figures showing how the gap between earnings in Scotland and the rest of the country was narrowing, and, although at one time that might have been a good reason for keeping rents in Scotland much lower than they were in the rest of the United Kingdom, that argument is weakening. But wages and earnings in Scotland are still lower, and the standard of housing is much lower than it is in England.

If the Government intend to reduce the subsidies by £20 million or £30 million—I do not know what the figure is—there will inevitably be a substantial increase in rents of all kinds. The Government must have a figure in mind. They must know what they regard as a fair proportion of gross income to pay in rent. Perhaps the hon. Gentleman will tell us what proportion of an individual's income should be paid in rent.

This question of rents and subsidies has caused great concern in Scotland. As the hon. Gentleman well knows, Scottish newspapers have been full of the immediate reaction of the great majority of Scottish people in this matter because they do not know what the Government have in mind. Essentially, of course, they have two things in mind: one, to cut public expenditure on subsidies; and two, to pass that burden on, and more, to the council tenants.

This is bound to have the effect of reducing house building. Local authorities will be reduced to building only for the disabled and for old people. There will be no possibility of their building houses for the kind of rents which they will have to charge if the subsidies are substantially reduced, for people will literally not be able to afford the kind of rents which will have to be charged.

Let us suppose that the local authorities, nevertheless, go ahead and say, "We shall still charge what we think are reasonable rents, and we shall subsidise them from the rates". In education, the Government have made great play of allowing freedom of choice to the local authorities, freedom to go comprehensive or to stay selective. Will they allow them the same kind of freedom in their rent policies?

My goodness, when the Scottish local elections come in May, the Tories will be swept clean out. We shall have Labour-controlled authorities throughout Scotland, and they will say, "We are not prepared to charge rents at the levels which the Government want us to charge. We shall put up the rates". What stick will the Government use against the local authorities then? Will the Government's policy be as consistent in this respect as their policy is in education, letting the local authorities have freedom to decide their own rents and their own rates, without intervention by the Government? I know that there is statutory power to put in a commissioner, and it has been done—we did it—but it is no good talking about freedom for the local authorities in education and denying it to them in housing.

I come now to, perhaps, the most important question of all which was asked of the Secretary of State in that interview published by the Sunday Post. He was asked what he thought was the greatest benefit to Scotland in the package deal which the Chancellor produced, and he replied: … the new impetus for industrial development. New attractions for industry include a special tax concession in development areas". I do not know what that means unless it is a reference to the changeover from investment grants to investment allowances. Is that it, or is there something else about which we have not yet been told? Is it one of the smoke signals from the Scottish Office and nothing else? I want to know.

The right hon. Gentleman said also that there would be larger and more extensive grants and loans under the Local Employment Acts". How much larger? He must have had a figure in mind if that meant anything at all. He must know what the bigger incensives are to be. It has never been spelled out. When the Secretary of State for Trade and Industry replied to the first day of our two-day debate this week, we thought that he might make considerable reference to regional policies. Instead, we had what was generally recognised to be one of the worst Front Bench speeches of all time—badly read, brutally insensitive, arrogant, with no attempt to answer the debate, and not a word about regional policies.

I wish that the Government had learned the lesson that we learned—how extremely stupid it is to give a senior Ministerial position to someone who has hardly warmed his bottom on his seat in the House of Commons. We learned that lesson, and they will learn it. I wish hon. and right hon. Gentlemen on the Front Bench opposite had seen the face of the right hon. Member for Wolverhampton, South-West (Mr. Powell)—I have never seen him so amused. He is never very cheerful but he was laughing his head off at the discomfiture of the Secretary of State for Trade and Industry on Wednesday night. The Secretary of State did not mention regional policy and nothing that the Government have so far announced will do anything to help the development areas.

I mentioned the substitution of the investment grant by allowances. That has been given a very lukewarm reception, even by the C.B.I. Whatever the overall result it will lead to a diminution in the amount of financial aid given to development areas. Whatever the Chancellor may gain by ending investment grants he may well lose in tax revenues from companies. It is well known that far too many companies at present suffer from a cash shortage and low profitability. This was part of the case made by the right hon. Gentleman in his speech. He wants to increase profitability and that will be the yardstick. It will be the yardstick for the granting of investment allowances. If a firm does not make a profit it will not qualify for the allowance.

That is why the Chancellor is deliberately encouraging price increases. He said so a few weeks ago. This is one way of increasing company liquidity. That is the phrase. All right, that is fair enough for companies and the trade unions will be saying, "All right, we shall have a go at increasing our liquidity." We had a good example of it this morning. The municipal workers have increased their liquidity by £2 10s. a week. The miners will increase theirs, maybe by more than that. If they do not, there will be a general strike in mining for the first time since 1926. Already the Scottish miners have voted overwhelmingly to come out on strike, with dire consequences for the mining industry, the miners and the nation as a whole.

How on earth do the Government think they will unite the nation, make any attempt at solving the inflation problem or reducing prices? It will solve nothing. It will make things a lot worse. By this kind of policy the Government have unleashed forces which it will be very difficult for anyone to control. The Scamp Report is a smack in the eye for the Government. The Government stood apart and thought, "We will teach them a lesson, a poor weak union, underpaid." It is very reminiscent of what they did to the nurses in the early 1960s when the right hon. Member for Wolverhampton South-West was Minister of Health.

After 12 years or so of Tory Government he said, "We cannot afford more than 2½ per cent. for the nurses." That was their incomes policy then. This was dealing with one of the most lowly-paid, most deserving and hard-working professions in the country. So they tackled the weak then and they sought to tackle them now. But Sir Jack Scamp has said. "Nonsense, they can have £2 10s."

What do the Government think the consequences will be? Everyone else will say that they have to maintain differtials, that they will have to get at least what the municipal workers have got, because there are groups just as deserving and more so, than the municipal workers. I had an example last night of a nurse who had just come off night duty. She had been on night duty for weeks and weeks. Sometimes they have to work overtime and do not get away at eight o'clock in the morning. They might have to work until nine o'clock. What are her overtime rates? A penny an hour! These girls might get a tiny tax concession in the budget but overall they will be worse off.

The Government are laying in a load of trouble for themselves. I presume that this 50s. a week increase for the municipal workers applies to the Scottish workers? I just missed the Minister's statement today and I have not read the Scamp Report. Perhaps the Under-Secretary could tell us whether that is so. I am sure that what my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) said in the debate on the coal industry this week was right, that had the miners held their ballot on strike action after the Chancellor's budget was announced they would have got their two-thirds majority and much more and we should now be in the midst of a general strike.

I want to turn to another question which the Secretary of State for Scotland answered in the Sunday Post. Not of course in the House of Commons. The Sunday Post is more important than this place. People cannot answer back in the Sunday Post and it is possible to get inspired questions, to fix it all before hand—"What questions would you like me to ask you?" He was asked about unemployment, and said: Regional employment premium will be paid for the next four years. That will help to reduce unemployment. He also said that there is to be aid to shipbuilding but on a different basis. I should like to know on what different basis. They would like to know on Clydeside what the different basis is, too. He went on to say: High unemployment in Scotland has been the result of four years of the present system. That was about as truthful as the statement made by the Secretary of State for Social Services last night when he said that all inflation had been started by the Labour Government in 1964.

I wonder whether the Under-Secretary recalls that in 1963 when the Conservative Party was in its 12th year of office the average rate of unemployment in Scotland, over the whole 12 months, was around 105,000. That was with the operation of the Local Employment Acts, to which they now attach so much importance. That was after they had had all the opportunity in the world to reduce the gap between the unemployment rate in Scotland and the rest of the United Kingdom. We brought it down.

The percentage rate in Scotland was almost regularly more than double what it was in the rest of the United Kingdom during the 13 years of Tory government. We have got that down to one-and-a-half times. That is not as god as we should like, but it is moving in the right direction. The hon. Gentleman shakes his head, but he will see from the figures that that was the trend. The absolute numbers, although far too high for many of us, were still not as high as those in the 12 years of Tory government. There will not be a monthly average of over 100,000 in Scotland. The average monthly unemployment rate in Scotland in the whole of 1963 was 105,000.

The Secretary of State in that same answer said that special measures were being taken this winter, which he had already announced, not to us, but in a Written Answer to a Question by, I think, my hon. Friend the Member for East Stirlingshire (Mr. Douglas). It was announced very late in the day, that £1½ million was to be given in a special scheme of accelerated work, presumably to local authorities. I have a Question put down to the hon. Gentleman, and he can use that excuse if he likes, but if he will answer me now it will be helpful. Will he give a breakdown of that figure of £1½ million between local authorities and functions? How is it to be spent and by whom? In parenthesis, when the Labour Government introduced a similar scheme they gave £3 million and announced it much earlier. The Minister's announcement now will have little effect before the worst unemployment figures are on us in January, February and March.

The Secretary of State did not mention in his answer to the Sunday Post something which will have the worst effect of all on the unemployed. It is obscene, almost as obscene as the abolition of welfare milk, to deprive men on the dole or on sickness or injury benefit from receiving benefit for the first three days. Scotland has a higher proportion of unemployment than the rest of the country. Therefore, by definition, this measure will hit Scotland proportionately harder than England and Wales. The saving on that is to be £20 million a year. Will the hon. Gentleman say what estimate he has made of the saving that will represent in Scotland?

I know that there is a facile reply, which was made, I think on Wednesday night, by the Secretary of State for Trade and Industry when he said, "You were going to do it". The hon. Gentleman might not know that. I am giving him a point. That a Labour Minister should even have mooted the idea a year or two ago shows the depths of corruption to which one can descend on attaining Ministerial office. That Minister was shot down in flames by the Parliamentary Labour Party and the trade unions. The proposal got no further than her pending tray, and she was removed from that Ministry. Pressure of that sort will not be exercised by back benchers on the Government side. On the contrary, they regard such punitive measures as salutary, as a discipline that should be exercised for the first three days on those who dare to be unemployed, injured or sick. What an obscene, indefensible cut it is. I think I have said enough on that. Does not the hon. Gentleman think that I have said enough?

I hope the hon. Gentleman will reply to my comments on the cuts in public expenditure and public investment as they apply to Scotland. I do not know when we shall hear from the Secretary of State for Scotland. He is the man we want to hear, but he gives interviews to the Sunday Post or Reveille, or whoever it is he talks to. We want him to come here and wash his dirty linen in front of us. We want him to tell us what he will do in Scotland, and tell us soon. We shall then see whether he can reconcile that with the pledges which he gave to the electorate on 18th June.

2.15 p.m.

Mr. Ray Carter (Birmingham, Northfield)

I have been extremely impressed and moved by the condemnation by my hon. Friend the Member for Fife, West (Mr. William Hamilton) of the Government's economic proposals, particularly as they affect Scotland. I am thankful that he has initiated this debate. I should like to go back briefly to the economic debate of yesterday and the day before—

Mr. Deputy Speaker (Miss Harvie Anderson)

I hope the hon. Gentleman will not do that. It would be out of order if he were to try to do so.

Mr. Carter

I intend to follow the lines laid down by my hon. Friend the Member for Fife, West who, by way of introduction, referred to the remarks made by the Prime Minister when he spoke of the body politic and the need for the Conservatives to develop policies prompted by both the mind and the heart. Having listened to my hon. Friend the Member for Fife, West, I am confirmed in my belief that the Government lay claim to the demented mind but the Opposition lay claim to the heart. The Opposition are concerned not only for their constituents but for the country as a whole. There are very close links between the City of Birmingham, which I have the honour to represent, and Scotland. Scotland, as a development area, faces serious problems which impinge directly on Birmingham. I refer specifically to immigration.

Large numbers of people have been forced to emigrate from Scotland to Birmingham because of economic and social inequality. Many of our car workers come from Scotland and they are among our best workers. Emigration from Scotland causes extreme pressure on housing, health and education, and this is a direct result of the neglect of Scotland during the 13 years of Tory Government. The Tories failed during their period of office with regional policies aimed at stimulating particularly the Scottish economy and but for that failure many of the problems of Scotland and England would not have arisen.

Birmingham and every other city in England has industrial links with Scotland and I refer specifically to coal. I submitted a Private Notice Question to Mr. Speaker for consideration for today, but he chose not to allow it. In England we rely on Scotland for much of our energy needs which are met by coal, and this is particularly true of Birmingham.

We have reached a point where there is a critical coal shortage and again we look to the Scottish coal mines and the lack of attention devoted to them over the years. Not only is there a shortage of smokeless fuels, but I am now assured by the coal merchants' federation that, because of the dropping of certain clean air requirements and the permitting of the use of bituminous coal, there will also be a shortage of bituminous coal. In Birmingham, London and most other cities we face a severe fuel shortage this winter. I have written to the Secretary of State for Trade and Industry asking him precisely what he intends to do about this problem. Old people, particularly, will be relying on the Scottish coal mining industry for the fuel which will carry them through a dark winter. The Scottish hydro-electricity industry is another important source of cheap energy and we hope that this area of development will not be forgotten when the Government consider measures aimed at stimulating the Scottish economy.

Even more important in terms of the affinity between Scotland and Birmingham is the car industry. My constituency has the largest car manufacturing plant in Europe. It is part of the British Leyland Group which has offshoots in Scotland. British Leyland is facing severe economic difficulties and its whole future may rest on the performance of those offshoots in Scotland and other development areas.

These offshoots are in their infancy. They were established as part of an attempt by the Labour Government to move growth industries into the development areas. They have to be supported and protected while they are in their infancy, but every indication from the Government so far suggests that that protection is likely to wither away.

Another factor is the cruel abolition of the I.R.C. If it is to remain the predominant car-making company in the country, British Leyland, which is wholly British-owned, may have to ask the Government for assistance, but the I.R.C., which could have given it positive and immediate assistance, has been abolished. I hope that it does not have to go to the Government for assistance, but if it does, I hope that the offshoots in the development areas will be protected because of their own infancy and vulnerability, for in the future British Leyland may have to depend on them.

Precisely what assistance is the car industry in Scotland likely to get from the Government? Development area policy generally is a critical factor in the whole of Britain's economic future. A chain is only as strong as its weakest link and we must ensure that the development areas remain strong, competitive and viable and also able to offer a standard of living equal to that of the rest of the country.

I have always thought that for most Scotsmen home is best. Most Scotsmen would love to live in the place that they call home. I sincerely hope that the Government, and particularly the Scottish Office, will ensure that Scotsmen who want to live in Scotland—and I for one would not demand that they stay there—should have the wherewithal to stay there if they wish.

I sincerely hope that the Under-Secretary will give a forthright answer to the issues which have been raised by my hon. Friend the Member for Fife, West and that his answer will give the people of Scotland grounds for hope.

2.27 p.m.

The Under-Secretary of State for Development, Scottish Office (Mr. George Younger)

I am most grateful to the hon. Member for Fife, West (Mr. William Hamilton) for giving us the opportunity of having a talk in the Chamber this afternoon about the problems of Scotland and the effects on Scotland of the Government's Measures of recent weeks. I am sorry that the hon. Member may have felt that he was a little constricted by lack of time, but he managed to get a great deal into the time that he had. I find the amount of time a great luxury. I have answered several Adjournment debates in the last few months and on every occasion I have been left with about seven minutes in which to answer many questions. Today the hon. Member has been extremely generous and I will do my best to answer as many of his questions as possible.

I am grateful to the hon. Member for Birmingham, Northfield (Mr. Carter) for joining in the debate. I have always thought that it was a good thing for Members other than Scottish Members to feel free to take part in debates on matters affecting Scotland. I welcomed what he said and the sympathetic way in which he discussed the motor industry in Scotland as one coming from a part of the country where that industry is very much to the fore.

I should like to concentrate my answers to the hon. Member for Fife, West under several main headings as that may marshal the main subject matter in a way which will enable it to be appreciated. After a few preliminaries, about which I will say a little later, his remarks came under three headings. They were the effect of the Chancellor's statement on the social services; secondly, the effect of the announcement about new housing policy which was made this week; thirdly, the effects of the Government's Measures on industrial development and the bringing of new jobs to Scotland. I will try to cover each of these subjects as fully as I can.

I would say first to the hon. Gentleman that, although I am always pleased when he addresses the House on any subject, because I always immensely enjoy what he says, I did not very much enjoy what I thought were the rather unfortunate remarks he made about my right hon. Friend the Secretary of State. It is perfectly possible for us to differ on matters of policy on many occasions, and that is always likely to be the case in Scotland, but I do not myself believe that one does anything to help one's side of the House, or the institutions which we represent, by making unwarrantable attacks on and suggestions against the people belonging to the other side, and I would say to the hon. Gentleman, who, I think, will agree, because he is a fair person, that my right hon. Friend is, in his statements to and attendances on and in his dealings with this House, follows exactly the same procedure as the right hon. Member for Kilmarnock (Mr. Ross) when he was in my right hon. Friend's position.

Mr. William Hamilton

No. He did not.

Mr. Younger

Perhaps the hon. Gentleman will allow me to finish what I have to say on this point. He has had a long innings.

My right hon. Friend intends to give this House the fullest attendance that any Secretary of State can ever give to it. He is following exactly the same procedure as that followed by the right hon. Gentleman who preceded him in office. Indeed, I remember very well a case not more than two years ago when, in the previous Government, an English Minister came here to make a statement about something, and when he was asked questions about how it affected Scotland, he did not know whether Scotland was affected or not.

Mr. William Hamilton

Every Scottish Member of the House has objected very much to the manner in which over the last few weeks the Secretary of State for Scotland has not come to the House to make any statement at all but has chosen to have Press conferences and to publish statements in the Press. That is quite contrary to the normally accepted practice. If there is to be a policy statement it ought to be made in this House, and the Minister concerned ought to leave himself open to questions by any hon. Member on any part of it.

Mr. Younger

My right hon. Friend is intending to do exactly that, and whenever matters of policy are to be announced they will of course be announced to this House. In the particular case of the statement this week on housing, as the hon. Gentleman very well knows, when there is a statement to be made covering the whole United Kingdom, even when there are in it differences between the two countries, it is normal procedure in this House for one of the two Ministers, the Scottish or the English—not necessarily the English Minister, but one of the Ministers—to make the statement and to speak for his right hon. Friend as well. The hon. Gentleman is a very experienced Parliamentarian. He knows very well the practice of this House, and my right hon. Friend is following the practice of this House and will continue to do so. I am certain that, in his heart, the right hon. Member for Kilmarnock knows very well that this is exactly the normal procedure.

The next point I come to is one made almost in passing by the hon. Gentleman. He referred to the oft-repeated determination of this side of the House to reduce the number of civil servants and he mentioned that there has been an increase in the Scottish Office of 78 civil servants. Let me tell him that the present total of civil servants in the Scottish Office is well within, is quite considerably within, the figure which had already been approved by the previous Government and by the previous Secretary of State. Indeed, it may be quite possible that it would have increased by more than in fact it has if that right hon. Gentleman had still been in office.

The hon. Gentleman's remarks, I think he will agree, then covered general subjects which we have been discussing in the last few days, and he will not expect me to give answers which properly should be given by my hon. and right hon. Friends in other Departments. I can make only very general comments, which, I hope, will suffice in response to what he said.

The hon. Gentleman gave a lot of figures to indicate that the balance of these measures is not favourable to people with low incomes. All I would say to him on that is that he ought to recognise that the present Government have taken specific Measures to help those on low incomes, not only things which the previous Government never did, but things which the previous Government struggled to do and failed to do. The previous Government never produced any scheme for helping low-paid workers.

On the subject of social security benefits I think the hon. Gentleman will agree that the family income supplement is a new departure—a new departure by this Government. He knows that the low-paid worker who cannot get supplementary benefit is a person who is particularly hard hit by inflation, and so on. The hon. Gentleman a moment ago said, I think, that this is a swindle. I do not think the people who will get something up to a maximum of £150 a year, which will be available under the F.I.S., will regard it as a swindle. It will be a great encouragement to them.

Next, though this is by no means new, he referred to means tests. How many more means tests are there to be, he wondered? And he said that people would be subject to snoopers and interviewers and all the rest of it. I wish, if he feels that way, he had been more to the fore in saying it in his own Government's time, because his own Government not only had a means test which they had inherited from our system as it had been over many years back but introduced new tests. They introduced rate rebate schemes. I thought it a good idea, but did the hon. Gentleman think, and does he think, that a viscious means test? Has that resulted in snoopers and others making people's lives more miserable? Of course it has not. That is now a normal fact of life which people have got used to and which many people think is of very great advantage altogether.

If the hon. Gentleman were so desperately distressed by the means test, why was it that he allowed his right hon. hon. Friend to send a circular to the local authorities encouraging them to have rent rebate schemes? I agree with that, too. I agreed with the right hon. Member for Kilmarnock in doing that, and I wish he had succeeded in persuading all local authorities to have rent rebate schemes. Unfortunately, he did not, but he certainly tried. Did the hon. Gentleman think that a wrong thing to do? Was that divisive, to have that means test which the right hon. Member for Kilmarnock was encouraging local authorities to have? I do not think we can have one rule for one side and another rule for the other side, and I hope the hon. Gentleman will think about that.

Mr. Carter

There was a twin policy. Under the Labour Government there was a twin policy on rate rebate and rent rebate schemes for we had at one and the same time increased subsidies, whereas under the present proposals the Government are intending to decrease subsidies

Mr. Younger

I am grateful to the hon. Gentleman for intervening but perhaps I could deal with that point when I come to talk about housing generally. If I try to answer now the point that he makes we shall get diverted from the main thread of what I am at the moment wanting to say.

I think I have said enough about means tests to indicate that there is nothing new about them and that they were encouraged by the previous Government. I think the previous Government were right in doing this, because unless we have a policy of concentrating our help to the people who need it most—although we may save ourselves administrative trouble if we do not; indeed, we certainly would—we absolutely inevitably prevent those people who need the help most from getting it, or from getting enough. That is why I think the last Government were right to have a means test. Incidentally, they had one, too, for prescription charges, and the previous Government did it against their own pledges. However, it is quite right to ensure that the help we give is directed to the most needy people.

The hon. Gentleman pointed out that his right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins), the previous Chancellor, had taken a large number of people out of the tax bracket by increasing tax allowances. And so he did, but the hon. Gentleman did not tell the whole story, because, of course, his right hon. Friend took out of the tax bracket people who under the Conservative Government had never been in the tax bracket.

Mr. Speaker

Order. It looks susspiciously as though the hon. Gentleman is dealing with a matter for legislation.

Mr. Younger

I beg your pardon, Mr. Speaker. I did not wish to go any further on that point. I think I have covered enough of what the hon. Gentleman said on that matter, and perhaps I can move to another, and that is the question of the effect on the welfare services in Scotland of the Chancellor's statement this week, and so on. The hon. Gentleman asked a number of questions which I shall try to answer as well as I can.

First of all, as regards income limits and the Health Service charges generally, and on the timing which the hon. Gentleman asked me about, I can say, I think the Chancellor said as well, that none of these new charges will come into effect before, at the earliest, 1st April, 1971. Therefore their effect on the cost of living is not immediate, and some of the charges may not even be able to be brought in until after that date. Certainly none will be brought in earlier.

The hon. Gentleman referred to my right hon. Friend having said in an interview with the newspapers that about half the people would get exemptions. The fact is that precisely 50 per cent. of all prescriptions are exempted from the charge, and thus I do not think that my right hon. Friend can be said to have been very far out in his statement that about half were exempted. If one considers the number of people, the answer is 42 per cent. If one consider the number of prescriptions, the figure is 50 per cent. I therefore repeat that I do not think my right hon. Friend is very far out on that.

On the question of exemptions, as the hon. Gentleman probably knows, in spite of the charge being increased to 4s. those exempted will be all those under 15, all those aged 65 and over, expectant and nursing mothers, persons suffering from certain chronic condtions, which are fairly clearly prescribed, war pensioners in respect of their war disablement, and all persons in receipt of supplementary pensions or allowances who establish personal hardship. That is a pretty generous list of exemptions, and perhaps I might say in passing that if the hon. Gentleman does not think they are adequate he should realise that they are the exemptions brought in by his Government when they brought back prescription charges a few years ago.

The hon. Gentleman asked about the effect on school meals and milk. It has not been possible to make a firm estimate. I do not think that anyone has been able to calculate what will be the reduction in milk sales. It is difficult to know what proportion of the milk now being used for free milk will be consumed in future when it has to be paid for. As I say, it has not been possible to estimate the effect, but the hon. Gentleman might be interested to know that about 44 per cent. or 375,000 pupils, take school meals now. The increased charges will probably mean an initial drop in the amount of take-up, with a gradual recovery, and the savings are estimated to rise from about £1,100,000 in 1971–72, to £2,300,000 in 1974–75. This will come from increased incomes and from saving in food overheads. It is not possible to work out a proportion between those two, but I hope the hon. Gentleman will feel that those are interesting figures. The hon. Gentleman will also be interested to know that the latest estimate is that about 96,000 pupils are exempted from paying for school meals and milk. I hope that he will regard that as useful information.

I deal next with the interesting point made by the hon. Gentleman about earnings levels. It is true that the longstanding difference between average earnings in Scotland and average earnings in the United Kingdom as a whole has been narrowing over the last eight to 10 years. This is something that we very much welcome. The hon. Gentleman was correct in saying that to some extent this lessens the argument that we may have at times over special extra help for certain charges, and so on. In 1969 there was a 2½ per cent. differential between average earnings in Scotland and those in the United Kingdom as a whole. There is still a gap between those average earnings, and it is a gap that we want to see closed. It has been closing over the last 10 years and that is all to the good.

The hon. Gentleman asked about savings to be made in the capital programmes of nationalised industries, and whether this would have any effect on employment. The hon. Gentleman is right to raise this issue, because anything that has an adverse effect on employment in Scotland at the moment would be bad indeed. I can tell the hon. Gentleman that of the total of £1,500 million in nationalised industries' expenditure for the year 1971–72, the Secretary of State for Scotland is responsible for just under £80 million, for the two Scottish Electricity Boards, and so on. This total will have some effect, but the cut to be made in Scotland is very small indeed and will have no effect on the carrying out of the jobs and tasks of the boards, and will certainly have no measureable effect on employment. It has not been possible to break down the cuts either between industries or between types of industry, but the amount is very small and will have no effect on either employment or the performances of the nationalised bodies involved. I hope that that will be of some reassurance to the hon. Gentleman.

I move to the hon. Gentleman's interesting remarks about attracting jobs to Scotland. He is right in saying that of all the things that face us this winter in Scotland the task of attracting new jobs is possibly the most important of all. Various things can be said about this. First, I have never thought, and I do not think now, that the only criterion of how successful one is in attracting new jobs is how much money one is spending on doing so. Do not let me ever be accused of charging the previous Government with not spending enough money on this task. They spent it, and they spent it like water, but what we must look at is not how much they spent, but what they achieved.

To make a fair assessment of the results we must look at the situation with which they were dealing. In the period 1960 to 1964 we were achieving a steady increase in the total number of jobs. I remember the hon. Gentleman being so agitated about this being exposed a year ago that he made one of his long speeches, possibly even a little longer than his speech this afternoon, to prevent a debate initiated by the then Opposition taking place just before a local election. I pay full tribute to the hon. Gentleman. He is a past master at this kind of thing. No one is fit to touch him at this activity, but I must tell him that the facts still remain, and that today I have the opportunity to make the position clear.

There was in those years under the Conservative Government the system that he mentioned. The Local Employment Acts were an important part of that system, and the hon. Gentleman quoted some figures which he thought showed that those Acts had not been as successful as they should have been. I counter that by saying that during those four years there was a net increase in the number of jobs in Scotland of between 30,000 and 40,000.

The new Labour Government came to office in 1964. It took them a year and a half to make any changes in the system of attracting industry to the regions. In March, 1966, they produced their plan, just before the election.

Mr. William Hamilton

The Conservatives took 10 years to produce theirs.

Mr. Younger

The Government were criticised in about August of this year for not doing anything in eight weeks. They were criticised for apparently having done nothing, and they were also criticised for having caused an increase in the unemployment figures in August. I do not know how one can have it both ways. Either they did nothing, or they did something that caused the unemployment. They cannot be accused both ways. Be that as it may, when the Labour Government brought in their changes in the industrial development system everybody thought that it was worth giving them a fair trial and we did so from March, 1966, until March, 1970.

What is the picture today? What about this gain of between 30,000 and 40,000 in the four years prior to the Labour Government coming to power. Has it continued? Had it continued at even a slower rate I would not fault that, but the fact is that that gain was translated into a net loss from 1966 to last year of more than 35,000 jobs.

That is the measure that I like to take on the question whether industrial incentives are working or are not working. For my money the test is whether the jobs are coming, and not anything to do with the amount of money or anything else. My right hon. Friend said that one of his first priorities was to improve the system of attracting new jobs so that it worked more effectively. This is the measure by which he will be judged.

So we come to the measures themselves. The Government are entitled to point out that investment grants, as such, have been withdrawn. They have been withdrawn after being the subject of criticism from both sides of the House. The hon. Member mentioned them. His own Estimates Committee wanted an inquiry into them, because it was not satisfied that investment grants were making the best use of money. Some hon. Members opposite have made powerful contributions to the effect that in their view—and they are by no means inexpert—the investment grant system is by no means the best use of our resources. If we do not use our resources effectively in this field the waste will mean that we have to cut down on something else.

If we can put aside political considerations I am sure that both sides of the House would be in broad agreement on this point and that the old Ministry of Technology and the new Department of Trade and Industry would also be in broad agreement that the system of investment grants has a very big question mark against it in terms of being the best way of using money to attract new jobs. That is why the Government have decided to change the system to one that previously at least had a record of some success. That is why we have changed to a system of allowances instead of grants.

Mr. William Hamilton

I agree with some of the things that the Minister says, but if there were an investigation of the kind recommended by the Estimates Committee into the effectiveness of investment grants it would have been better to have waited for that investigation to be completed before changing from it to the old system of investment allowances.

Mr. Younger

That is a point of view which it is fair to make, but the hon. Member would probably agree that the Government have been under considerable pressure to get on with the job, and if we were to sit back and have another investigation—I may be doing the hon. Member an injustice, but I do not think so—I can see in my mind'e eye an Adjournment debate on a Friday afternoon asking the Government to take some action, on the ground that they had done nothing but set up an inquiry into investment grants when everybody knew all about them. I can imagine the hon. Member doing a good job on that.

We must also remember that the Select Committee on Scottish Affairs carried out an exhaustive examination on the relative merits of the two systems and came to the conclusion that there was not much to choose between the two systems, balancing the advantages and disadvantages. I agree that it did not come out firmly either way. The view of the Government is that the new system will be better. I believe that it will be a better draw for Scotland and that the inclusion of the service industries in the new incentives is a major plus for Scotland.

One thing that has been worrying us for the last five years is the fact that about half our jobs—and a greater proportion in some areas—are in the service industries. We have never believed that there is something intrinsically wrong about the service industries and something intrinsically right about the manufacturing industries; we believe that jobs are jobs and I am glad that the new arrangements will give a fair deal to the service industries by giving them some benefit in terms of industrial incentives.

I believe that the new package of industrial incentives will be very successful in bringing new jobs to Scotland. In this connection I have one other point to make. Contrary to what many people expected, particularly hon. Members opposite, the differential between development areas and the rest of the country remains unchanged. The difference in the amount of money is the same. Therefore the pull for the development areas is every bit as strong as it was before these changes were announced.

The real object of these incentives is to attract industries from the congested areas where there is over-employment and lack of space, to places like Scotland and other development areas where the necessary facilities are waiting to be used and labour is ready, willing and anxious to get to work. It is the draw of these incentives that is important, and that because of the unchanged differential, is unaffected by these changes. I think that the Government and the Prime Minister deserve great credit from Scotland for seeing that the pull is maintained as it was before.

I now turn to the questions that the hon. Gentleman asked about housing. As he said, this is an immensely important matter for Scotland, because the housing problem in Scotland is, in sum total, the most difficult in the United Kingdom. I welcome the chance to say a few words in amplification of what was announced earlier this week. In my political life—certainly for the last ten years—I do not know how many meetings I have attended when speaker after speaker from every walk of life and every political party has repeated what a tremendous problem the housing situation in Scotland is. Time and again I have listened and time and again when the speakers have come to the end of their remarks there has been a ripple of applause—and nothing has been done about it.

The present Scottish housing system is crazy. It ensures that public money put in to the housing system is not concentrated on the people who need it most—the people who have no homes, who cannot get into council houses and are waiting on these long lists and going to the housing managers year after year asking how they are getting on. Scottish Members of Parliament meet these people every week. They are the victims of our present housing system and its crazy priorities. Our subsidies are concentrated on people who are living in houses—the lucky ones, who have got what everyone else is queuing up to get. That is a very sad feature of the situation.

But more than that—because of our historical system of renting houses we have not merely been failing to catch up with our problems; we have been watching existing and quite usable houses fall into decay, year by year, before our eyes. They have been falling into decay because no one has had the courage to grasp the necessity of putting money into those properties in order to keep them from falling down. If we can use money to save properties from deteriorating, not only are we providing new houses by preventing old ones from becoming slums and being pulled down; we are doing it at considerably less cost to the public than building new houses on fresh sites, and we are doing so often with greater acceptance to the tenants themselves, who in many cases prefer the houses they know to the houses they do not know, and the towns and streets they know to the towns and streets they do not know.

This is the background to the reason why the Government have grasped what the hon. Gentleman referred to as the nettle of the Scottish housing problem. My right hon. Friend deliberately made clear that he did not lay down a set of facts and figures about what would be the effect of these changes in every case. This was because of the things which are vital to changing the housing system, and this is a fundamental change. It is essential that before details are worked out there should be long and full consultations with the local authorities who are the housing authorities and will have to work this out and carry the responsibility. That is why we are now embarking on detailed conversations with the local authorities to discuss with them their views and the details of the ways in which this can best be done.

Mr. William Hamilton

The Chancellor mentioned a £100 million floor and a £200 million ceiling of the total housing subsidies cut. That was without the slightest consultation. These are the figures we are working on. Presumably there will be consultation as to the exact figure between those limits? Surely the Scottish Office must have that floor and ceiling? Surely he can give us this figure and say that the Government are consulting the local authorities about the margins?

Mr. Younger

No, I certainly cannot and would not want to. The hon. Gentleman is under a misapprehension. The object of this scheme is not to save a precise figure of money, it is to meet need. The Secretary of State is going into these discussions, and I am, on his behalf, also with the object of agreeing with the local authorities how we can meet that need and best help the housing situation in Scotland, but not with the object of saving any particular sum of money. Indeed there will be no saving in money certainly in the first year or two.

The hon. Gentleman is very fair in some of the things he said. He said that rents in Scotland have on the whole been on the low side and I pay a tribute to him for being so fair. He also pointed out that his right hon. Friend the former Secretary of State for Scotland, I think rightly, followed a policy of accepting that there was a need for increases in rent levels. I agreed with him in that. What this new scheme will do is to concentrate the housing subsidies from public funds not on a particular place which may have anyone in it, rich or poor, but on particular people with particular needs.

Anyone who thinks that that is a bad objective ought to talk to those living in very poor conditions getting no help with the rent which is too high for what they can afford. They ought to go to some of the people who are living and have been living for years, four, five or six people in a single room because they cannot get a council house. These are the people who should receive Government help and money. That is why we intend to base the new system of subsidies on the needs of individual tenants. This means that when the rent goes up it will be accompanied by a rebate scheme which will see that all those in need in any way will get part of the rent rebated. Once we have negotiated this with the local authorities it will become clear that it is much the fairest way.

There is a completely new departure here in that this Government have been prepared, for the first time ever, to introduce rent rebates or rent allowances as they are to be called, for people living, not in council property, but in privately-rented property. The fact that they are not in council property is entirely fortuitous in many cases. It is not their fault, yet these people even under present rebate schemes cannot get rebates. This means, first that many of them are perforce paying more than they can afford in rent but have no option except to pay it somehow. Secondly, it has the effect that landlords are not in many cases getting enough money to do even the most minimal necessary repairs. This means that the houses are falling down around the ears of the tenants.

With this new scheme the tenants of privately rented property will be gradually brought in under the fair rents principle approved by the last Government. They will, for the first time, get a rent allowance, which is the same as a rent rebate. That will be a boon to all and I hope that it will be welcomed by everybody when discussing the new housing policy.

The hon. Member for Fife, West asked what extra help would be provided for Glasgow in view of our promises. These changes will be of particular help to Glasgow. The idea of the change in the subsidy system is not merely to concentrate subsidies on tenants who need them most but also to have more money available to enable us to concentrate on areas where there are real slum clearance problems, and expensive sites and similar problems. This is particularly the case in big cities, and Glasgow is possibly a city with the biggest problems of all. The new policy will provide extra special help for Glasgow.

I wish to make it clear that the Government do not consider that their pledge to Glasgow is fulfilled yet by the help given in this new housing policy. We intend to carry out our undertaking to give extra special help to Glasgow and I am now in consultation with Glasgow Corporation. We are having fruitful conversations as to how we can best carry out our pledge, and I confirm that we intend to do what we promised.

The hon. Member for Fife, West was rather disappointed to find that I was apparently not interested in agriculture.

Mr. Carter

Before you turn to another subject, would you—

Mr. Speaker

Order. I am not turning to anything. The hon. Member must use the correct parliamentary form of address.

Mr. Carter

I apologise, Mr. Speaker. I was anxious that before the Minister left the subject on which he was speaking he would deal with the question I asked earlier about rents and rates. I pointed out that while the Conservatives say they are pursuing the principles that we laid down, we increased subsidies and they are reducing them.

Mr. Younger

In some places the subsidy will not be reduced and in certain circumstances, where there are authorities with many low income families, it could be greater. The hon. Gentleman may not have noticed that the changes will not merely have an effect on rents, but tend to reduce the burden of rates to the extent that the central Government will be subsidising, and to a large extent paying, rent rebates. The combined effect of these changes on rents and rates must be taken into account if the true picture is to be appreciated.

The hon. Member for Fife, West was anxious that I should speak about agriculture. When I told him that I was not interested in agriculture, I did not mean that in a truculent way. I am not interested in it from a Ministerial point of view. In that sense I have no personal involvement. Agriculture is the responsibility of my hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith). I did not mean that I was not interested in the subject.

However, I can certainly assure the hon. Gentleman that my hon. Friend the Under-Secretary of State for Home Affairs and Agriculture is carefully watching the effects on agriculture of all these changes and will be taking them into account in the Annual Price Review negotiations.

I have done my best to answer as many as possible of the questions raised by the hon. Member for Fife, West. I greatly appreciate his initiating this debate because we have had more time than is usually available to us to discuss these important matters.

We all have our political differences and we all have our views on whether one method or another is the better. The Government believe that the changes that have been introduced will in general over the period of the next few years contribute very substantially to a solution of some of the harrowing problems we have faced for so long, and in some cases with so little success, in the United Kingdom as a whole and in Scotland in particular. We believe, otherwise we would not have introduced them, that our measures will be of help and advantage to Scotland and to the people living there. We hope that the hon. Gentleman and his hon. Friends will judge us on the results of our policy. When, as I believe, those results are seen in the form of a general improvement in the standard of living and the prosperity and expansion of Scotland through the provision of new industries, and so on, I hope that the hon. Gentleman and his friends—and I know full well that the hon. Member is generous in these things—will agree that these have been wise measures, brought in by a new Government who intend to do a good job in improving the whole way of life in Scotland.

Mr. Carter rose

Mr. Speaker

Order. The hon. Gentleman has exhausted his right to speak. I understand that he has already spoken in the debate.

Mr. Carter

On a point of order. Mr. Speaker, I contributed to the debate, and I asked what I thought were some basic questions, which the Minister has not answered.

Mr. Speaker

That is not a point of order but a point of difference between the hon. Member and the Minister.

Question put and agreed to.

Adjourned accordingly at eleven minutes past Three o'clock.