HC Deb 08 April 1971 vol 815 cc692-715
Mr. Speaker

Owing to the length of time which has been taken since 12 o'clock on these other matters, I shall slightly readjust the timings of the Adjournment debates.

12.19 p.m.

Mr. Gregor Mackenzie (Rutherglen)

I am grateful for the opportunity to raise a matter which is of considerable importance not only to the constituency that I represent but to the whole of Lanarkshire—that of increasing unemployment and short-time working. I am grateful that the Minister for Industry has taken the trouble to come and listen to the debate and to answer the points which will be raised.

The Minister will be aware that the figure for unemployment in Scotland now stands at well in excess of 120,000; that is about 5.7 per cent. of the employed population. In Lanarkshire, which is about the highest populated and the most industrialised county in Scotland, we now have an unemployment figure of about 14,500; that is about 4,500 more than there were nine months ago.

It is important to appreciate from these figures that they do not show the degree of short-time work that we have in Rutherglen; nor do they include the numerous and unfortunate redundancies that we have had in Rolls-Royce and—something that ought to be impressed upon the Minister—nor can they reveal the length of time for which people are now unemployed. This is exceedingly important. People are now unemployed for much longer periods than they were some time ago. Therefore, we think it right and proper to raise this matter in the House and to ask the Minister for his assurance that he is willing and able to do something about this problem.

We do not raise this matter in a grumbling spirit of pleading. We raise it because we genuinely believe that in Lanarkshire we have a substantial contribution to make. We have made a very substantial contribution in the last century to the build-up of heavy engineering, steel and coal, and we still feel that we have a contribution to make to the economic well being of the community. Therefore, it is pathetic that men and women in Lanarkshire, many of them very highly skilled and talented, are not allowed to use these talents to the full.

We have been told over the past few weeks that Her Majesty's Government have taken a number of initiatives which they hope will stimulate industrial activity. But may I say to the Minister that we do not feel that these initiatives will fulfil our aspirations until we can see within the Department of Trade and Industry a very real enthusiasm for the regional policies which the party to which I belong has put into being in the last few years, and until we see a real enthusiasm and interest in regional matters.

We have been told in the last few days, in reply to questions, that the Budget will stimulate industrial activity. In my judgment, for what it is worth, the Budget is only a mildly reflationary Budget and it has given very little to the people of Scotland, to the people who are out of work in Lanarkshire. Unless, therefore, positive initiatives are taken by the Minister, the limited amount of growth that will be generated by the Budget will go to the most prosperous parts of the United Kingdom and we shall be left with what is now a new word in the Department, the spill-over, from the more prosperous parts of the United Kingdom.

We have also been told in the last few weeks that a great part of our county will be a special development area, and this pleases many of us. We like to think that at least there is this initiative on the part of the Government. We shall, however, want to wait and see how effective these special development area measures will be.

This was much heralded in the Scottish newspapers. The Scottish newspapers, the day after the Secretary of State made his announcement, said almost with one voice that this would mean about £100 million more for the West of Scotland. This was never the figure officially put on it by any member of the Government from the Treasury Bench, but it was not without significance that most Scottish newspapers got the same figure of £100 million. To many of us this is rather a mythical figure. As the Minister knows, and as the answers which he has given will prove, the figure spent on the special development areas will only be as high as industrialists make it, by application.

If we read the philosophy of the Secretary of State aright, then we shall get in the West of Scotland only that amount which is the spill-over from the other areas. The previous Government, and particularly my right hon. Friend the Member for Kilmarnock (Mr. Ross) when he was Secretary of State for Scotland, were conscious of the need to assist the people of Lanarkshire. My right hon. Friend appreciated that we had in our two basic industries of coal and steel a very serious run-down. Our coal seams were running down and our steel industry, because of technological changes, was changing in character. We therefore appreciated the very serious need for restructuring our whole industrial set up in the Lanarkshire area. We much appreciated my right hon. Friend's initiatives at that time in bringing extensions to the electrical appliance industry and in bringing the electronic industries and the newer type industries into our county. We shall always be grateful to him for that valuable help.

He was able to do this primarily because of the investment grants policy and regional employment premiums. We in Scotland feel very sad that we have been robbed of these grants and advantages. The Minister has the benefit of the advice of the Secretary of State for Scotland who will, no doubt, tell him that no matter what is said from the benches opposite, the S.T.U.C., the Scottish C.B.I. and the local authorities in Scotland are adamant in their view that investment grants were a very real attraction to industrialists to come to Scotland. We are very sad that we no longer have these advantages that we have enjoyed over the past few years.

No doubt, many of my hon. Friends in the course of the debate will raise other issues concerning other industries, but I should like to mention two in particular that affect my part of the County of Lanarkshire. I do not think it will surprise the Minister when I tell him that the first industry to which I want to refer is the paper and board making industry which affects me in my constituency and my hon. Friend the Member for Lanarkshire, North (Mr. John Smith). Over the past few years we have had a loss of over 2,000 jobs in Scotland in the paper-making industry, and many of these 2,000 jobs have been in the County of Lanark.

This is a pretty serious matter for people who have given 30 or 40 years service to the paper and board making industry. The Minister will appreciate that these men who loyally served the industry in Lanarkshire and, indeed, throughout Scotland have skills which are peculiar only to that industry. Once a highly-skilled paper maker who has spent all his life in the industry is declared redundant, his skill is of no value outside a paper mill and he is seeking work virtually as a labourer. That is about the extent of the problem.

That is a pathetic reflection on our modern society. These men naturally ask one important question. They see in the City of Glasgow and other centres of industry a great deal of paper being used, and they cannot understand why the great paper users in the City of Glasgow and elsewhere find it more profitable to buy their newsprint and other paper from Scandinavia and, indeed, from North America, when there are paper mills not half a dozen miles from these great cities.

This is the point which was made to the Minister—and, from the Press reports, it appears to have been made reasonably well—by a deputation of leaders of the paper industry and S.O.G.A.T., the trade union concerned, and the Minister promised to look into these problems. We hope that in due course he will come forward with the answers. The deputation made the substantial point that there seems to them and to us on these benches to be very unfair pricing on the question of newsprint and paper bought from Scandinavia. It seems peculiar to us that there is only a very marginal difference in pulp and paper prices purchased from Scandinavia.

Much the same applies to newsprint bought from Canada. Many of us were disturbed to read reports that one of the paper-making companies in this country had recently decided to declare about 2,000 people redundant and to bring from Canada the newsprint which it needed to make up the deficiency. Having seen the Press reports, and having seen nothing to contradict them, I wrote to the Under-Secretary of State, and he was kind enough to reply to me yesterday. His reply disturbs me a great deal.

I had put to the hon. Gentleman that it was a false economy to allow such companies to go to Canada for newsprint, and I emphasised the serious effect that this would have on the number of people employed in our paper industry and the serious effect it had on our balance of payments. But the hon. Gentleman wrote to me to the effect that, although he understood that it would cause redundancies and there would be an adverse effect on our balance of trade figures, he considered nevertheless that these were commercial decisions best left to the individual firms concerned.

Mr. Speaker

Order. Will the hon. Gentleman forgive me a moment? I have now had an opportunity to look at the timing of debates today, and, for the assistance of those hon. Members who wish to take part in this debate, I wish to say that I think it reasonable that it should end at approximately 1.30 p.m. rather than at 1.15 p.m. as previously arranged.

Mr. Mackenzie

I am much obliged, Mr. Speaker.

We very much resent the sort of philosophy which lies behind the approach to these matters which the Under-Secretary expressed in his letter to me, and we hope that the Minister for Industry will persuade his colleagues in the Department to reconsider the answer which I had in those terms.

Over the past nine months, we have constantly pressed the Minister—and we asked his predecessors in office before that—to do all that could be done to help the paper industry in Lanarkshire. We have continually pressed that there should be an investigation into the whole set-up and that the whole question of Scandinavian prices and of importing newsprint from Canada should be examined. The men I mentioned earlier have given a lifetime of service to the industry, and they are entitled to a lot more consideration than is shown in the answer which I received yesterday.

Our main concern in Lanarkshire—I think that it spreads throughout Scotland today, and this is one reason why I am glad that the Minister for Industry has decided to answer the debate—is for the future of the steel industry in our county. Lanarkshire houses many British Steel Corporation plants. We have strip mills, tube, general and special steel plants, construction plants, forges and foundries—all of them owned by the British Steel Corporation. In the whole of Scotland at present, there are about 27,000 people who depend on steel for their livelihood, and the majority of them are to be fauna in the Lanarkshire constituencies. We feel it right, therefore, that this matter should be ventilated in the House of Commons.

A few days ago, the Secretary of State for Trade and Industry opened a debate on steel and the future of the industry in Britain. During that debate, my hon. Friend the Member for Motherwell (Mr. Lawson) very properly put, in a short and succinct speech, the problems facing the steel industry in Scotland. What worried us was that the Minister for Industry was unable in his winding-up speech to give any assurances about the future of steelmaking in Scotland. We hope that the only reason was that time prohibited him from properly examining our problem, and we hope that he will today be able to say something about both the short-term and the long-term projects planned by the British Steel Corporation in Scotland.

As for the short-term plans, I wrote about a year ago to my hon. Friend the Member for Swansea, West (Mr. Alan Williams), then Joint Parliamentary Secretary to the Ministry of Technology, and he assured me at that time that the short-term investments of the B.S.C. in Scotland were very much in the forefront of the Corporation's thinking. He told me that £100 million of the Corporation's money would be invested between 1969 and 1974, and he said that, Scotland should at least maintain its position within the national total in the foreseeable future, with consequential benefits to Scottish steel-making areas. In the last few months, however, we have become most concerned about whether that short-term programme of investment to the tune of £100 million is still to go ahead. We should like to hear from the Minister that the developments mentioned in that letter to me a year ago, involving Ravenscraig, Clyde-bridge, Gartcosh and a number of other plants and projects, are to go ahead. It is important for the Scottish steel industry that they do.

My hon. Friend the Member for Motherwell and I are especially concerned about the future of the special steels division. The Clyde Alloy section of the British Steel Corporation operation at Craigneuk and Hallside employs between 3,000 and 4,000 people. It has for a long time been a proud achievement that we have had this unit, that it has been a viable and economic unit, and it has played, and still plays, an important part in the economic life of Our community. We should like to think that, no matter what the pressures coming from Sheffield or from the London headquarters, the plants at Craigneuk and Hallside will continue well into the future.

Further, on the question of special steels, we should not like to think that there are those within the British Steel Corporation who would seek to use the short-term recession—we hope that it is only short-term—to make closures or declare redundancies for the purpose of long-term nationalisation programmes. We hope to have an assurance from the Minister that he will use his good offices with the managing director of special steels to assure us that there will be no closures at Craigneuk or Hallside because of the recession in demand, and that further rationalisation plans will not be pursued in that way.

I come to the question of longer-term plans and developments. All Scottish Members of Parliament, and especially Lanarkshire Members, support those people in the British Steel Corporation who want to see substantial growth in this country's steel-making plants. We should like to think that the best hopes of the members of the Corporation, that steel production in this country should rise to 43 million tons, will be achieved, and will be achieved with the blessing of the Minister.

Those of us who have hopes that we shall achieve the target of 42 million—43 million tons have been a little saddened recently to read in the Press of campaigns by those who are much in favour of importing more steel at the expense of the steel-making capacity in Lanarkshire or, for that matter, in Wales or the Midlands of England. The answer the Minister gave his hon Friend the Member for Tynemouth (Dame Irene Ward) yesterday, that the shipbuilding industry would no longer be under the same obligation to purchase steel within this country, will give little comfort to those making steel, whether the British Steel Corporation or the private sector.

If we achieve the target of 43 million tons, we hope that Scotland's share will be no lower than 4½ million tons. We on this side of the House were pleased to hear from the Under-Secretary of State for Scotland for Development, in a recent debate on Scottish unemployment and industrial activity, that it was the Government's hope that Scotland's share would be 4½ million tons.

Mr. George Lawson (Motherwell)

That was by 1975. But it is very much less than we would expect for 1980.

Mr. Mackenzie

Yes, and we want to know that that 4½ million tons will still stand. In the speech by the Minister in our debate on the Scottish steel industry we had no assurances even on the 4½ million tons. I am grateful to my hon. Friend for reminding me that that figure was to be achieved by 1975. We should like to know where we stand. There is much fear and apprehension in Scot land on the issue. The newspapers have said in the past few months that there could be no Scottish steel industry at all if we did not get some of the projects we shall demand in this debate, but I think that we were reassured by the Under-Secretary of State when he told us that it would be a nonsense to say that there would not be a steel-making capacity of substance in Scotland after 1980. We believe that the Government have stated the position clearly. All that we want the Minister for Trade to do today is to back up his hon. Friend's assurances in the debate.

There is not a branch of industry in Scotland today, including the Scottish T.U.C. and the Scottish Development Council, which is not concerned, as I and my hon. Friends are, about the future of Scottish steel making. We believe that in the long term it lies with an integrated steel plant at Hunterston on the Ayrshire coast. There is not a steel-making plant being constructed anywhere in the world today that is not sited on the coast alongside deep water. When we argue in favour of Hunterston we are not simply plugging the case of the Scottish steel industry but are doing it because we believe it to be in the best interests of the steel-making industry throughout the United Kingdom. The case for Hunterston, which has been rehearsed in the House many times, is beyond dispute. The deep-water facilities that we can offer are beyond dispute, as are the savings, maintenance and capital costs of having a terminal there. So we believe that it will be to the advantage of everyone if we are given the right to go ahead with the plans for an integrated steel works at Hunterston, which will provide much employment for the people engaged in steel making in Scotland, and will be for the benefit of steel making in the United Kingdom as a whole.

But whilst we in Lanarkshire who are concerned about the future of steel making are enthusiastic about Hunterston, and have, to a man, pressed for its development, such a development will have very serious repercussions for the county of Lanarkshire. We have 15,000 to 20,000 people making steel in Motherwell, North Lanark, Bothwell, Cambuslang and Rutherglen. They would have to transfer to the coast, or we should have to find alternative employment for them somewhere in Lanarkshire. Our county council has over the years built up a stock of houses, schools, roads and other social amenities. It is a modern county and, we think, an attractive county. We feel with some justification that we are ready to play our part in modern development. We are anxious for Hunterston and shall continue to press the Minister on it, but we hope that he will appreciate that it will have serious repercussions for Lanarkshire. Perhaps we should have a survey of the industrial scene in West Scotland to see what is to be the future of Lanarkshire if our best hopes of having an integrated steel works at Hunterston are to be fulfilled.

We are waiting for the Government to make statements on many aspects of industry that affect our county. We are waiting for a statement on steel and for a statement on paper, which has been promised. We are waiting for a statement on the RB211, which affects people in East Kilbride, and for a statement on the future of ship building, which also affects Lanarkshire. In all of these industries we have an important part to play. We hope that in all these industries we shall have the Minister's support in making progress on Lanarkshire's employment prospects.

12.46 p.m.

Mr. John Smith (Lanarkshire, North)

I am very grateful that my hon. Friend the Member for Rutherglen (Mr. Gregor Mackenzie) was able to secure this topic for debate today. Those of us who represent Lanarkshire constituencies have become increasingly concerned about the growth in the number of redundancies in recent months. All those who represent Scottish constituencies have been concerned at the number of redundancies, now running at 6,500 a month, a jump from a figure of 2,900 last June. Within the North Lanarkshire travel-to-work area there have been 4,000 redundancies since then.

Against such a background, the Minister will not be surprised that the Lanarkshire Members are extremely concerned about the loss of job opportunities occurring within the county. My hon. Friend mentioned the difficulties facing the paper making and board making industry throughout the United Kingdom, and particularly in Scotland. I wish to draw to the Minister's attention the closure of the mill at Caldercruix in my constituency, owned by Robert Craig and Sons Limited. That mill is scheduled to close on 7th May this year. If the closure is carried through, 300 employees will be made redundant. That may not seem a large number compared with the many people involved in major redundancies in recent months in this country, but Caldercruix is a village of just over 2,000. The paper mill has been its staple form of employment for decades, and the people who work in it have passed on the skills from father to son throughout those decades. It is a close-knit community, with many cases of husbands and wives and fathers and sons working together in the mill. We have had an excellent labour relations record during that period. The whole history of the enterprise has been one of co-operation between the management and the labour force.

Hon. Members will be aware of the consequences felt in mining communities when a colliery closes. My constituency has had to face many such closures since the end of the war, and on the whole it has done so with fortitude and a great deal of adaptability. But Caldercruix faces something probably even worse than the closure of a colliery would be to a mining village.

The community is still stung by the announcement that this centre piece of its life is about to be removed. Is it possible for anything to he done to avert or postpone the closure? Will the hon. Gentleman intervene with the owners to see whether anything can he done? If nothing can be done and the closure is inevitable, what is to be done to provide alternative employment?

I asked the Secretary of State for Employment what action his Department proposed to take following the closure of the mill. On 5th April he told me that it would …make every effort to find alternative employment for those who are to become redundant…".—[OFFICIAL REPORT, 5th April, 1971; Vol. 815, c. 37.] He added that a job team would begin interviewing at the mill during the week beginning 19th April, following a special canvass for jobs in the surrounding area. I do not doubt the right hon. Gentleman's good intentions but one is entitled to be rather cynical about the prospects of the special canvass being productive. The surrounding area has been extremely badly hit by redundancies.

At the Airdrie employment exchange, 1,086 people were registered as unemployed in June, 1970; the figure is now 1,600—an increase of 514. At the Coat-bridge employment exchange nearby, 1,371 unemployed were registered in June, 1970; that figure has risen to 1,947—an increase of 576. Taking the two together—and Coatbridge and Airdrie are the nearest towns to Caldercruix—there are 3,547 people redundant in that area already. I doubt whether a special canvass for jobs for those to be made redundant in Caldercruix will be productive, because looking for a job in the west of Scotland at the moment is like looking for a needle in a haystack.

It would be disastrous if this cohesive labour force of 300 people, who have learned to work together and whose skills, as my hon. Friend pointed out, are linked to the paper trade, were to be lost for ever. I ask the hon. Gentleman to take note of the representations made to him by the employers and the trade unions in the paper industry and to see what can be done by the Government about the unfair pricing policies of our Scandinavian competitors.

It is sometimes said by the Government that redundancies are being created because of excessive wage demands. I took special care to investigate that in relation to the closure at Caldercruix. I was assured by the local managing director and by the chairman of the parent company, Associated Paper Mills Ltd., that that could not be said of the Caldereruix mill and that no excessive wage rises had been either demanded or granted. They had no complaint about the labour relations, which have been excellent for very many years. In many of these places, where there has been a family tradition of employer and employed, labour relations are often very good. The closure has nothing to do with excessive wage claims. I stress that so that it can go on the record.

It might be possible to save the mill if the Government could intervene in the question of the unfair pricing policies, but if that is not possible I ask the hon. Gentleman to review the provision of alternative employment in the North Lanarkshire area and to pay particular attention to the prospect of building more advance factories in the area. I know that the Department of Trade and Industry on the whole does not wish to build more advanced factories unless existing advance factory space has been filled. But it would be a gesture of confidence in the future if another advance factory could be sited in Caldercruix. The local people would see an opportunity being created for other work to come to their village, and it would be a gesture of confidence by the Government in the future of my constituents. I ask the Government to give serious consideration to that proposal.

If it is not possible to locate an advance factory within the village, then I ask them to locate it nearby and also to consider mounting another programme of advance factory building for Lanarkshire. The redundancies in the county over the last nine months have tended to wipe out the gains we made during the previous several years by bringing in advance factories and by other policies.

If we are serious about providing jobs for those who are redundant, we have to communicate our confidence in the future by a programme of advance factory building and also by a programme of retraining on a much bigger scale than contemplated so far. I am thinking, for example, of the 300 workers at Caldercruix who have been trained for the paper trade. They may not get jobs in the industry again and they should be offered the opportunity to retrain for some other industry which may come into the area. I ask the hon. Gentleman to take up with the Secretary of State for Employment the possibility of introducing a much larger retraining programme in the North Lanarkshire area.

I turn to the situation in Shotts. Shotts is a community which has suffered greatly from pit closures in the past. In 1945, there were 19 collieries there; only one operates nearby today. The community has faced a great deal of hardship in the past and has done so with fortitude. It has met the challenge of changing times extremely well. Indeed, it was delighted when the last Government put an advance factory at the Stane site. But since that factory was completed last June, it has not, unfortunately, been occupied, and it stands as a monument to a good endeavour never followed up. I ask the hon. Gentleman to pay special attention to finding a tenant for it. Nothing would increase confidence and morale in the area as much as if that factory were occupied. In that area, unemployment has increased from 393 in June, 1970, to 518 last March. So labour is available for an incoming tenant of the factory.

I echo the sentiments of my hon. Friend about the steel industry. It is vital to the Scottish steel industry and its future viability that we get the ore terminal at Hunterston. The Secretary of State for Scotland states that he shares our concern. I hope that he uses his influence in the Government to show how vital it is to the future of the existing steel industry in Scotland that we should get the ore terminal and the steel complex at Hunterston.

At the end of the day, the Government will ask what solution we propose to the problem. The Government should not be allowed to escape in this situation from facing the consequences of the policies they have adopted. I echo my hon. Friend's complaint about the effect that the abolition of investment grants will have and is already having on the prospects of attracting new industry to Scotland, particularly to Lanarkshire. We are convinced that the switch from investment grants to investment allowances was done to save money. The five-year review of public expenditure showed that in each of the years 1972 to 1975 a considerable saving will be made by switching from investment grants to capital allowances. For example, in 1972–73, the Government will save £345 million in investment grants at a cost of £235 million in capital allowances. Clearly, the switch has been done to economise.

We greatly regret what appears to have been a doctrinaire decision taken at a time when we need an increase of public expenditure in Scotland. Scotland, particularly Lanarkshire, benefits from a high rate of public expenditure, not only generally, but because that gives real bite to regional development policy. I ask the Government to get rid of the lame duck philosophy which has characterised their approach to regional development and the problems, I hope temporary problems, of some major industries, because we shall never be able to offer a proper future to the people of Lanarkshire unless we have a regional development policy, which means a policy operated by a Government determined to make it succeed and determined to put public money into backing up their confidence in the future of an area.

I ask the Government to reconsider their regional development policies in the light of the crisis situation which now exists in the West of Scotland. My hon. Friend the Member for Rutherglen mentioned the 14,000 unemployed in Lanarkshire. The Glasgow Herald of yesterday pointed out that there were 35,000 unemployed in Glasgow, which is in the travel-to-work area of Lanarkshire. We now have a crisis situation in Lanarkshire and the west of Scotland. We ask the Government to rise to meet that crisis by reviewing the whole of their policies and, even if it is unpalatable to them politically, to adopt some of the policies followed by the Labour Government which were successful in attracting industry to our area.

1.2 p.m.

Mr. George Lawson (Motherwell)

I congratulate my hon. Friend the Member for Rutherglen (Mr. Gregor Mackenzie) on his success and compliment him on his enterprise in getting this short Adjournment debate. I associate myself with his thanks to the hon. Member for Bournemouth, West (Sir J. Eden), the Minister, for coming to listen to what we have to say. The hon. Gentleman knows that he is generally regarded as fairly doctrinal—he may be surprised to hear that, but I do not think so.

I remind him that a past Conservative Government took considerable steps in Lanarkshire and that Lanarkshire would have been in an exceedingly difficult situation if those steps had not been taken. I refer to the establishment of the steel strip mill at Ravenscraig. It was laid down at Ravenscraig, which is in my constituency, because of the intervention of a Conservative Prime Minister, Mr. Harold Macmillan. I am prepared to give credit where credit is due and to say that that was also true of the motor car industry. It was not my right hon. Friends, but a previous Conservative Government who brought the motor car industry to Scotland. I like to think that the hon. Gentleman is prepared to embark on such measures as the occasion demands, and certainly it calls for major steps.

When we talk of steel making in Scotland, we talk of steel making in Lanarkshire, for there is only one major works outside that county. Within Lanarkshire it is concentrated in my constituency. We have the Ravenscraig Works themselves, the Lanarkshire Works, the Dalzeel, the Clyde Alloy and the former Etna Works, now unhappily closed, all substantial steel-making companies.

The circumstances today are not such as to permit matters to be left to ordinary commercial judgments, to thinking in terms of the cost of a job, profitability, which is usually a short-term consideration. I do not decry and never have decried profitability. I recognise that various types of enterprise are undertaken because it is expected that something will be gained from them. But there may be circumstances for a nation when such considerations are comparatively minor, when what requires to be done is so vast that no single person or group of businessmen can begin to approach tackling the problem. That is now the situation with the steel industry. The task is too big and too serious for the nation for decisions to be left to normal commercial criteria, and when I say that it is too serious for the nation, I mean not just Lanarkshire and Scotland, but the whole of the United Kingdom.

When one talks about steel making in Lanarkshire, one talks about employment. If the works in Lanarkshire are to close, there will be virtually no employment in the county and the area will become an industrial desert. That kind of thing cannot be allowed. The workers of the area are reconciled to seeing the industry slowly moving its concentration towards the coast. This is a process which has been going on over 100 years. It says much for the people and town council of Motherwell that they have accepted this development, that they understand that the industry cannot indefinitely be concentrated in Motherwell, for example.

However, we regard the establishment of the ore terminal at Hunterston as being necessary for the continuance of the existing industry quite apart from its development, and that development will be in the interests of the United Kingdom, not just the local area. But as the industry moves towards the coast, transitional arrangements must be made so that there is no serious dislocation among existing works. The move can be carried out over a number of years to the benefit of Lanarkshire, Scotland and the whole United Kingdom.

But this underlines the importance of the Government's intervention. With all the force at my command, which at times may not seem to be much, I emphasise that the job is too large to be left to normal commercial processes, too big even for the British Steel Corporation. The Corporation cannot find the money to pay for the kind of development which we have in mind. I would not be so presumptuous as to quote figures to the Minister, who is already familiar with them, of course, and who will know that investment in steel making in the United Kingdom compared with that of other countries is so small that we are not even in the league in this respect.

I will not give the figures because they have been sent to the Minister by the Scottish Council for Development and Industry. They are most illuminating. The hon. Gentleman will no doubt agree that we must do much better than we have been doing. I will not argue whether this is because of the nationalisation versus denationalisation question. Investment in the industry has been calamitous. We cannot hope to remain an industrial nation of any consequence unless we are able to make our own steel sufficiently cheaply. Not only have we been investing at a much lower level than any other country, but we have been producing at an increasingly lower level. The production of crude steel, which is the sinew of a nation, has fallen.

We are told that the profitable section is special steels. We have substantial special steel units in Lanarkshire. Despite the fact that the largest part of the special steel section is still under private enterprise, our increase in production of special steel over the years has been appalling. It has been about 6 per cent. in the period 1960–69. This compares with the Japanese increase of something like 400 per cent. Every other country has been racing ahead in the production of special steels while we have been dropping out.

Tied up with the question of employment in Lanarkshire and its future is the future of steelmaking. We are at the centre of things. We make no special plea that we should be a steel-making centre for all time. We are prepared to accept that major developments will take place on the coast, we hope our part of the coast. All we are saying is that the Government must sort this out. This is the Government's responsibility. The other day, during a sort debate on the steel industry, I pointed out that the Government intervene on defence. No Government can leave the defence of a nation to any kind of hotchpotch commercial arrangements. It is a matter for the nation and therefore for the Government.

Equally, I say that because the world has moved so quickly since the nineteenth century, no Government of whatever party can leave the steel-making industry to normal commercial considerations. This does not mean that we ought not to be thinking in terms of cheap steel. We can get that only by applying the best available techniques, developing the best sites, maximising the greatest measure of good will available among managerial and workpeople. If the hon. Gentleman can begin to do this we shall cheer him on. We will give the Government every support.

They cannot possibly leave this to the normal processes of commercial judgment or to the B.S.C., big though it is. The Corporation must at the least be given permission to go ahead with its plans, which are pretty ambitious, although I would say not ambitious enough. It is our understanding that the Corporation wants to build up capacity so that by 1980 it will be producing in the region of 43 million tons. We think this is very small beer compared with what others are doing, certainly compared with the Japanese. They are producing four times as much as we are.

The Minister could use his considerable influence to ensure that the Government will come in behind the B.S.C. and see that the most ambitious parts of the Corporation's scheme are carried out and that in Lanarkshire we are not confronted with any sudden decision saying that in the interests of economy half of the industry in Lanarkshire is to be killed. We could not stand that. We are ready to co-operate over a period of time in a smooth transition, knowing that the Government will be making efforts to retain and bring in new industry. I take it that it is not in the Government's mind to carry out this kind of sudden killing? If it is, it will be a very sad and angry day for the people of Scotland.

1.16 p.m.

The Minister for Industry (Sir John Eden)

I am grateful, as is the House, for the moderate and constructive way in which the hon. Member for Rutherglen (Mr. Gregor Mackenzie), supported by his hon. Friends the Member for Motherwell (Mr. Lawson) and Lanarkshire, North (Mr. John Smith), have spoken in this debate. I know that their moderation does not minimise their strength of feeling on this subject. I realise that they speak as they do because of their real concern for the situation which has been developing in Lanarkshire. I may not be able to answer all of the points that have been put to me but I can assure them that I will study their speeches carefully later and if there are any points that need a supplementary reply I will write to the hon. Gentlemen concerned.

The hon. Member for Rutherglen referred to the position of the whole of Lanarkshire. He will know that since 1945 the economy of the area, particularly North Lanarkshire, has been undergoing a pretty radical change. It is not something which has come about in the last few years and certainly not in the last few months. It has been happening progressively since 1945 and I want to put the debate into that context.

Coal mining has almost disappeared. There are three pits, none of which, I am glad to say, is in jeopardy. They employ just under 3,000 men. Many of the older iron and steel works have closed and modern strip mills and a number of firms, mainly engineering, have been introduced in the area. As hon. Gentlemen know, we have engaged in a review of the structure of development area status to determine whether any other changes were needed. The result of this study led to the creation of a number of special development areas and notably to that of West Central Scotland. This will help progressively over a period of time. I do not for a moment pretend that by changing a designation there will, overnight, be a transformation of the situation. It is not always fully understood how considerable is the full range of inducements which designation as a special development area provides.

Other facilities are already available in the development areas. These include free depreciation on new machinery and plant; initial tax allowances of 40 per cent. for capital expenditure incurred in the construction of industrial buildings; the regional employment premium, while it lasts, up to 1974; training grants for on-the-job training costs and training courses; assistance through the Department of Employment towards the transfer of key workers; assistance under the Local Employment Act, 1960, such as the provision of D.T.I. factories, building grants at 35 per cent. and in some cases 45 per cent., loans at moderate rates of interest and removal grants. There are additional incentives for the special de-development areas, such as a rent-free period in a Department of Trade and Industry factory for a period of up to five years; operational grants at 30 per cent. of the wage and salary bill for the first three years; loan towards the balance of building costs.

That represents a fairly considerable package of inducements. I have enumerated them rapidly and in short form simply to get them on the record and in the hope that hon. Members will do their part, as I am sure they will, in giving these advantages publicity, for they are considerable and they will progressively assist in attracting new industry to the area.

The hon. Member for Lanarkshire, North asked me particularly about Government training schemes and advance factories. There are four Government training centres in Lanarkshire providing a total of 650 training places. A number of new training initiatives were recently announced by my right hon. Friend the Secretary of State for Employment. These include payment of grants to employers in the development and intermediate areas who engage or retain workers aged 45 and over who have been unemployed for eight weeks or more; new short courses at lower levels of skill at Government training centres; and the Department of Employment would also be prepared to enter into arrangements with employers whereby they could use their spare training capacity to provide local training courses for the unemployed at Government expense.

The vocational training scheme has been extended. Under it, professional and executive staff of the age of 40 and over can in certain circumstances receive financial assistance for short courses with employers or to attend suitable courses at colleges of further education. Assistance is also available under the Resettlement Transfer Scheme to those who have no early prospects of obtaining work in their home areas, to resettle permanently, or until work is available in their home areas, in jobs elsewhere for which no available worker can be found, locally. On 1st April this year the grants and allowances under the scheme were increased.

The Department of Trade and Industry has 11 industrial estates and individual sites totalling just under 700 acres providing employment for 24,300 people, two advance factories totalling 74,000 sq. ft. and 12 other factories totalling over 275,000 sq. ft., and 117 acres of land are available at various locations in North Lanarkshire. In the Glasgow group of employment exchanges, the Department has six established industrial estates which, together with a number of individual sites, provide employment for 26,000 people. A seventh estate is being progressively developed at Cowlairs and work has begun on another site at Dalmuir. There are four advance factories either built or under construction, 33 other factories and 95 acres of land available for new industry. In addition, three advance factories were recently authorised for Clydebank and the Department is considering other sites.

I apologise for speaking rather rapidly, but every effort is being made to interest suitable industrialists in the vacant premises. I come back to my main point, namely, the limitation imposed on the amount of help any Government can provide which arises from the shortage of mobile industry and of people willing to go to areas to take up the advantages and opportunities available to them.

Hon. Members have spoken of two industries in particular—paper and steel. The paper industry has been going through a very difficult period. Hon. Members say that the pricing policies of the E.F.T.A. suppliers have operated unfairly. The E.F.T.A. themselves make out the case that world market forces dictate their pricing policies. I have been looking into this matter very closely as a result of all the representations made to which hon. Members have referred. Fresh evidence has come to hand which seems to support the contention of the United Kingdom industries and I am studying it as urgently as I can. But, because of many grades of paper involved, the changing pattern of supply and demand and the effects of substitute material, such as plastics, it will require a complex economic study to isolate the natural market effect from deliberate price manipulation. This is the point which is hard to pin down. But I assure hon. Member that if manipulation can be demonstrated the Government will be ready to make the appropriate representations.

I wish to say a few words about the steel industry on which the hon. Member for Motherwell spoke particularly strongly. I cannot give answers about specific works because decisions in these matters are primarily the responsibility of the British Steel Corporation. Proposals must in the first instance come from the Corporation. If I had answers which I could give the hon. Gentleman, I would not hesitate to give them. I do not want to mislead hon. Members or anybody outside engaged in this industry. The hon. Gentleman knows as well as I do that as a result of recent financial deterioration in the Corporation's performance the short-term review is engaged in studying the existing development plans. We have not asked for the deferment of Ravenscraig, but all these schemes are under consideration as a result of the study of the Corporation's financial position.

We hope to have an answer within six weeks, and we are pressing ahead with it. What matters is not that there is investment for investment's sake but that the costs of the investment projects are such as will be a reasonable guarantee for the profitability of the venture when it gets into gear. I accept what has been said about the great need for new investment in the industry. This need has existed for some years. None of us is trying to knock the industry or kill any sector of industry. Those are the words which the hon. Member for Motherwell used. I am sure that he does not expect me to give him any different answer.

I can give the absolute undertaking that our chief concern is to avoid a continuing drift into unprofitability because we want a secure, viable industry with a future. In the light of the rising costs to which the steel industry, like many others, has been subject, we must look afresh at some of the premises on which decisions were based. I hope that I have put it as reasonably and fairly as possible. I accept that when we have a developing situation it is very much the Government's responsibility to help sort things out. This is why we are involved to the present extent.

The steel industry in Scotland has contributed very substantially to the benefit of the economy and of many engineering industries in this country. I would hope that it will long continue able to do so, but the exact proportion of investment, the exact decisions concerning the rundown of plant, are matters in the first instance for the Corporation. The hon. Gentlemen know that certain decisions were announced by the Corporation not so very long ago, and it will obviously be continuing a review of the availability of plant and the need to retain in being older sites and factories. This is because the Corporation, too, is as concerned as we are that the Corporation shall be a strong economic, as well as a widely, broadly based, industrial unit.

It announced right at the beginning of the existence of the Corporation what the sort of broad scheme was, and in 1969 made clear that it was planning to launch a sort of two-pronged attack for the rationalisation and the modernisation of older works, to improve productivity throughout the industry and to introduce more flexible working methods. It was then made clear that it would be aiming at a reduction of manpower by 50,000 in a period up to 1975. Some of the manpower reduction objectives which it then had in mind have not up to this point been achieved. I think that there is no doubt that it will have to press ahead with further closures. I am not specifying those in Lanarkshire or in Scotland, but, generally speaking, it is quite clear that we shall want to see that this industry is balanced and stronger in the future.

I know that I shall not have been able to reassure the hon. Gentlemen very much by the answer which I have been able to give, but I hope that they will take heart from the measures which have recently been introduced by the Government—from the creation of the special development area, from the measures announced by my right hon. Friend the Chancellor of the Exchequer. I believe that these give enormous hope for the future, and for the development of industrial and economic activity in this country. They are bound to have an impact, and a beneficial impact on Lanarkshire. They will take time to have effect, but, undoubtedly, we shall see over the months, the years, to come the progressive benefit of improving confidence throughout industry. I hope that, in the meantime, all those in the area, at whatever level of employment in the industry, whether at workforce or management level, will make the best possible efforts they can to take advantage of the opportunities which do exist.

Finally, I again assure the hon. Gentlemen that I shall do my best to study the record of their speeches and to follow up any of the points which I have left uncovered. I hope before very long to visit the area.