SCOTLAND (ECONOMIC SITUATION)

HC Deb 13 July 1971 vol 821 cc229-357

Mr. Speaker

Before I call the right hon. Member for Kilmarnock (Mr. Ross), I would inform the House that I have selected the Amendment standing in the names of the Prime Minister and his right hon. Friends.

4.8 p.m.

Mr. William Ross (Kilmarnock)

I beg to move, That this House condemns Her Majesty's Government for the failure of its economic policies, which have led to the highest level of unemployment in Scotland in post-war years and increasing hardship for the people of Scotland. It is nearly 13 months since the people of Scotland decisively rejected the policies of the party opposite, and, at every democratic opportunity which they have had since then to express a political view, they have demonstrated that they have not changed their minds. In these intervening months, virtually an unbridgeable gap has been created between the people of Scotland and this Tory Government. Their credibility with the people of Scotland has gone. I do not blame just the Secretary of State, although he must accept his part of the responsibility for the deeds and misdeeds of his Government, but I see that it has been said that the present Government have effectively dug the grave of the Tory Party in Scotland.

We condemn this Government for their indifference, their neglect, their callous disregard for the needs of Scotland and their complete mishandling of the situation. The facts are beyond dispute. In the month of June, we had the highest unemployment figure for any June month in the post-war years. The fact is that unemployment in Scotland always rises between June and July. There is a reason for it. But we face a worsening situation, not just next winter, but next summer. We shall have the latest unemployment figures next Thursday. It may be that the Secretary of State is in a position to give us an estimate of what the figures are likely to be. I think that they will shock the whole of Scotland.

The situation is worsening month by month compared with the position a year ago, and we have no effective action from the Government. We have no indication from them that they are seriously concerned, although I notice that in the Amendment they propose to move, they talk about the figures being "regrettably high".

Comparing January of this year with January of the previous year, unemployment in Scotland showed an increase of 19,000. In February, the increase compared with the year before rose to 27,000, in March to 31,000, in April to 34,000, in May to 35,000, and in June to a figure which was 37,500 higher than it had been the year before. That is a staggering increase, and it is worsening month by month, with the Government totally inactive.

Right hon. and hon. Gentlemen opposite will say that they inherited the situation. That is what we were told in February. They said that they inherited a situation of 80,000 unemployed in summer time. What will the right hon. Gentleman say now when, as a result of his racing round Scotland like a frightened rabbit, the figure is 121,000 and likely to rise still further?

Hon. Members have to appreciate that, in Scotland, between 76,000 and 80,000 children leave school each session. They do not all leave at the end of the session which, this year, closed at some time between 23rd and the end of June. Many of those children will be registering as unemployed. Of those who leave during the year, probably about 40,000 or 50,000 will do so at the end of the summer session. Many of them will appear on the register in the month of July and in the figures that we are to be given next Thursday.

In Scotland, we face the prospect of 130,000 unemployed in the month of July. Anyone who has studied the relationship between winter and summer unemployment figures can guess easily what will happen. It is too late for any action, even any action that is likely to follow the announcements which I have no doubt that the Secretary of State will be making today. Inevitably, the unemployment figure will rise to at least 150,000 in the month of February next year, and the chances are that it will be very much higher.

All that the Government can say is, "Please, Sir, it was not us." They have now been in office for 13 months. For four of those months they said nothing ; they went into hibernation. However, they were aware of the problem. They were wringing their hands in despair when unemployment was half what it is today and saying that something should be done. For four months, they said nothing. Then, on 27th October, we had a statement from the Chancellor of the Exchequer.

Some people seem to have forgotten about that statement. We had an echo of it today in the Government's statement on their housing policy. That was foreshadowed in the statement on 27th October when they suggested that by the middle 1970s they would save between £100 million and £200 million on housing subsidies, and that the figure for Scotland would be between £10 million and £20 million.

What were the important things done for Scotland then? We were told that investment grants, which were almost the lynchpin of development in Scotland, were to end. R.E.P. was to be not tapered off or phased out but brought to an end in 1974. For Scotland, investment grants in the previous year had meant £75 million, cash. R.E.P. had meant £60 million.

Mr. Ian MacArthur (Perth and East Perthshire)

How much in S.E.T.?

Mr. Ross

The hon. Gentleman will be able to talk about S.E.T. in a few weeks' time, when he sees exactly how prices tumble. I am always surprised how people forget the way in which S.E.T. was taken off Highlands hotels and other hotels in different parts of Scotland. There was no drop in prices. If the Gentleman wishes to take comfort from what is likely to happen to S.E.T., let him look at what was said in the Glasgow Herald last week—

Mr. MacArthur rose—

Mr. Ross

No, I shall not give way. The hon. Gentleman is good at interrupting everyone else's speech—

Hon. Members

Give way.

Mr. Ross

No. The hon. Gentleman no doubt will have an opportunity to make his own speech later on. We have plenty of time.

So there we have the position, with investment grants finished and with R.E.P. to go—

Mr. MacArthur

And S.E.T. halved.

Mr. Ross

But that was not all. There was the slashing of the nationalised industries' programmes by £43 million, starting this year, and rising in three years' time to a cut of £73 million. A closing date was put into the programme for building new hotels. Then there was the menace threatened, which has now become reality, of the slash in housing subsidies which local authorities have been discussing with the Secretary of State for many months. Every single item was guaranteed to have an effect upon the Scottish economy and upon investment.

I am sure that the right hon. Gentleman remembers what he said at the time. On 28th October, the day following, The Scotsman said this : Mr. Gordon Campbell, Secretary of State for Scotland, insisted last night in a statement that the refashioning of incentives for regional development without any reduction of the money for development areas would be an impetus for Scottish development. The new methods would be more effective. That was October. The Secretary of State must be in despair about the position of the Scottish economy today. No doubt the right hon. Gentleman has had a copy of the magazine Scotland sent to him. He should read the business page, which says : It is a long time since the outlook for the economy looked bleaker. At the risk of being boringly repetitious, action by the Government is long overdue if we are not to drift helplessly into recession and crisis … Of all the manifestations of our economic ills none is more worrying than the chronic low level of investment. That is not the only publication to confirm the pessimism of right hon. and hon. Gentlemen on this side of the House. On the same day, The Scotsman said : … it seems that if the economy ceases to stagnate, the resulting benefits for Scotland could be substantial, but if economic inertia continues, then she could well be worse off. We are worse off. Generally speaking, the responsibility for this situation lies not just with the Secretary of State but with those who are in command of the whole economy. Inertia has continued despite what the Government did in October and despite what they did in the Budget.

The Secretary of State can point to special development areas and all the rest, he can have all the local Employment Acts and special development areas he likes—indeed, he can have all the incentives he likes, although the present ones are pretty poor compared with the direct incentives which we gave—but if there is no mobile industry and no confidence in the country, he will not get the development, the movement or the expansion of industry.

Todays Financial Times, under the heading, No signs of upturn in U.K. production", goes on to say : There are no signs of an upturn in U.K. industrial output. The May production figures which became available yesterday, show a fall from April's, and in the three months March-May production was lower than in December-February. So far from advancing, we are going down

If right hon. and hon. Gentlemen opposite do not like that newspaper, I refer them to The Times of today, which says : … the Treasury's mid-year economic assessment should now have served that purpose. It will have painted a picture of stagnation in both current expenditure and investment. … The measures that the Government did adopt either failed to have any discernible impact on demand, such as the reduction in income tax, or were actually deflationary in their immediate effect, such as "— mark these words— the shift from investment grants to investment allowances. Everyone in Scotland, from Lord Clydesmuir to the S.T.U.C., is saying exactly what we told the Government in October would happen : that they would dry up the impetus to development in Scotland by the change from investment grants to allowances. It must have made good reading for the Secretary of State if he read The Guardian leader this morning, which says : Scotland's winter wind… Unemployment is already as bad as it could possibly be. The writer of that article does not know the Tories, because there is worse to come. When the English used to talk about going back 40 years to find their worst unemployment figures, we used to be able to say that we had only to go back to 1963 when a certain right hon. Gentleman was the President of the Board of Trade. That right hon. Gentleman is now the Prime Minister, and he has not lost his touch when it comes to Scotland. The first six months of 1971 have proved the most disastrous period that Scotland has had. Right hon. and hon. Gentlemen opposite cannot get away from the fact that this is the result of their misled and misguided but calculated policies. The Prime Minister himself on Scottish television, when attacking the incentives which we gave, said that they were over-generous. But they were effective. He was saying that we did not need them. What did we want? A soup kitchen economy in a soup kitchen country?

We had another indication today of the madness of right hon. and hon. Gentlemen opposite. They have means test madness : means tests for rents for council houses, means tests for rents for private houses, means tests for school meals and school milk, means tests for welfare services, for rent rebates and for rates rent rebates. It is means tests, means tests, means tests. Scotland's economy is drifting towards ruin, and right hon. and hon. Gentlemen opposite know it. It is not just the lame ducks. Redundancies in Scotland were being declared at the rate of 6,500 in the months of April and May, despite this great new impetus towards development.

What did we get in I.D.C's? In April and May jobs prospects from I.D.C's granted under the great new system amounted to 754. Yet nearly 12 times that number of redundancies were being declared as new jobs were being created. But new jobs being created—

Mr. James Hamilton (Bothwell)

Cremated.

Mr. Ross

—have a habit of disappearing in the pipeline. I nearly said "cremated". I probably would have been right. There is no doubt about the redundancy notice. Workers receive redundancy notices and on the same day their place of work is closed.

Into this situation we have the hacking policies of the Government relating to the steel industry. They held up an announcement, which was made and authorised in January, 1970, that the Ravenscraig development was going ahead ; but, with the interference of this disengaging Government, we got the announcement last week after 18 months of delay. The hacking of the industries connected with the steel industry has created gloom and despondency throughout industry generally.

Let us consider the activities of the Secretary of State for Trade and Industry, not the Minister for Trade, who, I understand, is winding up the debate today. However, I welcome his return to the scene of, dare I say it, his former triumphs with the Scottish economy. The Secretary of State for Trade and Industry ought to be here, because that industrial anatomist has been very busy. He has had the enthusiastic assistance of the hon. Members for Cirencester and Tewkesbury (Mr. Ridley) and for Bournemouth, West (Sir J. Eden), the like of which we have not witnessed since a celebrated anatomist in Edinburgh engaged the services of Burke and Hare.

It was into this situation that U.C.S. fell. I will not rehearse that sad story. We have already, through questions and the answers we have received, built up an interesting dossier of comings and goings and of information being sent. Indeed, we know from the report which was prepared on 9th December by the hon. Member for Cirencester and Tewkesbury just how all that was done concerning U.C.S. was calculated, planned and laid down in December 1969. This is one of the saddest and most disgraceful stories that has ever come out about a Government Department's activities. I hope that my hon. Friend the Member for Glasgow, Craigton (Mr. Millan) will add one more date to that dossier : that just after that statement made by the Secretary of State for Trade and Industry on, I think, 4th November the credits for U.C.S. were held up. In other words, the lame duck policy was put into operation.

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

The right hon. Gentleman complains about what he calls the "lame duck" policy. Will he explain to the House the criteria on which he would give help to ailing companies? Would it be to all companies, or just specially favoured companies?

Mr. Ross

That is a very good question. I am sure that the attitude which the Secretary of State adopted when the Cabinet discussed U.C.S. was the same as mine. What is involved is not just the 8,500 jobs at U.C.S., but 20,000 jobs elsewhere, because nowadays most of the work of a shipyard is assembly work, while the main work is done by outside suppliers. Every effort should therefore be made to ensure that U.C.S. is kept in existence. We should remember the statements about U.C.S. being on the road to viability and the improvements in its launchings and contracts. It could have been saved. If one balances any question of doubt against social consequences, one realises what should be done. It has rightly been said that U.C.S. is fast becoming a symbol of Scotland's economic plight … There is no doubt that U.C.S. should be saved, but hon. Gentlemen opposite took the decision to butcher the company before they became the Government.

Mr. MacArthur

Rubbish.

Mr. Ross

That was the advice given by the hon. Member for Cirencester and Tewkesbury, and the existence of that report has never been denied. The hon. Gentleman drew up the report. The Secretary of State said that he never saw it. Perhaps I may tell him that his name was on the circulation list. He was one of two Scottish Members to whom the report was to be sent. It may well be what the right hon. Gentleman did not receive it or did not read it. Or it may be that even as a member of the Shadow Cabinet he was not brought into these consultations on the future of the shipbuilding industry. If that is so, that is even worse than admitting that he had seen the document. It is an indictment of the right hon. Gentleman's position in the Conservative Party.

We are now faced with the position that the whole of Scotland is in uproar about U.C.S. I have never before seen a march such as that which I saw in London of unemployed workers and people whose jobs were threatened. There were men from the shipyards. There were ministers from the Church of Scotland, priests from the Roman Catholic Church and men from local authorities. When the march was repeated in Glasgow it proved to be the most disciplined demonstration that we had ever seen against a Government decision.

Mr. Galbraith

What about Greenock Dry Dock?

Mr. Ross

The hon. Gentleman should appreciate that the financing of that dock was done by his Government. If he wants to know anything about it, he should read the report of the Public Accounts Committee. The hon. Gentleman should realise that Greenock Dry Dock is still in existence and is being used. Let us hope that after the four wise men have finished and the recommendations have been made to the Government the whole of U.C.S. will be fully employed. If that is going to be the outcome of U.C.S., they should never have embarked on these proceedings. I have said before, and it is true, that the Government will spend far more on U.C.S. than it would have taken to obviate the whole position. The action was the result not of policy but of dogma. It is only one facet of the Government's policy which has created this gulf between them and the people of Scotland.

Not very far from U.C.S. there is a place called Alexandria, which we fought to save when the Ministry of Defence decided that it had to give up the work that was being done there. I can remember the weeks of work put in by officials of the Scottish Office, by Ministers, and by officials from the Ministry of Technology and the Ministry of Defence. I remember how we managed to get Plessey to take over that factory. One deciding factor in that decision was the ability to use the machinery and the people who were there. About 18 months ago there was talk of increasing the number employed there to 2,000. Today that factory is being closed.

I think that there is room for two inquiries in Scotland. There should be an inquiry into what happened about that factory. It is time that we had a public reply to my hon. Friend the Member for Dunbartonshire, West (Mr. Ian Campbell), who has asked some pointed questions about this matter. This factory itself is important to the area in which it is situated, but it has become even more important following the considerable improvements in the road pattern of the area, thanks to the work of the Labour Government.

I should like to know what the Secretary of State did about that. When we have a Government who do not believe in intervening, a Government who are actively engaged in disengagement and in leaving everything to private enterprise, we realise that the outlook for the people of Scotland is dismal, bleak and grim. What did the Government do about Plessey, and what are they going to do about this factory?

The excuse given by Plessey was that it had to safeguard its industries in the south. Are we to understand that that is to be the pattern in future, and that all regional policy has been thrown overboard? Regional policy does not begin and end with local employment Acts. It must be seen in every sphere of Government influence. It must be seen in what the Government do about the nationalised industries to ensure that the special bias that is required is given to the development areas. One of the sad things is that the Government have not used their power, through the nationalised industries, either to reflate the economy or to give discriminatory reflation where it is required. That is certainly something that they could do.

There is also the problem of Hunterston. The hon. Member for Bute and North Ayrshire (Sir F. Maclean) may have been pleased with what happened at Hunterston, but the deep-water facilities there are unique in this country and they must be used for the advantage of the people of Scotland. There was a time when the Clyde was a rural river, but we have seen the changes that have occurred in the whole pattern of trade, both incoming and outgoing.

I remember how when the idea was first mooted elaborate proposals were put forward by Glasgow University and the Scottish Council—Oceanspan. The development of Hunterston was first suggested in relation to the steel industry. The ore terminal was urgently required because of the expansion of the industry and the future of the general terminus quay at Glasgow. Following the inquiry we waited for months and months, but we heard nothing at all from the Secretary of State. The right hon. Gentleman says "No" by instalments. He says that he has zoned the area, but he refused Chevron for the purpose of industrial development. It is not to be left to the local planning authority to decide who shall go to an area. If the right hon. Gentleman cannot agree to Chevron, what can he agree to?

Sir Fitzroy Maclean (Bute and North Ayrshire)

The right hon. Gentleman has accused my right hon. Friend of being negative in his attitude. All that he has said "No" to so far is an American oil company which would have brought few jobs but done a great deal of damage to amenities. I remind the right hon. Gentleman that he did the same thing, and I think quite rightly, in respect of Murco.

Mr. Ross

The hon. Gentleman is entitled to his opinion. I would rather that he did not impute opinions to me.

Sir F. Maclean

I did not.

Mr. Ross

The hon. Gentleman said that I had done the same thing in respect of Murco. That is not true. Let him read the reports and he will find that they do not compare. [Interruption.] I can assure "Mr. Europe"—

An Hon. Member

Who is he?

Mr. Ross

The right hon. Gentleman went to Bonn once and the Scottish Press said : "Here is Mr. Europe". Instead of going to Bonn the right hon. Gentleman ought to go to Bonhill and see what sort of reception he meets there. I can assure hon. Gentlemen that if the two decisions are compared they will be found to be entirely different. What will happen about Hunterston? When will we get an approach from the British Steel Corporation and the Clyde Port Authority about the ore terminal? Is this something else which is being delayed by the cutting down of the grants foreshadowed in the statement of 27th October about port modernisation?

We are anxious to hear about this, because a terminal would be the first step. I hope it is one of the things that the right hon. Gentleman will announce today. We want to hear him say that he will give the go-ahead for the construction of an ore terminal at Hunters-ton. If we do not get that terminal we shall never get a steel complex there. One of the most engaging things about the right hon. Gentleman is that he endowed his shadow interventions with an aura of Eastern prophecy. About 1963 he suddenly discovered the existence of Hunterston and its unique facilities. Indeed, he claims to be a pioneer about this. He talked about the steel complex there, instancing what was being done elsewhere and seemed to think that there should be a speed-up of decision-making. We think so too.

There was no indication of that from the Secretary of State for Trade and Industry the other day. Many fears are being expressed in Scotland today that the new growth point in Britain is not to be Hunterston but Foulness, Shoeburyness and Southend-on-Sea. It is interesting to note that while Scotland is being fobbed off with an experimental rifle range from Shoeburyness which Wales refused to have, the Shoeburyness area is being developed with the construction at Foulness of an airport which will cost £150 million more than if the airport had been sited elsewhere.

We know that the V.A.T. office is not going to Wigtownshire or Glasgow, or Edinburgh, or any development area. It will go to within a few miles of Shoeburyness. Is this the new development area policy of the Tory Government? We have seen the easing up of I.D.C. policy—and there will need to be a considerable easing up to allow that kind of development. It is depressing that we spend years and years, pressing Governments and Cabinet colleagues, getting accepted the idea that priority should be given to the regions and then suddenly within a few months of a new Government all is lost and the regional policies come virtually to a halt.

The right hon. Gentleman takes a pride in saying, "We created the special development area policy"—

Mr. Galbraith

On a point of order, Mr. Deputy Speaker. Could you ask the right hon. Gentleman to address you because it is difficult to hear what he is saying.

Mr. Deputy Speaker (Miss Harvie Anderson)

I do not think the right hon. Gentleman means any discourtesy, but it is rather difficult to hear him.

Mr. Ross

It was not calculated. I am sure that the hon. Gentleman would be the last person to accuse me of that discourtesy. I have a high regard for him. He was the only Member with the courage to support the Government over U.C.S. The rest of the troops fled the field—he was the only Scottish Tory who spoke.

Mr. MacArthur

Typical distortion.

Mr. Ross

The position of the Scottish economy is serious ; the army of the unemployed grows daily. I do not say that hon. Gentlemen opposite are inhuman ; they are simply blind to the hardships caused by certain decisions they take. There are many people in Scotland who have forgone their holiday this year. On Clydebank they went on holiday on 2nd July for three weeks ; the men in the Govan, Linthouse and Fairfield Yards will go on holiday at the end of this week. None of them knows what will happen after 4th August.

Will the right hon. Gentleman tell us whether he has so far had meetings with the Four Wise Men, and with the Liquidator? Can he cheer us up with a statement that the Government have changed their mind about the annihilation of U.C.S. and the selling-off of what they have, if necessary at a pittance, to quote a celebrated document? Can they tell us anything about the S.D.A. beyond what we already know?

The right hon. Gentleman knows that I have been seeking an interview with him about the position of Kilmarnock, Ayr and South Ayrshire. My hon. Friend the Member for South Ayreshire (Mr. Sillars) has been discussing this with me too. The people of Livingston are concerned about it, as are the people of Dundee and Glenrothes. If I were a member of the Highland Board, I would be concerned about it too. It has become nonsensical. [Interruption.] I am not against the special area development policy ; I am against unfair discrimination in areas worse off than those accorded special development area status.

Will the Under-Secretary tell me how the unemployment in Irvine compares with that in Kilmarnock, or that in Ayr with Paisley? I will tell him. It is very much worse in those areas left out of the special development area scheme. Administrations should be fair in giving help to areas but let us not delude ourselves that a special development area, whether or not it covers the whole of Scotland, would be of any use unless the economy is right. This is what the Government have failed to do. They are getting plenty of advice from everyone about that. The hon. Gentleman should turn his mind to a general reflation in the country. In Scotland there should be massive reflation.

I am not talking about £8 million to be spent over two years an the maintenance of trunk, principal and unclassified roads. That is the sort of joy we got this morning in Committee upstairs from the right hon. Gentleman. And what does it mean? It is less than £4 million a year, and we spent more than that on winter works in 1968. That is all we were offered this morning by the right hon. Gentleman.

A considerable part of even that sum must be paid by local authorities, because the right hon. Gentleman said that 75 per cent. would be the grant for maintenance of principal roads, with a 50 per cent. grant for unclassified roads. I trust that the right hon. Gentleman recalls the cut made in the rate support grant for local authorities of £1 million this year and £2 million next year. What is the net benefit of all this to Scotland? Will it cure unemployment? Of course not, and I hope that the right hon. Gentleman will not rest on this ludicrous position.

We require a massive improvement, and the Government must consider pouring orders into these areas, particularly in relation to the nationalised industries. We did this when we were in power through the Post Office and the steel industry. Only by this means can we ensure that the jobs in the factories that supply the national industries are boosted.

The Government must turn their mind away from what they have done in respect of, for example, investment grants. Lord Clydesmuir recently gave the Government some good advice and his words are quoted in today's Guardian. He is the mildest of men, and when he gets angry with a Tory Government something must indeed be wrong. There is no indication that his words are being heeded.

The whole question of confidence is at issue. The people of Scotland have a Government for whom they did not and would not vote. Hon. Gentlemen opposite dislike the people of Scotland for their political loyalty to the Labour Party. [Interruption.] The Times said this morning : The position in Britain today may well be one where the forces of recession are so deeply entrenched that traditional reflationary measures on their own are powerless to remove them ". We have reached the stage in Scotland when we have become so deeply embedded in unemployment that it will be difficult to get out of it. The Times went on to say that the Government's measures lacked that economic catalyst blithely described as the confidence factor without which no sustainable economic growth is possible". It added : It is within the Chancellor's power to help fill up industry's order books by stimulating demand. His real problem is to convince industry that they will remain full in the lifetime of future fixed investments". Confidence in this Government has gone. It is not a change of policy we need, but a change of Government.

4.54 p.m.

The Secretary of State for Scotland (Mr. Gordon Campbell)

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof : 'recognising the special problems that have arisen in Scotland and the regrettably high unemployment accompanying them, which has resulted from the inflationary policies pursued by the last Government, endorses the measures introduced by Her Majesty's Government, including the creation of a special development area covering West Central Scotland and other powerful incentives for regional development, as relevant and effective for dealing with this situation'. The upward unemployment trend when we arrived in office last year was a depressing fact. In every month since October, 1969, unemployment had been higher than in the corresponding month of the previous year, and the gap was increasing all the time. That was the position from October, 1969. We could, therefore, see what the trend was before we came to office.

Even more depressing was the prospect that the raging inflation at that time would make it difficult to alleviate and put matters right. The high rates of unemployment in Scotland in recent months would not have happened if this inflation had not been rife in 1970 and if there had been some reasonable growth in the economy. But because of rising costs, resulting mainly from unexpectedly high wage settlements, firms have felt impelled to reduce their labour forces and have been understandably cautious about launching into new investment and expansion.

Mr. Donald Stewart (Western Isles)

How can the right hon. Gentleman maintain that inflationary wage settlements were the cause when he knows that average wages in Scotland have been lower than in England?

Mr. Campbell

I will come to that shortly.

During the past year the Government, for this and other reasons, have made it one of their main tasks to do all within their power to curb inflation and its effects on costs and prices by tackling this at its source—inflationary wage settlements. [Interruption] There are some welcome signs that we are succeeding, but the inflationary situation which we inherited cannot be put right overnight.

Mr. John Robertson (Paisley)

Fifteen months is a long night.

Mr. Campbell

As the House knows, I deplore the current high levels of unemployment in Scotland. They are painful in human terms and wasteful because our resources are not fully used. The Government are determined to put this right and the policies and measures which we have introduced, some of which are only now beginning to have effect, are designed to promote soundly based growth, with special emphasis on regional development.

Let us examine the situation in the middle of last year, when inflationary wage settlements were threatening to cripple trade and industry. [Interruption.] There had been a period of compulsory squeeze, which many hon. Gentlemen opposite, among others, opposed and criticised. When the freeze came to an end, the flood from the thaw was allowed to pour over the dam. The result at the end of the day was a situation which was worse than if there had been no freeze.

Moreover, the consequent rise in prices was inevitable, though naturally later in its impact. This has nowhere been more neatly described than in these words : The main fact is that we won the 1966 election by choosing the moment of wage inflation before the prices had really been felt to rise ; and obviously we were seeking to do it again in this election in 1970. That was said in a radio broadcast on 15th April by the right hon. Member for Coventry, East (Mr. Crossman). There is no doubt that the decision to let wages rip in the first part of last year, and to let the inevitable later price rises look after themselves after the election, was a political decision which had most damaging effects on Scotland.

Mr. George Lawson (Motherwell)

My hon. Friends and I do not base ourselves on the words of a journalist. Is the right hon. Gentleman aware that he has simply quoted the words of another journalist?

Mr. Campbell

He was a member of the Labour Cabinet. One is inclined to take account of the statements made, within a year of leaving office, by such a right hon. Gentleman.

Besides grappling with this inflationary situation, the new Conservative Government worked out, without delay, changes to improve the combination of regional development measures ; and on 3rd February I announced that the major part of West Central Scotland was to be designated a special development area, including nearly half the working population of Scotland. We have extended to the whole of the Edinburgh area the intermediate status, which the Labour Government had, on a highly arbitrary and unrealistic basis, given only to Leith. No part of Scotland is now without assistance for industrial development.

The new incentives for development areas include a system of free depreciation which can be carried forward to future years or back to previous years where profits are not made at the beginning ; increases in the rates of building grant ; greater use of the local employment Acts ; and continuance of the 40 per cent. initial allowance for new industrial buildings, which was due to have ended in 1972.

The new taxation allowance for service industries is especially helpful in Scotland, where service industries have, in recent years, felt acutely the discrimina tion against them. Similarly, the halving of S.E.T. this month is likely to have a more favourable effect in Scotland than in any other part of the country.

For the new and very large special development area in West Central Scotland, there are additional incentives for new industry. There is the operational grant for eligible wage and salary costs for the first three years for incoming projects. This grant is being increased from 20 per cent. to 30 per cent. Also, rent-free factories can be made available for five years, instead of two years as in the development areas generally. The combination of incentives related directly to employment is more powerful than at any other time.

I know that some hon. Members opposite hanker for the old investment grants. But they have apparently forgotten that the Estimates Committee, containing a majority of Labour Members, called over two years ago for an investigation into the effectiveness of investment grants, and that the Labour Government of that day duly started such an investigation. The point I ask the House to consider is that, under the previous system, a huge investment grant could be given for a project which had the effect of reducing jobs. The grant was not related to employment and could have haphazard and anomalous effects of that kind.

Mr. Bruce Millan (Glasgow, Craigton)

Why do not the Government publish the results of the inquiry?

Mr. Campbell

The inquiry was started under the previous Government. What they did was their affair, but they announced to the House that they had started an inquiry. We came into office having already stated that we would make this change, because we had made our inquiry before we came into office.

Dr. J. Dickson Mabon (Greenock)

Let us get this absolutely clear. Such a study was commissioned, but it was not published although present Ministers, when they came into office, had this study, and they made this decision before they read the study. Is not that true?

Mr. Campbell

Naturally, in Opposition, we were not just sitting about waiting until we came into office to see the results of the studies of right hon. and hon. Gentlemen opposite. We had been doing our own work and we stated beforehand that on the information and studies which we had made, we thought that the money for development areas could be used more effectively and tied to jobs by other methods. Having said that before we came to office, we went into it very quickly in our review and announced at the end of October new measures and changes which were in principle on the lines of what was the intention before we came into office.

Mr. William Hamilton (Fife, West)

I was Chairman of the Estimates Committee which made that recommendation. It is true that no research had been done into the effects of investment grants. That recommendation was implemented by the Department which made the inquiry. We would like to know how far the Government's policy has been influenced by the recommendation made by that inquiry and whether the Minister will now publish the results of the inquiry.

Mr. Campbell

That is an interesting point which I will certainly look into. I have the report of the Estimates Committee. I found it most interesting reading on this point. I have taken my extract from it.

Mr. Hamilton

It is in the right hon. Gentleman's brief, that is all.

Mr. Campbell

Not at all. This is something on which I have been working for nearly two years. It has nothing to do with the brief. It is something that I have prepared entirely myself. I remember very well that the hon. Gentleman was Chairman of the Estimates Committee. We have discussed this matter before, across the Floor of the House. He and I are especially interested in this subject. I will follow up what he has asked, but I cannot spend the rest of my speech on that matter.

There are now powerful and attractive incentives for industry to develop in Scotland, but they will be fully effective only when there is more mobile industry looking for places in which to settle or expand. The incentives must be accompanied by investment confidence and growth. I agreed with the right hon. Gentleman when he said that. The Government's economic policies as a whole are designed to achieve that situation.

During the past year there has been a limited amount of mobile industry in Britain. At the same time, employers, because of rising costs and falling profit margins, in many cases have been reducing the numbers employed on existing work. This shedding of labour and the lack of growth of the economy have together contributed to the present situation. Without a healthy and expanding national economy it is difficult for the regional economies to grow.

Besides the general measures which I have mentioned, we have taken a number of specific measures nationally to establish a sound framework for growth. We have made two successive cuts in corporation tax, amounting in all to 5 per cent.; after cutting S.E.T. by half, we shall abolish it altogether by 1973 ; and Bank Rate has been cut. All these measures constitute a strong stimulus to firms throughout the country. As business confidence returns, these measures will be seen to encourage and help to finance industrial expansion.

Mr. Tam Dalyell (West Lothian)

Has the Scottish Office made any serious estimate of what has happened as a result of halving S.E.T.? Are there any figures for that?

Mr. Campbell

There are a number of factors. A very important factor is that the cost of an average house is likely to be reduced by £50. A number of other factors, for example, inflationary wage settlements, could have the opposite effect. But the cutting of S.E.T., we are told, is the equivalent of £50 off the average price of a house. [HON. MEMBERS : "Who told you?"]. The industry, as well as others.

One important way in which more growth in our economy can be achieved is by the dynamic effect of entry into the European Economic Community. This is one of the main reasons why the Government are seeking access to that huge market. This can be of immense significance to Scotland in promoting—

Mr. Alex Eadie (Midlothian) rose—

Mr. Campbell

If the hon. Member will forgive me, I have given way a lot. I will give way to him after I have dealt with the passage about the E.E.C.

This can be of immense significance to Scotland in promoting the additional investment we need and in producing more mobile industry looking for areas in which to expand. The removal of tariff barriers between the United Kingdom and the Common Market countries would create more favourable conditions for overseas countries to invest in Scotland.

With the support of industry in Scotland, and through the agency of the Scottish Council, a considerable effort is being made, with Government help, to concentrate and co-ordinate Scottish promotional work abroad. Over recent years one thing has become quite clear and it is more apparent than ever now. That is that many foreign companies, especially American companies are interested in settling in Scotland if we are to be part of the Common Market. But if we do not join, they may decide to settle on the other side of the North Sea in order to be inside that vast consumer market. The stimulus to the British economy as a whole which is likely to accompany membership of the E.E.C. could be of great benefit to Scotland.

Our regional development measures for attracting new investment to Scotland are in full accord with one of the major objectives of the E.E.C. as stated in the Preamble to its Treaty, namely, to ensure harmonious economic development within member States by reducing the existing disparities between the various regions of those States.

Moreover, regional policies of the kind which we have for Scotland are being pursued by present members of the E.E.C.—for example, Italy and France. I have myself made a tour of the new steel works at Taranto in the south of Italy ; and further steel works development is now being carried out in that region.

When considering in the coming weeks the momentous decision to be taken by Britain we should have in mind that the effect of the industrial dynamic is likely to be beneficial to Scotland as it will be to other parts of the country. It is not surprising that the Scottish Council—the right hon. Gentleman was quoting Lord Clydesmuir a good deal earlier this afternoon—supports British entry. So did the Study Group which was set up by the Scottish C.B.I.

Indeed, the right hon. Member for Kilmarnock (Mr. Ross) himself, when he was Secretary of State two years ago, seemed to be of the same view. In a Written Answer he made this statement :

"A detailed analysis of the consequences of membership for particular parts of Great Britain is not practicable but the Government are confident that in the long run membership will be of economic advantage to all parts of the United Kingdom."—[OFFICIAL REPORT, 16th July, 1969; Vol. 787, c. 113.]

Mr. Eadie

Was the right hon. Gentleman in the House earlier this afternoon when the Prime Minister confessed that no regional policies had as yet been worked out by the E.E.C.? Therefore, does he not agree that this has flung open to a considerable extent the question of regional policies inasmuch as, if we pay too high a price to enter, the Government, in allocating financial resources, will not be able to pursue financial policies in the way that the right hon. Gentleman is suggesting to the House?

Mr. Campbell

I was here earlier and heard that exchange. I was referring to what members of the Community are doing now individually. The fact that they have not finalised their own regional policies as a group together means that we as members can take part in the discussion on and eventual formulation of those policies. I only wish that they had left their fishing policies to be dealt with after our entry, because life would have been made a little easier for us if those policies had been left open until we and others were members and could have done something about them.

Mr. James Hamilton

The Secretary of State referred to the Scottish Development Council and the C.B.I. Will he tell us now whether both of those bodies are in tune with the Government's policy as regards the departure from investment grants and the move towards free depreciation?

Mr. Campbell

As I have said before, different industries have different views. There are some industries that have preferred the investment grant system. Obviously capital-intensive industries in some cases benefit from them. Other industries prefer the new system. I have taken account of the different views, but I am not aware of a particular view being stated by either of these bodies as a whole to me. These bodies have been concerned with the major questions of unemployment, what can be done to improve investment confidence, and the measures to be taken to use fully the resources of Scotland.

I turn now to the question of Upper Clyde Shipbuilders which the right hon. Gentleman mentioned.

Mr. Robert Maclennan (Caithness and Sutherland) rose—

Mr. Campbell

I have given way a great deal and I must move on, otherwise I shall take up too much time. [HON. MEMBERS : "Give way."] If the hon. Gentleman wants to talk about the Common Market before I leave that subject, I will give way.

Mr. Maclennan

The right hon. Gentleman said in his remarks on the subject of the Common Market, quoting my right hon. Friend the Member for Kilmarnock (Mr. Ross), that it was expected that in the long term it would be for the benefit of Scotland. Many people would not dissent from that. What we are concerned about is the short term. Has the right hon. Gentleman noticed today that the investment intentions of industry show the most depressing downturn and the level of production is falling? Is the right hon. Gentleman making the strongest representations to the Chancellor to reflate quickly, because, if he does not, Scotland will not be in a healthy state to withstand any further strains?

Mr. Campbell

As regards the short term, I believe that if Britain decides to enter the Common Market, and when this becomes clear, this in itself will start the confidence in investment which we look to, because firms which are now waiting to see which way we are to go will start making their plans. So I think that there are good short-term prospects in this. The measures which we have taken already since we have been in government are intended to and are now beginning to have their effect in creating—

Mr. Lawson

They are not.

Mr. Campbell

As I explained, it takes time for all measures to come into effect. For example, some of the Budget measures are starting to have effect only this month. Therefore, unfortunately, there is a time lag before such measures can become effective.

I must turn now to the question of U.C.S., which the right hon. Gentleman mentioned, because the right hon. Gentleman has again made the ludicrous proposition that U.C.S. has gone into liquidation as a result of a deliberate Government plan over several months. The right hon. Gentleman is talking utter nonsense. I want to make that quite clear. I am glad to note that the Press realise now that the suggestion is ludicrous.

That U.C.S. should have gone into liquidation now could only add to the troubles and burdens of the Government. It is the last thing that we could have wished. It is happening in an area which has special problems, as we have recognised by designating it as a special development area.

Since U.C.S. was brought into existence by the right hon. Member for Bristol, South-East (Mr. Benn), whom I am glad to see here, when he was Minister of Technology, it has been in difficulties. It has had a succession of crises when it has come to the Government for financial help. Between November and February last such a crisis occurred, but it did not receive publicity, and publicity would not have helped U.C.S. The Government were able to assist U.C.S. at that time with the detachment of Yarrow's and by agreeing to a substantial writing down of its capital.

Mr. Dick Douglas (Clackmannan and East Stirlingshire)

Never completed.

Mr. Campbell

It was agreed at that time. U.C.S. then said that it was out of the wood and could see a viable future.

I have with me the U.C.S. magazine of March of this year. It carries optimistic comments such as those we were also reading in the Press in March and April. I was glad that all seemed to be well again. There was in that magazine the following passage written by its managing director : The last Government made it quite clear that we could expect no further aid, and the present Government have made it equally clear. We must stand on our own feet, and through our own efforts go forward. That was last March.

Later, when he was asked in a television interview what had gone wrong, the managing director said this : I think it is inherent from the formation of the group. The group was formed really with insufficient working capital. When the last crisis blew up so quickly early last month, it was clearly a shock to the board of U.C.S. themselves. As I stated in the debate on 15th June, it was the result of an urgent financial review which they had arranged. The board clearly did not themselves know their true financial position until they received the report of their special review on 7th June.

It has been suggested that the Government should have known, even if U.C.S. did not, because of the S.I.B. director on the board. Let me here quote from the evidence given by the right hon. Member for Bristol, South-East before the Select Committee on Scottish Affairs on 24th June, 1969. The right hon. Gentleman was dealing with the question of communication between U.C.S. and the Government. He said this :

"In the case of Mr. McKenzie, he has been the S.I.B. director dealing with the S.I.B. But it has never been our objective that we should deal with the company through the government directors. The government directors are directors of the company. They have special responsibilities which are understood. But I think it would completely undermine the authority of the Chairman if he felt that one member of his Board was dealing with the Government or with the S.I.B. without his being consulted. Therefore, we have always dealt, in so far as it was necessary to do so, directly with the Chairman."

Mr. Anthony Wedgwood Benn (Bristol, South-East)

The right hon. Gentleman quotes from an answer which I gave to the Committee in response to a question about whether I dealt with the company through the Government director. I gave the absolutely correct answer, and that is what he read. What the right hon. Gentleman has not dealt with in that connection is whether it is the duty of the Government director to inform the Government of circumstances which arise. Of course, Mr. Mckenzie so informed me at earlier stages. It is inconceivable that the Government did not know what was happening, and they were, in fact, following a plan worked out by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) in December, 1969.

Mr. Campbell

I was quoting the right hon. Gentleman simply to show that he had stated to the Select Committee the normal means of communication, which were the normal means of communication also for this Government—Minister to chairman and board. I agree, also, that there was nothing to prevent the S.I.B. director expressing his personal view if he had to. But what I am pointing out is that it was perfectly clear that the board of U.C.S. itself was not aware of its financial position. It instituted the financial review, at the instigation of the S.I.B. director, and it was not until the result of that was produced that it suddenly realised what the company's position was. I think that the board was making its optimistic remarks in all good faith in March, April and May. I believe that it really thought that it was out of the wood, until it suddenly had the further review and found that the company was in deeper trouble than before.

Mr. Douglas

I realise that there have been a number of interruptions, but there is an important point to be made here. The essence of the association between the S.I.B. director and the Government has not fully been unfolded, because the initial impetus to go into liquidation goes back to October, 1970, when the S.I.B. director communicated directly with the Department and gave a very pessimistic impression to the Department of the company's future. In so far as that led the present Government to withhold the underwriting of credit, that precipitated the crisis. The Government are responsible for directly communicating with the S.I.B. director and, indeed, for overruling and over-riding the views of the S.I.B. on credits at that time.

Mr. Campbell

The S.I.B. director was then doing exactly what the right hon. Member for Bristol, South-East (Mr. Benn) said he was free to do, and the crisis which I have just described was overcome. The Government were able to help by the detachment of Yarrow and by the substantial writing down of capital. Upper Clyde Shipbuilders was itself quite satisfied that it was out of the crisis and out of the wood ; it thought that it was in a better position than ever. I am glad to correct that misapprehension, and I must now get on.

In the same proceedings of the Select Committee, on the question of the future possible liquidation of U.C.S., the right hon. Member for Bristol, South-East said, on 24th June. 1969 : … we have never taken the view—it would be quite wrong to take the view—that at whatever price U.C.S. or any other company in the shipbuilding industry would be kept alive ". I quote that because it is on the record, it is quite understandable, and the Select Committee heard the right hon. Gentleman say it. In the light of what he has done and said two years later, I think it right that the right hon. Gentleman should recall what he said at that time.

Mr. Benn

The right hon. Gentleman quite properly quotes what I said, that at no stage were we prepared to support any company regardless of its prospects of viability. The criticism which he has to face is that at higher cost than the cost of support he is letting U.C.S. go into liquidation. He is paying a higher price for it than giving the company the resources to allow it to move into viability. That is the charge which he must face, and he has made no attempt to answer it.

Mr. Campbell

That is the point to which I am now coming, and I am obliged to the right hon. Gentleman for raising it. I must make clear again that, last month, it was not just a loan of £6 million which was needed. The board of U.C.S. said that it hoped that the company could become solvent again if the Government were prepared to provide £5 million to £6 million as grant or equity, not as loan, and if its creditors would accept 33p in the £, which would have meant a further £5 million or so to it. But even then there was, unfortunately, no clear prospect of when the company could become solvent again, if at all. A great deal more than £6 million was involved.

I have said that before, but there was so much noise in the Chamber at the time that, unless hon. Members looked at HANSARD the next day—and some of it may have been missed—they might not have had the point clear, and I am glad to make it absolutely clear now. It was not just a matter of £6 million.

Mr. Benn

How does the right hon. Gentleman define solvency? The definition given by the Secretary of State for Trade and Industry was not one which has ever been applied in business in any similar circumstances.

Mr. Campbell

I think that the chairman of U.C.S. and my right hon. Friend were themselves in doubt about what they were meaning by that. But I cannot pursue the details of it now. I think that the right hon. Gentleman has got my point. The £6 million has been bandied about as though that was all that was required. Unfortunately, it was a great deal more than that.

The Government are determined to bring about a successful reconstruction on the Upper Clyde. They are providing funds now to cover pay, including holiday pay. I am myself meeting the group of advisers for discussions later this week. Last week, I had the benefit of discussions with the provisional liquidator, Mr. Robert Courtney Smith, who, I believe, has the confidence of everyone concerned. It is important now to concentrate on the future.

I turn now to Hunterston, and the question raised by the right hon. Member for Kilmarnock, to draw attention again to its importance for the development of the West of Scotland. It is true, as he said, that, over two years ago, on 7th July, 1969, I initiated a debate in the House in Supply time on the importance of the Firth of Clyde and the unique facility of deep-water sheltered berths there. My hon. Friends and I drew attention to these and other assets, and their particular importance for the steel industry, besides providing a basis for a new industrial complex in Ayrshire.

I supported the interim report of the group working on Oceanspan during that debate, before the Oceanspan Report itself had come out. Sir William Lithgow and Professor Nicoll were working on the matter but had not yet produced a report, but they put out an interim report which received my full support. Soon after I came into office, I was presented with the report of a public planning inquiry. My main decisions were affirmative, not negative. I lost no time in taking the planning decisions to allow a deep-water port and an ore terminal and, by zoning the land for industry, to leave the way open for a modern integrated steel works in due course.

These decisions were announced last December, and thus the potential and availability were proclaimed in due time. The bodies and the corporations concerned are now working out the proposals.

We should not overlook, either, the way in which defence establishments can use our resources in Scotland. Besides contributing towards our country's defence, these establishments provide a considerable number of jobs of different kinds. The rocket range in the Hebrides and other establishments, such as the Faslane base, have shown that these establishments can usefully contribute to our Scottish economy.

I have some experience of this myself as there are two Service airfields in my own constituency which play an important part there. Although one of them has had what were at the time the noisiest, indeed, the most deafening aircraft in the world, my constituents were wise enough not to object, since they knew what was good for the area's economy. The complaints have come only recently and stem from anxiety that one of the stations may be somewhat reduced.

Mr. John Brewis (Galloway)

My right hon. Friend will be aware that in my constituency we have considerable experience of defence establishments extending over about 30 years, and he will know that some establishments are much worse than others.

Mr. Campbell

I am aware of that, but I think that right hon. and hon. Members on boh sides recognise that there is practically no establishment, industrial or defence, which does not, when it arrives, cause damage to someone, whether through smell, noise or visual effect. Unfortunately, there are such disadvantages. What we must do is try to steer what will be helpful and useful developments to the most appropriate places and the places where they are needed.

I believe that all informed observers of the siutation which I have described agree that, besides economic measures, including regional development incentives, a public works programme could make a significant contribution towards alleviating unemployment in the coming months. The Government have been con- sidering this, and we have been able to identify such work, over a variety of fields, which can usefully be undertaken.

I can now announce a major new programme in this field, which can be divided into two schemes, to increase expenditure on public works in Scotland up to March, 1973. The first is the one about which I informed the Scottish Grand Committee this morning. I propose to authorise a special roads scheme for Scotland amounting to £8 million in the current financial year and the next. It will consist of £2 million of additional expenditure on trunk roads and £6 million on other roads, towards which special grants will be available in Scotland only.

Second, there are works which can be carried out wihout any special grant arrangements. My Departments will consider with the local authorities and other bodies directly responsible further work of a capital nature, beyond what is already programmed, which they could undertake and substantially complete by March, 1973. This could include work on schools and other educational buildings, on hospitals, in agriculture and fisheries, and for social work, police, fire, environmental and other local authority services. I have provisionally estimated that all the possibilities from the two schemes could between them yield a total of about £33 million of additional work.

I intend to stimulate the maximum possible amount of work to be done in the remainder of the current financial year, so consultations will be pressed ahead with all possible speed. We hope to get some work approved and started even before those consultations are finished. For example, in education we can give immediate approval to a substantial number of improvement and replacement projects which could not be accommodated within normal programmes.

Mr. Galbraith

I am very interested in my right hon. Friend's helpful announcement, but he left out a very important aspect. Since industry pollutes, could not the grants be given particularly for anti-pollution work, and thus give us the best of both worlds?

Mr. Campbell

I will certainly bear my hon. Friend's point in mind in the consultations.

In addition, where we can provide a direct stimulus to the Scottish economy we have not hesitated to do so. The special house improvement grants for the next few years, proposed in legislation now before the House, are intended to encourage more work of a kind which, in addition to its value in providing better housing conditions, will provide work quickly for the construction industry.

We have been looking very carefully at housing finance. The Government's housing policies were fully discussed in the Scottish Grand Committee recently. Our proposals for housing finance for Scotland will be set out in a White Paper to be published tomorrow. The reforms proposed are somewhat different from those proposed for England and Wales in the White Paper published today. The Scottish White Paper will end some unavoidable uncertainty, and provide for progress in housing in both the private and the public sector.

Dr. Dickson Mabon

The right hon. Gentleman has referred to house improvement grants. Let us get the figure of £33 million clear—the £8 million on roads and the other £25 million. Does it include the house improvement grants scheme? Is it entirely additional to programmes already announced?

Mr. Campbell

It is entirely additional to the programme I have announced, to the special grants included in the Bill which is being discussed on the Floor of the House.

Dr. Mabon

Do I take it that £8 million is on roads, and is divided into two sections, part of which is financed by the local authorities, and that £25 million goes to local authorities? May we have more detail on how that will be allocated between central and local government expenditure?

Mr. Campbell

I cannot give further details now. We are going into consultions with the local authorities on how it can be used, and we will provide the House with the information at the earliest opportunity. I wanted today to announce the broad lines of the programme.

We have also recently made arrangements to assist Glasgow to tackle some very real problems. These will produce further work for the construction industry. First, we are proceeding to establish a new community at Stonehouse in Lanarkshire, with an initial target of about 10,000 houses. Second, the Scottish Special Housing Association is to undertake the construction of about 7,000 additional houses for families coming out of Glasgow. Third, up to £1 million a year will be provided for five years to assist the Glasgow Corporation to improve the general environment.

In economic matters there is always a considerable time gap between the introduction of measures and their showing results. But there are some encouraging signs. Industrial development certificate approvals, both for the West Central Scotland S.D.A. and for Scotland as a whole, have turned upwards in the first six months of this year. Though this is too short a period for any firm judgment to be made, this is encouraging after the downward trend in recent years.

Another very significant and encouraging factor is that there are indications that the discovery of oil in the North Sea off the Scottish coast will prove a commercial proposition.

Mr. Ross

Could the right hon. Gentleman give us the figures for the I.D.C.s?

Mr. Campbell

My right hon. Friend the Minister for Trade will provide figures later when he winds up the debate. I said that there were encouraging signs, and in a speech that is already too long, I am giving general indications. The particular points raised will be dealt with later.

If B.P.'s tentative plans for bringing oil ashore from its Forties field materialise, Scotland could benefit considerably. If the flow of oil is up to expectations, it could provide a secure base for the planned expansion of the Grangemouth refinery to 18 million tons a year, making it one of the largest in Europe.

Already there are signs that the exploration activity off the North-East coast is generating activity in that area of Scotland, where shore installations, pipeline construction, servicing facilities, housing and other provision for oil industry personel would be required. The North-East Scotland Development Authority has shown admirable initiative in bringing together the oil companies and the local interests concerned at an early stage.

It is also encouraging to note that Scottish capital is beginning to participate in the groups applying for licences. The recent Government announcement inviting applications for licences for the exploration of large new areas included for the first time 16 blocks in very promising areas, including Scottish waters, for which competitive tenders are invited. This is expected to stimulate exploration activities still further. My Department will be actively engaged in support of these promising developments.

I have made it clear that we have been facing a difficult situation in Scotland. In the relatively short time we have been in office, we have taken a number of major steps to put the situation right, both centrally and regionally. My announcement today of a large new public works programme is another measure to help, and is designed for the immediate future. But putting the situation right will take time. It is essential to discern the opportunities available in Scotland and for Scotland, as well as the special problems which we face. It is our firm purpose as a Government to see Scotland clearly in her traditional place among the leading industrial nations.

Several Hon. Members rose—

Mr. Speaker

Order. The debate began at seven minutes past four. We have had two speeches in about an hour and a half. I am stating a fact and not making a complaint. Over 20 hon. Members wish to speak and we have about 3½ hours before the Front Benches will want to intervene again.

5.39 p.m.

Mrs. Judith Hart (Lanark)

The first thing to be said in commenting on the Secretary of State's speech is that he seems to under-estimate the degree to which he is in considerable political trouble. I have never heard a more complacent speech in a situation like the present from the Government benches. We see that the right hon. Gentleman is in the more serious trouble when we look back at his predecessors. I recall the period during the 1950s and early 1960s when his predecessors, including the present Minister for Trade, were in office, and the worst unemployment situation that arose during that time, when in the middle of a rather difficult winter Scotland had a figure of unemployed which reached the 120,000 mark. We remember the tremendous distress which even the Government of that time were feeling and which they talked about.

The right hon. Gentleman may refer in the Amendment to "regrettably high unemployment", but we have heard hardly a word of regret from him today. On the contrary, we have heard a good deal of complacency and the kind of promises that we cannot take seriously any more in the light of a year's experience of this Government. We have heard little of any real sense of regret or of any real sense of the urgency which has arisen in the Scottish economic situation in the 13 months that he has been Secretary of State.

The period of the 1959–64 Conservative Government was bad enough for Scotland—a time of Conservative fuel policy and pit closures, of Conservative transport policy and Beeching rail closures—but it was a time of Conservative innocence compared with what has been deliberately inflicted on the Scottish economy in the past year. We are all fully aware of the figures. The right hon. Gentleman, the Government and the people of Scotland are facing the present level of unemployment against the prospect of much more to come and of unknown risks to come which we cannot calculate. Rolls-Royce and U.C.S. are still at risk. More redundancies have been announced and more are in the pipeline every week. Soon the school leavers will be added to the ranks of the unemployed. And there is next winter to come.

In his Amendment and in his speech today, the right hon. Gentleman not only admits but takes some pride in recognising that the "regrettable unemployment" is a direct consequence of the Government's deflationary policies. That is the factor which we have never heard coming from a Conservative Government before. They admit that it is not just their failure to take necessary action but a deliberate act of policy to create deflation, whatever its effect upon those parts of Britain which urgently need more employment rather than a taste of Tory deflation. He regrets the consequences, but what we want to know—and he has not told us—is what kind of an argument he is putting up in the Cabinet. Is he arguing for or against deflationary policies? Is he arguing that reflation is overdue? I suspect, from what he said today, which went a little beyond the natural Cabinet loyalty of a Secretary of State for Scotland towards his economic colleagues in the Cabinet, that he is one of the firm believers that deflation has not gone far enough, that he is not arguing inside the Cabinet for the economic policies which are essential if we are to have any kind of upturn in employment in Scotland.

The right hon. Gentleman seems to be limiting himself to fighting for his programme of public works. Of course, it is splendid to hear that at least he is converted to Keynesianism, even if he is not converted yet to anything which takes us beyond that point. He is at least ready to admit that there can be Government intervention, even if it is only in the Keynesian sense of putting men to work on roads and building. He suggested that this programme will be a massive contribution to resolving the Scottish problem of unemployment this winter.

He should remember, however, that in a public works or building programme two kinds of people are required. First, highly skilled building workers are needed. That will be a good thing for the building industry and to the extent that there are skilled building workers out of work, this will be good enough. Secondly, large numbers of unskilled workers are unemployed, and they are needed in such a programme. But a high proportion of highly skilled craftsmen from other industries are unemployed and the right hon. Gentleman's public works programme can offer little to them. The latest figures from the area of my constituency—Lanark—show that 47 per cent. of the unemployed in the Lanark employment exchange area are in the skilled category, and public works programmes are not the kind of thing which they are either anxious to take or which they should be offered by a responsible Government seeking to use in the community the resources of skill which they possess.

The trouble with the right hon. Gentleman and his Cabinet colleagues is that they are prisoners of their own political philosophy in this matter. In their elec- tion manifesto, on the general principle governing these matters, the Conservatives said that they rejected the detailed interventionism of Socialism. But what Scotland is proving goes beyond this, with 121,000 unemployed and the prospects of having more next winter, and goes beyond even the fact that, in the last year or two of the Labour Government, we did not reduce unemployment as much as we would have liked. What is being proved is the total failure of a free market economy to exploit resources and provide full employment, even assisted by the financial incentives of regional policies—certainly those of the present Government.

The right hon. Gentleman implied—and, indeed, said when he offered us his remarks about entry into the E.E.C.—that growth is an essential precondition of economic health in Scotland. Of course that is so. But I question his assumption that entry is a recipe for that kind of economic growth. We can more properly debate this matter next week, but the belief is growing that the possible cost to our balance of payments will be so great that entry into the E.E.C. will be a recipe for minus growth rather than higher growth. But that is a matter on which there are differing opinions. The essential difference between the rate of growth of the last two or three years of the Labour Government, which was not as high as anyone would have liked to see, and the rate of growth today, which is even lower and may this year even be minus growth, judging by investment trends, is that we were establishing a sound balance of payments surplus as a basis for growth. The present Government inherited that sound basis and they have no excuse for lack of growth. Nevertheless, they make the excuse that they have to keep wages down.

When the right hon. Gentleman talks about the inflationary process of a year ago, what he is saying is that the Government decided on low growth, even if it means stagnation and minus growth, in order to keep the standard of living of the working people lower, because to do otherwise would be incompatible with their other economic and social objectives. Scotland is suffering from deliberate deflation caused by a political philosophy which takes that point of view.

It is no good the Secretary of State talking about "special measures" and "creating a sound framework for dynamic growth" if he is not prepared to pursue the kind of policies which are the only answer in this situation. The first essential for Scotland, therefore, is a programme of reflation, with the recognition that, in order to prevent the spiral of wages and prices, a prices and incomes policy is necessary. If that is to be achieved, it can be done only on the basis of a contract with the trade unions, and that will be achieved only on the basis of their understanding that the Government, pursuing a prices and incomes policy, are also pursuing social objectives that they wish to see accomplished. I do not think that the Conservative Government—and this is their dilemma—can ever enter into that kind of social contract with the unions.

Within the context of growth, there are special regional factors required which need to go far beyond anything which we have developed over the last 10 or 20 years. We need the right kind of incentives. I endorse everything that my right hon. Friend the Member for Kilmarnock (Mr. Ross) said about the desirability of investment grants rather than allowances and about the regional employment premium. We need the right kind of financial incentives, and very tough and effective industrial development certificate control. One question which the Government will have to answer in next week's debate is how they can reconcile a tough I.D.C. policy, which is a pre-condition of regional development, with the free flow of capital involved in the Treaty of Rome if we go into the Common Market. Much more stress should be laid on preferential lending rates and preferential bank rates. We have had those from time to time in the Scottish economy. They can be one of the most effective measures in providing finance for industrial development within Scotland.

We also need new emphases in public ownership, and again they go in exactly the reverse direction to that which the Government are likely to pursue. Far from hiving off and preventing the diversification of nationalised industies, we need a deliberate policy of not only encouraging but directing them to diversify into the regions where employment is needed. This is the one sector where Government intervention can be guaranteed to work because the Government control the financial and marketing forces involved. I fear that the Conservative Government will never be able to find the right answer within their philosophy. For example, I should like the National Coal Board in Scotland to go into system building. This matter was under discussion when I was in the Scottish Office. This would be perfectly logical. We could have done with a sound, Scottish-based system building firm in Scotland. The Coal Board could have filled this rôle. I should like new public enterprises to be created—and this has been mooted in a number of Labour Party policy statements—in other directions as well as by diversifying the nationalised industries. All of these developments are possible only within a framework of growth.

I should have liked to make a number of constituency points. I will merely mention that, as the Secretary of State knows, I have been having discussions with the Secretary of State for Trade and Industry about the exclusion of Lanark from the special development area policy. I still have hopes that we shall reach a satisfactory conclusion on that matter, so I will not burden the House with it.

The Secretary of State for Scotland does not seem to realise the degree of his own political difficulty. He does not seem to understand that he is creating for himself the reputation of a Secretary of State who has done more damage to Scotland than any other since the war. The right answers are so diametrically opposed to the policies which he and his colleagues are pursuing that the question is not how long must we bear the burden of increasing unemployment in Scotland but how long must we bear the burden of the Secretary of State and his colleagues?

5.55 p.m.

Mr. Michael Clark Hutchison (Edinburgh, South)

There is no doubt that at present and for some years past unemployment in Scotland has been greater than it should have been and that prosperity has not been all that it should have been. Since I have been a Member of the House, Governments have attempted various remedies, but they have never had final and lasting success.

I find it difficult to pinpoint what is wrong and why we should not and have not done better over the years. I do not think it is anything to do with the national character. We are an able people with plenty of skills. I do not think it is anything to do with the political set-up or political beliefs. It is nothing to do with being workshy. If anything, the Scots are more hardworking than most people in the world. I do not think the education system can be blamed. We do not lack basic self-confidence.

Fortunately, many areas are reasonably prosperous and many firms are doing quite well, particularly those dealing with finance and insurance and the banks ; they should not be overlooked. I am inclined to think that the root cause in some industries and firms has been bad management. The story of Upper Clyde Shipbuilders is very sad, and there have been faults on both sides. I do not think that the management can be entirely acquitted. However, this does not provide us with an answer or with a line of action for the future.

I have not had a great deal to do with Scottish industry over the years as my work before I became a Member lay elsewhere. But not long ago—and here I must declare my interest—I became an outside director of General Time Ltd., the makers of Westclox and other brands of clock, whose factory is in Dumbarton. The factory is a subsidiary of an American organisation, but we work entirely on our own and employ 900 people, half of whom are women. The executive management is first class and the workpeople are excellent. We export on a considerable scale to South Africa, Australia and elsewhere. The Americans have such confidence in this company that they have given up operating the sales to Europe, including the Common Market, and given the responsibility to us in Scotland. The firm is expanding.

I do not know what lessons can be drawn from that. It has nothing to do with me because I have been with the company for only a short time. But if this organisation can do the job, why cannot others? Incidentally, the Americans decided that we should sell to Europe long before any decision on the Common Market was made. We are not interested in the Common Market. We can beat the Common Market countries, whatever they do.

If I were asked why this company was in a reasonably happy position, I should say that it was because people have confidence in its management. If the workpeople have complaints or grouses, they know that they will get a square deal. The technical management is highly intelligent, and great care is taken to tell all employees exactly why things happen and what is proposed. People like to know what is going on in an organisation, and I think that in that respect relations are often very poor.

I am sure that there are many companies in Scotland which are equally good or perhaps better than the company to which I have referred. I hope that managements will always try to be imaginative and efficient.

Mr. James Hamilton

This is an important point which I have made several times. Does the hon. Gentleman agree that, where there are good industrial relations, there are good communications from boardroom level to shop floor level? Does he further agree that the Industrial Relations Bill could prove to be a handicap to companies of that kind?

Mr. Clark Hutchison

I do not know enough about the Industrial Relations Bill to know all its provisions or how it will work. I know only that in the company in which I am interested we have good relations from the board to the lowest rung on the ladder.

I commend my right hon. Friend the Secretary of State for the measures he has taken for the well-being of our country. He has not been sparing in his hard work and devotion to this job. Throughout the years we have been playing about with all sorts of remedies and devices to improve the position of Scotland. We have had depreciation allowances, Local Employment Acts, development area status, and so on. Attempts have been made to meet the difficulties and to recognise our geographical position and our distance from large markets. But I often wonder whether we should not scrap the whole lot and go over to an entirely new system of tax differentials.

For a long time I have believed that if Scotland had a lower rate of income tax and company tax than the rest of the Kingdom she would prosper. This would not be difficult to administer. I know the Treasury would bristle at the idea, but surely the Treasury can be overruled. I have in mind that people who are genuinely resident in Scotland for the major part of the year, and companies which produce 80 per cent. of their production in Scotland, should pay a lower rate of tax. I commend this system, which would give a tremendous boost to Scotland, would be easy to operate and would be easy to defend.

I suspect that my right hon. Friend the Member for Argyll (Mr. Noble) is not averse to this idea, but whether my right hon. Friend the Secretary of State will be able to carry the day, I do not know. I may be told that this system would not be possible if we went into the E.E.C.

Mr. James Hamilton

Hear, hear.

Mr. Clark Hutchison

My reply to that is that I do not want to go into the E.E.C. Such action in my view would be detrimental to industry in Scotland and to agriculture and fisheries. In any event, I much prefer that we should wrestle with our own problems in our own way and have them under our own control. Entering the Market would take away our freedom of manoeuvre and power of decision, and so from Scotland's angle, quite apart from the United Kingdom's angle, I would oppose it.

I have endeavoured briefly to put forward some ideas which I hope my right hon. Friend will look at seriously.

6.4 p.m.

Mr. Ian Campbell (Dunbartonshire, West)

I perhaps go with the hon. Member for Edinburgh, South (Mr. Clark Hutchison) on the Common Market, and I entirely endorse the remarks he has directed to the Westclox factory which is in my constituency. I know of the excellent relationship that exists. The factory has a 100 per cent. union shop, and this is perhaps relevant to the intervention of my hon. Friend the Member for Bothwell (Mr. James Hamilton).

I should like to speak about the closure of the Plessey factory in Alexandria. The hon. Member for Edinburgh, South was speaking about the good industrial relations in the Westclox factory, but just across the way in the Plessey factory the shop stewards were called together two hours before they went on their summer holidays and told that the place would close at the end of August. This is not the best way to conduct industrial relations. I want to speak of Plessey not because of the high unemployment—rising to one in eight males unemployed—which will increase because of the closure, but because people of all shades of political and industrial opinion are worried about the way in which the Plessey closure came about.

Six months ago the factory was a Government factory. My right hon. Friend the Member for Kilmarnock (Mr. Ross) explained the trouble to which the Labour Government went when he was in office to try to get new work into this Royal Naval torpedo factory. It is looked upon locally as a public scandal that a firm which was given many incentives to come into the area should, within six months, disappear. We know that the Government's policy is non-interference in industry, but during the last year there has been interference with Rolls-Royce, which was said to be because of defence. Not long ago there was the hiving-off of Yarrow from U.C.S.—this, again, is the defence section of U.C.S. Had it not been for the reaction of the work people, public opinion and Parliament to the announcement of the liquidation of U.C.S., the Government would not have stepped in so quickly to do something about it.

Plessey was born of Government involvement, but the previous Government's baby is being treated by this Government very much like a step-bairn. I will briefly run over the history of the firm and how the tax-over came about. About 20 months ago the R.N.T.F. was being set up to produce an under-water missile. A large new clean area had been established in the factory—one of the finest in the country—and new machine tools had been ordered. Unfortunately, there were some bugs in the design of the torpedo which could not be ironed out, so work had to be stopped. The Government found the firm Plessey, which was prepared to take over this large factory. It fitted the specification of a growth-type firm, able to take over the machining side, use existing labour in the large machine shops within the factory. It set up a numerical control section, which was taken over from Ferranti of Dalkeith, together with many of the Dalkeith technical people. Now we see what has happened to this Scottish product in a new growth industry.

An interesting point about the start of the operation in Alexandria was that the Plessey operation was going on hand-in-hand with the run-down of the torpedo work. The torpedo work came under the restrictions of the Official Secrets Act, but the factory was divided into units with different firms working within the same building.

On 20th July, 1970 the Under-Secretary of State for Trade and Industry, in reply to a Question I asked about Plessey and the employment situation, said that the firm intended by the end of 1970 to employ 500 people and at the end of 1971 to employ 1,000 people. The company advertised locally for labour and said that its ultimate aim was to have 2,000 to 3,000 people employed. It will be realised what a blow it has been to the area that this factory is to be closed.

The company's Press release on the closure mentioned three significant facts. First, it said : This reduction in demand—which has occurred rapidly since the end of 1970—is due to the effects on industrial investment of cost inflation and the general economy, both in the United Kingdom and internationally. We on this side of the House feel that one of the reasons for the fall-off in the machine tool industry has been the change in Government policy and investment grants. Anybody with any connections with industry will realise that this is very much the case. Because of this change in Government policy, people are not buying equipment.

The Press release also stated : … Plessey has reluctantly decided that it is no longer possible to support on an economically viable basis the supplementary numerical control operations which were started in Scotland last year, when market forecasts still indicated a possibility of expansion. The hon. Member for Banff (Mr. W. H. K. Baker) said in the Scottish Grand Committee this morning that it was impossible that the change in Government could have led to a changed situation in industry since the present Government have been in office for only a year. But the Press release shows that Plessey at the end of 1970 thought that its economic trends were on the right lines, but its production has fallen so quickly since then that the company has had to close the business.

My right hon. Friend the Member for Kilmarnock (Mr. Ross) has reminded us that the company has been sending work south. On that point the Press release said : The company, therefore, very much regrets it has no alternative but to cease operations at the Argyll Works. Alexandria, Scotland, in order to maximise and safeguard its main resources in numerical control which have been firmly established in the South of England … This is all too often the story when a firm has establishments in areas other than Scotland.

When the closure was announced, I wrote to the Secretary of State for Trade and Industry and put certain points to him. I should like to put those matters on record since they are worrying the unions and other people in the area. Inducements were offered to the firm to go to Alexandria. The normal inducements could not be offered because the equipment was already in existence. One point that should be made clear relates to the terms of sale and the inducements which were offered to Messrs. Plessey by the previous Government.

In lieu of grants for equipment, what was the price paid by Plessey? This was a Government asset which was being set aside, and the job was being offered to this firm on the cheap. I should like to know what is the situation now that the firm has decided not to carry out its obligations. Certain Government contracts for torpedo work were being carried out in Alexandria, and I should also like to know what steps are being taken to transfer this work elsewhere, and whether it is to go south of the border.

A most important point on which we should like a clear answer relates to the decision about reacquiring these premises. It is not just a matter of negotiating a price with Plessey. It must be made clear that the Government should take over this asset on the terms of sale which were offered to the firm ; otherwise this Government asset will be lost and the firm may make a profit out of a situation which has arisen because a defence project involving the R.N.T.F. has been ended.

I have already raised the point with the Government on a previous occasion when part of the Plessey works was being closed. I received a reply from the Under-Secretary of State for Development at the Scottish Office, the hon. Member for Ayr (Mr. Younger), who I find very helpful in giving advice on these matters. The hon. Gentleman said in his reply that the Government were not prepared to take over these premises mainly because three advance factories are being constructed in Clydebank at this moment. I hope that when these factories are completed they will soon find tenants, but the people in Alexandria in the Vale of Leven will now have to find work in the area.

This is a close-knit industrial community and the people feel that they should be able to find work in the vicinity. Even though many workers travel to Singer's and John Brown's premises in Clydebank, work is needed in Alexandria itself. The Government should look again at acquiring these premises so that they can let them, with all the benefits of the special development area which the Government stress in their Amendments. It may be said that this large factory does not need to be re-occupied. I would point out that it is a factory of some 500,000 square feet, and it would be a blot on the landscape if this large industrial complex were left unused in the middle of the Vale of Leven.

Governments do not change very much in their attitudes. I remember some years ago when the firm of Denny in Dumbarton was to be closed and we took a deputation to see the then Minister of State, Lord Craigton. Lord Craigton told the deputation "Why worry about having industry in Dumbarton? Dumbarton is a pleasant little place—why not just become a commuter community?" This advice was firmly rejected because obviously an industrial community would never wish to become a purely commuter community.

Last week at Question Time the Prime Minister said that his Ministers went out of their way to see deputations. I wish to point out that on 27th May I wrote to the Secretary of State for Trade and Industry to ask whether he would see a deputation. The answer I received was as follows : … I do not think there would be anything to be gained by seeing a deputation to go over the ground again. We had not even been over any ground on that occasion and we feel that in the present circumstances, since this is a Government factory, we have a stronger case than ever to meet the Minister.

The hon. Gentleman's last sentence was : We shall be keeping a close watch on developments. That letter was dated 30th June, 1971. On 1st July, I received a phone call from the Provost of Dumbarton saying that the factory was closing. It is small wonder that the people of Scotland are so anxious about our trading and industrial situation, when Government Departments keep that kind of close watch on developments such as this.

6.20 p.m.

Mr. Patrick Wolrige-Gordon (Aberdeenshire, East)

The situation we are debating today is extremely serious. The present unemployment position is the worst in Scotland since the war. That is true in terms of numbers. But numbers are not the whole point. Unemployment is bad for those unemployed, be they 9, 90 or 900, and in my view we want a national mobilisation for unemployment on the same scale and carried out with the same individual care as a regiment at war gives to those who need to be taken to a place of safety.

Certainly the Government have announced a major contribution today, with £8 million to be spent on an extended road programme, £33 million on additional works, special house improvement grants and special assistance to Glasgow. But there is a limit to what the Government can do, and I say that without regret because if the Government were able to solve the unemployment problem on their own they would be all powerful, and all the evidence suggests that the more powerful that a Government gets the more inadequate they become, irrevocably limited by the slenderness of their own human resources. Moreover, the limit on their activity imposed by a mixed economy helps to underline the fact that unemployment is everyone's problem and not just that of the unemployed or of the Government alone.

I have been very struck by the number of people discussing the situation, especially in this House, who seem to think that the Scottish problem is immutable. I do not believe that. I have the greatest faith in the Scottish people. However, in many areas of British life there is a kind of prejudice that somehow, somewhere, someone else owes us a living. It has become almost an article of faith in Britain that one should live on the "get" and not on the "give", and that if one tries to live on the "give" one will be knocked out. I understand that feeling. However, with that philosophy, unemployment is inevitable, since no one cares about what happens to the next person in the queue.

Conversely, if we decided to live on the "give" and really shifted our production, our services and our way of operating, a new lift would be given to the country, to the economy and to our people. We in this House should try to encourage that kind of approach, because it is all too often a factor which is sadly missing. Often in this House, inevitably, events are interpreted in the narrow terms of party advantage, and one is liable to be told that any kind of change of the sort that I have suggested is impossible while the party opposite pursue its reactionary policies, whether they are to the Left or to the Right.

I disagree entirely. The great advantage of a free country is that the individual does not need to wait for the Government. There are a great many Scotsmen and women who have formed and are running successful enterprises which, to a greater or less degree, provide employment. There are people who take responsibility and try to make a practical contribution to solving the problem. Obviously the need is to multiply the number of such people. Public works are a necessary palliative of the present crisis, but the future strength of the Scottish economy depends on the extent, variety and number of its roots.

Mr. James Hamilton

The hon. Gentleman talks about the Scottish economy and about Scottish investment. Is not it true that there is a reluctance on the part of Scottish investors to invest in Scotland? Then the hon. Gentleman talks about the workers of this country. However, even in his own constituency General Motors are operating, and that company will tell the hon. Gentleman about the finest workers in the country.

Mr. Wolrige-Gordon

I agree with the hon. Gentleman. What I have said applies to investment just as much as it does to everything else. We are told that it takes something like £2,000 of capital investment to employ one man. I should like to see some of the people employed in that way getting the chance of that money as capital loans so that they can get started themselves and possibly employ others later.

I also think that we should look very much more carefully at the suggestions of Sir John Toothill and others about a differential fiscal policy in Scotland for the sake of development. It is an idea which has been put forward already in this debate. I do not believe that we need to be too proud in Scotland.

There has been much talk already about the Common Market. One obvious effect of British entry inevitably will be an intensification of what is called the "Golden Triangle". Scotland is outside it. Therefore, development policies will be even more important if we go into the Common Market. In view of that, why should not Scotland be made a pilot example of the virtues as well as the most effective methods of diversification and regional development? At the moment, there is no other part of Western Europe which could provide such an opportunity.

I wish to say a special word about oil. My right hon. Friend the Secretary of State referred to it in his speech. In our position today, we must direct careful attention at anything which provides a real cause for optimism in the future. Is Scotland to become a booming oil country? If so, how long will the boom last? What plans can be made to see that the investment therefrom will be solidly based? I recognise that oil does not have a direct effect on employment to any great extent, but there is no question of the wealth involved, and it could affect my own part of the country in the North-East of Scotland. As my right hon. Friend said, B.P. is considering landing oil from its Forties oil field in the North Sea, 110 miles from the coast, at Peterhead in my constituency. Peterhead is ideally suited for this kind of enterprise. I should like an assurance from my right hon. Friend that the Government will give every assistance that they can to this laudable enterprise.

B.P. is one company. There are now 400 blocks in the North Sea open for licence. The majority of those blocks are off Scotland. As my right hon. Friend has said, there are four major oil investment companies with predominantly Scottish capital. Will my right hon. Friend be able to ensure that Scottish interests are taken into account fully in dealing with these natural resources? Again, when some of the blocks are auctioned, can we be sure that Scotland gets the value of the money spent and its fair share of the oil royalties? I do not think that we are being selfish when we make a strong point of this.

England has always been a comparatively richer country, by the accidents of geography and size. In this matter of oil, it is just possible that the balance may be redressed somewhat. I believe that Scotland should have the benefit of the riches in her sea and that the Government should ensure this.

I conclude with a brief word about boat building. Not all the boat building in Scotland is done on the Clyde. In recent months, I have tried to make it plain to the Government that boat building in the smaller yards round the coast needs reconsideration.

In the North-East two leaders of the industry have given tongue to their concern about lack of orders. In earlier debates and in correspondence my hon. Friend the Under-Secretary of State for Home Affairs and Agriculture gave me to understand that if this situation persisted he was prepared to receive a deputation from these boatyards later in the year. Has he any proposals yet for such a meeting?

Mr. John Robertson

Would it not be wise for the hon. Gentleman to make sure that he received a deputation right away? Otherwise, the ferry ships being built for the Shetland-Orkney-Aberdeen run will have been built in the Faroes, outside British shipyards, with British Government subsidies.

Mr. Wolrige-Gordon

I am aware of that. I am also concerned as a matter of policy. I do not blame any man considering investment in an inshore fishing boat, which would be built in one of the yards I have in mind, being very careful about pursuing his investment plan. I very much hope that account has been taken of the considerable advance which has been made in the Common Market negotiations as a result of my right hon. and learned Friend's discussions there last Monday. But, even so, I read in the Press at the weekend that the Highlands and Islands Development Board is being very careful about its investment plans for the industry during this difficult stage. I am sorry about that, but I fully understand the reasons for it. Nevertheless, this matter will presumably be resolved by October. I hope that my right hon. Friend will bring this debate to the attention of his right hon. and learned Friend so that the position of these yards, which in many cases is potentially critical, can be reconsidered in time.

A minor point concerns the credit facilities to enable the yards to compete with countries like France, Norway and Poland in supplying fishing boats to Southern Ireland. This industry is in almost the same state of suspension as the negotiations go on. However, I think that we should be in a position to compete with other countries in supplying these boats. Our own yards are highly competitive. This has so far been a matter of negotiation between the Department of Trade and Industry and the Scottish Office. Will my right hon. Friend tell us the result of these negotiations at the end of the debate?

6.33 p.m.

Mr. Russell Johnston (Inverness)

It is not only the rate of employment which is so distressing, but its spread throughout Scotland. The Highlands has a higher rate of unemployment now than for 20 years, despite the existence of the Development Board for over six years. There is a high unemployment rate in the small burghs in the east in Banff, Arbroath and cities like Dundee. Even in the Borders there is an unemployment problem for the first time since the war. In Glasgow, in the centre of Scotland, we see it at its worst with the tragedy of U.C.S. and the problems of Plessey, and so forth.

Matters in Scotland are pretty grim, as the right hon. Member for Lanark (Mrs. Hart) said. I think that they are likely to get grimmer, despite the measures which the Secretary of State has announced, as we enter the winter.

It is not only the immediate future which I find worrying, but, far more serious, the long term future of balanced growth in Scotland, standing, as we are, at the door of Europe. That is important, and it worries me considerably.

We need immediate expansion in public works and the release of capital in the private sector. Houses are required to be built and roads to be constructed. I welcome the announcement made by the Secretary of State in this regard.

I am perhaps more attached to Keynes that the right hon. Member for Lanark. I have always believed that it is better to create work than to allow men to rot on the dole. Although our social security system makes unemployment less horrible, the misery remains as real and the waste as tangible.

It is important to look beyond the question of the expedient. Unless there is some vision there can be no hope and unless there is a plan there can be no defined progress. That is a criticism of this Government, frequently made by the Opposition Front Bench, which I accept. We cannot measure progress unless the Government say what they hope to do and in what time they hope to do it.

I want briefly to try to present in outline a Liberal answer to a major part of Scotland's problems, the kind of answer which a Scottish Parliament, if we had one, in a British federal system would be pursuing. I was interested to note the remarks of the hon. Member for Edinburgh, South (Mr. Clark Hutchison) who was talking about differential taxation. I welcome this kind of conversion.

Mr. Clark Hutchison

indicated dissent.

Mr. Johnston

The hon. Gentleman shakes his head.

Mr. Clark Hutchison rose—

Mr. Johnston

Incidentally I admired the hon. Gentleman's courage. Knowing his view on the Common Market, I visualised him waiting out the dreadful doomwatch sitting in his clock factory. That was quite a thought.

Mr. Clark Hutchison

I should like to correct the hon. Gentleman. It is not a conversion. I have been nattering about differential taxation for years.

Mr. Johnston

The trouble is that we need more than nattering. We need some firm commitment.

Mr. John Rankin (Glasgow, Govan)

What is wrong with "nattering"? It is a common expression.

Mr. Speaker

Order. There is a great deal wrong with sedentary nattering in this House.

Mr. Johnston

I entirely agree, Mr. Speaker.

There are certain things which are, as it were, going for Scotland. I want to list them and try to fit them together.

As I said in the last debate on 3rd February, and as has been mentioned already, there is, off our shores, an unmeasured wealth of oil and gas from which we could benefit and which equally could pass us by. It was significant that the Secretary of State mentioned it. When I raised it in the last debate there was no mention of it from the Front Bench. Indeed, the hon. Member for Aberdeenshire, East (Mr. Wolrige-Gordon) has apparently discovered it, though he made a long speech on 3rd February without referring to it.

There is in the Clyde an unequalled asset—Scottish, British, European, call it what we like—as a deep water port, and related to it there are the skills of shipbuilding, which are now at risk, the opportunities to produce steel competitively with the world at Hunterston, the ore terminal, and the concept of Ocean-span linking Europe to the Americas.

There is in the Highlands and Islands Development Board, for all its limited activity, a body with powers and evolving expertise both to refashion the Highlands and also to be the prototype for similar exercises in the other regions of Scotland, perhaps fitting into the pattern of local government reform which may eventually come forth. Liberals have argued this for a long time. Indeed, my right hon. Friend the Member for Orkney and Shetland (Mr. Grimond) mentioned a Highland Development Board in his maiden speech in 1950. My hon. Friend the Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) introduced a Bill for a Border Development Board.

On 6th December, 1967, I asked the then Secretary of State for Scotland what forecast he could make of a reduction in the number of jobs in Scotland in coalmining, heavy engineering and shipbuilding respectively, over the next 10 years ; and what related provision he proposes to enable those who are displaced to be retrained in other skills". He replied : it is impracticable to make firm forecasts for individual industries so far ahead, but measures to deal with training and retraining needs have been greatly advanced since the problems of structural change in Scottish industry were fully identified in the White Paper on the Scottish Economy."—[OFFICIAL REPORT, 6th December 1967 ; Vol. 755, c. 302.] The Liberal Party found that an unsatisfactory answer. It is not that I am particularly chiding the right hon. Gentleman in retrospect for that answer ; I think that he deserves great credit for producing the White Paper and trying to make a forecast. The failure has been to try to make subsequent revised forecasts.

The Scottish Liberal Party set up a Committee under the chairmanship of Mr. R. A. Robertson, the Chairman of Hutchison Engineering. It reported in February 1968, and projected redundancies in shipbuilding, which have been justified, and argued for a super yard on the greenfield site. Events since then, and thinking since then, have led us to link this idea to other proposals to form a considered plan.

First, we would bridge the Upper Clyde position for two or three years, or perhaps a little more, thus saving the skills and the valuable equipment that is there, because much of the yard has been refurbished. Second, we would use that time and the confidence it would create to construct a new super yard on the greenfield site, making it a joint effort between the Government and the private sector. Third, and this the Secretary of State must do, we would go ahead with Hunterston, because a steel works only makes real sense in Scotland if it is linked to shipbuilding.

Mr. Brewis

Has the Liberal Party costed all these developments? Can the hon. Gentleman give us any idea of what they would cost?

Mr. Johnston

I shall come to that in a moment. The hon. Gentleman is right to be concerned about the cost. His Government are not profligate with money. That is one thing of which they cannot be accused.

Japanese steelyards can produce about 250 tons a year, and aim to produce about 700 tons. Those are the figures for individual plants. The British figure is 150 tons. It has been estimated that Hunterston could produce up to 800 tons. The fourth thing is Oceanspan. I mentioned this in the debate on 3rd February. It cannot be left to the Clyde Port Authority. It is something which the Government must take up.

If those things were fitted together, they could represent a considerable industrial revolution in Scotland. This all costs money, and I now return to the question of oil, because this is not merely the meanderings of a Liberal. I am not alone in holding the view which I expressed during the debate on 3rd February. The magazine Scotland, issued by the Scottish Council for the Development of Industry, this month poses the same questions which I posed during the debate, and to which I received no answers from the Minister.

First, what will be the revenue from the granting of franchises? Will it be £20 million, £50 million, or £100 million? Where will the money go? Will it go straight to the United Kingdom Treasury? I suppose the answer is "Yes". Will Scotland get any allowance for it? I fear that the answer is "No".

Second, what will the royalties yield? The magazine Scotland estimated the yield at about £100 million, which is quite a lot of money.

Mr. Douglas

The line of thought which the hon. Gentleman might like to pursue is who will get the rates for the rigs?

Mr. Johnston

That is a good question. Where will the work go that will be involved, both in the drilling and on shore? The magazine to which I have referred asks whether Aberdeen, which is ideally situated, will derive any benefit.

Money is there, not only for the Clyde, but for related development in the East and to provide backing for regional development elsewhere. The Highlands and Islands Development Board has had £8 million—that is about 1¼ miles of motorway a year—over the period of its existence, and one cannot expect to make any fundamental change in an area the size of the Highlands with that kind of money.

The Robertson Plan is an integrated plan which could offer a viable future and, as I said on 3rd February : If our problems are to be solved, more urgent and radical measures will be necessary than have so far been taken."—[OFFICIAL REPORT, 3rd February, 1971 ; Vol. 810, c. 1774.] I repeat that, and I do it, as I believe a Liberal always should, having made constructive suggestions which can be criticised, because these debates ought to be used as constructive occasions rather than as opportunities for mutual recrimination.

6.45 p.m.

Mr. Ian MacArthur (Perth and East Perthshire)

I was interested to hear the speech of the hon. Member for Inverness (Mr. Russell Johnston). I was glad that he, too, referred to the enormous excitement over the discovery of oil off Scotland. We know that the oil is there. The indications are that large strikes could be made, and I believe that these could result in a flow of wealth into our country to an extent which we can hardly begin to grasp.

Mr. Rankin

But not into Scotland.

Mr. MacArthur

The choice of this subject for today's debate was not unexpected. The unemployment rate in Scotland is alarmingly high, and the industrial scene has been darkened latterly by the agonies of Rolls-Royce and U.C.S. There have been other blows, too, such as that described by the hon. Member for Dunbartonshire, West (Mr. Ian Campbell), in whose constituency the Plessey factory lies.

It is natural that the Opposition should have selected unemployment as the subject for debate on this Scottish Supply Day, and it is right that we should debate this problem which, directly or indirectly, affects every person in Scotland. As my hon. Friend the Member for Aberdeenshire, East (Mr. Wolrige-Gordon) said, unemployment is everyone's problem, whether unemployed or not, and the growth of unemployment in Scotland has certainly stripped too many people of their jobs.

But it is wrong of the right hon. Member for Kilmarnock (Mr. Ross)—and I am glad that he is back in his place—to have mounted his assault on the Government in the way that he did. His speech will not bring much comfort or hope to the army of unemployed to which he referred. It is an army of unemployed, and I believe that the quality which we need to restore in Scotland, and which the army of unemployed needs, is that of confidence. There was nothing at all in the right hon. Gentleman's speech to build confidence or to point to those areas in which we can justifiably say there is confidence. I think that the right hon. Gentleman did no service to his constituents, or to the people of Scotland, by blackening the outlook for Scottish industry in the way that he did.

We are used to this sort of dreary dissertation from the right hon. Gentleman, and I make no complaint about that, but it is curious to hear him berating the Government for the situation that we face. What, one may ask, was the right hon. Gentleman doing during those long, long years between 1964–1970 when he was presiding over Scotland? I remember one thing that he did. He published his notorious White Paper, to which I refer often, and—

Mr. Douglas

Not again !

Mr. MacArthur

—I shall go on referring to it. I recommend right hon. and hon. Gentlemen opposite to read it every day and, when they go to bed to read it there. If they do, they will have nightmares when they realise the extent to which they muddled the economy, fiddled the election and misled the people of Scotland.

In January, 1966 the right hon. Gen-leman published his great White Paper on the economy. He set as his target the creation of between 50,000 and 60,000 extra jobs. That was the main theme of the document, and I remember the Press release which the right hon. Gentleman put out to all the newspapers in Britain. It had as its opening words "More jobs". That was his promise to the people of Scotland. They were to get 50,000 or 60,000 more jobs. Of course we did not get any more jobs at all.

What happened was that by the end of the period we had lost 82,000 jobs. The right hon. Gentleman missed his target by a total of 142,000 jobs—the 60,000 that we did not get and the 82,000 that we lost. Yet right through his period of office the right hon. Gentle-clung obstinately to his discredited White Paper and treated our constant questions with constant contempt.

Mr. Ross

Hear, hear.

Mr. MacArthur

It is also strange to hear the right hon. Gentleman claiming credit for removing S.E.T. from some hotels in Scotland. He pointed to this in reply to an intervention of mine.

He may take pride in that if he wishes, but who was it who imposed selective employment tax on the hotels in Scotland? It was the right hon. Gentleman himself. In January, 1966, in the notorious White Paper which I have mentioned, just before the election, the right hon. Gentleman wrote that special attention would be given to tourism. Special attention is what tourism got—the special attention of the selective employment tax—in May, four months later.

The right hon. Gentleman, who accused the Highlands of whining about selective employment tax, applauded to increases in selective employment tax and then realised too late the harm it was doing, and he and his right hon. Friend the then Chancellor of the Exchequer at last and belatedly removed the tax from one of the most sensitive areas in Scotland, the Highlands, but restricted the removal to hotels alone. To hear the right hon. Gentleman take credit for that is to be reminded of the parent who claims to be kind when he stops bashing the baby. When the right hon. Gentleman was in office and looked to the future, he failed miserably on every count. On that record, no one in Scotland will pay much attention to what yesterday's man has to say about tomorrow.

If we look through and beyond the extremely discouraging unemployment figures in Scotland, we find that there is some evidence to give us encouragement for the future. Since the war, under successive Governments, the structure of our industry has changed fundamentally, much more so than people generally realise, As the older industries have declined, so the newer industries have advanced. The pace of advance has certainly not been enough to replace each lost old job by one new gained job, but the modernising change in the nature of employment in Scotland has been progressing for 20 years or more.

A visitor returning to Scotland today after a long absence would hardly recognise the scene, certainly in the industrial belt. It is a new Scotland in which we live. Certainly the shadow of unemployment hangs over the industrial belt and beyond, not least in my constituency, but that shadow should not be allowed to obscure the fact that we have a healthy modern base of opportunity from which to expand and it is expansion which we need now.

We need above all to exploit that opportunity to provide new modern jobs, to bring to an end the chronic gap between employment levels in the North and the South. My right hon. Friend will agree that some of the Budget measures earlier this year are only now beginning to have effect, because they took effect only a week or two ago, and we can expect that they will contribute to an upturn in the economy soon. I trust that the likely extent of that upturn will be considered by my right hon. Friends with the utmost care, because it may not be enough to produce the resumption of growth which we need. There are other measures which the Chancellor could take, and I am certain that there will be no hesitation about taking those further steps if they can be taken without the risk of swinging the country back into a renewed burst of inflation.

We were told today by my right hon. Friend of a welcome range of actions, £33 million worth, to inject additional employment into Scotland, and I warmly congratulate my right hon. Friend on this initiative.

Mr. Ross

It was £35 million. I know because I have had the advantage of reading it in the Evening Standard.

Mr. MacArthur

I am obliged to the right hon. Gentleman. I understood it to be £33 million. It is a very substantial and welcome sum. These measures will bring great relief at the very time when relief will be sorely needed.

My right hon. Friend will agree, however, I am sure, that, excellent chough these measures are, they are essentially short-term measures and in themselves will not meet our longer-term need, which is the provision of securely based long-term employment.

We have often discussed the relative merits of investment grants and investment allowances as a means of encouraging industrial development in Scotland. I have no doubt that the present system is likely to be more beneficial, but any incentive to encourage industries to move and develop can be effective only if industry is in a mood to move and develop. There is not enough of that mood today, but I suspect that a relatively small change in the economic climate would transform the position and spur on the confidence which we need for investment and expansion. It requires relatively little to tilt the balance so that we may enter a period of growth.

Contrary to what has been said by hon. Members opposite the position is not entirely that of stagnation. In the six months from December, 1970, to May, 1971, the number of I.D.C.s approved represented 6,170 jobs. Certainly that is not enough, but that compares with an increase of 4,260 jobs in the equivalent period a year previously, when the right hon. Gentleman was in power. It is an increase of 45 per cent. and it is worth pointing to that figure. It is not enough, but it is certainly much more than a drop in the ocean of need.

We urgently need more expansion. I suggest that it is the state of the total United Kingdom economy which matters most. What Scotland needs for growth is growth in the total economy, because it is only then that the incenives to move and develop can have any real effect. The prospect for Scottish growth must be set in the United Kingdom context, certainly in the short and mid-term. If that is right, and I believe that it is, it must be right also to set the Scottish economy in the European context.

In the longer term, our manufacturers in Scotland would have direct access to a vast European home market, and foreign investors would see Scotland not only as part of the United Kingdom, but as part of Europe and so as a base for serving Europe. It is worth remembering that in the years after the last war American industry saw Scotland as a base from which to gain access to the Commonwealth and the sterling area, and there were many American developments in Scotland, accounting for some 10 per cent. of our employment. This was welcome employment and it was a most important development in the Scottish economy. In much the same way, and perhaps much sooner than we expect, expanding industry on the Continent will look to Scotland as a base for expansion.

Entry into the E.E.C. will produce an additional stimulus to development of the economy in Scotland, and I am sorry that the right hon. Gentleman made his silly remark about the visit to Germany by my right hon. Friend the Minister for Development. That visit and his discussions were looking ahead constructively, but that, I appreciate, is an approach which the right hon. Gentleman is unlikely to comprehend.

My right hon. Friend did the House a service by reminding us of what the right hon. Gentleman had to say about the E.E.C. two years ago, but since then the right hon. Gentleman has been playing "follow my leader".

Mr. J. Bruce-Gardyne (South Angus)

A difficult task.

Mr. MacArthur

It tends to make one giddy.

According to the Sunday Mail, two days ago, in a clarion call to the people of Scotland, the right hon. Gentleman said : There's nothing much you can say about my view until we can have our various conferences". That was in answer to a question about the E.E.C. That is the quality of leadership which the right hon. Gentleman offers to us and his alleged followers in Scotland—he will do what the various conferences tell him to do.

On this crucial question he leads his regiment from behind. Like the Duke of Plaza Toro he may find this more exciting, but it is a curious form of leadership for the right hon. Gentleman to display to those in Scotland who he claims follow him.

Mr. Alexander Wilson (Hamilton)

Is the hon. Gentleman suggesting that the ordinary citizen has no right to say whether or not we should join the E.E.C? In other words, is he suggesting that hon. Members should not listen to their constituents, to the voters and their organisations, on this issue? What is his idea of democracy?

Mr. MacArthur

My idea of democracy is that an hon. Member should say what is in his mind. He must, of course, discuss this and all problems with his constituents. It seems odd that the leader of a once great party in Scotland, having declared his view two years ago, should suddenly dodge the issue and sit on the fence at the crucial moment when people are supposedly looking to him for guidance and leadership. That is what the right hon. Gentleman has been doing over this issue.

There are three stages of opportunity in Scotland. First, in the short-term, the further and massive injection of funds announced today, coming on top of the measures which my right hon. Friend announced recently, will provide more jobs, and do so quickly, but these are essentially short-term measures.

Second, in the short to mid-term, the resumption of growth in the United Kingdom will act as a spur to growth in Scotland, where we have a healthy industrial base from which to expand. However, I remind my right hon. Friend that unless there are indications of growth in the total economy soon, we will not stimulate investment and get the expansion we need.

Third, in the mid to long-term, we have the great opportunity which our entry into the E.E.C. will provide for Scotland. The immediate scene is grave. As the Government Amendment states, unemployment is regrettably high. I would call it intolerably high. Yet there are grounds for confidence and, far from it being complacent to point to them, I believe that it is irresponsible and damaging not to point to them. Beyond the present gloom there is reason for confidence because there are large new opportunities for Scotland, and a strengthening base from which to grasp them.

Several Hon. Members rose—

Mr. Deputy Speaker (Sir Robert Grant-Ferris)

It is just after seven o'clock. This might be a convenient point for me to point out that I have been informed that many hon. Members wish to speak in this debate. I calculate that if each speaker takes not more than ten minutes, nearly all, if not all, those wishing to take part will be able to speak.

7.04 p.m.

Mr. Robert Hughes (Aberdeen, North)

I will not follow the hon. Member for Perth and East Perthshire (Mr. MacArthur) in his peregrination around the Common Market. I hope that I will be fortunate to catch Mr. Speaker's eye when we debate that subject next week.

It is clear that the injection by the Secretary of State and hon. Gentlemen opposite of the whole subject of the E.E.C into this economic debate has simply been a smokescreen to cover up the ills of the past 13 months of Tory rule.

We seem always to be dealing with a gloomy situation in Scotland. The picture is always dull. It is understandable that my hon. Friend should be pessimistic rather than optimistic because many of us have been through redundancy or the fear of it and the closures or the fear of them. We have lived through these things in the firms which employed us before we came here.

For the last 20 years or more we have debated the decline of the Scottish economy. We have a dream that one day we ill discuss Scottish economic affairs and they will be in a healthy condition—that we will have the same kind of overheating problems that seem to occur with unfailing regularity in the South-East of England.

For a while under Labour there was a degree of confidence in the future. There was a glimmer of hope that the Scottish economy was beginnin gto up-turn a little. Six years of Labour Government produced considerable expansion of the infrastructure. New modern industries were beginning to establish themselves in Scotland and we had high hopes of great expansion. But, unfortunately, the pace of progress has not been contnued.

When I spoke in the debate on the Gracious Speech on 9th July I welcomed the prospect of a computer memory manufacturer coming to Aberdeen. Sadly, this prospect is no longer as certain as it was. The company concerned decided that it had to postpone the building of a new factory, and I understand that a final decision whether or not to come to Aberdeen will not be made until the end of this year. The reason for this change of heart is that the general economic situation of the country does not warrant the firm going ahead with its expansion plans. I am pleased to note, however, that the company does not have a closed mind to expanding in this way, but I must admit to being a great deal more pessimistic than I was some time ago.

Industries with growth potential are, of course, welcomed because they have financial backing. However, they are hesitant to commit themselves. Even more damaging, of course, is the picture of new industries closing down and leaving Scotland to return south of the Border.

The Government's regional policy has definitely changed for the worse. The change to tax incentives away from the cash grants that were available under the Labour Government have made a big difference. I accept that hon. Gentlement opposite, being loyal Conservatives, will not accept what I say, and I therefore draw to their attention an article which appeared in the Aberdeen Press and Journal of 8th July last under the heading : No Ross Smelter but for Labour Grant". The report was of a statement to hon. Members made by the chairman of the British Aluminium Company who, when giving evidence to the Select Committee, said according to the report : We were strongly influenced by the investment grant and its availability on this scale. We would not have gone ahead without it. In other words, the chairman of one of the biggest capital-intensive industries in the country was making it clear that under the present system he did not believe that his company would have gone north. Capital-intensive industries are important, although the kind of industries we want in Scotland are labour-intensive.

What other items of policy do the Government have to help alleviate hardship in Scotland and overcome some of our problems? There was an interest- ing interchange at Question Time on 8th July, and although it was in relation to Southend—it was about the dispersal of Government personnel from London—the answer given by the Prime Minister, who had been charged with indifference, was interesting. He said : As to indifference, it was under Conservative Governments that both the main initiatives for dispersal of Government personnel from London were taken. They were taken in 1963 by a Conservative Government, and by myself in this Conservative Government."—[OFFICIAL REPORT, 8th July, 1971 ; Vol. 175, c. 1518.] HANSARD, of course reported accurately the words uttered by the Prime Minister, but neither our OFFICIAL REPORT nor any other report could possibly reveal the flavour and tone of the right hon. Gentleman's remarks. The words do not savour the mood in which the Prime Minister was that day. The right hon. Gentleman was in his most arrogant mood, pointing out how on both occasions the Conservatives had done something to disperse Government personnel from London.

I advise the right hon. Gentleman to look at the record. He will see what happened as a result of that famous dispersal policy of 1963. The Scottish unemployment total was 105,000 and the total net migration that year was 40,000. The only other year in which unemployment approached that record figure was 1959, when the average for the year was 95,000 unemployed, with an annual net migration total of 25,000.

In the first year of Tory Administration we are again over the 100,000 mark. The House and country will have noticed the strange coincidence that in years of Conservative Administration we have extremely high unemployment figures. It is no use hon. Gentlemen opposite calling this a coincidence. The previous occasion was after 13 unlucky years of Tory rule—unlucky for the country in general and for Scotland in particular. Instead of boasting, the Prime Minister should have approached the Dispatch Box with some shame for the damage which he and his Administration have continually done to Scotland.

On the dispersal of Government personnel, if the Prime Minister wishes to live up to his words about producing some diversification and dispersal, he should take up the suggestion made in this month's magazine Scotland, which suggests that Aberdeen could become a major oil centre. This is possibly the only thing which the hon. Member for Aberdeen, South (Mr. Sproat) and I have in common. We both wish to see a great expansion of the oil industry in Aberdeen and the North-East. The magazine suggests : North Sea activity has pushed London to the fore, because it is there that the international companies can contact the Government—in this case the Department of Trade and Industry, Petroleum Division. This could equally well be sited at Aberdeen and would act as a magnet for the companies who at the moment set up their European bases in London. I hope that the Government will act on this proposal and do us the service of providing the magnet to attract all kinds of new industry to Aberdeen.

By their hag-ridden dogma the Government have allowed U.C.S. to go to the wall. Despite the consequences to the Scottish economy, they have done nothing to prevent U.C.S. landing in difficulty. For the shipyards the difficulty is not confined to the Upper Clyde. Many people in my constituency work in the small shipyard of John Lewis and Company, which strives hard to expand the order book and to try to modernise and slough off its extremely bad history of bad industrial relations and antiunion managements. None of these things is possible without firm order books on which to base the future. People cannot spend money on new machinery unless the future prospects justify it. It cannot inspire the workers to be more flexible unless there is a very firm order book.

The John Lewis shipyard tendered for four ferries for the Shetland Islands, worth £500,000, on an extremely competitive basis. All of us in Aberdeen were extremely concerned when this order, which has Scottish Office approval—I understand that about 75 per cent. of the cost is to be met by the Scottish Office—went to the Torshvn shipyard in the Faroes. The Aberdeen Press and Journal again mentions this : Four car ferries costing more than £500,000,.. are to be built in a foreign yardd because the price is 'considerably less' than any British yard can offer. It goes on to say : Representatives of the council and our consultants visited Faroe and were satisfied the yard was capable of producing a first-class job. And the Faroese Government are guaranteing that the vessels will be delivered at the stated price. It has been suggested that the guarantee goes much further than the Faroese Government giving a guarantee regarding the stated price for delivery. It is suggested very seriously that the Danish Government has guaranteed this shipyard against all loss appertaining to this order. If this is the case, there can be no competition on the order.

It is the duty of the Scottish Office, especially where development areas are concerned, to make absolutely certain, first, that tenders are competitive, and, second, that there should be a direct channelling of work towards the development areas. It is no use waiting until companies get into distress and are almost closing before weeping crocodile tears and trying to do something about it. The time to do something about it is now, when the company is trying to expand. The Government have been sadly lacking in this respect.

The Government's attitude on unemployment is best typified by the psychology of the statements made in the past by leading members of the Government. None of us in Scotland will ever forget the occasion on which the Prime Minister, then Leader of the Opposition, was interviewed on Scottish Television about tax incentives and investment policy. He received a reasonably hostile interview because the interviewers were concerned about the cuts he was promising to make if he obtained office—which, in the unfortunate event, he did—and the kind of damage which this would do to the Scottish economy. His attitude to Scotland was, "Do you want a soup-kitchen country in a soup-kitchen economy? "This kind of grotesque insult to the people of Scotland hits hard and he will not be forgiven for it.

Our forebears outside and inside the House know the soup-kitchen as the reality of every-day life, the reality of the unemployed. The Government have conjured up out of the nightmare of the past the reality that perhaps not too far in the future the soup-kitchen will be with the people of Scotland. We can almost forgive the Government for not knowing of the unemployment and hardship or to what extent they affect us. But what we can never forgive is that they do not care a damn about the people and the unemployment in Scotland.

7.16 p.m.

Mr. John Brewis (Galloway)

For at least 10 years I have been taking part in debates about the Scottish economy. I assure the hon. Member for Aberdeen, North (Mr. Robert Hughes) that the ills of the Scottish economy have certainly not started in the last 13 months. It is wrong to suggest that all was well under the previous Labour Government. My hon. Friend the Member for Perth and East Perthshire (Mr. MacArthur) pointed out the loss of 82,000 jobs, which was very bad compared with the performance of the previous Conservative Government, when there was a net gain, in a very difficult time, of 76,000 jobs. On top of this, in 1966 there was the highest rate of emigration from Scotland of 47,000 people.

The right hon. Member for Kilmarnock (Mr. Ross) presided over a very rapid rundown in the coalmining and shipbuilding industries. I notice that the right hon. Lady the Member for Lanark (Mrs. Hart), who graced our debate for a short time and has now left the Chamber, mentioned the possibility of public ownership and of diversifying employment opportunities. It is interesting to consider what the National Coal Board did in Scotland in the five or six years of Labour Government. Forty-nine collieries were closed and 4,532 jobs were lost. Fifteen of these collieries were in the right hon. Gentleman's county of Ayrshire, in which there was a loss of 1,193 jobs. In Sanquhar, for example, the rate of unemployment rose at one time to 25 per cent. But now, with the introduction of a new industry, Century Aluminium, in which my hon. Friend the Member for Dumfries (Mr. Monro) had some part, unemployment is falling.

Mr. Alexander Wilson

Why did each one of these collieries close? Was it through seam exhaustion or on economic grounds? What were the reasons for closure?

Mr. Brewis

Largely because coal priced itself out of the market.

Mr. Ross

I know a lot about Sanquhar, and one of the reasons why the colliery there closed was complete exhaustion. The hon. Gentleman mentioned what his hon. Friend the Member for Dumfries had done, but he did not mention what the Labour Government did. We made it a special development area. We introduced Templeton's Carpets, Trends Carpets and aluminium—at least three new industries. The hon. Gentleman should say how many have closed under his Government.

Mr. Brewis

Would the right hon. Gentleman like to say how many industries came to Galloway, my constituency, under his Government? I am very happy to agree with him that there have been new industries introduced into Sanquhar and that his Government made it a special development area.

The Scottish economy is very dependent on the United Kingdom economy because we rely so much on the local employment policy inducing industry to go to development areas.

The hon. Member for Aberdeen, North complained about the inducement system for getting industries to development areas. It is a good package of inducements now and it was a good package of positive inducements before. At present the only negative inducement is the I.D.C. system. I do not say for one moment that the I.D.C. system should be abolished ; because it has the effect of bringing to the attention of industrialists the attractions of a development area. However, in view of the number of I.D.C.s granted in non-development areas I wonder how effective the system is. In 1960–64, for example, 91.5 per cent. of all I.D.C.s were granted in non-development areas. In 1965 the proportion fell slightly to 90 per cent.—virtually no change. In 1969 it was up again to 92 per cent.

We need a stronger form of negative inducement to get industry to move from over-heated areas to development areas. When I journey by train through England I am surprised to see how much industrial building is going on. Sometimes there is an obvious reason for the location of a factory in a particular place. Obviously grand pianos cannot be made in the Western Isles, for example. However, on going to London Airport by bus one wonders whether it is necessary to have a Cherry Blossom boot polish factory at Chiswick, more or less in central London. Going a little further afield, speculative developers are erecting industrial factories at Iver, near Slough. There is a toothpaste factory at Taplow. Even in Banbury they make instant coffee, employing about 2,000 people. All these are developments which have taken place in the last 10 years or so.

There is a case for looking into the problems of congestion in non-development areas. We in the Select Committee on Scottish Affairs asked some questions about this of the Board of Trade. It then seemed that little study had been done on this subject under the last Government or the one before that. I hope that this Government will look into this position, because far more needs to be done to induce industries to go to development areas.

Much has been said about the opportunities Scotland will have when we join the Common Market. I do not wish to say much about it. Undoubtedly the E.E.C. is sucking in labour from many outside countries like Yugoslavia, Turkey and Greece, and there is industry which needs to be exported from the E.E.C. to areas of high unemployment. In view of the way that German industry has developed in Southern Ireland, I think that we have missed out in the past in looking for the developments we have got from America, because we could probably have got developments from parts of Europe. I therefore congratulate my hon. Friend the Member for Ayr (Mr. Younger), the Under-Secretary, on looking into this, and I wish him all success.

I turn to a constituency point, though I think that the principle of the matter is relevant to much of rural Scotland and particularly to the subject of land use, which subject we are now considering in the Select Committee on Scottish Affairs.

For years Wigtownshire has suffered from high unemployment and high migration. Although it has been a development area for many years, no factory employing men has been attracted to the area nor, in view of the higher grants now available in Central Scotland, is it likely that such a factory will come there.

When it became clear that the Shoeburyness gun-proving establishment would have to move from Foulness because of the new airport, I know that my right hon. Friend the Secretary of State for Scotland worked very hard in the Cabinet to get it to come to Wigtownshire, because it meant a net increase of about 350 jobs, mainly for men, over those at present employed by the Royal Aircraft Establishment at West Freugh. Whatever one's views may be locally about this problem, one should thank the Secretary of State for his efforts on our behalf.

As I said in an intervention, we in my part of the world are used to defence establishments : there has been an R.A.F. bombing range in Luce Bay for at least 30 years. During the war there were many other establishments, including a gunnery range at Burrow Head, and there is still a tank firing range at Kirkcudbright. We are used to the R.A.F. occasionally dropping bombs on its bombing range in Luce Bay. We are used to the test flights of Concorde going overhead. These are intermittent noises.

The gunnery range is in a completely separate category. Some hon. Members may know that the noise from a gun is about three times as bad in front of the muzzle as behind it. At Foulness there is a straight coast and most human habitation is behind. But firing into a bay means that many people along the coast are living in front of the guns.

When an experimental gun fired about 60 rounds on 25th June, there was a moderate wind from the South-West which protected the Mull of Galloway. However, on the east coast of Luce Bay the sound was excruciating. At Stairhaven the ground shook from the noise of the gun, and I am told that pig lamps were broken by the vibration. All along the coast, doors and windows rattled. It was many times worse than the biggest bombs the R.A.F. has dropped. Such a level of sound might be tolerable occasionally, but the gun position is scheduled to fire on 225 days a year a total of 20,000 rounds—that is, every working day Monday to Friday about a round every five minutes or so.

I do not think that anyone could go about his business in Stairhaven without wearing ear mufflers. We know that the guns will kill tourism all along the coast from Glenluce to Port William and probably in a wider area. Tourism is a tender plant. There are only two little areas in Northern Ireland where there is any trouble and they are not areas where tourists normally go, yet the tourist trade in Northern Ireland has withered since the trouble started. Yesterday a bank manager told me that his branch at Stranraer alone had taken £1 million in tourism every year. Therefore, the money from tourism is by no means chickenfeed.

I do not think that it is equitable that people who have established caravan parks or made improvements to their hotels or property should suddenly have their work ruined by the noise coming from a gun range, and there is no possibility of their getting any compensation.

Yesterday the county council voted by one vote in favour of a gun range but by a much larger majority in favour of a public inquiry. I hope that my right hon. Friend will be able to give us this and tell us so tonight, because it is a very unpleasant atmosphere when people start questioning each other's motives. One side says that the other side is not interested in unemployment. The other side says that the other people are not interested in amenity. It would be the fairest thing possible if there could be a public inquiry presided over by somebody of the status of a judge of the Court of Session, and thereafter we would be prepared to accept his decision.

I want to raise two other small points which could not be taken into account in the county council's deliberations. Even taking over 2,500 acres of good arable ground there is not room to get more than eight of the 14 Shoeburyness gun facilities into the site there. This is utterly uneconomic and not sensible. Would it not be much better to find a bigger site on which the whole establishment could be set up all together?

Second, millions of pounds have been spent on the R.A.E. station at West Freugh. For example, there has been the extension of the runway, only just completed. If that establishment has to move, more millions will have to be spent re-establishing it somewhere else. Would it not be much better to settle for an increase in experimental work and, possibly, more employment at West Freugh, even though it might mean more bombing in the bay? I feel sure that the local people would accept that with gladness rather than have the proposed gunnery range.

7.31 p.m.

Mr. William Small (Glasgow, Scotstoun)

On the question of defence establishments, the hon. Member for Galloway (Mr. Brewis) made his case, and his attitude is clear. On the question of joining the E.E.C., I find that a smoke-screen is raised all the time. I am always interested to see the man who becomes a 100 per cent. European, and I am watching the performance of right hon. and hon. Members opposite with close attention. At one time the great cry was for the abolition of British Standard Time. Here was a move for synchronisation between ourselves and Europe, but then came the great cry—it appeared in election addresses too—"Let us do away with British Standard Time"—bash the Labour Government, and bash B.S.T. I am waiting to see what hon. Members opposite do about reintroducing the principle of synchronisation with Europe as a first indication of their faith. It will be interesting to see what the Scottish Tories do.

My purpose is to deal with unemployment, and in the context of what is happening in Glasgow, in particular. Never have there been such scenes within living memory—at least, I have never known them—as the great demonstrations which have recently come down to London. What is happening to our communities in Scotland today? I have to speak up for the unemployed. I have been one of them in my time. I walked the streets for a long while, and I know something about it.

There is a great sense of concern in the community now. In George Square already, a petition has attracted 100,000 signatures. What is the concern about? First, there will be children weeping at home this weekend because their parents are not taking them on holiday this year. What can their fathers and mothers say? There is a dethronement of the authority of the parents because the children feel that they cannot provide them with the amenities which other children can have at this time.

The children who are leaving school have been cheated. In the old days, the idea was that the workers would be educated beyond their station by our public education service. Now, people know their rights, they know their anticipations, and they know their true station. Under both Governments, a great education prospectus was launched. Our children are going through the schools and colleges, and passing out with flying colours, but at the end of the day they are cheated and robbed of their prospects of employment.

Nothing could be worse. Wherever one looks about the world—never mind about Tupamaros and people like that—a sense of deprivation is the incubator of crime, and that is no help to the cause of freedom and good order in our society. People feel that they have no objective when they have no job and no prospect of getting one.

I say these things out of great concern and a sense of duty. I am not talking about economic man. I am talking about what unemployment means in terms of deprivation and humiliation for men and women and for their children at school. When children see that their parents cannot provide them with the generality of things which give them a sense of status in this country—there are those, for example, who can have a car, even though a second-hand one—they have a real sense of deprivation.

To adopt what the Duke of Edinburgh once said, it is time this Government got their finger out and did something about it.

7.34 p.m.

Mr. Iain Sproat (Aberdeen, South

The hon. Member for Aberdeen, North (Mr. Robert Hughes) raised the question of the Shetland ferries being built in the Faroes. He will not be surprised to know that I entirely share his concern in this matter, and I have already raised it with the Secretary of State for Scotland. I ask the Minister to tell us tonight whether, even if these ships cannot be built, as I should like them to be, in Scottish yards, we can be certain, at least, that the repairs, when they come up, will be done in Scottish yards. That would go some way to allay people's fears, particularly among the trade unions, a delegation from which came to see me last week.

We have heard a lot of gloom and despondency from the Opposition today. I do not disagree that there is a lot to be gloomy and despondent about—the U.C.S. affair, the Plessey affair, the totally unacceptable high level of unemployment, which concerns us just as much as it concerns hon. Members opposite—but I wish to present the other side of the picture, too. It is this other side of the picture which makes me profoundly confident about the medium and long-term future for Scotland.

Moreover, today's announcement by my right hon. Friend of the short-term injections of capital which we are to have will go a long way to alleviate much of the short-term distress in Scotland today, I congratulate my right hon. Friend on the sums involved, which, I suppose, must approach about £40 million, including the house improvement grants which he announced earlier this month.

I have considerable confidence in Scotland's economic future. First, we now have an excellent investment incentive package. It is a package which is generous, comprehensive and flexible. In spite of what was said by the hon. Member for Aberdeen, North, I entirely support the switch from grants to allowances because I believe that, in the long term, this cannot but create jobs and create viable industry. It is no use just creating industry which cannot go on providing jobs. So I entirely agree with the switch from grants to allowances. We can still have grants and loans, when we need them, under the Local Employment Act, which, as the very name suggests, is operated by reference to the amount of employment which can be given.

Edinburgh and Portobello have been given intermediate area status. We have created a special development area in the West of Scotland, with improvements and advances in building grants, rent-free factories for up to five years, 30 per cent. operational grants, free depreciation, training grants, removal expenses grants, infrastructure improvement grants, and regional employment premiums until 1974.

The only point—I put this to the Under-Secretary, my hon. Friend the Member for Ayr (Mr. Younger)—at which I should like to see an improvement is that in the special development area it should be possible to give some of the benefits to companies already there. What we are looking for is increased production and more jobs. It does not matter whether a company comes in from outside, from further than 30 miles, or is there already. I ask my hon. Friend to consider that improvement, although I emphasise again that, overall, we have an excellent investment package in Scotland.

My right hon. Friend, in opening the debate today, mentioned the subject of housing reform. I very much welcome what he said. This is all tied up with the whole question of Scotland's economic future. In Scotland today, we hold, alas, three wretched records in housing. We have the most houses in public ownership in the whole of the United Kingdom, we have the most overcrowding in slums in the whole of the United Kingdom, and we have the most absurd level of rents in the whole of the United Kingdom.

I do not believe that it is coincidence that we have all those three factors together. It is obvious that the housing situation in Scotland deters companies which would otherwise be keen to take up the advantages which we can offer. They are put off by the appalling housing which, all too often, is to be found in Scotland today.

Dr. M. S. Miller (Glasgow, Kelvingrove)

Can the hon. Gentleman tell me what is absurd about a rent of £4 a week for a Scottish family whose main wage-earner is earning less than £20 a week, and when there is heavy unemployment in Scotland?

Mr. Sproat

My point is that the level of rents in Scotland is roughly half the average in England, which leads to a situation in which there is not enough money to plough back into improving the housing. Cases such as the hon. Gentleman raises will be covered under our scheme, because we shall give rebates to those who do not have the income to pay the fair level of rent.

Apart from the question of executives being put off coming to Scotland to new industry, I should be very interested to know whether any estimates have ever been made of the impetus to emigration from Scotland which the bad housing there over the years has given. I hope that the position will be greatly improved by my right hon. Friend's proposal for housing reform.

I agree that we have an excellent investment package for Scotland, but, as many hon. Members have said, until we can activate it by overall United Kingdom growth we shall not see the full advantages which it could bring. Therefore, we must consider what the Government are doing with regard not only to Scotland but to the economy of the United Kingdom. We are going through hard times, but I have faith in what the Government are doing to regenerate the economy as a whole. We are cutting taxation. We have already cut it by £1,000 million within our first year in office. We are slowly de-escalating huge and unjustified wage claims, which more than anything else have resulted in the high unemployment and high prices. Until they are de-escalated we shall not be able to stop that high unemployment and the big price rises. The main plank in the programme for regenerating the economy is putting some sense back into industrial relations.

Those three points—the cutting of taxation, the de-escalating of huge and unjustified wage claims, and putting sense into industrial relations—are producing results, even though the Bill has not yet been passed. They are not great results yet, but the halving of S.E.T. and the reduction of corporation tax by 5 per cent. must give extra liquidity to companies in Scotland. It will be interesting to see, come September, when we have all the pension increases, the increase in the retail trade as a result of more money jingling in pockets. This will be a minor inflationary injection for Scotland. [Interruption.] It is no use the hon. Member for Kilmarnock (Mr. Ross) laughing. It is the greatest single pension rise the old-age pensioners have ever had.

The de-escalation of wage claims is succeeding. The hourly wage rate for the last six months of 1970 was rising at 8.1 per cent. a year. In the first five months of this year, the latest figures I could obtain, it is rising at 3.5 per cent. Such a cut is a good indication of our success, slow but definite, in cutting back high and unjustified wage claims.

Mr. John Smith (Lanarkshire. North) rose—

Mr. Sproat

I will give way when I have finished this passage.

I believe that we now have fewer strikes in progress in Scotland than at any time in the past 20 years. That is a result of the Government's firm attitude over industrial relations. It is beginning to show results. They are small so far, but I believe that the effect of that attitude in regenerating the economy will grow.

Mr. John Smith

I am grateful to the hon. Gentleman for allowing me to interrupt the passage from the Conservative campaign guide to which we have been treated. Does he agree that the only discernible result of those policies for Scotland is that we have the highest rate of unemployment since we last had a Conservative Government?

Mr. Sproat

I do not agree. What I have said shows that that is not true.

I turn from the short-term prospect to the longer-term prospect, and here I want to say something about the Common Market. One hon. Gentleman said that he did not think that it should be discussed in this debate because we shall debate the subject next week. I do not agree. For Scotland's economic prospects, the Common Market is a vital element, and should be discussed today. The point raised by the hon. Member for Glasgow, Scotstoun (Mr. Small) about British Standard Time shows a basic ignorance. He thinks that just because something happens in Europe it must happen here, but, of course, it does not. We can go on abolishing things like B.S.T. for as long as we like when we are in the Common Market ; there is no need to harmonise everything. I would go on rejecting B.S.T. for as long as I was in the House, even when we were in the Common Market.

I believe that Scotland will benefit, as the economy of the United Kingdom as a whole will benefit, from our entry into the E.E.C., and that Scotland will enjoy a higher standard of living, as will the whole United Kingdom. The Common Market countries have enjoyed a higher standard over the last decade than they had before. Indeed, they have overtaken this country.

I was glad that my right hon. Friend mentioned the question of fishing. That is separate from the overall economic development of Scotland. I am very glad that he made the reservations he did. which I entirely share.

Many firms and companies in Scotland are hanging back on their investment plans until they know for sure whether we shall go into Europe. When we know for certain, we shall see a welcome increase in investment.

My hon. Friend the Member for Galloway (Mr. Brewis) mentioned Southern Ireland and German investment. It is perhaps even more instructive to look at the level of German investment in Belgium over the past 10 years since the Common Market got going.

Mr. Donald Stewart

How does the hon. Gentleman conclude that entry into the E.E.C. will benefit Scotland, when there have been numerous occasions in the United Kingdom context when the South-East of England has had an affluent society while Scotland has not?

Mr. Sproat

It is generally accepted that when England was affluent Scotland might not be so affluent, but it was more affluent than before, and that when the United Kingdom as a whole hit hard times, Scotland hit appalling times. Whatever century the hon. Gentleman may be living in, we are irredeemably bound up with the economy of England and Wales today.

I also welcome entry into the E.E.C. on the whole question of regional policy, because I believe that the European Investment Bank would be another source of funds for further Scottish development. The Social Fund of the Community would also help retraining in Scotland, which is another important factor. I believe that not a single mandatory change in regional policy as it affects Scotland would be necessary because of entry into the Common Market. We could go on exactly as we wanted in our regional policy, or change it as the House might decide. I see the hon. Member for Western Isles (Mr. Donald Stewart) shaking his head. Does he realise that France and Italy have larger development areas, not only by geographic area but by population? We shall be able to go on with our development area policy for Scotland even if we join the Common Market. One of the main objects of the Community is to reduce economic differences between regions. Therefore, we in Scotland need have no fear of entry but should welcome it as a great chance to expand our economy.

Therefore, when I consider the excellent investment incentive package we have, the possibilities of Oceanspan and North Sea oil, the overall strategy of growth that the Government are applying to the country as a whole, and the prospects that the Common Market opens up, I have every confidence in the economic future of Scotland.

7.50 p.m.

Mr. Dick Douglas (Clackmannan and East Stirlingshire)

There were certain elements of the analysis of the hon. Member for Aberdeen, South (Mr. Sproat) which I could not share. The Secretary of State indicated that he foresaw a high level of unemployment when he came to office. I want him to look searchingly at the unemployment figures. From January to June this year, the monthly average of unemployment has been 27,000 higher than the monthly average of 1970. What are the prospects for the Scottish economy and the Scottish people in the winter of 1971–72? We should be grateful if the right hon. Gentleman could tell us that we are likely in that winter, or even in 1972, to get back to the 1970 monthly average. But we have had no such indication from the Government and unemployment in Scotland is now averaging 120,000. Can the right hon. Gentleman, in terms of post-war recorded figures, tell us of any six-monthly period when unemployment has been running at 120,000 in Scotland?

Hon. Members opposite have put a persuasive case that the growth of the Scottish economy must be closely linked with the growth of the United Kingdom economy. I am always interested in the type of economic advice given by the right hon. Gentleman's economic advisers. I wonder how much he listens to them. Professor A. D. Campbell, professor of economics at Dundee University, writing in the Investors Chronicle on 26th May in relation to a particular regional study—and I hope I am not quoting out of context—said : There is, however, no Government commitment to the expansions considered in the Tayside Study so that recovery in Tayside will depend, as in most other areas, on the general recovery of the U.K. economy. What have we in prospect for that? The Chancellor of the Exchequer's budgetary forecast is not on tap. We are still awaiting the result of his survey. His budgetary strategy is a failure. There is no point in hon. Members opposite talking about the cut in corporation tax. Let them point out at this time the balance sheet of any Scottish company—or of any United Kingdom company for that matter—which shows cash flows capable of giving sustained investment in future. Company liquidity is still very tight. There is no indication that industry is willingly going to undertake purposeful investment, and that is regardless of whether we enter the E.E.C., because the Government in three tragic instances have sapped the confidence of industry. They have done so by their actions over Rolls-Royce, U.C.S. and the Mersey Docks and Harbour Board.

The right hon. Gentleman pleaded, "I was there first." He is always there first. Let him go, for instance, to the Clyde Port Authority and ask those in charge whether they could raise money on the public market just now at any rate of interest, and they will tell him that the result of the Government's action over the Mersey Docks and Harbour Board has eroded the possibilities of public concerns going to the market. That is a fact. It has nothing to do with the Labour Government but is the direct result of 13 distasteful months of Conservative Government.

We have not got growth prospects. The fires of economic growth have not been lit, and the fires of inflation have not been stilled. We have the worst of all possible worlds and the only business in which people are willing to invest is the money business. Very few people are willing to turn their money into fixed assets. That is one of the troubles with Government policy. They have eroded confidence. One can speak with a great deal of sympathy about trying to get foreign capital and foreign fixed investment into the country, but there are dangers in this and one should be alive to them. Part of the recession in the Scottish economy, although not entirely, results clearly from the fact that there has been a recession in the United States, and the multi-national companies set up in Scotland during the last 10 years or so have found it expedient to curtail growth there.

What are the Government going to do not just to get foreign investment in Scotland but to create indigenous growth? The young people who are coming on to the labour market are highly trained and highly skilled. One of the tragedies of this summer is that a lot of highly-trained personnel will be coming on to the labour market at a time of high unemployment. We have invested considerably in the past and will do so in future in training skilled personnel. What for? To be thrown on to the scrap heap of unemployment? It is a tragedy. What do the Government propose to do about that?

There has been the erosion of regional policy as exemplified by the process of raising the level for industrial development certificates. This, too, is a tragedy. The siting of the value-added tax centre at Southend is yet another tragedy. Did the right hon. Gentleman agree to that? It was a Cabinet decision. It is not so much the number of jobs that is important, but the psychology of the decision in that the Government, when they can make a decision, choose to site a Government enterprise in an already congested area.

Mr. Gordon Campbell

The point, as explained by my right hon. Friend the Chancellor of the Exchequer, was that the Customs and Excise is already at Southend and that if the value-added tax is to be brought in in two years' time it is convenient to use the Customs and Excise people already there. But three-quarters of the personnel are going to be dispersed throughout the United Kingdom and the figure of 10,000 which some hon. Members have produced is completely out of proportion.

Mr. Douglas

The right hon. Gentleman has answered my question. He agreed to this decision and he has not taken into consideration the psychological effect.

We are already paying dearly, to the tune of £150 million, for the decision to site the third London airport at Foulness. If that is linked with a port and further industrial development in order to suit the powerful industrial interests trying to promote that type of project, and the right hon. Gentleman acquiesces or complies with that decision, the people of Scotland will not take kindly to it.

Mr. Gordon Campbell

What I agreed to was that about three-quarters of the personnel are going to be dispersed throughout the United Kingdom.

Mr. Douglas

I do not welcome the right hon. Gentleman's interjection because I have moved on from that point. Great public companies are bringing pressure to bear and are knocking on the Government's door. The people of Scotland will not forgive the right hon. Gentleman if he acquiesces to this decision.

I take the point about the switch from investment grants to tax-based incentives. Again, I quote from the same article by one of the right hon. Gentleman's economic advisers : The switch from investment grants to free depreciation has reduced the Region's attractions relative to areas without Development Area status ; and vast new areas, competitive with Tayside for new industry, have been given the greater advantages of S.D.A. status …". This clearly indicates that the differentials between development areas and non-development areas have been eroded. The right hon. Gentleman should bear this important consideration in mind.

I turn to a point about a matter which is very dear to me concerning U.C.S. The Secretary of State raised this issue ; I did not intend to raise it. But I say unequivocally that the views of the S.I.B. director fell on very receptive ears on 14th October. He made recommendations to the Government concerning credits for shipowners who had ordered ships with U.C.S. I want written into the record the Answer given to me on 2nd July by the Secretary of State for Trade and Industry : The Shipbuilding Industry Board Director discussed the position of the company with officials of my Department on 14th October. In the course of that discussion, he expressed doubts about whether the company should continue trading. No written communication passed between Mr. Mackenzie and the Department."—[OFFICIAL REPORT, 2nd July, 1971 : Vol. 820, c. 222.] I do not want to impugn anyone's professional status, but it should be clearly pointed out that there was a distinct possibility that Mr. Mackenzie, in evaluating the position, would be faced with a conflict of interests. In a Written Answer given to me today, the companies in which Mr. Mackenzie held directorships were set out and included among them was Yarrow and Co. Ltd. In view of this, the Department should at least have called for documentary evidence of the background in detail.

I may seek the indulgence and good grace of the House to raise this matter further, but I wish to put it on record that Mr. Mackenzie might have had a conflict of interest. I ask the Minister who winds up the debate to say whether the possibility of a conflict of interest was put to the S.I.B. director and whether he was asked to resign from the U.C.S. Board or from Yarrow and Co. Ltd. because it is passing strange that the only part of U.C.S. which we could be sure of saving was Yarrow Shipbuilders, which is wholly owned by Yarrow and Co. Ltd.

8.4 p.m.

Sir John Gilmour (Fife, East)

One of the main points raised in this debate is whether the method of supporting industry followed by the Opposition was better than the method which my right hon. Friends are following. For the Opposition to prove their claim, they would have to show that at the end of the Labour Government's period of office, when an election was called very unexpectedly, a large inflow of jobs was being created in Scotland by the means employed by the Labour Government. I do not think that that was happening. If the jobs had been in the pipeline, they would have been coming out now. My right hon. Friend the Secretary of State is right in saying that he inherited a very difficult situation.

We have been having debates about the all-too-high level of unemployment in Scotland since about 1958. Neither party has been able to find the answer. It is a very good thing in these debates to be a bit critical, not only of the Opposition, but of ourselves, and I hope to do this in a constructive way.

One of the troubles is that when we give a big grant to an incoming industry which puts up a new factory there is immediately a flow of labour from established industries to it. There is also wage escalation, because the Government are paying money to help pay higher wages to attract industry. In the intervening period before we go into the Common Market—and the opportunities which arise from the Common Market will certainly come, but not for some time—there is a great deal to be said for a programme for modernising and helping existing industry in Scotland. I am interested in the future and prospects for what I have. Although I should like to have enough money to buy, say, another bull, I wish to tend and foster the cattle I have. I think that the Government would be well advised to foster and improve existing industries in the period immediately ahead. This is particularly necessary because in a very short time the regional employment premium, which is bringing quite large sums into existing industries in Scotland, will be phased out.

What can Scotland cash in on in particular? We must cash in on the deep water in the west of our country and the bridge which can be created through the port on the Clyde for industrial Scotland. How can we best set about doing this? I think that the solution lies in an injection of capital into the steel industry. One of the things which I find slightly worrying about the C.B.I. report on the steel industry—and my right hon. Friend the Secretary of State said that he had been to see the steel works at Taranto—is that by joining the E.E.C. we shall be taking part in a pricing policy whereby the steel is priced at the works and the consumer, who is at a distance from the works, will have to pay for the transport. I take it that the purpose of the steel works in Italy which my right hon. Friend visited was to attract and expand steel-using industries in the area. This is what we would have to do in Scotland.

Another problem which I see arising from our entry to the Common Market is that if we greatly depend on an I.D.C. policy it is one thing, in an United Kingdom context, to refuse an I.D.C. for growth in the South or South-East, but what will be the position if, having refused it, the company says, "We will go to Brittany or Normandy"?

There are some immediate and possibly short-term steps which my right hon. Friend the Secretary of State can take to help foster existing industries. One of them concerns the whisky-producing industry which will be faced with a challenging situation arising from our entry to the Common Market, because the price of its raw material—cereals—will increase. Another difficulty is that countries will be very much guided by what we charge when it comes to setting their own spirit duty. This would be a very appropriate time to reduce the duty on whisky, and I hope that my right hon. Friend will give this point serious consideration. [HON. MEMBERS : "Hear hear."] I am glad that there is a certain amount of support for that. I should perhaps have declared an interest before I made that statement.

The paper-making industry, which affects so much the East of Scotland, can look forward to a better future if we go into Europe but, on the other hand, it is facing serious difficulties at present. One gets the impression that some Scandinavians are trying by unfair competition to get the mills in this country out of production before our advent into the E.E.C., and we therefore need help there. Other hon. Members have mentioned the fishing industry. Here we have a prosperous industry right round the coast of Scotland which should not be neglected in the negotiations.

We must have a bit of imagination. The Highlands and Islands suffer greatly from the high cost of transport, and I see no reason why the Chancellor of the Exchequer should not reduce petrol duty on all islands. No one who lives on an island has free access to the road system of this country. An islander has to pay a heavy charge to come over on a ferry before he has access to the road system. Since the people living on islands do not get full value from the road system they should not be charged the full pertol duty. If we do this the people in the Highlands and Islands will feel that the Government have some imagination, and do not have the civil servant's "same all over the country" attitude which most Governments of the past have had.

A matter which concerns my constituency is the sugar beet factory in Cupar. This is a hardy annual which I have brought up many times. There has been a feasibility study into the possibility of someone other than the British Sugar Corporation running this factory. We know that on entry into the E.E.C., after the Commonwealth Sugar Agreement ends, 400,000 tons of sugar will either not come in or will come in after payment of a higher duty which will adversely affect our balance of payments. This is equivalent to 200,000 acres of sugar beet grown either in Europe or elsewhere, and the farmers in Fife and the East of Scotland have agreed to support the factory if a change can be made so as to allow private enterprise to take part in this essential industry.

With higher cereal prices if we go into the Common Market there will be a greater need for a break crop in Scottish agriculture. I remember my hon. Friend the Parliamentary Secretary to the Ministry of Agriculture, saying that the price of wheat would be such that people would be growing it on the top of Ben Nevis. If this happens and there is increased cereal production the need for the growing of sugar beet will be all the greater.

I am fairly certain that our economic difficulties will not quickly be overcome. We read in the newspapers about Pan-American and T.W.A. having to merge, and the possibility of continuing the RB211 seems to be fading every day. Perhaps it is wrong to cry woe but, on the other hand, it is better to face the dangers and difficulties and be prepared for them. I suggest that something could be done in the short term between the Department of Social Security, my right hon. Friend and the Minister of Defence. I cannot believe that there are not some items of defence which normally the Exchequer says there is not enough money to buy. If we have to pay out huge sums in social security to skilled men for doing nothing, would it not be better to calculate whether, as a bridging operation until new industry is brought in, some useful equipment for the State could be procured? By doing this we should be utilising the labour and creating a useful asset.

8.14 p.m.

Mr. John Rankin (Glasgow, Govan)

I agree largely with what the hon. Member for Fife, East (Sir J. Gilmour) said but I remind him of the need to provide movement and jobs for people. There is a continuing movement of people from the Western Islands over to the mainland. If we do not satisfy the economic and social needs of the people who live in these less attractive parts of the country, those people will not wait, because the attractions are too few and the transport arrangements, whether by surface or by air, are in sufficient. I hope that the Secretary of State is taking note of these matters. He has heard of them already. If we are to preserve the distribution of population more equitably throughout Scotland we must provide jobs, attractions and all the other amenities of life to keep people living in the areas which tend to be depopulated.

Sir J. Gilmour

On this transport question, does not the hon. Gentleman agree that one can buy a fortnight's holiday in Majorca more cheaply than a return ticket to Stornoway?

Mr. Rankin

That is an even stronger criticism from a supporter of the Government than I as a critic of the Government have made, and I trust the right hon. Gentleman the Secretary of State will pay close attention to that.

The hon. Member for Aberdeen, South (Mr. Sproat) said that he was a supporter of entry into the Common Market. I, too, am a supporter, because I think Scotland has a better chance of economic freedom in the Common Market than she has at present. Scotland is too much under the control of the wealthier and more powerful country with which she is allied. On the flight from Glasgow to London, from the time one leaves the Lake District there is scarcely a single bit of England that is uncultivated and scarcely a big town which is not very close to another big town. So here we have a mass of people, a mass of work and a mass of wealth that Scotland cannot equal because she has not the physical backing to create that wealth. Consequently, in parts of England such as Coventry and the Midlands we have established great Scottish populations, Coventry is almost a Scottish city. Our workers have gone to that city from Scotland seeking better homes and better wages than they can get in their home country, and what is happening is that they are dissociating themselves almost completely from Scotland. Scottish communities are being established in England because Scotland has not been able to provide her own people with a sufficiently attractive livelihood.

Our Scottish business men have been seeking to break this English control—I say this without wishing to be offensive—by establishing their own business contacts with the Continent. Those business men have been in direct contact with customers in Europe and have sought to ease the situation by trying to get air services started so that the various business representatives can fly between Europe and Scotland to sell Scottish goods and promote Scottish industry in Europe. They have been doing this for quite a while. I have raised this matter on two or three occasions and have had absolutely no encouragement, because every bit of business that leaves Glasgow and Edinburgh to go into Europe in order to promote Scottish industries must go through London. Nothing can be done as between Glasgow and Western Europe without first getting the permission of London. That is one powerful reason in my view why we should support the Common Market—[Interruption.]

Mr. Deputy Speaker (Sir R. Grant-Ferris)

Order.

Mr. Rankin

Mr. Deputy Speaker, I am not aware that it is an offence to give a reason for one's views. I have given only one reason.

Mr. Deputy Speaker

I am seeking to put to the House that the hon. Gentleman should be allowed to make his points in his own way.

Mr. John Robertson (Paisley)

On a point of order, Mr. Deputy Speaker. Surely a Member of the House is allowed to make known his reaction to a comment by one of his hon. Friends. It is surely not an offence to make that comment.

Mr. Deputy Speaker

It is perfectly correct that an hon. Member should be allowed to make his comment, but I hope that the hon. Member for Glasgow, Govan (Mr. Rankin) will not be diverted by any other comments.

Mr. Rankin

I apologise, Mr. Deputy Speaker. I accept the comment of my hon. Friend the Member for Paisley (Mr. John Robertson) in the same spirit as I hope he will accept my comments. It is because I feel that it is necessary to try to get direct Scottish connections with European countries that I and many other people favour the Common Market. I hope that this will succeed in giving us a certain amount of liberation for which we have waited so long and which we so badly need. Every one of us, whatever our views on the Common Market, knows that Scotland has not advanced as rapidly as it should in filling up its empty spaces. We all know from our service in the Scottish Grand Committee the problems facing the Scottish economy, and this is one of the basic reasons for the continuing exodus of our young people from Scotland. We must do all we can to keep those young people in Scotland so that they may help to develop their own country and so increase the prosperity of the United Kingdom as a whole.

8.24 p.m.

Mr. Hamish Gray (Ross and Cromarty)

I go a long way with certain comments made by the hon. Member for Glasgow, Govan (Mr. Rankin), and I hope to deal with some of them a little later in my speech.

Somewhat unusually, I disagree with some the the remarks which were made by my hon. Friend the Member for Perth and East Perthshire (Mr. MacArthur). I do not agree that the future prosperity of Scotland necessarily depends entirely on the prosperity of the United Kingdom. It is a pity that this has always been regarded as a foregone conclusion. What happens in times of prosperity is that in Scotland the prosperity is a little less marked than in other parts of the United Kingdom. Conversely, in times of depression the effects are infinitely worse in Scotland than elsewhere.

I agree with those who have suggested that the balance could be rectified if further oil strikes are made off our shores. A tremendous future lies ahead for our country if such oilfields are developed, and I hope that royalties from these finds will be more evenly distributed than has been the case in the past.

The ailments of our economy are not easily diagnosed. I do not agree with those who suggest that all our troubles emanate from the period 1964 to 1970; they go back a good deal earlier than that. However, I suggest that the previous Government's policy instead of rectifying the situation only accentuated the deficiencies.

The system of investment grants has been discussed at length and my only criticism of grants is that so often they were given to companies which were expanding from elsewhere. Therefore, in hard times the first places to be closed down are those in the furthermost parts away from the original company, and consequently Scotland has been the sufferer.

I do not intend to deal at length with unemployment since it has been fully covered by hon. Members on both sides of the House. Since there are still many hon. Members who wish to take part in this debate, I do not want to be drawn too widely on that subject. I am sorry that the right hon. Lady the Member for Lanary (Mrs. Hart) is not present at the moment since she made one or two accusations against the Government which should be investigated. She referred to the transport system being pursued by the present Government, but omitted to point out that the transport policies pursued by the Labour Government did nothing to help the situation in Scotland. I can think of few occasions when a Bill created more disquiet in Scotland than did the Transport Bill introduced by the previous Government.

I agree with the right hon. Lady that the situation in regard to regional policies is extremely worrying. In spite of assurances given from both sides of the House, people are still gravely worried about the effect on regional policies if we join the E.E.C. There are few comments on regional policies in the White Paper. While I do not want to be distracted by the subject of the E.E.C. at this stage, many of us will want to ask questions about the regional policy when the appropriate time comes next week and in the months ahead.

Since becoming a Member of this House, I have been somewhat depressed by the perpetual attacking of each other's past policies that takes place. It does not seem to matter which department is taking part in a debate. A great deal of time is spent from both Front Benches lashing the policies of the other side. Il is purely as a means of defence that it occurs so often, and one side is as guilty as the other. But, at a time when we should be combining in the interests of Scotland to try to solve the problems of our economy, it is a pity that we spend so much time hammering one another.

I believe that the Government are trying seriously to control the cost inflation which has hit industry in the past years. Certain hon. Gentlemen opposite would be well advised to support the Government in their efforts instead of trying to stir up matters in places outside this House. That needs to be said, and I have no hesitation in saying it.

Mr. James Sillars (South Ayrshire)

Members of the Conservative Party really must stop this nonsense. The people who began the argument that wages were chasing up prices were the leaders of the Conservative Party, and they did it in page 11 of their manifesto under the heading, "Steadier Prices".

Mr. Gray

The problem of prices has been gone into fully today, and my hon. Friend the Member for Aberdeen, South (Mr. Sproat) made a very interesting comparison in figures showing how the Government already have started to get on top of the problem. We appreciate that it cannot be solved overnight—[Interruption.] The hon. Member for South Ayrshire (Mr. Sillars) is entitled to his opinion, of course.

The new policies that the Government are pursuing will take time. The Government accept that they are bound to take time. We cannot expect miracles overnight, but we are confident that these policies will succeed, As time goes on, hon. Members opposite may have a fair amount of word-chewing to do.

S.E.T. already has been halved, and it will be abolished altogether in 1973. Considerable encouragement has been given to the steel industry recently with the announcement about Ravenscraig and the close co-operation now going on between the board and the Government will be to the benefit of the industry.

The subject of Hunterston has been dealt with thoroughly. One of the disadvantages of speaking in the later stages of a debate is that much of what one wanted to say has been said already by other hon. Members. A number of hon. Members have referred to special development areas, and the announcement about increases in road programmes and housing grants will be received with delight throughout Scotland.

The problem is not as simple as that, however. Until such time as we can attract investment, whether it be foreign investment or from within the United Kingdom, Scotland will still be up against it. I do not agree with the hon. Member for East Stirlingshire (Mr. Douglas) that this Government have damped out any hope of investment taking place in Scotland. It is fair to say that investment had been very slow for a number of years before my right hon. and hon. Friends came to office. There was a great deal of apprehension, and right hon. and hon. Gentlemen opposite must accept their share of the blame.

I believe that Scotland has a very great future. I am not despondent about it. But it requires the maximum co-operation on both sides of the House to create in Scotland the will to succeed and the knowledge that success can be ours. I hope that all parties will contribute to this in due course.

8.34 p.m.

Mr. Donald Stewart (Western Isles)

The hon. Member for Ross and Cromarty (Mr. Gray) made one or two valuable points, although I did not agree with all of them. He brought out the fact that Scotland has not automatically come into line with improvements in the economic situation in England. We have seen many occasions of that in the past.

I was quite unable to follow the reasoning of the hon. Member for Aberdeen, South (Mr. Sproat), to whom I am grateful for giving way on one occasion. I am sorry that he did not give way to me the second time. If he had done so, I should have raised with him the point about assistance to development areas in the Common Market. Recently, I raised with the Chancellor of the Duchy of Lancaster the fact that the Brussels Commissioners had ordered the Belgian Government to desist from giving assistance to a development area in Belgium. The right hon. and learned Gentleman has confirmed in a letter to me that they cannot do it without the approval of the Brussels Commissioners. This seems ominous for Scotland, which has already suffered enough from remote control in the present set-up. We shall be much more remote if and when we enter the European Economic Community.

It is correct, as the hon. Member for Fife, East (Sir J. Gilmour) said, that it does not behove hon. Members on this side to make the case for the prosecution against the Government. I am in general agreement with the Motion, that the Government have failed and are failing, but I do not think that the Opposition have any great grounds on which to attack them.

The right hon. Member for Kilmarnock (Mr. Ross) during his period of office as Secretary of State for Scotland, and the right hon. Member for Argyll (Mr. Noble) before him, talked about jobs in the pipeline for Scotland. Alas, as usual, it turned out not to be a pipeline taking jobs in, but a drainpipe draining jobs away. A well-known editor in the North of Scotland has said that for Scotland it is always better news tomorrow, and tomorrow never comes.

Although the Labour Government did not sent out the signal "Every man for himself", the fact is that at the end of their term in office Scotland had 82,000 jobs fewer than at the start. The Scottish unemployment figure is 45 per cent. up on the position a year ago. In passing, I point out that the current rate in England is 2.9 per cent. It is five years since Scotland has had an unemployment figure as low as that.

Both the Labour and the Conservative Governments have put forward policies which have damaged Scotland. However sensible or rational these policies may have been for England, they were disastrous for Scotland. We have on many occasions recently had to take unpleasant medicine for what was primarily an English disease. We never came in on the affluent society ; we never suffered from too much employment. We knew nothing about these problems.

I was sorry that the Secretary of State for Scotland mentioned, with approval, that we were getting various defence installations in the West of Scotland. We have far too many of these now. We have the Polaris base which Norway, although a member of N.A.T.O., refused to accept. It is time that this was taken out of Scotland, particularly from a heavily populated area. [An HON. MEMBER : "Send it to Foulness."] That is a very good idea, but I do not think that it would be accepted by Foulness. We have a rocket and gunnery range in Galloway. To regard these matters as a solution for unemployment seems a dread- fully anti-social policy. It is almost like saying, "Let the crime wave expand so that there will be plenty of work for the police." Is that the kind of work we want in Scotland? Certainly not.

The hon. Member for Edinburgh, South (Mr. Clark Hutchison) asked some very pertinent questions. He asked : Why is Scotland suffering in this way? Is it that our people are work-shy? Do we lack the financial acumen? The hon. Gentleman answered all these questions satisfactorily, but he left out the most important answer of all : namely, that we are suffering in this way because we lack a native Government to look after Scottish interests. That is why those who have mentioned oil are wrong. Without any claim to second sight, I can tell the House that the oil will flow south and that Scotland's share will be very small indeed.

I appeal to the Government, in the short term, to adopt the five-point Toot-hill plan. This would help to get over the immediate situation. I also ask them to give the go-ahead for the Hunterston programme. Nothing would do more to restore confidence in Scotland and the Scottish economy.

8.40 p.m.

Mr. Alexander Wilson (Hamilton)

Having listened to the debate from its commencement I can only say that speeches from the Government benches constitute nothing but a huge smokescreen, designed to divert the attention of anybody who cares to look at the words of the Motion.

I do not want, and my constituents are not keen, to listen to airy-fairy notions, however great they may turn out to be in the future, about getting oil from the North Sea. This is essentially a censure Motion on the Government who have gone into stagnation since June of last year. They have not only stagnated in their policies, but they have allowed themselves to slip back to such an extent that there has been an increase in unemployment in Scotland which is un-precented since the end of the last war. This smokescreen is no longer effective against the people of Scotland, as results in national and local elections have shown, and will continue to show until we get rid of this Tory Government.

In my constituency a fear is developing about something that I warned would happen when Rolls-Royce collapsed. There is fear about huge increases in the unemployment rate. When I refer to unemployment I am talking, not about figures, but about people. I am talking about men, women and children who have the right to work and the right to live in some dignity.

In Hamilton, in my constituency, in one year the male unemployment figure has risen to 1,290. In Blantyre it is 491, and in Larkhall it is 410. The same sort of picture is being created by the Government in other areas. The figures are the result of the Rolls-Royce collapse, and yet the Secretary of State this morning blandly announced an extra £8 million for road building.

Will the right hon. Gentleman tell the Rolls-Royce workers that this great public works programme is available to them? These are men with skills that have been gained over a lifetime of service to this country. In Hamilton there is 37 per cent. unemployment among skilled workers. In Blantyre the figure is 33 per cent., while in Larkhall it is 44 per cent. The figures do not lie. The figure for the long-term unemployed has increased in this short period of 12 months to such an extent that it is now 23 per cent. in Hamilton, 24 per cent. in Blantyre, and 20 per cent. in Larkhall.

Of course this censure Motion is essential. When the Government were elected last June they were supposed to be ready to rejuvenate the economy. They were supposed to be ready to cut unemployment at a stroke. They were supposed to be ready to cut prices at a stroke. Of course the Government should stand condemned, and any hon. Gentlemen opposite who supports the Amendment shows very little feeling for the people about whom we are talking, the unemployed. They find themselves unemployed, not through any fault of their own, but because of the sheer apathy of a bad Government.

I listened, in the Secretary of State's opening speech, for some expression of compassion for the people, but failed to find it. In my constituency in particular, the picture now developing can be compared with the 1930s. That picture shows a soulless Government, who are deliberately legislating to show direct profit to their ever-narrowing circle of friends.

They are legislating for insecurity among the people who made the wealth of this country, but who, alas, have never had the opportunity to share in that wealth. The past 12 months have shown a decline in the growth of investment. In Lanarkshire alone we talked about £4 million or £5 million worth of investment. Only £6 million of this sum came from Scottish industrialists. The remainder came from overseas. Industrial development certificates are almost forgotten by industrialists. There is stagnation in the economy ; there is a feeling of despair among the workpeople, a hopelessness at not being able to obtain employment. It is important that we should understand the feelings of those people.

In about six or seven days' time most of the workpeople in my constituency will be on holiday. I wonder if anyone on the Government Front Bench has ever been in the position of having to explain to his children that there would be no holiday for them. How is a child told that there will be no holiday? How does a mother explain to her children that they cannot have the little treats to which a child is normally entitled? How does a father explain that he cannot provide for his own family, through no fault of his own? The biggest blow to working men and women is deliberate legislation by which they lose their dignity If there is one thing that we on this side of the House will defend with everything we have it is our dignity, our right to work and provide for our families. The Government stand condemned in the words of the Motion. Every vote against the Motion at ten o'clock tonight will be reversed the first opportunity the Scottish people have, the first opportunity the English people have and the first opportunity the Welsh people have. We shall return a Labour Government which will believe in people and not profit.

8.50 p.m.

Mr. W. H. K. Baker (Banff)

In a debate of this type one naturally likes to refer to conditions in one's own constituency, and this has been so today. I should like to refer to the three main industries in my constituency, fishing, agriculture, and, a notable industry, whisky.

The country faces the prospect of going into the Common Market quite shortly. The farmers are content. Whether hill farmers or lowland farmers, there is a big opportunity for them, and we have been assured by the Government—and this is in the White Paper—that conditions for hill farmers will certainly be protected, and that is a cause for great satisfaction.

But question marks hang over the distilling industry. There are more distillers in my constituency per acre than in any other constituency in the United Kingdom. The distillers have many doubts about the possible adverse effect of V.A.T. In recent years there has been an upsurge in distilling, with vast exports of whisky to the United States of America. Without that valuable market the distillers would be in bad trouble. I hope that tonight my right hon. Friend will make some comments on the application of V.A.T. to whisky, or at least let me know when that information is available.

The third main industry, fishing, has been doing pretty well of late because of the action of the Conservative Government in 1964 when it extended the fishing limits. I refer to the inshore industry. It is largely due to the economic measures by the previous Conservative Government that this happy state of affairs has come about.

But fishermen are worried about the future. Where there is a fishing industry there are ancillary industries, such as boat building, and for various reasons, not least the imminent application of Common Market rules and regulations, there is anxiety about the future. Unhappily, the result is that order books in the four boatyards in my constituency are thinly occupied, if order books can be thinly occupied. I hope that within the next two or three months we shall be able to get satisfactory negotiations in Brussels so that the future of this immensely important industry is assured, because until we have stability in the industry, we shall have uncertainty in the boatyards and in the industry itself.

In a supplementary question. I suggested to my right hon. Friend the Foreign Secretary yesterday that the Government should reconvene the 1964 Fisheries Convention, together with Norway, which was not a signatory. If we could get the Convention reconvened, away from the Brussels negotiating table and outside the atmosphere of the present negotiations, it might be possible to obtain a solution which would be equitable to all United Kingdom fishermen, and not least to the inshore industry. There is uncertainty at the moment and the sooner we can get stability in this respect the better.

The economic situation in my constituency, because things are going well in the fishing industry and agriculture, is not too bad. In other words, the rate of unemployment is not desperately high. I hope, however, that there will be an improvement from the fishing point of view so that the crews will be forthcoming We will then be able to continue to have a prosperous fishing industry.

8.57 p.m.

Mr. John Robertson (Paisley)

Today I heard the most dreary, dull and irrelevant speech that it has ever been my misfortune to hear from a Secretary of State for Scotland. Faced with a serious crisis of unemployment, short-time working and redundancy—in other words, a crisis of confidence right across industry in Scotland—the right hon. Gentleman stood at the Dispatch Box with a silly grin on his face and tried to assure us that everything would be all right once we were in the E.E.C.

I do not know what that has to do with the immediate problems that we in Scotland face or how they will be solved quickly. I want to hear about the Scottish steel industry and shipbuilding north of the Border. Six months ago we were being told all sorts of things about industry being attracted to Scotland. Where are these expanding industries? At present we see electronics and computer firms closing down. Where are the industries that were to take us into the space-age?

The Secretary of State said that he deplored the high rate of unemployment. One might be forgiven for believing that he was trying to kid us. Either the right hon. Gentleman who is a Minister of Cabinet rank is not privy to the decisions of this Government—that he knows nothing about them and is not consulted—or he disbelieves the briefs that are put in his hands. I believe it is the former. I do not think the Secretary of State for Scotland counts any more. I have concluded that he is not listened to and that the case for Scotland is not heard where the decisions are made.

The logic is—and hon. Members who are arguing in favour of the E.E.C. should heed this—that Scotland must have its own Parliament. If things continue as they are the Scottish people will make this demand because it will seem the only solution. A lot of monkeying about with regional policies will not solve anything. Hon. Members on both sides must beware, in any event, about using the word "region" to describe this nation that is Scotland. How can one argue on behalf of the Scottish economy and in the same breath talk about a regional policy? The two are contradictory.

I wanted to hear about the steel industry. I wonder if the right hon. Gentleman the Secretary of State has been to Scotland to inquire about it. We do not know from his speech today. But we know that he has been to Southern Italy, as a great many of us have, on what my hon. Friend the Member for Glasgow, Scotstoun (Mr. Small) calls the gravy train, taking free rides, free drinks and free eats, to see this marvel of the Common Market, the steel works, away in a desert, and enjoying it very well. With the sun shining and with time off, that is lovely.

I wonder how many right hon. and hon. Gentlemen opposite took the trouble of not only looking at the steel works but going to Brindisi and having a look at some of the slums and seeing the low standard of living. It is shameful to see the dreadfully shocking condition of the people in that area. This single steel works is put up as the salvor of all the people in southern Italy. We all know that it is not. They live in shameful poverty that is a disgrace to any nation and to Europe. Is that what the right hon. Gentleman offers as a solution to Scotland's problems? He says, "We shall be all right, boys, if we join the Common Market. American firms are running about looking for a place to build a factory. They will come to Scotland. "One wonders, why not Southern Italy, where they have built the steel works? Why build in Scotland when they have the steel works in Italy? They cannot get anyone else to go near the steel works in Italy. Perhaps they melt the products down and re-roll them. It is a wonderful prospect. We suggested the solution to the problem in Scotland some time ago. One could build the ships at John Brown's, break them up at Gare Loch and start building again at John Browns. That is the kind of solution being presented by the right hon. Gentleman.

For goodness sake, let us get down to an appraisal of the problem. The hon. Member for Edinburgh, South (Mr. Clark Hutchison) tells us how he has wondered over the years why it was that this intractable problem we have all tried to solve for so long has never been capable of solution. It has to do with the centre of Government, or, at least, with the modern phenomenon, which is true of all countries, that once one builds up very large conurbations of people and industry, of their own free will and their dynamic, they seem to keep growing and to draw in people and industry from the peripheries. That is true of this country, of America and of the Continent. This has happened within Scotland and is happening with Scotland in relation to London and the rest of Great Britain. The population of Ireland, North and South, has been sucked in, as has that of the North and the South-West of England and that of Scotland.

But if we join the Common Market a new magnet will be created, a new concentration of industry and population, and the process will begin again. Not only will it be difficult to deal with Scotland's problems in relation to the rest of the United Kingdom, but, if we are a member of the E.E.C. it will be infinitely more difficult to deal with Scotland's problems in relation to the concentration of population and industry in the Paris-Milan complex.

It is not a problem that we shall attract American capital and we can go into Europe and sell our goods. Has it ever struck anyone that this means that the industrialists from Europe can sell goods in Scotland? So often we have been told that they are better at it than we are. What chance do we stand then?

Give us a solution to the problems of unemployment in Scotland, and not a lot of excuses that my right hon. Friend the Member for Kilmarnock (Mr. Ross) is responsible for all the ills and that the Government have only had a year to cure them. What a dreadful thing it is for the Minister to come to the Dispatch Box to say that.

I hope that the Minister for Trade will have a little more cheering news to give us. He should at least try to convince us that he knows what he is talking about.

Mr. Speaker

It was at 22 minutes to six that back bench Members first had a chance of joining in the debate. Since then, in just under 3½ hours we have had 18 back bench speeches, an average of under 12 minutes each. I thank hon. Members very much indeed for their cooperation.

9.5 p.m.

Dr. J. Dickson Mabon (Greenock)

I think that we would wish to congratulate you, Mr. Speaker, on the way in which you have regulated our proceedings.

This has been a very useful debate. As Scots we can congratulate ourselves on having £25 million more than we had when we started the debate. If we had not had the debate perhaps the programme would not have been announced. Today we had a short debate in the Scottish Grand Committee when more work was announced, adding up to £33 million. Not bad for an Opposition in one day. Undoubtedly, without pressure of this kind on the irresponsible Government that we have we would get nothing at all.

I must congratulate Mr. Innis Macbeath of The Times. What prescience!. He told us several days ago that the Government were about to announce programmes of, not £33 million, but £100 million, but that was for the whole country, and the Scots would get one-third. He was right. Mr. Macbeath said also that the estimate of jobs that might be expected from that would be about 16,000.

It is in that context that we are discussing what the Government have announced, which is part of their defence against this Motion of censure, because that is what we are debating. The Government have tabled an Amendment which says, "This is not fair. We have done two great things. We have set up the S.D.A. and we have given other strong regional incentives since we came to power. So you cannot vote against us because of these two things."

If ever there were an action which proved the Motion of censure, it is the Government's concession of a £33 million injection into the economy. It is a self-confession that all is not well. The Government know that they are in very great trouble. So, despite the Amendment, the announcement of a substantial public works programme has had to be made. We do not know how substantial it is because Conservative Governments have bad habits of losing the way with these programmes. So we must all monitor the Government and ensure that this programme comes into full reality and that it is a valid programme.

At best the programme will give us 16,000 jobs or so. At the moment the figure of unemployment is 37,000 higher than it was last year. So no question arises that this is the solution and that the Opposition should withdraw the Motion of censure. It is not good enough.

Therefore, we have to carry on with the debate and look at the Amendment. The Amendment seeks to defend the Government's position by maintaining two propositions that one can identify—first, the S.D.A. and, second, the other regional incentives. In a few days, by the way, we shall have the July figures, as my right hon. Friend the Member for Kilmarnock (Mr. Ross) said. Maybe the figure of unemployed will not be 37,000 more ; may be it will be even more. I hope not, but one must measure that against the 16,000 jobs which this £33 million programme means.

I wonder how many of the 7,885 carpenters, builders, joiners, and so on, out of work since the Conservatives were elected will get some share of these jobs. I wonder how many of the 13,000 unemployed in the civil engineering construction industry—one-sixth of the entire labour force—will scramble for these 16,000 jobs.

It is not good enough to be satisfied with this. The hon. Member for Aberdeenshire, East (Mr. Wolrige-Gordon) said that it was a palliative. The hon. Gentleman is right on the ball there. That is all that it is—a palliative to deal with a situation symptomatically—not radically, not fundamentally, but symptomatically. It is not adequate to the needs.

Tonight the right hon. Member for Argyll (Mr. Noble), whom we welcome once again to our debates, returns to the scenes of his old crimes. We remember him very well when he was Secretary of State for Scotland. On 26th October, 1962 the right hon. Gentleman said this at Strachur : I do not see the problems of Scotland being settled in a couple of months, but during the next year or so. The right hon. Gentleman was right. Not from that right hon. Gentleman any of the overnight nonsense that we get from the present Secretary of State. After all, a night to him is not even 13 months. All nights are long for the Tory Party. Perhaps it has something to do with British Standard Time. I do not know. But the right hon. Member for Argyll was right. He took up office in 1962, he made that statement at Strachur, and by October, 1963, he was presiding over a Scotland with 100,000 unemployed. Then, with that panache which we all associate with him, with his yellow silk waitcoat, striding over Scotland—

The Minister of Trade (Mr. Michael Noble) indicated dissent.

Dr. Mabon

I correct that then—he announced his White Paper for Central Scotland. There was no mention of the Highland, of the North-East or Tayside. He was very much like the present Secretary of State who, in two major economic debates, in February and today, never mentioned the Highlands once. That programme for Scotland in 1963 was about Central Scotland, not about North.

Now, the right hon. Member for Argyll comes on the scene to defend the Amendment. He has to defend the success of the special development area. That is what we are told—that it has been a great success. In fact, 20 men in that area are chasing every Clydeside vacancy. That is the proportion of men out of work and trying to find work. We have never had its like since the war. My constituents, who have long memories of unemployment, tell me that they cannot recall such a time, unless they go back to 1935, 1936 and 1937. It is as bad as that.

Some hon. Members have complained that their constituencies are outside the S.D.A. My right hon. Friend the Member for Kilmarnock talked about Irvine, Ayr and so on. I say this is consolation to those who are outside the S.D.A. and who feel out in the cold : it is freezing inside the S.D.A. There is no need to be jealous. Nothing is happening. Industry is not on the move. That is why the S.D.A. is not working. In itself, the S.D.A. is a good concept, but it is not working because industry is not on the move. However one may try to frame regional incentives, as they are called—or national incentives, to take the point made by my hon. Friend the Member for Paisley (Mr. John Robertson)—and however one may describe them, they do not work under any Government, with any system, unless there is growth in the economy as a whole. Whether it be the economy of a country or the economy of a continent, it still turns basically on the question of growth, and that is where the Government have failed.

I am helping the right hon. Member for Argyll. He must defend the success of the S.D.A., and he will, no doubt, tell us of the upturn in the I.D.C. figures. The Secretary of State almost pre-empted the argument by saying that one cannot judge on six months. He is right, but that is the point at which poor Argyll has been asked to defend the Government's performance tonight. [Interruption.] Yes, poor Argyll, certainly, for I should not like to have to defend such an impossible case.

Mr. Gordon Campbell

I must remind the hon. Gentleman that the S.D.A. has been in existence for only four months. He talks about six months.

Dr. Mabon

But the right hon. Gentleman was most anxious to impress upon us that there was an upturn. The number of industrial development certificates, he said, was showing it. He has to produce some evidence to the credit of the Government to show that their policies are working.

One hon. Member said that a Budget is helping. It takes a while to work its way through, we were told, I think, by the hon. Member for Aberdeen, South (Mr. Sproat). Which budget is he talking about?—yesterday's budget, today's budget or tomorrow's budget? Is it October's Budget, yesterday's Budget, which we had some talk about earlier today? Is it today's Budget, the one which we have just voted on, or is it the budget which we shall hear about shortly when the Chancellor finishes the July review?

In the October Budget, we had a housing cut of £10 million, rising perhaps to £20 million. We shall hear about that tomorrow. We were also told in the October Budget that quite a substantial amount of money—nearly £60 million—for various activities in industry was to be struck out from the Government's programme. We now learn from the announcement today that some of the housing cuts of the October Budget are cancelled. After all that chopping and changing we are back where we started, except that the Labour Government are out of office and the unemployment figures are substantially higher. The same programmes are adopted at the last minute, but they cannot have the same effect because it takes time for these changes to make their way through the economy.

A number of hon. Members referred to the treatment of U.C.S. I represent a constituency which has a shipbuilding group of enormous reputation and great success. There is no question about its viability. It has a first-class labour force, and there is no doubt about its management, which is very sound and aggressive. It is building one of the largest yards in the United Kingdom, and it has a tremendous future. We are very sad about the position of Upper Clyde, and take no joy in it at all. The men made redundant will shortly be coming down for the jobs that my men have, so there is an economic threat as a result. The Government have done an incredible amount of damage to the name of Scotland and the name of the Clyde.

Mr. MacArthur

No.

Dr. Mabon

Yes. When my managers and men go abroad to get orders they are not asked, "Are you from the Upper Clyde or the Lower Clyde?" People overseas know only about the Clyde. I am telling the Government to stop knocking them, and the hon. Gentleman should do so as well. I will come to the Secretary of State's involvement in a moment. The knocking must stop, and U.C.S. must be taken out of its present predicament. It must be put back into solvency and activity without further damage to the name of Clydeside or Scotland. The whole U.C.S. affair has been extremely badly handled from the point of view of our country, our industry and reputation.

As a matter of personal honour, the Secretary of State has an obligation to answer this question and not dodge it : did he or did he not see the so-called Ridley Plan? If he did not—and I suspect that he did not—he should say so.

Mr. Campbell

I have already said so in answer to a question. The hon. Gentleman must be deaf or blind. According to the Press, it came out when we were in Opposition—it was produced by my hon. Friend, if he produced it, long before we came to Government, and as far as I know I have never seen it.

Dr. Mabon

Now we have it clearly at last. The right hon. Gentleman revels in all his plans. For example, when in Opposition he could say that the Conservatives would have not investment grants but investment allowances. He admitted today that when they came to power they abolished investment grants without examining our report and seeing what the officials thought. [Interruption.] This is in HANSARD ; I ask the House to look at HANSARD tomorrow. The fact is that he did abolish investment grants. All the evidence from the Continent, from those countries which employ regional development instruments, shows that they prefer grants to allowances. Again, I appeal to HANSARD. I ask hon. Members to look at the Prime Minister's answer today when, pressed on whether he would accept grants rather than allowances, he said that in certain circumstances he might. The right hon. Gentleman was privy to a plan about allowances and grants. Is he now telling us that he was not privy to the Ridley Plan?—[An HON. MEMBER : "He is too unimportant."]—Maybe he is. The right hon. Gentleman must make up his mind. Either he was involved or he was not. Whether or not the Ridley Plan was an article of policy by the Conservative Opposition equal to that of investment allowances and grants, it has had the same effect as if it were an article of policy. When we read the plan we see that everything has happened precisely as it said it would—what the Conservatives were to do in office, how they were to achieve it, the stages by which it was to be achieved, how various parts were to be broken off and how the labour force was to be rationalised. It is all there in black and white. The right hon. Gentleman does not have to go to the crystal. It is in the book. It is perfectly clear.

We are still in the middle of the U.C.S. crisis. As one who has recently been in the United States and has discussed the matter with members of Congress, I can assure the Government that we are facing a tough proposition on the question of the RB211 engine and the future of Rolls-Royce in Scotland and in Britain as a whole. Where are the 16,000 jobs announced today when one considers the position in Scotland and what the demands are?

Mr. MacArthur

Would the hon. Gentleman recall some significant words used by the right hon. Member for Bristol, South-East (Mr. Benn) in evidence about U.C.S. to the Select Committee on Scottish Affairs in 1969? He said : My own view is that if we had at any stage even now said 'We will give you whatever you need' we should have deferred the vital decisions that had to be taken by the company to staunch the losses and we should have begun a permanent subsidy of a company that would then ultimately have collapsed in conditions of great tragedy for those involved, at the expense meanwhile of the viability of other shipbuilding groups. Will the hon. Gentleman read that and think again?

Dr. Mabon

If the hon. Gentleman had attended our debates and listened to my right hon. Friend the Member for Bristol, South-East (Mr. Benn), he would know that my right hon. Friend answered that and has done so time and again.

Mr. MacArthur

I was here.

Dr. Mabon

Then the hon. Gentleman should have listened. Again I appeal to HANSARD. Three times I have appealed to HANSARD and I hope they are listening. The record will be right and the hon. Gentleman will see that these things were said.

The right hon. Gentleman and his colleagues cannot escape the fact that, however large the problem was, their handling of it has been disastrous to the name of Scotland and the name of the Clyde and they have got now to make amends. I want to suggest a number of things that should be done in the Government's new frame of mind in trying to salvage a very difficult situation.

First, they should stimulate the economy. I hope that that will come in the third budget this year. So much for management by business men ! We have had three Budgets in one year. Secondly, I hope, in the light of what the Prime Minister said today, and with all the evidence before our eyes in our own constituencies and among the business men we talk to, that the restoration of investment grants will be recognised as an absolute necessity. The third need is to look at the housing programme, which has fallen by 14 per cent. It should be increased dramatically. House improvement grants are no substitute. We should get back to the 44,000 figure we were achieving in our final years of office.

Fourthly, the training centres are not being properly recruited and filled. A big effort should be made to get the men who are unemployed into the centres to get new skills. But, of course, let us match those skills with jobs. That brings us back to the fundamental point, and my fifth suggestion is that it is high time to initiate better training for management in Scotland, which is not of the best. We should seek to extend, in Scotland at least, if not in the whole of the United Kingdom, the kind of plan which my right hon. Friend the Member for Kilmarnock (Mr. Ross) worked so well with my right hon. Friend the Member for Grimsby (Mr. Crosland), when they managed a pilot scheme for better training of management, some years ago. It was a good scheme which was fully taken up, and many people profited by it.

This is the kind of activity in which the Government should be indulging as well as introducing a public works programme dealing with water, sewerage and other things. Better management is as important as better labour relations and investment in infrastructure and work. It is an aspect that we tend to forget.

My sixth point concerns something which we in the last Government considered but never firmly decided upon. The right hon. Gentleman may have a tough time with his colleagues over it. It is the question of rehousing industry in Scotland. Most of Scottish industry operates in Victorian premises which are hopelessly out of date. This does not give Scottish industry a decent start against competitors. I think that the rehousing of Scottish industry by the State is something which must be taken on reasonably soon. We could do this if we were willing to use Scottish Industrial Estates and the corporations for the job instead of just concentrating on the housing of new industry.

Someone said in the debate that one of the defects of the S.D.A. policy is the absurdity of the so-called 30-mile limit. I have four instances of it in my constituency and the surrounding area. People cannot move from one point to another because they are within the 30-mile radius, and yet they could create employment or better conditions for the workers which could lead to more employment. These administrative shackles should be cut away.

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

I wish to correct something which the hon. Gentleman inadvertently said or an impression he gave unintentionally. No doubt there are some factory premises in Scotland which are out of date, but I am sure that the hon. Gentleman would not wish it to be thought that all of them were out of date. There are some very fine and modern factory facilities in Scotland, and I hope that the hon. Gentleman will confirm that.

Dr. Mabon

The trouble with being critical and honest is that one is misrepresented, unintentionally. If half the premises in Scotland are Victorian, the other half must be good premises. The figure has been given to me in confidence by someone who should know. I am sorry that I am being so constructive, because obviously it does not appeal to hon. Members opposite.

My seventh point is this : the Government should realise that Hunterston and its potentiality represents the greatest single chance which Scotland has of being a trading bridge between Europe and America. According to the Economist last week, Krupps has made a survey of the potentiality of this site for a steel plant able to load on to large ore vessels steel which could account for as much as 80 per cent. of the plant's production. I would prefer the British Steel Corporation to do this job rather than Krupps. That is not unreasonable. But whoever does it there is no doubt that it would be a new focus of industry in Scotland. It would be a steel works able to supply our friends in Europe and America and to form the basis for the consumption of larger quantities of steel in Scotland. This is the greatest single development which the Government could authorise this year or in any year in the next five.

Mr. Alexander Wilson

Apart from resigning.

Dr. Mabon

There is a better chance of getting a steel mill than of getting this lot to resign.

I take issue on the question of Clyde-port. It cannot develop without the steel works being a focus of activity. To go into the economics of building a large iron ore port such as Clydeport without a steel works is foolish. It is not my opinion which counts, but the opinion of those who would sponsor it. I do not visualise Clydeport asking for this money unless it is clear that the Government intend to build this large steel works in Scotland.

In the absence of a national ports authority and nationalisation of the ports, let us face this fact : it is far better for the State directly to invest in Clydeport than to seek to saddle it with loans in trying to build up a great port at Hunterston. Let us have some ambitious thoughts about this section of Scotland which offers the same opportunity as was offered in Victorian times when Central Scotland became the cradle of the industrial revolution in our part of the United Kingdom.

That is the kind of positive programme which the Government should be adopting. They are doing none of these things. They have failed in their objectives in the last 15 months. While we may know the song of distress, the extent of the Government's failure is eloquently put in the Conservative Party's manifesto on Scotland. The opening paragraph says : Scotland will get moving again. No part of Britain has more to gain from Tory policies ". If ever a Motion of censure were carried in a Tory manifesto, it is carried in this one.

9.30 p.m.

The Minister for Trade (Mr. Michael Noble)

It is like old times to come back to the Box at the end of a Scottish debate, and I am grateful to the right hon. Member for Kilmarnock (Mr. Ross) and to the hon. Member for Greenock (Dr. Dickson Mabon) for welcoming me back again. The hon. Member for Greenock said that this was to some extent a self-confession that all is not well, and every hon. Member representing a Scottish constituency on either side of the House feels that it is hard because the situation today in Scotland is deplorable. I am sorry that certain hon. Members said that my right hon. Friend made no reference to the human suffering caused by unemployment at this level. But my right hon. Friend did. He said it was regrettable not only from the human aspect but because of the tremendous waste of resources that unemployment brought about.

I was interested in a number of constructive points made by the hon. Member for Greenock which need much careful thought. I am delighted that he now supports, as we have for a long time, the training of people in new skills and in management. He will remember that not so long ago the main attack from the Scottish Council on his own Government's policies was that they were not considering this problem.

Dr. Dickson Mabon

That is not true.

Mr. Noble

I cannot remind the hon. Gentleman to look up HANSARD, but if he reads the Scottish Council reports of about three years ago he will find that was the main charge. The hon. Gentleman asked me to defend the policy of S.D.A.s. His Government invented S.D.A.s. and, because this was a convenient method of getting help quickly, we are following the course that his Government thought was wise.

Unlike our experience in some earlier debates, we have heard a great many constructive and useful speeches, and my right hon. Friend will be thinking seriously about a number of points. He has a considerable problem, which we all realise, of trying to get the situation in Scotland back again on to a good footing It was lamentable that the hon. Member for Hamilton (Mr. Alexander Wilson) should revert to the worst tradition of the old Scottish debates. It was rather remarkable that this speech should have come from Hamilton where, if he has a reasonably long memory, the hon. Gentleman will remember his right hon. Friend was totally rejected in a by-election not very long ago.

Mr. Alexander Wilson rose—

Mr. Noble

There are very serious problems, and we all know them, but his speech did not contain a single constructive idea from beginning to end. This is what is often wrong about speeches which are made in these debates—and I have attended many of them—

Dr. Miller

It was a good speech.

Mr. Noble

Every one is entitled to his opinion. It is a free House—[Laughter.]—and we are all entitled to express our opinions and stand by them, but we are equally entitled to deplore rubbish when it is spoken from either side.

The most depressing aspect of the speech of the right hon. Member for Kilmarnock is that he did not for one single second—

Mr. Alexander Wilson rose—

Mr. Noble

I am sorry—

Mr. William Hamilton rose—

Mr. Speaker

Order.

Dr. Miller

It is a free House—give him a drink.

Mr. Speaker

It is a free House, but it is tied to certain rules of order. The right hon. Gentleman has not given way.

Mr. Norman Buchan (Renfrew, West)

If an hon. Member is attacked, is he not entitled to reply?

Mr. Noble

The hon. Gentleman well knows that in our debates one is perfectly entitled to say what one thinks about a speech. It has been said often enough about me and people would never give way. The right hon. Member for Kilmarnock never gave way once in four years.

Mr. Ross

That is not true.

Mr. Noble

Unfortunately it is true, and I would ask the right hon. Gentleman to look at HANSARD.

The depressing aspect of the right hon. Gentleman's speech was that he did not for one moment contemplate that anything he had done in the six years that he was Secretary of State could possibly have contributed to the problems which we inherited. The situation today is extremely grave, and I do not hesitate to say so, but it is a fact that in 1966, when the right hon. Gentleman's plans could reasonably have been expected to come to fruition and when the right hon. Gentleman was in his own way leading forward the position of Scotland, unemployment was 55,000.

Mr. Douglas

It is now 120,000.

Mr. Noble

In July 1970, the unemployment figure was 93,400. We all know that this was not only the situation in Scotland but that it affected the United Kingdom as a whole. When we came into office in the summer of last year there were some particularly worrying features in Scotland, and everybody who had to study the figures could see them.

First, we could see that Scotland was securing a lower proportion of the new industrial projects than it had in the past. During the period from mid-1966 to mid-1970, total employment in Scotland had declined by some 65,000 jobs. These figures exclude the construction industry because the employment figure for that industry, after S.E.T., became a little more difficult to analyse because so many people became self-employed.

The figure was bad enough, but the total includes a loss of 20,000 jobs in the manufacturing industry at a time when employment in the manufacturing sectors of Wales and in the northern region increased by over 40,000 jobs. Therefore, I find it a little difficult to see from what basis of success in his own period of office the former Secretary of State seeks to say that it is all our fault and that he was doing a splendid job. He was losing manufacturing jobs in Scotland at the same time as his colleagues in Wales and the northern region were gaining them fast. This was a very difficult and worrying problem to put right.

Secondly, there was the problem of the particularly heavy incidence of unemployment in West Central Scotland. For a considerable time now half of Scotland's unemployment has been on Clydeside and in the surrounding areas of West Central Scotland. The right hon. Lady, the Member for Lanark (Mrs. Hart) and the right hon. Member for Kilmarnock indignantly demanded that the Government had done nothing about rising unemployment in Scotland. I wonder why the Labour Party did not stop the rising tide when they were in office. The signs were clearly there and the picture was one of steadily increasing unemployment.

I would not mind if only they said, "This was a problem which we were trying to tackle and which we found exceedingly difficult. We tried these methods, some worked and some did not". But not at all. They try to pretend that in some curious way the whole problem has developed suddenly since June of last year. I find that quite nauseating. Certainly the position has worsened. However, something which rapidly is going downhill takes even longer to put right than the sort of situation that the right hon. Gentleman inherited, which was on a steeply upward graph. It is because the policies of the previous Administration had failed totally to deal with the situation that it was right for this Government to see whether new policies should not be introduced which would have a good deal better effect.

My right hon. Friend made clear today the reasons why the new policies were adopted, what they were, and how he expected them to develop once we had the economy as a whole going as well.

I agree with the hon. Member for Greenock that it does not matter how good the incentives are or how big the S.D.A.s are, unless the economy can be got on the move upwards, there is no chance of attracting industry to Scotland and little chance of getting the industry which is in Scotland working at anywhere near its full potential.

To my mind, there are two separate but very important points. We have to get the economy of Britain moving. Once that happens, we have to have the right parcel of incentives in order to attract our share or more than our share—

Mr. Douglas

I am intrigued by the right hon. Gentleman's analysis. Will he concede that what we really need is a third Budget? Following it, we might get some other incentives to see whether the third Budget is in harmony with the new incentives, because clearly the present incentives are in harmony neither with the Government's budgetary policy nor with the anticipated growth in the United Kingdom economy.

Mr. Noble

When I sat on that side of the House, we were becoming perfectly used to three or four Budgets a year. However, I agree that to deal with special problems from time to time special Measures have to be taken and not confined just to a single time in the year, in order to put the required remedies into operation.

The difficulty in which the right hon. Gentleman and many of his hon. Friends find themselves is that it is not sufficient simply to say that we want investment in Scotland irrespective of what it may be. In the past four or five years, we have seen a very great deal of money going into Scotland through investment grants, but the number of jobs has dropped steadily.

Mr. Ross rose—

Mr. Noble

I should love to allow the right hon. Gentleman to intervene. However, as he would never give way to me, I think that it would be terribly good for his soul, for once, if an hon. Member refused to give way to him.

Mr. Ross rose—

Mr. Noble

No, I shall not give way.

Mr. Ross

It is quite untrue to say that I never gave way—

Mr. Noble

I think that he did on one occasion. The right hon. Gentleman knows that generally I am extremely courteous. However, as he refused to give way to me in debate after debate, just once in his life it would be very good for him if an hon. Member did not give way to him.

I now turn to the various points which were made in the debate to see whether I can either encourage or discourage some of the suggestions which were put forward.

Dr. Dickson Mabon rose—

Mr. Noble

I think I heard something which passed between the hon. Gentleman and his right hon. Friend. There was a little collusion going on.

Dr. Mabon

Will the right hon. Gentleman give way?

Mr. Noble

I will give way to the hon. Gentleman, but not at this moment because I know that he is doing a little fiddle with his right hon. Friend.

The right hon. Member for Kilmarnock asked why the office dealing with V.A.T. was to be in Southend. The answer, which I suspect he already knows, is perfectly simple. The Customs and Excise duties office in Southend will be used in the beginning stages for dealing with V.A.T. About three-quarters of the jobs which will be created—I think that is the right word—for V.A.T. will be scattered throughout the rest of the country. It is not, as it were, a post office which is being set up in Southend. The staff there will be used, but the great bulk of the extra jobs will be scattered throughout the rest of the country.

My right hon. Friend was asked and spoke about I.D.C.s, and the hon. Member for Greenock also mentioned them. My right hon. Friend very properly said that the signs of improvement were slight, but that it is always dangerous to try to base firm calculations on a short period. However, I can give some figures to the House. In the period January—June, 1970, 79 I.D.C.s were issued ; in the same period in 1971 there were 88. The area covered was 3.8 million sq. ft. in 1970 and 4.2 million sq. ft. in 1971. For West Central Scotland, under the S.D.A. policy, one can take only the March—June figures. In March—June, 1970, the number of I.D.C.s issued for that part of Scotland was 17 and in March—June, 1971, the number was 27. I do not ask hon. Members to cheer desperately about that, because I know that they will not. However, as I was asked for the figures, I have given them.

The right hon. Member for Lanark asked what would be the position of I.D.C.s if we went into the European Economic Community.

Mrs. Hart

No, I did not.

Mr. Noble

I shall check HANSARD tomorrow, but I wrote it down as the right hon. Lady said it.

Mrs. Hart

I should like to give the right hon. Gentleman a little longer to deal with the fundamentals of the situation. I did not ask what the I.D.C. position would be. I said that I found it impossible to believe that one could operate a successful I.D.C. policy with the free flow of capital under the Treaty of Rome.

Mr. Noble

The right hon. Lady can certainly find out what the position is by asking her right hon. Friend the Member for Dundee, East (Mr. George Thomson), but I.D.C. policy is being operated by the French in Paris, and there is no information, either from the capital point of view or I.D.Cs., that we need to change our particular policy.

Mr. Buchan rose—

Mr. Noble

I am sorry, but there are many points still to be covered. I understood what was said, and I have given the right hon. Lady the answer.

The right hon. Lady—and I took this one down, too—talked about her Government when she was a member of the Cabinet and said, "We had not reduced the unemployment figures as much as we would have liked". That is a fairly good description of doubling the unemployment figure in four years. The right hon. Lady went on to say, with great pride, that her Government had solved the balance of payments problems and so could not at the same time have any growth. She did not mention that they had very largely increased the short-term indebtedness of Britain, which somebody else had to repay.

Mr. James Hamilton rose—

Mr. Noble

I am sorry, but I have only 10 minutes in which to wind up a long debate.

I thought that my hon. Friend the Member for Edinburgh, South (Mr. Clark Hutchison) spoke very sensibly about the problems of Scotland from the point of view of a Scotsman who knows that we have considerable skills, considerable inventive genius, and considerable ability to work, and who finds it depressing and difficult to understand why we are continually in this sort of position. I have great sympathy with what he said. I believe that this is not endemic in Scotland, but there are moments—and this debate almost annually is one of them—when we do our best to tear ourselves to pieces for the benefit of nobody.

I know my hon. Friend's passionate desire to keep out of the Common Market. He proudly said that his factory in West Dunbartonshire could beat the Common Market, whatever it does, but just to encourage his shareholders may I tell him that, if we succeed in getting into the Common Market as the tariff on clocks from this country is about 10 per cent. he will be able greatly to increase the employment in his area, and make a great many more clocks.

My hon. Friend the Member for Aberdeenshire, East (Mr. Wolrige-Gordon) asked two questions. First, whether, if the oil which we all hope will be found off his coast is to come into Peterhead, the Government will be able to help in any reasonable way to establish the necessary facilities in his area. I am certain that all the help that is provided for D.A.s will be available for this purpose, and I think we all hope that this area will benefit from the rather fortunate discovery of oil.

As regards the small shipyards, I think that a meeting, which I believe has been discussed with the Scottish Office, might be of use, and I hope that my hon. Friend will be able to attend such a meeting to consider what is the right solution to the problem.

I should like to be able to answer the questions asked by the hon. Member for Inverness (Mr. Russell Johnston) about exactly what will happen with regard to the grant of franchises and royalties. I think that we should wait until we see what we get before we decide how we are going to spend it. That may not be a very liberal approach, but it is a practical one, and I think that there may be more than his party and mine trying to see that we get the maximum amount for Scotland.

My hon. Friend the Member for Perth and West Perthshire (Mr. MacArthur) spoke about the American investment that had come to Scotland in the past. I should merely like to add to what he said that this investment did not come in only to get into the Commonwealth area. It came in, particularly in the early 'sixties, not only to get the benefits of proximity to Europe, but to the E.F.T.A. market as well.

I have great hopes that if we succeed in our Common Market endeavours there will be great potential for new industry in Scotland, not only from America but also from Europe. My hon. Friend the Member for Fife, East (Sir J. Gilmour) seemed to strike a cheerful note by asking for the reduction of the whisky duty and the abolition of petrol duty on the Islands. I shall have the greatest possible pleasure in submitting both suggestions to the Chancellor of the Exchequer on his behalf.

My hon. Friend the Member for Ross and Cromarty (Mr. Gray) and the hon. Member for the Western Isles (Mr. Donald Stewart) both asked about regional policies if we go into Europe. As I have said about the I.D.C. policy, there is at the moment no visible sign that anything we are doing by way of regional policy would not be allowed in Europe. I cannot say that I agree with the hon. Member for the Western Isles in his views about either the rocket bases, the Polaris bases or the gunnery range. We may approach these things from different ends. I do find it a little distressing that someone should complain bitterly about unemployment in his area and yet feel so strongly about rockets that he should want to turn away jobs. He should consult his constituents before making that sort of statement on their behalf, although I appreciate that he may have strong personal feelings about it.

My hon. Friend the Member for Galloway (Mr. Brewis) asked whether, if the gunnery range came to his area, there would be a public inquiry. My right hon. Friend says that it is early days to decide whether this is the way he would deal with that matter. My hon. Friend the Member for Banff (Mr. W. H. H. Baker) raised a number of points on the Common Market. I cannot answer these today, but I have no doubt that he will take part in the very long debate on the subject later on.

In conclusion—[HON. MEMBERS : "Hear, hear."] I think it is fair to say that we have had a serious debate. It has finished up in the usual Scottish way with Minister being shouted at on all sides. I have seen it all too often.

I finish on one serious note. This is a problem which affects every one of us who lives or works in Scotland. We all have a considerable part to play in creating the right atmosphere for business to come to Scotland and for people to work in the factories under reasonable conditions. This is not something just for the trade unions, neither is it for industrialists alone. It is something in which all of us in the House can help. If we do that the future of Scotland will be a great deal better than if we spend the time barking at each other about who did what when—

Mr. Walter Harrison (Wakefield) rose in his place and claimed to move. That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the the Amendment be made :—

The House divided : Ayes 305, Noes 272.

Division No. 423.]	AYES	[10.0 p.m.
Adley, Robert	Bennett, Sir Frederic (Torquay)	Brewis, John
Alison, Michael (Barkston Ash)	Bennett, Dr. Reginald (Gosport)	Brinton, Sir Tatton
Allason, James (Hemel Hempstead)	Benyon, W.	Brocklebank-Fowler, Christopher
Amery, Rt. Hn. Julian	Berry, Hn. Anthony	Brown, Sir Edward (Bath)
Archer, Jeffrey (Louth)	Biffen, John	Bruce-Gardyne, J.
Astor, John	Biggs-Davison, John	Bryan, Paul
Atkins, Humphrey	Blaker, Peter	Buchanan-Smith, Alick (Angus, N&M)
Awdry, Daniel	Boardman, Tom (Leicester, S.W.)	Buck, Antony
Baker, Kenneth (St. Marylebone)	Body, Richard	Bullus, Sir Eric
Baker, W. H. K. (Banff)	Boscawen, Robert	Burden, F. A.
Balniel, Lord	Bossom, Sir Clive	Butler, Adam (Bosworth)
Barber, Rt. Hn. Anthony	Bowden, Andrew	Campbell, Rt. Hn. G.(Moray&Nairn)
Batsford, Brian	Boyd-Carpenter, Rt. Hn. John	Carlisle, Mark
Beamish, Col. Sir Tufton	Braine, Bernard	Carr, Rt. Hn. Robert
Bell, Ronald	Bray, Ronald	Channon, Paul
Chapman, Sydney	Hiley, Joseph	Owen, Idris (Stockport, N.)
Chataway, Rt. Hn. Christopher	Hill, James (Southampton, Test)	Page, Graham (Crosby)
Churchill, W. S.	Holland, Philip	Page, John (Harrow, W.)
Clark, William (Surrey, E.)	Holt, Miss Mary	Parkinson, Cecil (Enfield, W.)
Clarke, Kenneth (Rushcliffe)	Hordern, Peter	Peel, John
Clegg, Walter	Hornby, Richard	Percival, Ian
Cockeram, Eric	Hornsby-Smith, Rt. Hn. Dame Patricia	Peyton, Rt. Hn. John
Cooke, Robert	Howe, Hn. Sir Geoffrey (Reigate)	Pike, Miss Mervyn
Coombs, Derek	Howell, David (Guildford)	Pink, R. Bonner
Cooper, A. E.	Howell, Ralph (Norfolk, N.)	Pounder, Rafton
Cordle, John	Hunt, John	Powell, Rt. Hn. J. Enoch
Corfield, Rt. Hn. Frederick	Hutchison, Michael Clark	Price, David (Eastleigh)
Cormack, Patrick	Iremonger, T. L.	Proudfoot, Wilfred
Costain, A. P.	Irvine, Bryant Godman (Rye)	Pym, Rt. Hn. Francis
Critchley, Julian	James, David	Quennell, Miss J. M.
Crouch, David	Jenkin, Patrick (Woodford)	Rawlinson, Rt. Hn. Sir Peter
Crowder, F. P.	Jennings, J. C. (Burton)	Redmond, Robert
Curran, Charles	Jessel, Toby	Reed, Laurance (Bolton, E.)
Davies, Rt. Hn. John (Knutsford)	Johnson Smith. G. (E. Grinstead)	Rees, Peter (Dover)
d'Avigdor-Goldsmid, Sir Henry	Jones, Arthur (Northants, S.)	Rees-Davies, W. R.
d'Avigdor-Goldsmid. Maj.-Gen. James	Jopling, Michael	Renton, Rt. Hn. Sir David
Dean, Paul	Joseph, Rt. Hn. Sir Keith	Rhys Williams, Sir Brandon
Deedes, Rt. Hn. W. F.	Kershaw, Anthony	Ridley, Hn. Nicholas
Digby, Simon Wingfield	Kilfedder, James	Ridsdale, Julian
Dixon, Piers	Kimball, Marcus	Rippon, Rt. Hn. Geoffrey
Dodds-Parker, Douglas	King, Evelyn (Dorset, S.)	Roberts, Michael (Cardiff, N.)
Douglas-Home, Rt, Hn. Sir Alec	King, Tom (Bridgwater)	Rodgers, Sir John (Sevenoaks)
Drayson, G. B.	Kinsey, J. R.	Rossi, Hugh (Hornsey)
		Rost, Peter
du Cann, Rt. Hn. Edward	Kitson, Timothy	Russell, Sir Ronald
Dykes, Hugh	Knox, David	St. John-Stevas, Norman
Eden, Sir John	Lambton, Antony	Sandys, Rt. Hn. D.
Edwards, Nicholas (Pembroke)	Lane, David	Scott, Nicholas
Elliot, Capt. Walter (Carshalton)	Langford-Holt, Sir John	Scott-Hopkins, James
Elliott, R. W. (N'c'tle-upon-Tyne, N.)	Legge-Bourke, Sir Harry	Sharples, Richard
Emery, Peter	Le Marchant, Spencer	Shaw, Michael (Sc'b'gh & Whitby)
Farr, John	Lewis, Kenneth (Rutland)	Shelton, William (Clapham)
Fell, Anthony	Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)	Simeons, Charles
Fenner, Mrs. Peggy	Longden, Gilbert	Sinclair, Sir George
Fidler, Michael	Loveridge, John	Skeet, T. H. H.
Finsberg, Geoffrey (Hampstead)	Luce, R. N.	Smith, Dudley (W'wick & L'mington)
Fisher, Nigel (Surbiton)	McAdden, Sir Stephen	Soref, Harold
Fookes, Miss Janet	MacArthur, Ian	Speed, Keith
Fortescue, Tim	McCrindle, R. A.	Spence, John
Foster, Sir John	McLaren, Martin	Sproat, Iain
Fowler, Norman	Maclean, Sir Fitzroy	Stainton, Keith
Fox, Marcus	McMaster, Stanley	Stanbrook, Ivor
Fraser, Rt. Hn. Hugh (St'fford & Stone)	Macmillan, Maurice (Farnham)	Stewart-Smith. D. G. (Belper)
Fry, Peter	McNair-Wilson, Michael	Stodart, Anthony (Edinburgh, W.)
Galbraith, Hn. T. G.	McNair-Wilson, Patrick (NewForest)	Stoddart-Scott, Col. Sir M.
Gardner, Edward	Maddan, Martin	Stokes, John
Gibson-Watt, David	Madel, David	Stuttaford, Dr. Tom
Gilmour, Ian (Norfolk, C.)	Marten, Neil	Sutcliffe, John
Gilmour, Sir John (Fife, E.)	Mather, Carol	Tapsell, Peter
Glyn, Dr. Alan	Maude, Angus	Taylor, Sir Charles (Eastbourne)
Godber, Rt. Hn. J. B.	Maudling, Rt. Hn. Reginald	Taylor, Edward M.(G'gow, Cathcart)
Goodhart, Philip	Mawby, Ray	Taylor, Frank (Moss Side)
Goodhew, Victor	Maxwell-Hyslop, R. J.	Taylor, Robert (Croydon, N. W.)
Gorst, John	Meyer, Sir Anthony	Tebbit, Norman
Gower, Raymond	Mills, Peter (Torrington)	Temple, John M.
Grant, Anthony (Harrow, C.)	Mills, Stratton (Belfast, N.)	Thatcher, Rt. Hn. Mrs. Margaret
Gray, Hamish	Miscampbell, Norman	Thomas, John Stradling (Monmouth)
Green, Alan	Mitchell, Lt.-Col. C.(Aberdeenshire, W.)	Thomas, Rt. Hn. Peter (Hendon, S.)
Grieve, Percy	Mitchell, David (Basingstoke)	Thompson, Sir Richard (Croydon, S.)
Griffiths, Eldon (Bury St. Edmunds)	Moate, Roger	Tilney, John
Grylls, Michael	Molyneaux, James
Gummer, Selwyn	Money, Ernle	Trafford, Dr. Anthony
Gurden, Harold	Monks, Mrs. Connie	Trew, Peter
Hall, Miss Joan (Keighley)	Monro, Hector	Tugendhat, Christopher
Hall, John (Wycombe)	Montgomery, Fergus	Turton, Rt Hn. Sir Robin
Hall-Davis, A. G. F.	Morgan, Geraint (Denbigh)	van Straubenzee, W. R.
Hamilton, Michael (Salisbury)	Morgan-Giles, Rear-Adm.	Vaughan, Dr. Gerard
Hannam, John (Exeter)	Morrison, Charles (Devizes)	Vickers, Dame Joan
	Mudd, David	Waddington, David
Harrison, Brian (Maldon)	Murton, Oscar	Walder, David (Clitheroe)
Harrison, Col. Sir Harwood (Eye)	Nabarro, Sir Gerald	Walker, Rt. Hn. Peter (Worcester)
Haselhurst, Alan	Neave, Airey	Walker-Smith, Rt. Hn. Sir Derek
Hastings, Stephen	Nicholls, Sir Harmar	Wall, Patrick
Havers, Michael	Noble, Rt. Hn. Michael	Walters, Dennis
Hawkins, Paul	Normanton, Tom	Ward, Dame Irene
Hay, John	Nott, John	Warren, Kenneth
Hayhoe, Barney	Onslow, Cranley	Weatherill, Bernard
Heseltine, Michael	Oppenheim, Mrs. Sally	Wells, John (Maidstone)
Hicks, Robert	Orr, Capt. L. P. S.	White, Roger (Gravesend)
Higgins, Terence L.	Osborn, John	Whitelaw, Rt. Hn. William

Wiggin, Jerry	Woodnutt, Mark
Wilkinson, John	Worsley, Marcus	TELLERS FOR THE AYES :
Wolrige-Gordon, Patrick	Wylie, Rt. Hn. N. R.	Mr. Reginald Eyre and
Wood, Rt. Hn. Richard	Younger, Hn. George	Mr. Jasper More.
Woodhouse, Hn. Christopher
NOES
Abse, Leo	Fitch, Alan (Wigan)	Lyon, Alexander W. (York)
Albu, Austen	Fitt, Gerard (Belfast, W.)	Lyons, Edward (Bradford, E.)
Allaun, Frank (Salford, E.)	Fletcher, Ted (Darlington)	Mabon, Dr. J. Dickson
Allen, Scholefield	Foley, Maurice	McBride, Neil
Archer, Peter (Rowley Regis)	Foot, Michael	McCann, John
Armstrong, Ernest	Ford, Ben	McCartney, Hugh
Ashley, Jack	Forrester, John	McElhone, Frank
Ashton, Joe	Fraser, John (Norwood)	McGuire, Michael
Atkinson, Norman	Freeson, Reginald	Mackenzie, Gregor
Bagier, Gordon A. T.	Galpern, Sir Myer	Mackie, John
Barnett, Guy (Greenwich)	Garrett, W. E.	Maclennan, Robert
Barnett, Joel	Gilbert, Dr. John	McMillan, Tom (Glasgow, C.)
Benn, Rt. Hn. Anthony Wedgwood	Ginsburg, David	McNamara, J. Kevin
Bennett, James (Glasgow, Bridgeton)	Golding, John	Mahon, Simon (Bootle)
Bidwell, Sydney	Gordon Walker, Rt& Hn. P. C.	Mallalieu, E. L. (Brigg)
Bishop, E. S.	Gourlay, Harry	Mallalieu, J. P. W. (Huddersfield, E.)
Blenkinsop, Arthur	Grant, George (Morpeth)	Marks, Kenneth
Boardman, H. (Leigh)	Grant, John D. (Islington, E.)	Marquand, David
Booth, Albert	Griffiths, Eddie (Brightside)	Marsden, F.
Bottomley, Rt. Hn. Arthur	Griffiths, Will (Exchange)	Marshall, Dr. Edward
Boyden, James (Bishop Auckland)	Grimond, Rt. Hn. J.	Mason, Rt. Hn. Roy
Bradley, Tom	Gunter, Rt. Hn. R. J.	Mayhew, Christopher
Brown, Bob (N'c'tle-upon-Tyne, W.)	Hamilton, James (Bothwell)	Mellish, Rt. Hn. Robert
Brown, Hugh D. (G'gow, Provan)	Hamilton, William (Fife, W.)	Mendelson, John
Brown, Ronald (Shoreditch & F'bury)	Hamling, William	Mikardo, Ian
Buchan, Norman	Hannan, William (G'gow, Maryhill)	Millan, Bruce
Buchanan, Richard (G'gow, Sp'burn)	Hardy, Peter	Miller, Dr. M. S.
Butler, Mrs. Joyce (Wood Green)	Harrison, Walter (Wakefield)	Milne, Edward (Blyth)
Callaghan, Rt. Hn. James	Hart, Rt. Hn. Judith	Mitchell, R. C. (S'hampton, Itchen)
Campbell, I. (Dunbartonshire, W.)	Hattersley, Roy	Molloy, William
Cant, R. B.	Healey, Rt. Hn. Denis	Morgan, Elystan (Cardiganshire)
Carmichael, Neil	Heffer, Eric S.	Morris, Alfred (Wythenshawe)
Carter, Ray (Birmingh'm, Northfield)	Hilton, W. S.	Morris, Charles R. (Openshaw)
Carter-Jones, Lewis (Eccles)	Hooson, Emlyn	Morris, Rt. Hn. John (Aberavon)
Castle, Rt. Hn, Barbara	Horam, John	Moyle, Roland
Clark, David (Colne Valley)	Houghton. Rt. Hn. Douglas	Murray, Ronald King
Cocks, Michael (Bristol, S.)	Howell, Denis (Small Heath)	Ogden, Eric
Cohen, Stanley	Huckfield, Leslie	O'Halloran, Michael
Concannon, J. D.	Hughes, Rt. Hn. Cledwyn (Anglesey)	O'Malley, Brian
Conlan, Bernard	Hughes, Mark (Durham)	Oram, Bert
Corbet, Mrs. Freda	Hughes, Robert (Aberdeen, N.)	Orme, Stanley
Cox, Thomas (Wandsworth, C.)	Hunter, Adam	Oswald, Thomas
Crawshaw, Richard	Irvine, Rt. Hn. SirArthur (Edge Hill)	Owen, Dr. David (Plymouth, Sutton)
Cronin, John	Janner, Greville	Padley, Walter
Crosland, Rt. Hn. Anthony	Jay, Rt. Hn. Douglas	Paget, R. T.
Crossman, Rt. Hn. Richard	Jeger, Mrs. Lena (H'b'n&St. P'cras, S.)	Palmer, Arthur
Cunningham, G. (Islington, S. W.)	Jenkins, Hugh (Putney)	Pannell, Rt. Hn. Charles
Dalyell, Tam	Jenkins, Rt. Hn. Roy (Stechford)	Pardoe, John
Darling, Rt. Hn. George	John, Brynmor	Parker, John (Dagenham)
Davidson, Arthur	Johnson, Carol (Lewisham, S.)	Parry, Robert (Liverpool, Exchange)
Davies, Denzil (Llanelly)	Johnson, James (K'ston-on-Hull, W.)	Peart, Rt. Hn. Fred
		Pendry, Tom
Davies, G. Elfed (Rhondda, E.)	Johnson, Walter (Derby, S.)	Pentland, Norman
Davies, Ifor (Gower)	Johnston, Russell (Inverness)	Perry, Ernest G.
Davies, S. O. (Merthyr Tydvil)	Jones, Barry (Flint, E.)	Prentice, Rt. Hn. Reg.
Davis, Clinton (Hackney, C.)	Jones, Dan (Burnley)	Prescott, John
Davis, Terry (Bromsgrove)	Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)	Price, J. T. (Westhoughton)
Dcakins, Eric	Jones, Gwynoro (Carmarthen)	Price, William (Rugby)
de Freitas, Rt. Hn. Sir Geoffrey	Jones, T. Alec (Rhondda, W.)	Probert, Arthur
Delargy, H. J.	Judd, Frank	Rankin, John
Dell, Rt. Hn. Edmund	Kaufman, Gerald	Reed, D. (Sedgefield)
Dempsey, James	Kelley, Richard	Rees, Merlyn (Leeds, S.)
Doig, Peter	Kerr, Russell	Rhodes, Geoffrey
Dormand, J. D.	Kinnock, Neil	Richard, Ivor
Douglas, Dick (Stirlingshire, E.)	Lambie, David	Roberts, Alhert (Normanton)
Douglas-Mann, Bruce	Lamond, James	Roberts, Rt. Hn. Goronwy (Caernarvon)
Duffy, A. E. P.	Latham, Arthur	Robertson, John (Paisley)
Dunn, James A.	Lawson, George	Roderick, CaerwynE. (Br'c'n&R'dnor)
Dunnett, Jack	Leadbitter, Ted	Rodgers, William (Stockton-on-Tees)
Eadie, Alex	Lee, Rt. Hn. Frederick	Roper, John
Edelman, Maurice	Leonard, Dick	Ross, Rt. Hn. William (Kilmarnock)
Ellis, Tom	Lever, Rt. Hn. Harold	Sandelson, Neville
English, Michael	Lewis, Arthur (W. Ham N.)	Sheldon, Robert (Ashton-under-Lyne)
Evans, Fred	Lewis, Ron (Carlisle)	Shore, Rt. Hn. Peter (Stepney)
Faulds, Andrew	Lipton, Marcus	Short, Rt. Hn. Edward (N 'c'stle-u-Tyne)
Fernyhough, Rt. Hn. E.	Lomas, Kenneth	Short, Mrs. Renée (W'hampton, N. E.)
Fisher, Mrs. Doris (B'ham, Ladywood)	Loughlin, Charles	Silkin, Rt. Hn. John (Deptford)

Silkin, Hn. S. C. (Dulwich)	Taverne, Dick	Wellbeloved, James
Sillars, James	Thomas, Rt. Hn. George (Cardiff, W.)	Wells, William (Walsall, N.)
Silverman, Julius	Thomas, Jeffrey (Abertillery)	White, James (Glasgow, Pollok)
Skinner, Dermis	Thomson, Rt. Hn. G. (Dundee, E.)	Whitehead, Phillip
Small, William	Thorpe, Rt. Hn. Jeremy	Whitlock, William
Smith, John (Lancashire, N.)	Tinn, James	Willey, Rt. Hn. Frederick
Spearing, Nigel	Tomney, Frank	Williams, Mrs. Shirley (Hitchin)
Spriggs, Leslie	Torney, Tom	Wilson, Alexander (Hamilton)
Stallard, A. W.	Tuck, Raphael	Wilson, Rt. Hn. Harold (Huyton)
Steel, David	Urwin, T. W.	Wilson, William (Coventry, S.)
Stewart, Donald (Western Isles)	Varley, Eric G.	Woof, Robert
Stoddart, David (Swindon)	Wainwright, Edwin
Stonehouse, Rt. Hn. John	Walden, Brian (B'm'ham, All Saints)	TELLERS FOR THE NOES :
Strang, Cavin	Wallace, George	Mr. Donald Coleman and
Strauss, Rt. Hn. G. R.	Watkins, David	Mr. Joseph Harper.
Summerskill, Hn. Dr. Shirley	Weitzman, David

Main Question, as amended, put :—

The house divided: Ayes 305, Noes 272.

Division No. 424.]	AYES	[10.13 p.m.
Adley, Robert	Critchley, Julian	Harrison, Col. Sir Harwood (Eye)
Alison, Michael (Barkston Ash)	Crouch, David	Haselhurst, Alan
Allason, James (Hemel Hempstead)	Crowder, F. P.	Hastings, Stephen
Amery, Rt. Hn. Julian	Curran, Charles	Havers, Michael
Archer, Jeffrey (Louth)	Davies, Rt. Hn. John (Knutsford)	Hawkins, Paul
Astor, John	d'Avigdor-Goldsmid, Sir Henry	Hay, John
Atkins, Humphrey	d'Avigdor-Goldsmid, Maj.-Gen. James	Hayhoe, Barney
Awdry, Daniel	Dean, Paul	Heseltine, Michael
Baker, Kenneth (St. Marylebone)	Deedes, Rt. Hn. W. F.	Hicks, Robert
Baker, w. H. K. (Banff)	Digby, Simon Wingfield	Higgins, Terence L.
Balniel, Lord	Dixon, Piers	Hiley, Joseph
Barber, Rt. Hn. Anthony	Dodds-Parker, Douglas	Hill, James (Southampton, Test)
Batsford, Brian	Douglas-Home, Rt. Hn. Sir Alec	Holland, Philip
Beamish, Col. Sir Tufton	Drayson, G. B.	Holt, Miss Mary
Bell, Ronald	du Cann, Rt. Hn. Edward	Hordern, Peter
Bennett, Sir Frederic (Torquay)	Dykes, Hugh	Hornby, Richard
Bennett, Dr. Reginald (Gosport)	Eden, Sir John	Hornsby-Smith, Rt. Hn. Dame Patricia
Benyon, W.	Edwards, Nicholas (Pembroke)	Howe, Hn. Sir Geoffrey (Reigate)
Berry, Hn. Anthony	Elliot, Capt. Walter (Carshalton)	Howell, David (Guildford)
Biffen, John	Elliott, R. W. (N'c'tle-upon-Tyne, N.)	Howell, Ralph (Norfolk, N.)
Biggs-Davison, John	Emery, Peter	Hunt, John
Blaker, Peter	Farr, John	Hutchison, Michael Clark
Boardman, Tom (Leicester, S. W.)	Fell, Anthony	Iremonger, T. L.
Body, Richard	Fenner, Mrs. Peggy	Irvine, Bryant Godman (Rye)
Boscawen, Robert	Fidler, Michael	James, David
Bossom, Sir Clive	Finsberg, Geoffrey (Hampstead)	Jenkin, Patrick (Woodford)
Bowden, Andrew	Fisher, Nigel (Surbiton)	Jennings, J. C. (Burton)
Boyd-Carpenter, Rt. Hn. John	Fookes, Miss Janet	Jessel, Toby
Braine, Bernard	Fortescue, Tim	Johnson Smith, G. (E. Grinstead)
Bray, Ronald	Foster, Sir John	Jones, Arthur (Northants, S.)
Brewis, John	Fowler, Norman	Jopling, Michael
Brinton, Sir Tatton	Fox, Marcus	Joseph, Rt. Hn. Sir Keith
Brocklebank-Fowler, Christopher	Fraser, Rt. Hn. Hugh (St' fford & Stone)	Kershaw, Anthony
Brown, Sir Edward (Bath)	Fry, Peter	Kilfedder, James
Bruce-Gardyne, J.	Galbraith, Hn. T. G.	Kimball, Marcus
Bryan, Paul	Gardner, Edward	King, Evelyn (Dorset, S.)
Buchanan-Smith, Alick (Angus, N&M)	Gibson-Watt. David	King, Tom (Bridgwater)
Buck, Antony	Gilmour, Ian (Norfolk, C.)	Kinsey, J. R.
Bullus, Sir Eric	Gilmour, Sir John (Fife, E.)	Kitson, Timothy
Burden, F. A.	Glyn, Dr. Alan	Knox, David
		Lambton, Antony
Butler, Adam (Bosworth)	Godber, Rt. Hn. J. B.	Lane, David
Campbell, Rt. Hn. G. (Moray&Nairn)	Goodhart, Philip	Langford-Holt, Sir John
Carlisle, Mark	Goodhew, Victor	Legge-Bourke, Sir Harry
Carr, Rt. Hn. Robert	Gorst, John	Le Marchant, Spencer
Channon, Paul	Gower, Raymond	Lewis, Kenneth (Rutland)
Chapman, Sydney	Grant, Anthony (Harrow, C.)	Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)
Chataway, Rt. Hon. Christopher	Cray, Hamish	Longden, Gilbert
Churchill, W. S.	Green, Alan	Loveridge, John
Clark, William (Surrey, E.)	Grieve, Percy	Luce, R. N.
Clarke, Kenneth (Rushcliffe)	Griffiths, Eldon (Bury St. Edmunds)	McAdden, Sir Stephen
Clegg, Walter	Grylls, Michael	MacArthur, Ian
Cockeram, Eric	Gummer, Selwyn	McCrindle, R. A.
Cooke, Robert	Curden, Harold	McLaren, Martin
Coombs, Derek	Hall, Miss Joan (Keighley)	Maclean, Sir Fitzroy
Cooper, A. E.	Hall, John (Wycombe)	McMaster, Stanley
Cordle, John	Hall-Davis, A. G. F.	Macmillan, Maurice (Farnham)
Corfield, Rt. Hn. Frederick	Hamilton, Michael (Salisbury)	McNair-Wilson, Michael
Cormack, Patrick	Hannam, John (Exeter)	McNair-Wilson, Patrick (NewForest)
Costain, A. P.	Harrison, Brian (Maldon)	Maddan, Martin
Madel, David	Powell, Rt. Hn. J. Enoch	Taylor, Sir Charles (Eastbourne)
Marten, Neil	Price, David (Eastleigh)	Taylor, Edward M.(G'gow, Cathcart)
Mather, Carol	Proudfoot, Wilfred	Taylor, Frank (Moss Side)
Maude, Angus	Pym, Rt. Hn. Francis	Taylor, Robert (Croydon, N, W.)
Maudling, Rt. Hn. Reginald	Quennell, Miss J. M.	Tebbit, Norman
Mawby, Ray	Rawlinson, Rt. Hn. Sir Peter	Temple, John M.
Maxwell-Hyslop, R. J.	Redmond, Robert	Thatcher, Rt. Hn. Mrs. Margaret
Meyer, Sir Anthony	Reed, Laurance (Bolton, E.)	Thomas, John Stradling (Monmouth)
Mills, Peter (Torrington)	Rees, Peter (Dover)	Thomas, Rt. Hn. Peter (Hendon, S.)
Mills, Stratton (Belfast, N.)	Rees-Davies, W. R.	Thompson, Sir Richard (Croydon, S.)
Miscampbell, Norman	Renton, Rt. Hn. Sir David	Tilney, John
Mitchell, Lt.-Col. C. (Aberdeenshire, W)	Rhys Williams, Sir Brandon	Trafford, Dr Anthony
Mitchell, David (Basingstoke)	Ridley, Hn. Nicholas	Trew, Peter
Moate, Roger	Ridsdale, Julian	Tugendhat, Christopher
Molyneaux, James	Rippon, Rt. Hn. Geoffrey	Turton, Rt. Hn. Sir Robin
Money, Ernle	Roberts, Michael (Cardiff, N.)	van Straubenzee, W. R.
Monks, Mrs. Connie	Rodgers, Sir John (Sevenoaks)	Vaughan, Dr. Gerard
Monro, Hector	Rossi, Hugh (Hornsey)	Vickers, Dame Joan
Montgomery, Fergus	Rost, Peter	Waddington, David
Morgan, Geraint (Denbigh)	Russell, Sir Ronald	Walder, David (Clitheroe)
Morgan-Giles, Rear-Adm.	St. John-Stevas, Norman	Walker, Rt. Hn. Peter (Worcester)
Morrison, Charles (Devizes)	Sandys, Rt. Hn. D.	Walker-Smith, Rt. Hn. Sir Derek
Mudd, David	Scott, Nicholas	Wall, Patrick
Murton, Oscar	Scott-Hopkins, James	Walters, Dennis
Nabarro, Sir Gerald	Sharples, Richard	Ward, Dame Irene
Neave, Airey	Shaw, Michael (Sc'b'gh & Whitby)	Warren, Kenneth
Nicholls, Sir Harmar	Shelton, William (Clapham)	Weatherill, Bernard
Noble, Rt. Hn. Michael	Simeons, Charles	Wells, John (Maidstone)
Normanton, Tom	Sinclair, Sir George	White, Roger (Cravesend)
Nott, John	Skeet, T. H. H.	Whitelaw, Rt. Hn. William
Onslow, Cranley	Smith, Dudley (W'wick & L'mington)	Wiggin, Jerry
Oppenheim, Mrs. Sally	Soref, Harold	Wilkinson, John
Orr, Capt. L. P. S.	Speed, Keith	Wolrige-Gordon, Patrick
Osborn, John	Spence, John	Wood, Rt. Hn. Richard
Owen, Idris (Stockport, N.)	Sproat, lain	Woodhouse, Hn. Christopher
Page, Graham (Crosby)	Stainton, Keith	Woodnutt, Mark
Page, John (Harrow, W.)	Stanbrook, Ivor	Worsley, Marcus
Parkinson, Cecil (Enfield, W.)	Stewart-Smith, D. G. (Belper)	Wylie, Rt. Hn. N. R.
Peel, John	Stodart, Anthony (Edinburgh, W.)	Younger, Hn. George
Percival, Ian	Stoddart-Scott, Col. Sir M.
Peyton, Rt. Hn. John	Stokes, John	TELLERS FOR THE AYES :
Pike, Miss Mervyn	Stuttaford, Dr. Tom	Mr. Reginald Eyre and
Pink, R. Bonner	Sutcliffe, John	Mr. Jasper More.
Pounder, Rafton	Tapsell, Peter
NOES
Abse, Leo	Cocks, Michael (Bristol, S.)	English, Michael
Albu, Austen	Cohen, Stanley	Evans, Fred
Allaun, Frank (Salford, E.)	Coleman, Donald	Faulds, Andrew
Allen, Scholefield	Concannon, J. D.	Fernyhough, Rt. Hn. E.
Archer, Peter (Rowley Regis)	Conlan, Bernard	Fisher, Mrs. Doris (B'ham, Ladywood)
Armstrong, Ernest	Corbet, Mrs. Freda	Fitch, Alan (Wigan)
Ashley, Jack	Cox, Thomas (Wandsworth, C.)	Fitt, Gerard (Belfast, W.)
Ashton, Joe	Crawshaw, Richard	Fletcher, Ted (Darlington)
Atkinson, Norman	Cronin, John	Foley, Maurice
Bagier, Gordon A. T.	Crosland, Rt. Hn. Anthony	Foot, Michael
Barnett, Guy (Greenwich)	Crossman, Rt. Hn. Richard	Ford, Ben
Barnett, Joel	Cunningham, G. (Islington, S. W.)	Forrester, John
Benn, Rt. Hn. Anthony Wedgwood	Dalyell, Tam	Fraser, John (Norwood)
Bennett, James (Glasgow, Bridgeton)	Darling, Rt. Hn. George	Freeson, Reginald
Bidwell, Sydney	Davidson, Arthur	Galpern, Sir Myer
Bishop, E. S.	Davies, Denzil (Llanelly)	Garrett, W. E.
Blenkinsop, Arthur	Davies, G. Elfed (Rhondda, E.)	Gilbert, Dr. John
Boardman, H. (Leigh)	Davies, Ifor (Gower)	Ginsburg, David
Booth, Albert	Davies, S. O. (Merthyr Tydvil)	Golding, John
Bottomley, Rt. Hn. Arthur	Davis, Clinton (Hackney, C.)	Gordon Walker, Rt. Hn. P. C.
Boyten, James (Bishop Auckland)	Davis, Terry (Bromsgrove)	Gourlay, Harry
Bradley, Tom	Deakins, Eric	Grant, George (Morpeth)
Brown, Bob (N'c'tle-upon-Tyne, W.)	de Freitas, Rt. Hn. Sir Geoffrey	Grant, John D. (Islington, E.)
Brown, Hugh D. (G'gow, Provan)	Defargy, H J.	Griffiths, Eddie (Brightside)
Brown, Ronald (Shoreditch & F'bury)	Dell, Rt. Hn. Edmund	Griffiths, Will (Exchange)
Buchan, Norman	Dempsey, James	Grimond, Rt. Hn. J.
Buchanan, Richard (G'gow, Sp'burn)	Doig, Peter	Gunter, Rt. Hn. R. J.
Butler, Mrs. Joyce (Wood Green)	Dormand, J. D.	Hamilton, William (Fife, W.)
Callaghan, Rt. Hn. James	Douglas, Dick (Stirlingshire, E.)	Hamling, William
Campbell, I. (Dunbartonshire, W.)	Douglas-Mann, Bruce	Hannan, Wiliam (G'gow, Maryhill)
Cant, R. B.	Duffy, A. E. P.	Hardy, Peter
Carmichael, Neil	Dunn, James A.	Harrison, Walter (Wakefield)
Carter, Ray (Birmingh'm, Northfield)	Dunnett, Jack	Hart, Rt. Hn. Judith
Carter-Jones, Lewis (Eccles)	Eadie, Alex	Hattersley, Roy
Castle, Rt. Hn. Barbara	Edelman, Maurice	Healey, Rt. Hn, Denis
Clark, David (Colne Valley)	Ellis, Tom	Heffer, Eric S.

Hilton, W. S.	McNamara, J. Kevin	Rodgers, William (Stockton-on-Tees)
Hooson, Emlyn	Mahon, Simon (Bootle)	Roper, John
Horam, John	Mallalieu, E. L. (Brigg)	Ross, Rt. Hn. William (Kilmarnock)
Houghton, Rt. Hn. Douglas	Mallalieu, J. P. W. (Huddersfield, E.)	Sandelson, Neville
Howell, Denis (Small Heath)	Marks, Kenneth	Sheldon, Robert (Ashton-under-Lyne)
Huckfield, Leslie	Marquand, David	Shore, Rt. Hn. Peter (Stepney)
Hughes, Rt. Hn. Cledwyn (Anglesey)	Marsden, F.	Short, Rt. Hn. Edward (N'c'tle-u-Tyne)
Hughes, Mark (Durham)	Marshall, Dr. Edmund	Short, Mrs. Renée (W'hampton, N.E.)
Hughes, Robert (Aberdeen, N.)	Mason, Rt. Hn. Roy	Silkin, Rt. Hn. John (Deptford)
Hunter, Adam	Mayhew, Christopher	Silkin, Hn. S. C. (Dulwich)
Irvine, Rt. Hn. SirArthur (Edge Hill)	Mellish, Rt. Hn. Robert	Sillars, James
Janner, Greville	Mendelson, John	Silverman, Julius
Jay, Rt. Hn. Douglas	Mikardo, Ian	Skinner, Dennis
Jeger, Mrs. Lena (H'b'n&St. P'cras, S.)	Millan, Bruce	Small, William
Jenkins, Hugh (Putney)	Miller, Dr. M. S.	Smith, John (Lanarkshire, N.)
Jenkins, Rt. Hn. Roy (Stechford)	Milne, Edward (Blyth)	Spearing, Nigel
John, Brynmor	Mitchell, R. C. (S'hampton, Itchen)	Spriggs, Leslie
Johnson, Carol (Lewisham, S.)	Molloy, William	Stallard, A. W.
Johnson, James (K'ston-on-Hull, W.)	Morgan, Elystan (Cardiganshire)	Steel, David
Johnson, Walter (Derby, S.)	Morris, Alfred (Wythenshawe)	Stewart, Donald (Western Isles)
Johnston, Russell (Inverness)	Morris, Charles R. (Openshaw)	Stoddart, David (Swindon)
Jones, Barry (Flint, E.)	Morris, Rt. Hn. John (Aberavon)	Stonehouse, Rt. Hn. John
Jones, Dan (Burnley)	Moyle, Roland	Strang, Gavin
Jonss, Rt. Hn. Sir Elwyn (W. Ham. S.)	Murray, Ronald King	Strauss, Rt. Hn. G. R.
Jones, Gwynoro (Carmarthen)	Ogden, Eric	Summerskill, Hn. Dr. Shirley
Jones, T. Alec (Rhondda, W.)	O'Halloran, Michael	Taverne, Dick
Judd, Frank	O'Malley, Brian	Thomas, Rt. Hn. George (Cardiff, W.)
Kaufman, Gerald	Oram, Bert	Thomas, Jeffrey (Abertillery)
Kelley, Richard	Orme, Stanley	Thomson, Rt. Hn. G. (Dundee, E.)
Kerr, Russell	Oswald, Thomas	Thorpe, Rt. Hn. Jeremy
Kinnock, Neil	Owen, Dr. David (Plymouth, Sutton)	Tinn, James
Lambie, David	Padley, Walter	Tomney, Frank
Lamond, James	Paget, R. T.	Torney, Tom
Latham, Arthur	Palmer, Arthur	Tuck, Raphael
Lawson, George	Pannell, Rt. Hn. Charles	Urwin, T. W.
Leadbitter, Ted	Pardoe, John	Varley, Eric G.
Lee, Rt. Hn. Frederick	Parker, John (Dagenham)	Wainwright, Edwin
Leonard, Dick	Parry, Robert (Liverpool, Exchange)	Walden, Brian (B'm'ham, All Saints)
Lever, Rt. Hn. Harold	Peart, Rt. Hn. Fred	Wallace, George
Lewis, Arthur (W. Ham, N.)	Pendry, Tom	Watkins, David
Lewis, Ron (Carlisle)	Pentland, Norman	Weitzman, David
Lipton, Marcus	Perry, Ernest G.	Wellbeloved, James
Lomas, Kenneth	Prentice, Rt. Hn. Reg.	Wells, William (Walsall, N.)
Loughlin, Charles	Prescott, John	White, James (Glasgow, Pollok)
Lyon, Alexander W. (York)	Price, J. T. (Westhoughton)	Whitehead, Phillip
Lyons, Edward (Bradford, E.)	Price, William (Rugby)	Whitlock, William
Mahon, Dr. J. Dickson	Probert, Arthur	Willey, Rt. Hn. Frederick
McBride, Neil	Rankin, John	Williams, Mrs. Shirley (Hitchin)
McCann, John	Reed, D. (Sedgefield)	Wilson, Alexander (Hamilton)
McCartney, Hugh	Rees, Merlyn (Leeds, S.)	Wilson, Rt. Hn. Harold (Huyton)
McElhone, Frank	Rhodes, Geoffrey	Wilson, William (Coventry, S.)
McGuire, Michael	Richard, Ivor	Woof, Robert
Mackenzie, Gregor	Roberts, Albert (Normanton)
Mackie, John	Roberts, Rt. Hn. Goronwy (Caernarvon)	TELLERS FOR THE NOES :
Maclennan, Robert	Robertson, John (Paisley)	Mr. Joseph Harper and
McMillan, Tom (Glasgow, C.)	Roderick, Caerwyn E.(Br'c'n&R'dnor)	Mr. James Hamilton.

Resolved,

That this House, recognising the special problems that have arisen in Scotland and the regrettably high unemployment accompanying them, which has resulted from the inflationary policies pursued by the last Government, endorses the measures introduced by Her Majesty's Government, including the creation of a special development area covering West Central Scotland and other powerful incentives for regional development, as relevant and effective for dealing with this situation.