CASE FOR SUPPORT

HC Deb 27 July 1971 vol 822 cc351-97

The implications of this for the future will be considerable. If British electronics companies wish to establish themselves in any new area of technology, it appears they must do it alone. 'Go ahead,' the message seems to run, 'nobody's stopping you.' But nobody's helping you either."

The "stand on your own feet" philosophy—and if you are a lame duck, it is just too bad for Scotland.

The comment went on: We do not believe that industry should be permanently proposed up by artificial means but during the formative stages of a new technology there can be strong arguments for some form of official support. Similarly, the years while a market is being created often call for carefully chosen protection, just as young plants need to be sheltered from the frost. There need be nothing enfeebling about such support and such protection. They can be seen operating very effectively in both of the world's leading electronics nations—the U.S.A. and Japan. But somehow, for all the talk and heart-searching, this country has failed to find the key to prosperity in semiconductors. When the marks for this particular game come to be added up, we fear that everyone will receive a low score. Government, manufacturers, customers—there have been no really sparkling performers, and it can only be hoped that something has been learned for when the next game comes to be played. That rather lengthy quote from a trade publication shows something of the challenge which this Government must meet. They cannot sit on the sidelines and watch these young new industries being destroyed. In areas like Fife, where we have lost our old industry—coal—we depend on these new industries more than most areas. Therefore, the psychological blow of their being destroyed is all the greater.

I beg the Government to have some sense of their responsibility and not to be deceived and blinded by their own dogma. They should recognise that they cannot allow the blind forces of the market free rein, that they must intervene—for humane and social reasons as well as for good sound economic reasons.

11.0 p.m.

Mr. J. Bruce-Gardyne (South Angus)

I had not intended to take part in the debate because I was under the impression that we were at this stage to discuss the position of Upper Clyde Shipbuilders and the situation on Clydeside. But the area of debate has been somewhat widened, and the hon. Member for Dundee, West (Mr. Doig), for example, has referred to some of the problems of my constituency. I shall come to his comments in a few minutes. I have been somewhat provoked, also, by some of the comments made by hon. Members opposite. Listening to them, one might gain the impression that an unemployment problem suddenly arose overnight in Scotland on 18th June last year. In fact, as they and everyone else in Scotland know, that is far from the truth.

On the question of U.C.S., the hon. Member for Fife, West (Mr. William Hamilton) made one observation which seemed to me to have an element of attraction when he urged the case for the setting up of a Select Committee. I hope that if we were to do that it would manage to unveil for us precisely what the right hon. Gentleman the Member for Bristol, South-East (Mr. Benn) meant when he went to Clydeside in the summer of 1969 and delivered that famous speech, which was, I think, fairly characterised by the Scottish Daily Express as giving the message, "Not a penny more".

That was the right hon. Gentleman's message at that time, and it makes a pretty odd contrast with the antics in which he has been indulging in recent weeks. I hazard the guess—I have hazarded it outside the House, so I see no reason for not repeating it here—that, had it not been for the occurrence of a by-election in the Gorbals constituency, the right hon. Gentleman would have stuck by what he said in the summer of 1969 and would have ensured that the bankruptcy of Upper Clyde Shipbuilders occurred in the autumn of 1969 and not when it did.

Hon. Members opposite have emphasised the seriousness of the employment situation on Clydeside now. I wonder whether my hon. Friend the Under-Secretary of State could tell us whether it is a fact that the other yards on the Clyde, Yarrow's and Lower Clyde, are crying out to recruit labour, and, further, whether it is a fact that there are elements among the trade unions on the Upper Clyde who have indicated to any present employees of U.C.S. that if they should consider applying for jobs with Yarrow's or with Lower Clyde they would do so at risk to their families. [HON. MEMBERS: "Shame."] These reports are circulating. [HON. MEMBERS: "Where?"] They are circulating in Scotland. I shall be very interested to hear whether right hon. and hon. Members opposite can produce evidence to refute——

Mr. Norman Buchan (Renfrew, West)

It is your smear.

Mr. Bruce-Gardyne

—the reports that other shipyards on the Clyde are crying out for labour at the present time and explain why they are unable to recruit such labour.

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

The hon. Gentleman is repeating filthy tittle tattle for which there is not a jot of evidence and then asking hon. Gentlemen on this side to refute it. guarantees that the stories recirculate. by making the point in his speech he guarantees that the stories re-circulate. The truth is, and the hon. Gentleman knows this very well, that the only meaning of his argument is that there are employers in Lower Clyde who would like to see higher unemployment on the Clyde so that they could get some people recruited from there. That is the only merit of his argument. Beyond that he is simply engaging in the spreading of a rumour designed in some way to weaken those who are fighting for their right to work in Upper Clyde shipyards.

Mr. Bruce-Gardyne

What I asked hon. and right hon. Gentlemen to refute was——

Mr. Robert Hughes (Aberdeen, North)

rose——

Mr. Bruce-Gardyne

I am dealing with the right hon. Gentleman. What I asked hon. and right hon. Gentlemen to refute was that Yarrow's and Lower Clyde were seeking to recruit employees and were unable to do so. I asked how they explained this situation in a condition of serious unemployment.

Hon. Members

Withdraw.

Mr. Bruce-Gardyne

I do not intend to withdraw.

Mr. Hughes

rose——

Mr. Bruce-Gardyne

I do not want to delay the House much longer. I do want to deal with——

Mr. Hughes

Before the hon. Gentleman leaves that point——

Mr. Bruce-Gardyne

The hon. Gentleman must allow me to make my own speech.

Mr. Hughes

The hon. Gentleman should stop making assertions——

Mr. Speaker

Order. If the hon. Gentleman does not give way the hon. Member must not seek to intervene.

Mr. Buchan

On a point of order, Mr. Speaker. Assertions have been made which refer to the workers and management in an area which I and other of my hon. Friends represent. If we cannot answer these now I hope that we will be given an opportunity later of dealing with them.

Mr. Speaker

Certainly.

Mr. Bruce-Gardyne

I want to turn briefly to the situation on Tayside. The hon. Member for Dundee, West referred to this. Listening to the hon. Gentleman, I would not have thought that he was a supporter of a Government which introduced the quota system for imports of jute goods, which as he well knows has been one of the factors—I do not say the only one—which has resulted in the difficulties facing the jute industry.

Mr. Doig

Is the hon. Gentleman not aware that the jute industry asked for the quota system? He made no objection to this.

Mr. Bruce-Gardyne

I am well aware of what happened at the time. The Government of the day decided to make the change and, broadly speaking, the largest firms in the industry saw certain advantages for them in the new scheme. It was made quite clear at the time by a number of people, including me, that it would create problems in some of the smaller firms and this is what has happened.

Mr. Douglas

That was in 1964.

Mr. Bruce-Gardyne

It was not, it was in 1969.

I do not want to delay the House much longer, but I do want to refer to what was said about the extension of S.D.A. privileges, if that is the right word, in the Tayside region. The hon. Gentleman quoted the Lord Provost of Arbroath as supporting this proposition. I have made it clear to the Lord Provost that I would not support him in his approach, basically for two reasons. The first is because the hon. Gentleman overlooks the differential disadvantage which is applied through the S.D.A. scheme to existing employers in an area which receives S.D.A. rights. A payroll subsidy can obviously present considerable competitive disadvantages to established firms in an area which are not able to enjoy that subsidy themselves. I believe that we should consider not only the desirability of bringing new industry into an area but also the desirability of furthering the position of industry already there.

I am prepared to concede that the existence of special development area privileges in West Central Scotland puts Tayside at a competitive disadvantage in attracting new industry. The corollary of that is that if Tayside were made a special development area there would be demands from other parts of Scotland which would find themselves disadvantaged not only against Clydeside but also against Tayside. So it would go on and one would get a more and more unwieldy system of incompatible incentives.

The hon. Member for East Stirlingshire (Mr. Douglas) referred to the argument that a reduction in the differential in favour of development areas results from the increase in the first-year allowances. We accept that there is a limited reduction in differential is implied, but he overlooks the fact that first-year allowances do not apply to plant and investment in the qualifying factory, but that the machinery may well come from a development area. I can well see, for example, that machine tool manufacturers in my constituency could benefit from the increase in first-year allowances.

It is a mistake to assume that any limited erosion—and it is very limited—of the differential in favour of first-year allowances for the development areas is entirely negative for them. In so far as they are producing capital goods which go to investment in non-development areas, it may be a positive advantage to them in encouraging additional manufacturing investment. That is the other side of the situation. The problem of unemployment in Scotland is to a large extent a reflection of the success of the last Government's policies in destroying the profitability of British industry through their taxation system and thereby destroying the ability to invest and adding to the erosion of profit margins through the tax system the destruction of profit margins through the inflationary stampede they set going in their last 18 months of office. It is not good enough for hon. Members opposite now to turn round and complain about the consequences of those policies.

11.15 p.m.

Mr. Norman Buchan (Renfrew, West)

I thank you for calling me after the hon. Member for South Angus (Mr. Bruce-Gardyne), Mr. Speaker. This is the first time I have taken part in a debate on unemployment and the industrial situation in Scotland, for I have been dealing with other sectors of the Scottish scene and have left these matters to my comrades and colleagues.

I am impelled to intervene after some of the remarks of the hon. Member for South Angus. Despite the position which he regards himself as holding in the Conservative Party, he must learn that that kind of unsubstantiated smear is condemned by most decent people inside and outside the House. I had thought that what was wrong with the hon. Member was lack of heart; after listening to the last few minutes of his views on economics, I think that he is suffering from lack of head as well. If he does not understand the damage that remarks of that kind do, it is time that he did. We are dealing with a serious situation and we do not have time for frivolity, or callousness, or smears, and that is what we have had.

As it happens, I represent the area to which the hon. Member referred, the Lower Clyde, the shipbuilders of the Lower Clyde, and very proud they are too, of Glasgow and Greenock. I remember speaking at the factory gate at the time both my right hon. Friends were having discussions two or three years ago about the future of the Upper Clyde. What the lads were asking me was quite simply, "Are you giving them the money so that Upper Clyde can continue?" They were not saying, as some others did, "Do not bother about giving them the money, so that we may be in a better competitive position".

Mr. Douglas

I hesitate to advise my hon. Friend, but the hon. Member for South Angus (Mr. Bruce-Gardyne) said that the employers on the Lower Clyde made certain allegations about the trade unions. Would my hon. Friend care to pursue that?

Mr. Buchan

I shall come to that. I wished first to relate the attitude of the people with whom I am inevitably most concerned, the workers. I can tell the hon. Member that the kind of solidarity that the Upper Clyde requires will be forthcoming from the workers of the Lower Clyde.

I have a good deal of consultation with the workers and I have never heard anything which would substantiate the hon. Members' unwarranted and unnecessary smear. I hope that he will withdraw it because he has no basis for it, although it was not untypical of the kind of thing we are getting from the Government. We now have the most reactionary Government for the last century and a half and the most callous. They were elected on a fraud, the fraud that they would cut unemployment at a stroke. They have perpetuated themselves on the myth that all the problems were being caused by the workers' demands, and now they are trying to sustain themselves on the illusion that their problems will be solved by entering the Common Market. I want to deal with all of those.

The Under-Secretary will recall the unemployment figures in the London evening newspapers on the day of the election. The promise to cut unemployment at a stroke was clearly one of the most telling factors which secured the election victory on 18th June, last year, and the hon. Member for South Angus should recall 18th June, for it is a very important date. Since then we have had the kind of unemployment figures which Scotland has not seen since the 1930s. Now it is July and we have to take on board the young people who have left school and never worked.

I know what I am talking about, for I represent an area where there has been a long history of unemployment. I remember becoming a candidate in the winter of 1962–63 and finding to my horror 11 per cent. unemployment in Port Glasgow. But that figure is repeated in area after area in Scotland today. A breakdown of the figures shows that not only are more people unemployed, but more people are unemployed for longer periods. The number of those unemployed for more than six months is increasing drastically and the number of unemployed for more than 12 months is increasing drastically. This is the tragedy, not the tragedy of unemployment for three, four, or five weeks as people shift from job to job, but the creation of long-term hard-core unemployment, and I wish that the Under-Secretary who has a certain responsibility in the matter would pay a little attention.

Many of us on this side believe that what we are discussing tonight has its origins not in the problem involved in the exchange of letters in October and November last year, but the year before in the document starting from the hon. Gentleman himself. That document outlined the butchery of the Upper Clyde. Almost all the changes have been brought about by events. This is one way in which we can judge attitudes. We know the document, and when we know that the changes which it is said to contain have in each and every case been carried out, this is the difference between allegation based upon experience and facts and the kind of smear that we got from the hon. Gentleman.

One of the reasons why we would like to have a public inquiry into the whole question of U.C.S. is that we want to know what kind of rôle the hon. Gentleman's document played in this. I want to know, for example, to whom it was sent. The Secretary of State for Scotland says that he never saw it. If he did not get it, this shows with what contempt the Conservative Party treated regional Ministers. Either the right hon. Gentleman saw it or he did not. If he did not see it, this shows how the party opposite played down its importance. Even that is indicative of the Government, because they have no concern for the regions, since the tasks and the problems concerning the regions cut across their ideology.

The measures announced a week ago were not measures of a Government concerned. They were the measures of a Government in panic. This has been the problem of the Government. The fraud was that they would cut unemployment. The myth was that high prices and inflation were due to the demands of the workers. Absolutely no evidence has been brought forward by the Government Front Bench. Hon. Friends of mine have been asking for it for a year. What is the evidence that wage demands have caused unemployment?

Speculation we have had from the Prime Minister until we are sick of hearing it. There has been not an ounce of evidence that the demands of the workers have caused unemployment. When we look from situation to situation, it is in precisely those areas, regions and industries where there is no problem that we face the higher unemployment.

I know what is causing unemployment. Unemployment breeds on unemployment, because as soon as a pool of unemployment is created there is no longer need for an employer to hold on to his labour force, since he knows that if expansion comes, there will be a pool from which he can get his labour. Therefore, the moment that unemployment begins to rise—and it has risen dramatically, by 20 or 25 per cent. over the last 12 months—employers add to it by shedding their labour. This is the problem, and the Government have not faced it.

A week ago we got the panic measures of reflation. We all know—because it was predicted that it would happen—that the Government were worried that they were not carrying public opinion with them to take us into the Common Market. Because of this, the panic measures were brought forward. But whom will they assist? They may do something in the areas which satisfy consumer needs—they may or they may not. A lot will depend upon how much industrialists believe that the Government can go in for sustained expansion.

Much will depend upon how many industrialists are not investing because they intend to wait and invest in Europe instead. I have never heard such nonsense as the reply to my hon. Friend the Member for Dundee, West (Mr. Doig) tonight that investors in Europe will come to invest in Dundee to make things here so that they can send them back to Europe. What economic nonsense this is. That is another reason why we may not get the right results from reflation.

What we are clear about is that there is nothing here to assist the regions. The hon. Member for South Angus advances the spurious argument that demand in these areas will be assisted by the improved depreciation, pushed up to 80 per cent.; that that will cause a river of demand for capital goods in the regions. The truth is that investment in the regions has been given a disincentive because there is now only a 20 per cent. difference in the free depreciation in the regions and that elsewhere.

So we come to the problem of the Upper Clyde. In a day or two we shall get an announcement from the Government, and we are all waiting for it. If the Government do not announce that the entire yards on the Clyde will be maintained on the basis of the existing labour force, there will not be disappointment or hopelessness, but the kind of bitter anger which this class-ridden Government cannot conceive. The Government have made the class struggle respectable.

That is what the Government will face. The shop stewards are already saying that if that is not the case they are prepared to occupy the yards. There will be very few people in Scotland who will be prepared to condemn such action, because many of them will say that those yards belong to the workers every bit as much as they belong to the management. We hear of pre-emptive claims to possession, and it is to this kind of thing that we need an answer.

First, I ask the Government to recognise the bitterness and anger there is in Scotland and give this pledge to maintain the U.C.S. They may not like doing so, I know it goes against their dogmas, but let them look at the cost—that will appeal. They are always concerned with cash. Let them set the cost of redundancy payments, unemployment payments, and the rest, against the injection of the measly sum needed here to keep U.C.S. going. I think that the Government have even got their cash account wrong. In addition to saving money, they will be building ships and helping the balance of payments and, above all, giving some kind of sustained hope.

Second, we demand an inquiry. The hon. Member for South Angus has said he would welcome an inquiry because it would expose the statement of my right hon. Friend the Member for Bristol, South-East (Mr. Benn). If that is the case, let the hon. Gentleman use his position of political power to press the Government to hold such an inquiry. We would welcome it.

Third, I hope that if the Government are not prepared to have a public inquiry, the people of the Clyde will themselves hold a public inquiry—and put the Government in the dock.

11.28 p.m.

Mr. Tarn Dalyell (West Lothian)

Most of my hon. Friends have a far greater knowledge of Upper Clyde than I have and can speak with far greater authority, but I want to ask one question not only for the West of Scotland but for Scotland.

When the news of the Upper Clyde difficulties broke, the Government, with a degree of self-pity that some of us found less than attractive, said: "We did not know. We were only given 48 or 72 hours warning." What is being done within the Government machine to see that such a situation never occurs again and that the Government are never again confronted with the same kind of sudden crisis? This has not been explained. We would like to know what is being done to improve the Government machine in this respect.

My hon. Friend the Member for Tottenham (Mr. Atkinson) and I both wanted to speak on unemployment, and my subject was originally unemployment among youth, but eloquently from this side the case has been made. It is appalling to see young people between 15 and 17 years of age starting on their working lives without the prospect of a job—nothing is more appalling.

I want to put forward a constructive idea. My hon. Friend the Member for Dunbartonshire, East (Mr. McCartney) and I have been having a long correspondence with the Ministry of Defence on the subject of the very vast trading facilities at Caledonia and Rosyth. I confess to a constituency interest, since a West Lothian county councillor who is a civilian instructor in Dunfermline was paid off last week. His job, like the jobs of a number of other instructors, is coming to an end. It seems crazy when there is the present degree of youth unemployment, to run down an establishment that is military in name but which we all know in fact has trained a large number of boys for skilled civilian work throughout Scotland. Can the Scottish Office and the Department of Employment talk seriously to the Navy Ministers and ask them whether it is sensible to do this, at this stage in our history, to the considerable training facilities that exist there?

My speech can be cut short, because much of what I had to say was so well put by my hon. Friend the Member for Fife, West (Mr. William Hamilton) on the electronics industry. As one who represents Plesseys, I know only too well that what he said was in no way exaggerated. We look forward to hearing what is said in a later debate by the Under-Secretary for Trade and Industry on the dumping of microcircuits. But it is not just the question of microcircuits that will be raised by the hon. Member for Maldon (Mr. Brian Harrison). It goes much deeper than that. There is a crisis in the electronics industry as a whole, and not only the British electronics industry. I am not looking for miracle solutions, but I too ask for an inquiry about Alexandria.

We in the east of Scotland also have an interest in this, because we had hoped during the early 1960s to be a European centre for the techniques of numerical control. There were very high hopes built up at Dalkeith, where many of my constituents work. That is known to the Government and to my right hon. Friend the Member for Kilmarnock (Mr. Ross), because he was intimately involved in what looked like a very hopeful operation. I did not quarrel with the transfer of that technology for Mid Lothian and West Lothian to the West Coast, because I thought it was rational and it had our good will. What does not have our good will is the fact that numerical control techniques seem to have been run down in Scotland to zero. When we consider the potential power for good of those techniques, and the tremendous burgeoning that could take place, particularly in the context of European industry, we feel that it is tragic that this should have happened.

Moreover, we know very well that considerable sums of Government money are involved. This alone justifies the request for a public inquiry, apart from the assurances that the numerical control techniques would be kept up. I do not want to do any harm to the British electronics industry. Journalists writing in serious Press have made the case very powerfully. This is a case that the Government must answer.

On and on, we have continued the tragic saga of Rolls-Royce. Sometimes it looks hopeful and sometimes it does not. I have a specific question that Government must now answer. They were asked to submit evidence to the Senate Banking Committee. For good or bad reason, apparently they refused to do so. There is an obligation to explain to the country why that request was refused, because it seems to some of us that the refusal could be very harmful to our interests. Those who represent Rolls-Royce subcontractors are now acutely worried about what will happen. Whatever happens on 6th August or 8th August, there is no indication of any contingency planning if things do not turn out in the way we all hope they will. Therefore, if things go wrong—and I hope that they will not—in mid-August or early September, it will be a dereliction of duty for the Government not to produce some kind of contingency plan. I hope that they are having discussions with other people who might use the products of the Rolls-Royce subcontractors. This is neither the time nor the place to go into detail as to who those people are; the Minister knows perfectly well who they are. I beg the Government to have some clear contingency plan in case things do not turn out as they hope.

11.35 p.m.

Mr. Hugh McCartney (Dunbartonshire, East)

I shall not go over the many excellent points made by my hon. Friends and I will try to be as brief as possible in view of the time, but I must refer to the long history of industrial decline in Clydebank, Cumbernauld and other parts of East Dunbartonshire since the General Election last year. It is no accident that it has occurred in view of the declared economic and industrial policies of the Tory Party prior to the election and the evident desire by Ministers to introduce such policies sine; they were elected. It is clear that unless these policies are changed, and unless the Government accept the error of their ways, there is no hope of restoring the position in Scotland in general and in the areas which have been mentioned in particular, including Clydebank and Dunbarton, where there are very high levels of unemployment. The position in these areas is becoming alarming.

It is not wrong to keep emphasising the "lame ducks" statement of the Secretary of State for Trade and Industry because it crystallises the feelings of the hierarchy of the Tory Central Office and of Ministers. I met the Under-Secretary of State for Trade and Industry in London last year in the late autumn or early winter—I cannot remember which it was; the climatic conditions were mild at that time if nothing else was—to discuss the redundancies at the Singer Manufacturing Co. Ltd. Also present were representatives of the Scottish T.U.C. and of the Clydebank town council, shop stewards of the company and officials from the trade unions involved in the problem. It was clear that the Under-Secretary had little or no sympathy for the workers who were losing their jobs, for their families or for the social consequences of the redundancies and others which would follow.

The only crumb of comfort from that meeting and the several other meetings which took place in connection with the Singer and U.C.S. troubles and other troubles which have flowed from the Government's policy was the decision to demolish the Babcock and Wilcox factory and to build three advance factories on the site with a gross area of 100,000 square feet.

I visited that site on Saturday morning. Although the demolition has taken place, very little has been done in building the advance factories. I urge the Minister to encourage the people who have been given the contract to get on with the work as rapidly as possible. Advance factories are very welcome. Successive Labour Governments urged the building of advance factories to attract industry to Scotland. They were one of the main things which brought new industries and the new technological industries to Scotland. Unless the Government introduce policies which will encourage manufacturers to take up the advance factories, there is little or no point in building them. I hope that the Government will not use that as an argument for not spending money in this way, as they have done in the past.

One argument that is being used is that because advance factories are being built, there is no need to worry about employment of workers in U.C.S. However, I do not believe that we should look at the advance factories there or elsewhere in the development area as an alternative. The U.C.S. should be regarded as a comprehensive complex. These advance factories and any industry that is introduced must be regarded as supplementary to the existing industry. Every effort must be made to ensure the well-being of those existing industries.

Yesterday in the Scotsman it was reported that for Scotland the unemployment figures were 134,500—some 6.2 per cent. of the employable population. The hon. Member for South Angus (Mr. Bruce-Gardyne) said that these unemployment figures did not suddenly arise. I ask him to cast back his mind to February, 1963, when under a Tory Government similar disastrous unemployment figures were recorded. At that time they blamed a bad winter. We now have even worse figures than were recorded in February, 1963, and we have not suffered a bad winter, spring or summer. What we are suffering is a bad Government. The sooner we realise this the better. Certainly the electors, if given the opportunity, will tell the Government so.

I received a reply from the Department of Employment on 1st July this year which showed that in the Clydebank employment exchange area there were 2,376 unemployed males registered at June, 1971 compared with 1,522 in June, 1970. The percentage rates of male unemployment in the Glasgow travel-to-work area, which includes Clydebank, were 9.5 and 6.8 respectively for these periods.

I should like to refer to what was said on this matter of redundancies by Jack McGill of the Scottish Daily Express. We may disagree with McGill's interpretation of events, but I am sure we will agree that this respected reporter has his ear to the ground and generally speaking enjoys all the leaks going. If Jack McGill is correct on this occasion in referring to some 2,000 redundancies in U.C.S., then evidently the unemployment figure on Clydebank will rise alarmingly. Since some of the people employed in this area are from the contiguous area of Dunbartonshire, from Scotstoun, Govan and other places, the figures in those areas will be seriously affected.

The delegation of the Scottish T.U.C. which met the Secretary of State for Scotland and the Secretary of State for Trade and Industry were disappointed and dismayed. And they are not the only people who will be disappointed. The Prime Minister, the Secretary of State for Trade and Industry and the Secretary of State for Scotland and various other Government Ministers have received letters and deputations on this subject. Round robins and all kinds of pressures have come from the whole community in this area—from people who normally do not involve themselves in political or social issues. But the whole community in this area is rising in anger at what is to happen to U.C.S. and Clydebank. The Government said in the past that they did not wish to intervene in industry, but they have now intervened in such a way as to force U.C.S. into liquidation. We believe that where necessary Governments should intervene in the interests of the community, but in this instance Government intervention has faced a large part of the shipbuilding industry with liquidation.

In view of the change which has occurred since the U.C.S. difficulties first came to light, I believe that the Government should swallow their political pride and alter their attitude to U.C.S. with a view to helping it to continue as a viable unit. If they are prepared to do that, I am certain that no hon. Member on this side of the House nor any shop steward or trade union involved will make it embarrassing for them.

I think that it was the Scotsman yesterday which reported that certain Scottish Labour Members intended carrying out their own inquiry and investigation. I do not know whether that is true. If it is, I do not know where the reporter got his information.

However, when the Government reach a decision, it is to be hoped very soon, my view is that any inquiry should be instituted by the trade union movement in co-operation with the local authorities in the areas affected by any redundancies or closures. It is ironic that the Government who are opposed to industrial democracy may have started down a road which will result in the first real experiment in democracy in industry.

It has been suggested that, if the Government decide to dismember U.C.S., to hive off any part of it, or to close any part of it, the trade unions will take over the yard and operate it until such time as the Government see sense. This is a clear indication that the point may soon be reached about which I have warned the Government on two previous occasions. I referred to this possibility first when the House was considering the Industrial Relations Bill, and I mentioned it again when we last debated U.C.S. The road that the Government are travelling with their social and economic policies may force workers to show that they can do a better job in co-operation with management than the Government have managed to do.

In view of the new situation, with large-scale unemployment in Scotland, especially on Clydeside, I ask right hon. and hon. Gentlemen opposite to swallow their political pride. They must ensure that U.C.S. is retained as a first-class shipbuilding unit, recognising the traditional skills which exist there. Specula- tors are already poking their noses here and there, trying to smell out what profits are in it for them. They should be chased from the doorstep. The Clydebank Division especially should be maintained as an integral part of any new organisation which may be created following the report of the Government's four experts. Unless the Government accent the need to throw aside their doctrinaire ideas, all hell will be let loose on Clydeside, and they will have even greater trouble than they anticipate.

Before I sit down, I want to compliment the hon. and gallant Member for Aberdeenshire, West (Lt.-Col. Colin Mitchell) for his intervention in the course of these difficulties. He has visited the Clydebank Division. I welcomed his visit, and I know that the trade union movement as a whole, especially the shop stewards in the area, did the same. It was good to see a Conservative Member entering a shipyard sincerely trying to discover its problems. I know that the hon. and gallant Gentleman cannot fight our political battles in his own party, especially in this House, but I hope that his conversations with Ministers following his visit will have some effect on the decisions that the Government have to make.

I also heard that the Under-Secretary of State for Health and Education, Scottish Office, paid a visit to the Clydeside division of U.C.S. I do not know what his attitude was or what his suggestions were to the Government. However, I am sure that unless he declares himself on the side of the U.C.S. workers for the retention of U.C.S. as a complete unit, and the Government accept that position, he and many other Tory Members will be looking for other jobs after the next General Election.

11.50 p.m.

Mr. James Hamilton (Bothwell)

I want to follow the point made by my hon. Friend the Member for Dunbartonshire, East (Mr. McCartney) about the article in the Scottish Daily Express. A similar article also appeared in the Glasgow Evening Citizen, which is part of the same combine. I am prepared to state categorically that this seems to be the way that the Government work. They have allowed this matter to leak, and events may prove that the 2,000 workers mentioned in the Scottish Daily Express and the Glasgow Evening Citizen will become a reality.

This Government seem to make all their statements either at garden fetes or at the opening of new roads which were constructed under the direction of the Labour Government. They do not seem to be capable of making these statements in the House.

The Lanarkshire Development Council has tried hard to arrange a meeting with the Secretary of State for Trade and Industry, but so far he has not indicated that he is prepared to meet this responsible body.

I do not subscribe to the view of my hon. Friend the Member for Dunbartonshire, East who has congratulated some hon. Gentlemen opposite because they met the workers of U.C.S. If they have constituents working in the yards or in factories where there are redundancies, they have a moral obligation to meet them and to explain what the Government's policy is. In a similar situation, I should be prepared to meet the employer and workers who sent me to do a job for them in the House of Commons. On that basis, we are only carrying out to the full the views and the realisations of the people who placed a great deal of trust in us when they elected us at the General Election.

We talk about unemployment on the basis of percentages and of records being broken by all Governments. One of the sad features of this situation is that Scotland has over 16,000 unemployed in the construction industry. That is an indictment against any Government, especially as a tremendous number of houses are required to be built to house people in great need of decent accommodation. Power stations are also urgently required. In this situation, with construction workers signing on at the labour exchanges, obviously the effect on our economy must be extremely serious. It is not only that we have 16,000 craftsmen signing on; we have to take into consideration the ancillary grades which do not get employment because the craftsmen are unemployed.

I find it nauseating that in Lanarkshire 8.3 per cent. of the insurable population are unemployed. Of 8,000 youngsters who left school at the summer holiday period, to the best of my knowledge, 6,000 will be on the dole, on the scrap heap. It is possible that at least 2,000 of them will take advantage of further education. Unfortunately, the facilities are not available for them to take full advantage of further training. The Government should apply their minds to the question of technical training. A training centre is being run down in Lanarkshire. This does not benefit the country. I have written to ask Lord Melchett of the British Steel Corporation to give me a full report on the situation as regards this training centre. Its closure will mean not only that the instructors will be seeking other employment but also that the reservoir of trained personnel will not be coming forward. I hope that they will not be needed in the foreseeable future to add to the impetus to all industries which the Government claim are coming to Scotland.

In the Common Market debate the Secretary of State for Employment stated that the Government were opening new training centres throughout the country. In reply to a question from me he was unable to say how many training centres would be opened in Scotland. I understand that no new training centres are envisaged for Scotland.

Every hon. Member on this side must be deeply concerned on the question of U.C.S. Many of my constituents work at U.C.S. I hope that U.C.S. will not be sold down the river. The Government have a representative on the board of U.C.S. and it is unbelievable that he could not have given the information to the Minister responsible so that the Minister could have informed the House. We received only three days notice of the situation in U.C.S.

My right hon. Friend the Member for Bristol, South-East (Mr. Benn) is asking for a special inquiry into the question of U.C.S. This question should be thoroughly investigated and at the end of the day the House should be informed of what the Government are playing at.

Rolls-Royce concerns everyone in my part of the country. If Rolls-Royce is not redeemed, and if a solution to the Rolls-Royce situation is not found, unemployment in Lanarkshire, which is now 8.3 per cent., could easily become 11 per cent. I do not seek to spread despondency. I merely state a fact of life. The Government have a moral obligation to take action. The 136,000 unemployed that we had in 1963 under the Tory Government is a record of which they cannot be proud. We do not doubt that this record will be beaten before 1971 is out.

It is safe to say that we will reach 150,000. If anyone thinks the measures introduced by the Chancellor on Monday will be a short-term answer, they are living in cloud-cuckoo-land. In view of the high unemployment in my constituency and the rest of Scotland, there was no joy in Bellshill when the Chancellor told us that a £20 suit would cost 30p less. There was no rush to the tailor's to get new suits because most of my constituents, even those who are working, are not making the sort of money to be able to rush and buy a £20 suit just because the Chancellor has reduced the purchase tax on it by 30p.

None of my people are deeply concerned about buying refrigerators, and they are not intending to buy Jaguar cars. Will the Government tell the people of Scotland what they intend to do for a change? Have they written Scotland off? Have they decided that because Scotland renounced them at the last General Election they are not going to give them any consideration? If they do not tell the people what they intend to do, then obviously we in Scotland are entitled to do something sensational. If we do something sensational, hon. Members should bear in mind that the people are far better educated now than their forebears were in the 1930's. We will know how to adapt ourselves to this situation. I hope when the Minister replies he will answer many of the questions we have put to him this evening.

12.1 a.m.

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

I intervene very briefly because my right hon. Friend the Member for Kilmarnock (Mr. Ross) will be winding up for the Opposition. I wanted to deal with one or two points made by the hon. Member for South Angus (Mr. Bruce-Gardyne), who totally misrepresented the position. The attitude of the previous Government, in which I had responsibility for shipbuilding, was dictated by the economic and social considerations, and the suggestion that the Gorbals by-election had played any part is totally false. He knows it to be false. Were there to be any evidence of truth in it, it would be the most massive act of political corruption ever performed in British political history. I would not have referred to it except that some people listening to the hon. Gentleman might have believed there was something in it. When he went on to say there were threats by the men concerned against the families, it simply proved that he has no contact with the people living in Clydeside.

Quite without regard to the outcome of the Government's consideration of this matter, it has been motivated, in the opinion of myself and hon. Gentlemen who watch this, broadly by hostility to the Government's relations not only with industry but specifically with U.C.S. We have a Minister tonight whose document was the key to the whole Government policy. He has an opportunity to deny authorship of that document. But, in the absence of a clear denial, we know the sense of betrayal which the men working in U.C.S. have. It is derived from what he is believed to have said to his political colleagues in 1969.

It is this more than anything else which has created the political crisis which lies behind the economic problems facing U.C.S. I wanted briefly in this context to refer to the Bill presented by my right hon. Friend the Member for Kilmarnock, myself and others. In it we made it clear not only that public ownership was right for U.C.S. but also that the management and workers should jointly have been asked to prepare a development plan under public ownership, and that the details of the management pattern and structure of the company should have been accepted by the management and workers as a whole.

The hon. Gentleman who is to wind up the debate is famous for seeing all economic and industrial problems in profit and loss terms. I must warn him that, in advocating this view, he is totally out of touch with modern thinking—not only of trade unionists and shop stewards but of the modern school of management. We have put forward a serious policy alternative to his view and it is from this that future thinking on industrial policy will derive. If the Minister will not give an inquiry, I hope that the trade unions will take upon themselves the responsibility for examining the betrayal that the Government have perpetrated on this yard.

12.5 a.m.

Mr. Hugh D. Brown (Glasgow, Provan)

I make no apology for detaining the House, because we have been very patient in listening to speeches from hon. Members who have found it inconvenient to wait for the end of the debate. I refer particularly to the hon. Member for South Angus (Mr. Bruce-Gardyne). I am surprised that my colleagues have let him off the hook, because he is not just the Member for South Angus: he is a P.P.S. at the Scottish Office and an office bearer in the Scottish Conservative Party in this House——

Mr. Douglas

An office boy.

Mr. Brown

He just seems like that: in fact he is an office bearer. People outside will assume that at least he is privy to some of the gossip and rumours—some perhaps with substance—that circulate in the Scottish Office.

He has alleged that there have been threats to the families of those employed by Upper Clyde Shipbuilders. May I refresh the memory of the hon. Member for Howden (Mr. Bryan), who may not have been here all through this debate, but who was certainly present during the debate on the Industrial Relations Bill? That Bill contains a specific change in the law relating to picketing. The Government maintained that there had been attempts to endanger people in their own homes during industrial disputes. Many hon. Members on this side took exception to that, because some of the allegations were not substantiated.

But now, the hon. Member for South Angus makes categoric allegations—I am glad to see that he has returned to the Chamber—that trade unionists or the shop stewards in Upper Clyde were threatening the families of their own members if they dared to take jobs in Yarrows or in Lower Clyde. Is that a fair statement of what he said?

Mr. James Hamilton

Get on your feet, man.

Mr. Brown

If so, it is scandalous. Any of us with even a slight knowledge of the difficult situation of the trade unionists in Upper Clyde Shipbuilders recognises that they are obviously anxious, at least until the Government indicate their views, to preserve the labour force in Upper Clyde. That is not unreasonable.

Second, there is the problem of the different wage rates between Upper Clyde and Lower Clyde. We all recognise that the trade unions have problems in this regard, but that is vastly different from saying, as this hon. Member has said, that there have been physical threats, presumably of intimidation, against the families of those employed in Upper Clyde. Is he saying that, or did he lack his usual sophisticated command of language? Was he being too blunt? Does he speak for the Scottish Office?

My right hon. Friend the Member for Kilmarnock (Mr. Ross) rightly said recently that no one ever knew what he said in Cabinet. We would give him credit for this. Some of us think that sometimes he did not communicate enough about some of the broad considerations. I say this, as I think he knows, as a personal admirer of his. But if his P.P.S. had made statements like those of the hon. Member for South Angus, I reckon that my right hon. Friend would have had something to say about them—either to justify them or to refute them. So I am asking that someone—if there is anyone on the Government Front Bench at the moment with authority to speak on this matter—should either confirm or deny these allegations.

There seems to have been a breakdown in the lines of communication between the four wise men and the shop stewards. There may be nothing in it, but it seems amazing and, to say the least, most regrettable, that in this delicate situation, when the shop stewards, I believe, had a clear understanding that they would at least be consulted before the four wise men gave their report to the Minister, all that has been overlooked, in spite of all the talk about taking people into confidence and maintaining communications. As I say, there may be no significance in it, and I do not suggest that there is, but the fact of that failure of communication leads on to the comments I have to make about the hon. Gentleman the Member for Cirencester and Tewkesbury (Mr. Ridley), the Under-Secretary of State for Trade and Industry who is to reply to the debate.

There is no suspicion which trade unionists in Upper Clyde Shipbuilders might have which would not be justified by a reading of some of his speeches in, for example, the Committee on the Post Office Bill in 1968 and 1969. I have been around in politics quite a bit, and I confess that I thought he was a joke. I did not think that he commanded any support in the Conservative Party. I honestly could not see the Tories being so crazy in 1970, in the unlikely event of their winning the election—admittedly, I did not expect them to win it, and I was wrong about that—as to appoint to office someone who was treated as a joke because his ideas were so "way out". Yet here he is.

Whatever else may be said about the trade unionists of Clydeside, they can read. They can read some of the hon. Gentleman's speeches in the Committee on the Post Office Bill. The hon. Member for Howden was there as the Front Bench spokesman, and he knows what I am talking about. The reactionary views we heard from someone who is now a Minister were positively frightening, and in that setting one can understand the reaction of some of the people now concerned about the situation on the Clyde.

There will not be a bloody revolution on Clydeside if there is depressing or disastrous news from the Government, but the Government must for their part recognise that there are people in the trade union movement and on this side of the House who see some advantage in drawing the attention of the country and, indeed, of the world to this glaring situation, a situation in which men want to work, there is a demand for the product of their work, and yet, for some reason or other of finance or because of the outdated monetary system which we have, we cannot organise affairs in such a way as to enable those people to work and create the wealth which they are able to create.

We have taken a fairly long time in this debate, but we need not apologise for detaining the House. We are probably a day or two away from a Government statement, and this is a highly desirable time to impress upon them that they are playing with dynamite here. They have already shown that they are no longer a non-interventionist Govern- ment and they cannot afford to pursue the doctrinaire ideologies of the Under-Secretary of State. Either he must go, or someone in the Government must make clear to the people of Clydeside that some of the serious social considerations will be taken into account when they make their decision.

12.14 a.m.

Mr. William Ross (Kilmarnock)

We have had an interesting debate, interesting because we have once again had only one contribution from the Tory back benches. The hon. Gentleman concerned, the Member for South Angus (Mr. Bruce-Gardyne), began by saying that he had not intended to intervene, but, after he had intervened, I think that most Members wondered why he had. It was no great help.

A certain constitutional point arises out of what the hon. Gentleman said. He is the Parliamentary Private Secretary to the Secretary of State for Scotland, and it is a pretty well known convention that the P.P.S. to the Secretary of State does not intervene in matters which touch the responsibilities of the Secretary of State. If there are two things concerning Scotland at the moment they are (a) unemployment and (b) U.C.S. To have the hon. Member for South Angus, who certainly does not know the area or very much about the people other than those he meets on his fleeting visits to television studios in and around Glasgow, telling us what is happening among the men and failing to give us one single piece of evidence to justify his statements is a serious matter for the Secretary of State.

He is speaking as the man who knows the Secretary of State, how he thinks and acts, and what he says must reflect upon the right hon. Gentleman. We have had this smear about coercion and threats to families and the hon. Gentleman should have the guts and courage to get up and justify it. All we got is the hon. Member running away from the onus of proof. I do not call that courage, I have another name for it and it is something which I would associate with the rather supercilious and unreal presence in this House of the hon. Gentleman.

He talked about my right hon. Friend the Member for Bristol, South-East, but the hon. Gentleman was not here to answer him. He has a happy knack of running away at the right time. Then he talked about special development areas and why he could not support the provost of his main town. I hope the Secretary of State and the Under-Secretary read that speech. It was fairly critical of the special development areas, and especially about the effect they have on industries already in an area. Most new jobs do not come from industries entering an area but from those already there, those who are equipped, modernised and ready to take the chance. I do not see why we should pay very much attention to the hon. Gentleman. As my right hon. Friend the Leader of the Opposition said when he was Prime Minister, the hon. Gentleman is an expert on certain kinds of fish and he should stick to that. Tonight he specialised in red herrings.

My hon. Friends have painted the real picture of employment in Scotland. My hon. Friend the Member for Fife, West (Mr. William Hamilton) spoke of the electronics industry as it affected Glenrothes and elsewhere. The fact is that G.E.C. is moving factories from the area, concentrating in the South. There is the position over Plessey's raised by my hon. Friend. If we read the letter he received from the Under-Secretary at the Department of Trade and Industry it says that: … the factory and machinery were acquired by the firm from the Ministry as a normal commercial transaction and the terms of sale are therefore confidential. Are they? What they received has to appear in "Appropriations for Aid" in the Estimates and it can be quoted by the P.A.C. Whatever it was I can assure the hon. Gentleman it was not a normal commercial transaction. I can tell him that Plessey's was not the only interested firm. It may well be that Plessey's was interested in keeping a particular firm out. I do not think that the people of Dumbarton and Alexandria generally would be greatly taken by the chairman of that company who brought such devastating news to this area about the redundancies which are to take effect in August. I do not think that they would give him a knighthood. But this is quite common. Saxone, the well-known shoe firm, came to Kilmarnock. Its main factory there closed in April and over 200 people have been made redundant. The chairman has been rewarded with a knighthood. So the redundancy makers who have come to Scotland—Clore and Clark—can revel in their knighthoods, but those knighthoods are not supported by the people they have made unemployed. It was the old argument—works have to be concentrated. Plessey and the rest all said exactly the same thing.

What it all comes down to is that the Government are not prepared to intervene. That is the implication of this letter. It reminds us of the kind of letters we used to get in the early 1960s from the same Department—the commercial judgment of firms must not be challenged. The logical conclusion of this situation is that the Government's regional policy is virtually at an end. They are doing nothing about it. Here is a case in which they should have intervened because Plessey lives by Government contracts. The Mark 24 torpedo ran into snags at the Alexandria factory and the work was continued by Plessey. The torpedo is now to be developed. Where will it be manufactured? We have been through this before with the Ministry of Defence.

One of the things we did in Government, apart from the money we spent in development areas, was to allow contracts by nationalised industries, the Post Office and so on to be placed in development areas. But this Government are not concerned with regional policy. It is obvious that when they make the former head of the C.B.I. the Minister in charge, he will naturally listen to the pleas of the C.B.I.

My hon. Friend the Member for West Lothian (Mr. Dalyell) referred to the difficulties of the electronics industry. I hope we get an answer on the question of dumping which he raised. There are other cases of dumping in Scotland—in the paper trade, for example. It is time we had an answer in view of today's reports about Inveresk and elsewhere and the competition to which they have been subjected.

The Government now say that reflation is taking place and all will be well. We have reports from the stores about increased demand. But Scotland has 134,000 unemployed and the people of Scotland are not going out of their way to buy fridges and cars and the rest. Many of them are not even having holidays this year. When is the situation going to improve? The only person in the Government who has had the mischance to reply to that question is the Secretary of State for Scotland, but then he does not always know what he is talking about. He is probably advised by his Parliamentary Private Secretary. He said, in an inadevertent Parliamentary Answer earlier this year, that there will be an improvement later this year. The position has got worse. We have 134,000 unemployed this month and in August the figure will show a further rise. The simple reason is that most of the youngsters who have left school have not yet registered. Some did not leave school until after the registration date; some went on holiday at once. But they will register in August when the schools go back. The Government will then see the figures go up, as they did last year and the year before.

But some of the redundancies already notified will also be taking effect. The Plessey figures will be included in the next count. The figures should start going down in September and October, stabilise in November and start rising in December, January and February. Last year, there was an increase of 30,000 between July and February. If that happens this year, it means that in February and March, after the winter, and provided that it is a mild winter, and last winter could not have been milder, there will be between 30,000 and 40,000 more unemployed than now, and that would be a total approaching 170,000 to 180,000 in Scotland.

Yet Ministers will stand making the same speech—"Please Sir, it wasna me". They have been in office since June of last year and they have revelled in being the Government. They gave us a "great new impetus" on 26th October, the mini-Budget. Instead of an impetus, it drove Scotland further into unemployment. So they made us a special development area in March, and that was followed by the Budget, and now we have the latest effort.

There is no confidence in Scotland that they will be able to pull out. The situation is pretty well out of control. What do the Government have within their control? It is the future of the U.C.S. Men will sit in Downing Street and solemnly decide what is to be the future employment in those yards. The only thing standing between the maximum use of the existing force with the possibility of building it up—because the orders are there to be obtained by an efficient yard—between the men and their continued work and the continued well being of their families is a Government unprepared to give financial support.

Whether the Under-Secretary likes it or not, his name has been coupled with a report which has been called the Ridley Report. It was first mentioned in the House in the debate on the Queen's Speech in July, 1970. It was then mentioned in the Guardian at the time of the announcement of the liquidation, and its existence has never been denied. May I tell the hon. Member that I have seen it? May I further tell the hon. Member that I have seen the circulation, those other people to whom it was sent? The Secretary of State for Scotland has never said that he has never had it; but he has said that he has never read it.

What we want from the hon. Member, and I think that we are entitled to ask—because there were certain plans A and B in the report and one of those plans has been followed to the letter, the sequence has been perfect—is his confirmation or denial that that is what took place. The importance of this is that the man who as a back bench Member drew up this report and submitted it to somebody is now the man in charge of shipping, the man who advises the expert on lame ducks. I do not know whether the hon. Member for Dumfries (Mr. Monro), our silent senator, would like to intervene.

Mr. Hector Monro (Dumfries)

It is private.

Mr. Ross

I did not wish to accuse the hon. Member of having bad manners, but he was talking. I do not know whether he is bursting to make a speech or just talking privately about Northern Ireland.

Mr. R. Chichester-Clark (Londonderry)

If my hon. Friend was talking, it was because at that moment I wished to ask him a question which required an answer. He was very kind and polite to answer.

Mr. William Hamilton

Do it outside.

Mr. Ross

I heard the voice of the hon. Gentleman. I would never accuse him of discourtesy, but his conversation could have been conducted a little more quietly and preferably elsewhere.

I want to come on to the question of what is happening now. I do not want to go into the past; that is murky enough. I am concerned very much about a decision that will take place. We understand that the four "wise men" gave their report or their advice to the Government on Monday. We understand that it is being considered by the Department. That Department, for which the Under-Secretary is partly responsible, will submit its report, or advice on that report, to the Cabinet on Thursday—tomorrow—and the Cabinet will make its decision.

On that rests the fate of about 8,000 people employed in U.C.S. and also the livelihood of probably another 16,000 to 20,000 people whose livelihood depends on the continued existence in full force of U.C.S. I hope that the Government are seized of the importance of this, set within the sombre background of the Scottish unemployment situation. Let us have no more smears about the quality of the men. I was surprised that the hon. and gallant Member for Aberdeenshire, West (Lieut.-Colonel Colin Mitchell) did not get up and attack his hon. Friend, but perhaps he no longer calls him an hon. Friend.

Let us understand the importance of this to the background and to the people themselves. With my hon. Friends the Members for Glasgow, Maryhill (Mr. William Hannan) and Glasgow, Craigton (Mr. Millan), I had the advantage of seeing Sir Alexander Glen, Lord Robens and the two McDonalds. I was impressed by the quality of the people. I was anxious to find what was their remit. If a hatchet job is to be done, it will not be done by them. It will be done here. All that they will do, I presume, is offer certain suggestions or possibilities to the Government and tell them what the cost of these things will be. We ought to see that report and what advice is offered to the Government and balance against that the decision that the Government eventually take.

If any ceiling is to be placed on the support to U.C.S. in its reconstruction, the people who impose the ceiling will be the Government. We in Scotland recall a decision announced by the Secretary of State for Trade and Industry that the Government were not having an airport at Cublington but would put it at Foulness and would spend £150 million more to do it. Money, therefore, does not matter to them. Evidently they have plenty of it. They have already spent nearly £3 million, and probably more, in keeping U.C.S. ticking over.

Whatever proposals are put forward for the reconstructed U.C.S.—and I am sure that there will be some form of reconstruction—this will demand further money.

We would get more and more into the Rolls-Royce situation, but the Government have had second thoughts as they have gone along. They do not have the courage to see the "Butcher Ridley" plan through. The reaction of the people of Scotland, not just of the workers of U.C.S., made them stop short. But we are concerned to ensure that they turn their back altogether on that plan; that they maximise production; that they make the fullest use of resources of manpower and machinery, and that they do not flinch from the need for capital development perhaps in one or other particular yard, because the potential in the long run might be the best bet because of the short-term economic advantage.

That is why I strongly applaud what has been said by more than one of my hon. Friends tonight about Clydebank. It is too easy to say that we can write off Clydebank. We cannot. We cannot write off John Brown without writing off Clydebank, and nobody in their senses in such a situation would write off Clydebank. I hope that the hon. Gentleman the Under-Secretary of State for Development, Scottish Office will appreciate that.

I do not know of any town that suffered more during the war or whose people did more to build that town up again, and for a Government to devastate it again in a way more damaging than anything done during the war would be an absolute and utter disgrace.

It is time some of the Scottish Ministers realised one power they have, and that is the power to resign. I know they cannot use it all the time, but I hope that the Secretary of State is using it now. If we get the dissolution of U.C.S., the people who will be blamed in Scotland will not be the little men but those in the Scottish Office, and the Secretary of State for Scotland has special responsibility.

So that is our demand in respect of U.C.S. We want to ensure that the Government will accept their responsibility; that they will publish the report; that they will make their decision soon; that that decision will be to maintain the existing labour force at these Clydeside yards; that there will be no fragmentation; that the solution will not be the kind of solution advised by the hon. Gentleman the Member for Cirencester and Tewkesbury (Mr. Ridley) that they should sell off even at a pittance, as he said.

I can assure the hon. Gentleman that unless this is done, that unless hope is brought of a continuation of employment in these yards, with greater assurance of stability of employment, and unless the reconstructed company is given the right to seek orders, or to deal with orders that were pretty well the company's before these events started in train, there will be a very considerable outburst of anger and resentment, not just in Clydeside but throughout Scotland, such as we have not seen for a long time.

The decision is entirely the Government's. It is not that of the four wise men but that of the Government. And it is a Government that are not held in very high regard in Scotland—I think because the people of Scotland did not want them, and are suspicious of everything they do. They had better make a good job of it here, because with 134,000 unemployed now, rising for the month of August to nearly 140,000, and with the effects of the Plessey rundown still to be felt, anything they do that worsens the position in U.C.S.—well, they can have all the S.D.A.s they like, and all the summer fetes they like, but the people of Scotland will not tolerate or look with equanimity on a Government that look at the black reality of the situation and decide to make it worse.

This has been a serious debate. I am glad that my hon. Friends from Scottish constituencies have emphasised that what we are concerned about is unemployment, and whether the decision the Government will make within the next 48 hours will make it better or worse. The quality of the people on Clydeside demands that they make the right decision. The quality of the workmanship of which they are capable, given the right leadership and management, is an asset to the nation, which should be built up and not destroyed.

12.40 a.m.

The Under-Secretary of State for Trade and Industry (Mr. Nicholas Ridley)

We have had a serious, interesting and wide-ranging debate. I shall answer as many points as possible, though I hope that the House will accept that some of them are beyond the immediate responsibilities of my Department. I am sure that they will be picked up by other Ministers where they are concerned. I shall draw their attention to them where necessary.

I have the deepest sympathy for all those affected by the alarmingly high level of unemployment in Scotland. Like the whole Government and, I am sure, all hon. Members, I understand what it means in human terms for the people affected, their families and all concerned. I hope that no hon. Member will accuse me of not having those feelings in any aspect of what I say.

The right hon. Member for Kilmarnock (Mr. Ross) said that his first question was about what would happen in the future. I cannot answer him, and I do not think that anyone would expect me to speculate on the number of jobs and the number of unemployed in the up-turn or down-turn of economic forces in the period ahead, either short-term or long-term. Economic forecasting is one of the most dangerous sciences in which we can indulge.

I can give the right hon. Gentleman a few figures, however. The number of unemployed in Scotland has risen from 93,000 at the last General Election to 134,500. This follows a steady loss of jobs during the years 1966–70, when over 80,000 jobs were lost to Scotland.

Hon. Members

That is not true.

Mr. Ridley

In the period immediately before that, from 1960 to 1964, there was a gain of over 30,000 jobs, so it ill behoves the right hon. Gentleman to wag his finger at me across the Box. His record was not one to be all that proud of. Although I have stated that I am worried about the present position and sympathise with those affected, the right hon. Gentleman is in no position to talk as he did.

It is a little too simple just to lay the blame for the present admittedly worrying situation on this Government alone. There have been extraneous factors operating for the worse, such as the microelectronics problem, which is in no sense anything to do with the Government, the problem of the replacement of jute by man-made fibres, and the troubles in Pakistan, which have held up supplies.

Much more important, there have been major economic factors at work not only in this country but in the world. The origins of our trouble go back to 1969, the American recession and the recession which followed in this country, largely induced by the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) in his 1969 Budget, which caused the drastic contraction of the money supply and of demand and economic activity, the effects of which are still working through the economy. I can give instances. Some American firms which have set up in Scotland have found that when ill winds blew they had to close their Scottish subsidiaries and that the market for the products which they were making in America was contracting due to the American recession and therefore they could not produce so much or employ so many. In which respect was this due to the activities of the British Government?

Mr. Buchan

When were these deep-seated factors known to the Government? On 16th June, 1970, two days before the General Election, we were promised that unemployment would come down at a stroke. Has it?

Mr. Ridley

I do not remember any such promise as that. I remember words relating to other matters. But unemployment was rising in the period before the Labour Party left office. To believe that the existence of a different Government since June has in some curious way created the increase in unemployment is begging the question.

There have been three Budgets since the last election—one in October last, one in April this year and the mini-Budget last week—all of them increasing the resources in the community's hands, all of them increasing demand and all of them working to cure recessions and not to create them. All the Government's economic activities have been designed to improve the situation left by the right hon. Member for Kilmarnock and his guilty colleagues.

Mr. Ross

Does the hon. Gentleman suggest that the change from investment grants to investment allowances, which has been deplored in the shipbuilding industry and by more and more people in industry generally, has been of advantage, and what effect has it had upon development? The hon. Gentleman has referred to the three Budgets we have had since the General Election. The first one did not work, and the second one has not worked. Heaven help us if the third one does not work.

Mr. Ridley

I am coming to the question of investment grants. It is obvious—and I am sure that the right hon. Member for Kilmarnock will agree——

Mr. Ross

Do not be too sure.

Mr. Ridley —that the change from investment grants to investment allowances would have the effect of reducing or increasing the amount of investment starting or being planned in Scotland. That would be how one would measure it. One would not measure it by the increase in unemployment. One would measure it by the increase in projects or in new investment. I have the figures. From January to June, 1970, there were 117 industrial development certificates, expected to produce 4,800 jobs. From July to December, 1970, there were 124 certificates, expected to produce 7,100 jobs. From January to June, 1971, there were 89 certificates, expected to produce 7,200 jobs. Therefore, the rate for the first half of this year has shown an improvement of nearly 50 per cent.

Mr. Douglas

What is the figure for private investment?

Mr. Ridley

The hon. Gentleman must take his medicine. He and his hon. Friends have had their say. When the Government tell them the truth about what has happened, they must listen and not interrupt.

Mr. James Hamilton

The hon. Gentleman mentioned the I.D.C.s which had been granted and the number of jobs which they will bring. Will he concede that many of these certificates have been granted and not used? I can prove this in my own constituency.

Mr. Ridley

I cannot at present give the details behind these global figures. It is the figures themselves which the hon. Gentleman should bear in mind in considering this question in the future.

I also have the figures for West Central Scotland—the Glasgow area. From January to June 1970, I.D.C.s led, it is estimated, to the creation of 1,990 jobs; July to December 1970, 2,830 jobs; January to June 1971, 3,730 jobs. There is no evidence there to support what right hon. and hon. Gentlemen are saying.

The hon. Gentleman for Glasgow, Craigton (Mr. Millan) asked about Rolls-Royce. Of the 4,400 made redundant in this respect, some 1,405 are still unemployed. This shows a considerable absorption of those unfortunate people.

There is no news I can give the hon. Gentleman about the RB 211. He must await a statement in due course, which in its turn depends on the Americans.

He also asked about a statement on shipbuilding credit. I confirm that a statement will be made before the Recess. It was never suggested or intended it should go wider than to deal with the future of the credit scheme. We have never suggested this would deal with the whole policy, but only with the future of the credit scheme.

The hon. Member for Dundee, West (Mr. Doig) drew attention to the serious situation in Dundee where unemployment has risen from 4.9 per cent. a year ago to its present level of 7.8 per cent. He asked whether the Government would consider giving special development area status to Tayside. My hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) put forward contrary views to those of the hon. Member for Dundee, West, but I thought they carried some cogency.

The point is that there is only a limited amount of mobile industry which can be expected to settle in new areas, and the more widely one spreads the incentives the less there will be for any particular region.

I am sure Opposition Members will agree that the gravity, scale and size of the problem is far worse in West Central Scotland than it is on the east coast. Therefore, although I shall convey to my right hon. Friend what has been said tonight, in view of the scale of the problem about which the hon. Gentleman spoke with emotion and real feeling, it is right that the benefits should be concentrated where they are needed rather than that they should be spread thinly over the whole country.

The hon. Gentleman suggested that Dundee was totally failing to attract industries. But he might like to know that again the figures of estimated new employment created by I.D.C.'s show a fairly steady improvement in Dundee from some 140 to 1,590. Therefore, we are not as depressed as the hon. Gentleman about the prospects. I agree that it is not easy for Dundee so long as it has to compete with the incentives available in special development areas.

I want at this point to say a word about the jute industry, where there has been a considerable run-down. This has been due to the substitution of polypropylene for jute. There have also been serious difficulties in Pakistan following the troubles in that unfortunate country. We are very conscious of the difficulties which the jute industry has been facing, and the decision not to increase jute import quotas during the year beginning May, 1971, was a clear recognition of the difficulties.

Concern has been expressed about supplies following the recent disturbances in East Pakistan. Latest reports suggest that there is sufficient raw jute in stock in the Dundee district, in transit, or stacked at ports in Pakistan to keep the Scottish industry going at its present level for the present. The longer-term availability of raw material depends on the possibility of getting to ports in Pakistan the new crop now ready for harvesting. We are well aware of the need to maintain supplies in Dundee, and we have been in touch with the Pakistan authorities, who have assured us that they are giving the matter close and urgent attention. We shall continue to do all that we can to help.

Mr. Bruce-Gardyne

Have the Government received any specific assurances about transporting the jute crop to ports in Pakistan?

Mr. Ridley

The authorities in Pakistan have undertaken to do their utmost to achieve it. It is impossible at present to say how that will work out.

The hon. Member for Bothwell asked about Government training centres. There are now 10 centres in Scotland, and there is no proposal either to run one down or to close any of them. We have some space capacity in most of the training centres, and we shall do all that we can to encourage as many people as possible to take advantage of the vacancies.

The hon. Members for Dunbartonshire, East (Mr. McCartney) and Dunbartonshire, West (Mr. Ian Campbell) both made important contributions to the debate. They were concerned about the Plessey factory. I should tell the hon. Member for Dunbartonshire, East that work on two advance factories has started at Dalmuir and that a third one is to start building in August. We know of no interruption to their progress, and it is hoped that they will be available and let very soon.

The whole House regrets the announcement by Plessey that it has had to cease both the machine shop activities at Alexandria and the numerical-control work (here which only a short time ago seemed to offer the prospect of a substantial growth in new employment. My right hon. Friend the Secretary of State and my hon. Friend the Under-Secretary of State for Development, Scottish Office, were especially disappointed, since my hon. Friend attended the hand-over ceremony when the ex-torpedo factory passed officially to the company. I cannot comment on the future of the torpedo, but I shall draw the remarks of the hon. Member for Dunbartonshire, West to the attention of the Ministry of Defence. I hope that that Department will be able to let the hon. Gentleman know what the future is to be.

It is a blow that the Plessey factory has been closed. Numerical control for machine tools would be a very important growth industry. However, the difficulty is world-wide. It is not confined to Scotland. It is not in any sense due to local conditions. I have recently visited two major machine tool exhibitions at which I heard machine tool builders of all countries and of all types complaining about the extreme difficulties through which the industry is going at present.

I should like to mention microcircuits, a matter raised by the hon. Member for Fife, West (Mr. William Hamilton). I will not say very much about this matter, because I do not want to take up too much of the time of the House and my hon. Friend the Member for Maldon (Mr. Brian Harrison) will be specifically raising the matter with my hon. Friend the Member for Eastleigh (Mr. David Price) later today. It would be wrong for me to cover the ground when there is to be a debate solely upon this matter. I am sure that the hon. Member for Fife, West will want to listen to that debate, because my hon. Friend will go into the matter in great depth.

The factory at Glenrothes is not the only factory which G.E.C. has closed. It has also closed one at Witham in Essex. Therefore, Scotland has not been discriminated against in this matter. The balance has been equal between the two countries. We must leave it to the company to decide at which place it must make economies. Otherwise, we shall laden our companies with extra costs which will make it harder still for them to compete.

The problem here is competition. It is simply that the cheap producers in the Far East, and some in Europe, are exporting to world markets at prices far below what used to rule a short time ago. I have heard about prices as low as one-tenth of prices a year or two back for certain components. The average is probably not more than a fifth. It is probably most beneficial work to under-developed countries, which the Opposition are always keen we should help. Whatever the reason may be——

Mr. Ross

The hon. Gentleman mentioned Europe.

Mr. Ridley

Portugal is one of the countries, but the bulk is coming from the Far East where the standard of living is very low indeed.

Competition here is through E.F.T.A. and the Commonwealth. I do not think that any hon. Gentleman opposite, let alone the right hon. Member for Kilmarnock, was proposing that we should erect tariffs or other bars to trade either in E.F.T.A. or in the Commonwealth merely for the purpose of protecting the microcircuit industry against perfectly normal exports from these countries.

The hon. Member for Fife, West and, I think, the right hon. Member for Kilmarnock seemed to be alleging that there was dumping. I was asked what legal as opposed to illegal dumping meant. The answer, on which my hon. Friend will enlarge later in the day, is that legal dumping is dumping which is proved to be dumping under the terms of the Customs Duties (Dumping and Subsidies) Acts. It must be proved that the prices at which goods are being sold or exported are lower than the domestic prices ruling in the country where the goods are manufactured. If that is not the case, then it is not dumping. It is up to the competitors who are complaining to prove their case on a matter of that kind.

The hon. Member for West Lothian (Mr. Dalyell) raised the matter of Rolls-Royce and why the Government did not give evidence to the Congressional Committee in America. The answer is that it is not the function of the Government to become involved in another Government's affairs. We provided written evidence to put before the Committee, so that there were no misconceptions about the exact position of the British Government in the matter. We thought that it was likely to be counter-productive, because it would arouse adverse response, if the Government were to give oral evidence as well. There is no evidence that our position has been weakened by what we did. There is no danger to the project arising from this incident

The hon. Gentleman also asked about the future of H.M.S. "Caledonia" at Rosyth. In the Statement on the Defence Estimates 1970, the hon. Gentleman's own Government said this: H.M.S. 'Caledonia' will cease to be a training school for engineering purposes in 1977–78, and its task will be centralised in H.M.S. 'Sultan'. A number of possibilities for the continued use of the establishment after the present task moves are being considered … I will ask my hon. Friends at the Department of Defence to supplement that for the hon. Gentleman if they can.

Mr. Dalyell

It is the rundown of the civilian instructors engaged primarily in training for civilian purposes about which we are concerned.

Mr. Ridley

I take the point, but we cannot say anything about the future until we know about the future of the station itself.

I was asked by the hon. Members for Glasgow, Craigton and for East Stirlingshire (Mr. Douglas) to go over again some of the points in the history of the Department's relationships with U.C.S. I believe that it will be helpful if I do so, so that I can clear the record and so that there will be no misapprehensions about what happened. There are extraordinary suggestions by hon. Members that there should be some inquiry into this matter. I think that I can clear the matter without much difficulty.

I slightly resent the suggestions that the things that have been said by Ministers in the House in debate and in answer to Questions are not true. In matters of fact of this sort it behoves hon. Gentlemen to accept what they are told as being true.

Mr. Millan

The Government has been telling us lies all along about everything.

Mr. Ridley

After the way that the hon. Gentleman has been saying things like that, I must seek your protection, Mr. Deputy Speaker.

Mr. Deputy Speaker (Sir Robert Grant-Ferris)

The House would do best to hear the Minister. If hon. Gentlemen wish to intervene, I am sure that the Minister will be ready to give way.

Mr. Ridley

In October of last year the Shipbuilding Industry Board director warned the Government that in his opinion as a director of the company and with the information which he had available to him the company was in serious danger of trading illegally and that it would be wrong for the Government to guarantee credits to the company. When I asked the company to give us a complete balance sheet and profit and loss account, in the hopes that it would enable us to continue granting guarantees, the company undertook to do this and to come back as soon as it had its balance sheet properly organised.

It was not a question of cash flow. The problem was one of asset deficiency, in that the suspicion of the S.I.B. director was that the company was trading illegally because the value of its assets was less than the value it owed on the balance sheet.

When the balance sheet was produced in November it proved that the S.I.B. director was right and that the company was not in a position to trade legally. From that point the Government suspended guarantees and did all they could to facilitate the company to get itself into a position where it ceased to have an asset deficiency.

The results of three months of negotiations, mainly over the Yarrow problem, were that an extra £10 million of Government loans was agreed to be written off or written down which relieved the balance sheet of that amount of debit. There was also £2.8 million or thereabouts received or promised from shipowners which was allowed to be shown in the accounts as credit. The result of the separation of Yarrows plus these two things was to turn the balance sheet out of deficit into credit and it allowed the company to continue trading without any question.

This was announced to the House on 11th February. The company's accounts were inspected by the accountants in the Department and in the Treasury. All concerned, including the company's accountants, believed that the company was perfectly viable and in a condition to continue trading. I am not in any way traducing that when I say that the company itself felt it could now continue and would soon enter another profitable phase.

It was not because of Rolls-Royce. What the hon. Gentleman said is untrue. We did not suspect that anything was wrong on 4th February and everybody concerned——

Mr. Douglas

rose——

Mr. Ridley

Let me finish my point. Everyone concerned believed the company was in a position to prosper. The suggestions that there was knowledge that trouble was imminent or that it was something to do with Rolls-Royce or the political situation or anything of that sort are entirely untrue.

Mr. Millan

The announcement about Rolls-Royce was made by the Minister in the House on 4th February and the information about it was certainly available on 3rd February. Is it not an extraordinary coincidence that the day on which the U.C.S. situation should miraculously appear to be all right again should be the day on which Rolls-Royce was collapsing? This is far more than coincidence and the hon. Gentleman knows it.

Mr. Ridley

There may be a slight element of coincidence, as the dates were so close together. But for the hon. Gentleman to engage in tittle-tattle and smear without the slightest ability to produce evidence—these are the words he used about my hon. Friend the Member for South Angus—is something he should personally withdraw when I have given him my word that what he is saying is untrue.

Mr. Millan

rose——

Mr. Deputy Speaker

Order.

Mr. Ross

When he challenges my hon. Friend, the Minister should give way.

Mr. Millan

rose——

Mr. Ridley

Does the hon. Gentleman want to withdraw what he was saying?

Mr. Millan

Certainly not.

Mr. Ridley

I would make one point in answer to the reasonable point by the hon. Member for West Lothian, that we certainly did not know in February that the company was in any sort of difficulty.

Mr. Millan

That is not true.

Mr. Ridley

In June we had three days' notice that the company had an assets deficiency, which was later assessed by the liquidator at many millions of pounds. What went wrong is a good question, one which we are still inquiring into and which we hope to settle in due course.

Mr. Douglas

Would the Minister give way on his previous remarks?

Mr. Deputy Speaker

Order.

Mr. Ridley

No, I will not give way——

Mr. Ross

Will the Minister give way to me on this?

Mr. Ridley

I have refused to give way to his hon. Friend.

Mr. Ross

But this is a serious point. We remember that evening very well because we had a debate on Scottish employment. At midnight I went to see the Secretary of State for Scotland. I never publicised it, because it concerned U.C.S. and because of the messages we had received directly from the company. The Minister will equally know, or he ought to, that my right hon. Friend the Member for Bristol, South-East (Mr. Benn) was on the telephone to the Secretary of State. There was no doubt about the position and the troubles of U.C.S. that night—2nd February.

Mr. Millan

The Secretary of State told us.

Mr. Ridley

And a few days later than that my right hon. Friend made his statement in the House—I do not remember the exact date—in which he announced the reconstruction of U.C.S., the separation of Yarrow and the grants from the shipowners which together were putting the company in a position in which it claimed and appeared to be totally able to continue trading. So I think that that disposes of that problem——

Mr. Douglas

No, it does not.

Mr. Ridley

——and I hope that, in future, hon. Gentlemen will accept what they have been told and not go around trying to create mischief without a shred of evidence.

Mr. Douglas

This is shocking.

Mr. Benn

My right hon. Friend has referred to two conversations that he had with the Secretary of State for Scotland and that I had with his right hon. Friend. It would not be right for me to reveal in the House what was exchanged between the Minister and myself, but I can only tell the hon. Gentlemen and the House that the account which he gave of the Government's attitude to U.C.S. and to the viability of that company at that time runs absolutely counter to what the hon. Gentleman has just told the House.

Mr. Ridley

I am not aware of the contents of either of the two meetings because I was not present at them. Nor would it be my intention to reveal the contents of private meetings in the way that the right hon. Gentleman came dangerously near doing——

Mr. Douglas

Tell us what U.C.S. told you.

Mr. Ridley

One hon. Member asked how much would be spent on paying wages in the period up to 6th August. The total is about £3 million, of which probably half, or slightly more, will be regained from the shipowners who have had their ships completed through the work being done on them. So that is in the nature of a loan and the net cost will not be so great.

The report of the advisers has been received by my right hon. Friend, although there may be a revised copy still to come before it is finalised. We have been in touch with them from time to time and we know roughly the ideas they have in mind, but now the Government have to make up their mind on what to do about the report. I would say categorically that their minds have not been made up, that the report in the Scottish Daily Express is not true, and that what has been said in this debate will be carefully conveyed to my right hon. Friends, who will certainly not make up their minds without knowledge of these views.

Mr. Dalyell

There is a question on the review which is taking place, which the Minister half answered, although I think he had more to say. What improvements will be made in the Government machine to ensure that this does not happen again?

Mr. Ridley

We are studying this problem, to some extent as a result of this. The information available to the board of directors of U.C.S., which was available also to us, did not convey a full picture of what was happening. I do not know how it is possible to get around that.

My right hon. Friend will be making a statement very soon. I cannot say anything now about what the statement will contain or what the Government's conclusions will be, partly because the Government have not made up their mind and partly because they will wish to announce this in a statement at a later date.

Mr. Buchan

In the House?

Mr. Ridley

Yes.

Before he jumps on the band wagon and suggests nationalisation and all that he has been putting forward, and cries shame on us for what has happened to U.C.S., the right hon. Member for Bristol, South-East, should remember his evidence to the Select Committee on Scottish Affairs on 24th June, 1969. Like the hon. Member for Fife, West, I will end my speech with a quotation. It is not very long, but if the House will bear with me I am sure 'that hon. Members will find it interesting: First of all, 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. That would be accepting an open-ended commitment and would undermine entirely the shipbuilding policy generally. Because were we to take such a view that U.C.S. could under no circumstances go into liquidation, we would be creating a situation in which they would be free to undercut other shipbuilders on the lower Clyde, in the northeast, in Belfast, and know that their losses would be carried by a Government that was prepared under no circumstances to contemplate withdrawing support.